Political ad spending on TV to rise 25%

New study says broadcasters will make $2.5 billion

NEW YORK -- Heatedly contested races in this fall's midterm elections and a Supreme Court decision that ended certain spending restrictions could boost political advertising spending on TV stations 25%-plus compared with 2006 and produce a revenue windfall for broadcasters, according to a new study from research firm SNL Kagan that was released Wednesday.

It mentioned CBS Corp. as one of the key beneficiaries. And indeed, CBS Corp. president and CEO Leslie Moonves talked about the "very strong" outlook for election ad spending in a conference appearance on Wednesday - as did NBC Universal president and CEO Jeff Zucker.

SNL Kagan's "Broadcasting Guide to the 2010 Elections," unveiled Wednesday, forecasts TV stations could see political ad revenue rise at least 25% above the 2006 midterms to $2.5 billion. That would top the current midterm election record of about $1.98 billion set in 2006, according to the firm. It compares to the presidential election year record of $1.56 billion for broadcast TV ads set in 2004. Midterm years tend to benefit as about 70% of gubernatorial races are held in non-presidential election years.

Political revenue for publicly traded pure-play TV station groups is expected to exceed $300 million this year, according to SNL Kagan.

"In 2010, we expect that the combination of political unrest, high-profile congressional and guvernatorial races, and the Jan. 21 Supreme Court ruling that struck down certain laws restricting corporate and labor contributions to campaigns will lead to a political ad revenue treasure trove for broadcasters," said SNL Kagan analyst Tony Lenoir.

Among entertainment biggies, CBS Corp. and Univision Communications have the most exposure to toss-up states, the study found.

In the 16 states with highly-contested election races, station owner Sinclair Broadcast Group has the largest footprint of all TV pure-plays, with 24 full power stations and an estimated 11.1 million TV households, according to the study.

Radio will also benefit, with SNL Kagan eyeing political ad revenue for the sector to reach approximately $560 million.

Among radio firms, Cumulus Media has the largest footprint in contested states, with a total of 114 stations. And CBS Corp.'s CBS Radio unit "is likely to receive one of the largest windfalls in political advertising in 2010," thanks to its strong presence in California, Florida, Illinois and Ohio, SNL Kagan said.