TV Stations Benefit From Spending Bonanza During Costly Midterm Election

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Kay Hagan and Thom Tillis

In key Senate races, nearly a third of ads are paid for with “dark money,” where donors are unknown

More than 96,000 television ads have aired since January 2013 at a cost of more than $64 million in North Carolina during the heated U.S. Senate race between incumbent Democratic Sen. Kay Hagan and Republican challenger Thom Tillis, which will enter the record books Tuesday night as the most expensive single political contest in the country this year.

It is part of a midterm election cycle with a focus on control of the Senate that is the most expensive overall of all time, costing as much as $4 billion for all media in all the races across the country. The spend on broadcast advertising alone from Jan. 1, 2013, until Oct. 23, 2014, is about $1.8 billion, even though there were fewer total ads run than in the past.

“Compared to the last midterm election in 2010,” the Wesleyan Media Project reports, “the volume of advertising is down about 12 percent overall for the comparable time period (Sept. 1 to Oct. 23) in 2014.”

That is because there are fewer ads being bought in races for governors and congressmen, even as money has gushed into a handful of competitive Senate races.

Compared to 2010, spending on races for governor posts is down 12.7 percent, and for the U.S. House it is down 27.7 percent, while advertising on Senate races is up more than 37 percent, according to the Wesleyan study, which is based on data from Kantar Media/CMAG and others.

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Despite fewer spots, revenues overall were higher at most TV stations because of unprecedented demand for advertising. Graham Media Group (formerly the Post-Newsweek stations), which operates five TV stations, and Meredith Broadcasting, which has 17 stations, were among many station groups reporting improved quarterly earnings in October thanks in large part to the deluge of political TV adverting.

“It’s Christmas for local television stations,” says Kathy Kiely, managing editor for the Sunlight Foundation. “They are the big winners. They are not only getting advertising from the candidates who under the law have to be given the best available rate — they can’t gouge them — but also from outside groups that pay the top rate.”

More than ever before, the political ads have been fueled by an increase in so-called “dark money,” funds that come from non-profits that do not disclose their donors – those outside groups that pay top rate.

The Wesleyan Media Project in a study done with the Center for Responsive Politics found that 27.2 percent of 600,000 ads aired in the 2013-14 election cycle in federal races and governor races were paid for by outside groups. Of that, 37.8 percent was paid with dark money. In the Senate races, 48.6 percent of group ad buys were backed by dark money.

“These opaque groups are spending more money than ever,” Sheila Krumholz, executive director of the Center for Responsive Politics, said in analyzing the study, “and making up a larger portion of election spending.”

This change in the amount being spent as well as who is spending it are a direct result of court rulings, which now allow individuals and corporations to spend as much as they want through independent committees; even as candidates themselves have to follow federal election rule limits.

“This is the first midterm election where we’ve had the full impact of the suite of court decisions we call Citizen United,” says Kiely, “so we’re really seeing that outside spending in full force.”

The outside groups now spend more than the candidates in the key battleground elections. Even the role of the political parties has been watered down.

“The infrastructure of politics is totally changed,” says progressive political consultant Donna Bojarsky. “Political parties used to play a huge role both in determining who would run and who would get supported. They no longer have the same influence they had in better days.”

In North Carolina, just under 28 percent of TV ads in the Senate race are sponsored by dark money groups, according to an analysis by the Center for Political Integrity. “It means if you are sitting and getting bombarded by the more than 100,000 ads that have been run in that Senate race,” says  Dave Levinthal, the center’s senior political reporter, “not quite one in three of those ads is coming from an organization you almost can know nothing about when it comes to the funders.”

Levinthal pointed out that even some of the Super PACs, which do disclose their donors, get money from groups that use dark money, which he calls “defacto dark money” which uses the Super PAC “as a pass-through for a dark money group.”

“This isn’t happening across the board but it’s certainly happening in a way that would have been ludicrous to consider even a couple election cycles ago,” adds Levinthal. “It’s become much more the norm today. By 2016 and 2018, it’s likely to become de rigueur for outside groups to play a leading role in key congressional elections throughout the country.”

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