TV Political Ad Spending Forecast to Drop in 2014

8:33 AM PST 01/21/2014 by Eriq Gardner

Moody's expects less spending in a nonrecession election year for only the second time in the past three decades.

It's an election year, which usually means a financial bonanza for television broadcasters.

But according to a new report by Moody's, political advertising revenue will decline for only the second time since 1980 during a nonrecession election year. The financial firm forecasts $2.6 billion in spending for 2014, down nearly 10 percent from the $2.9 billion spent in 2012.

PHOTOS: John F. Kennedy and Hollywood: His Most Famous Supporters

Growth in political ad spending has been fairly consistent over the past three decades, and the U.S. Supreme Court's decision in Citizens United v. FEC raised expectations that broadcast TV coffers would only continue to fill. That ruling, which struck down as unconstitutional expenditure restrictions on independent political groups, came exactly four years ago today. Since then, large media companies have been on the hunt for local television stations to acquire.

Now comes a small election year surprise.

Moody's says that E. W. Scripps and Gray Television will likely be most impacted by a drop since their TV assets rely more heavily on political ad spending. Other TV companies are in better position, according to the financial firm. LIN Television and Sinclair Broadcast Group are noted as owning stations in battleground states for governor or Congress. Gannett and Tribune enjoy greater diversification in their businesses. And Entravision Communications is expected to be a beneficiary of increased attention on Spanish-speaking voters.

comments powered by Disqus