Los Angeles TV stations rake in the campaign cash
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Most of the votes have yet to be cast, but one group already has emerged as a big winner in next Tuesday’s election: Los Angeles television stations.
Well Fargo Securities’ media analyst Marci Ryvicker estimates that overall political spending this year could be as much as $3.3 billion -- an 11% jump over 2008. Television stations around the country are expected to collect two thirds of that total -- more than any other medium.
Los Angeles television stations are particularly well positioned. Ryvicker found that LA stations had collected $105 million by the third week of September -- three times as much as New York stations. And that was before the candidates’ spending sprees kicked into high gear. By the time election season is over, LA stations could take in as much as $150 million in political money.
“We could reach record spending levels here in Southern California,” said Sue Johenning, who is in charge of local advertising for the ad-buying firm Initiative. “It’s clearly the two big statewide races and all of these various committees. That’s making a difference.”
Meg Whitman, a Republican, has led the charge. The former Ebay chief has poured more than $140 million of her own billion-dollar wealth into her campaign for California governor. The floodgates opened after Labor Day when Democrat Jerry Brown and his backers began promoting his gubernatorial bid. That’s also when the race for U.S. Senate between incumbent Democrat Barbara Boxer and Republican Carly Fiorina intensified.
Several factors have contributed to this year’s gusher, including a U.S. Supreme Court ruling in January that now allows unlimited campaign spending by corporations and unions. In August, a low-profile Federal Election Commission decision opened the door for donors to pool their money and give anonymously, which produced a bumper crop of ads from nonprofit political groups and committees trying to influence voters. “The biggest factor driving the spending is the competitive landscape,” said Evan Tracey, president of Kantar Media’s Campaign Media Analysis Group. “Incumbents across the country are worried about losing, and they are not holding on to their money. And many of these statewide races are in states with expensive media markets like New York, Texas and California.”
Political spending this year should reach record levels, Tracey predicted.
Wells Fargo’s Ryvicker estimates that TV stations will collect $2 billion in political money this year. Cable television systems will generate at least $150 million; radio stations will garner $250 million; direct mail efforts should consume $650 million; and billboards will receive $55 million. Ryvicker estimated that newspapers would take in $95 million in political money.
Coming in last, according to Ryvicker and Tracey, will be Internet sites. Their collective haul should be about $50 million -- less than 2% of the total.
Companies that own TV stations in the LA market include CBS Corp., NBC Universal, Univision Communications, News Corp., Walt Disney Co. and Tribune Co., which owns KTLA-TV Channel 5 and the Los Angeles Times.
For the full story in the Los Angeles Times, click here.
-- Meg James
