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Political advertising usually grinds to a halt after the presidential election, but for some TV companies this year, the cash keeps rolling in.
On Jan. 5, as Georgia plans a runoff election for two U.S. Senate seats that will determine whether the Democrats or Republicans control the Senate — making the stakes national — the inbound cash for media has been extraordinary.
Political ad tracker AdImpact estimates that $431 million had been spent on the runoff as of Dec. 11. “It’s pretty insane,” says Michael Beach, CEO of Cross Screen Media. “We are seeing off-the-charts spending, I don’t think anyone has ever seen the amount of frequency that is going to a target.”
A number of station owners are reaping the rewards of the races, which are all but guaranteed to become the top two record-holders for ad spending on a Senate election (this year’s North Carolina race had set the mark with just shy of $300 million in spending). The advertising haul “will be very, very large, for obvious reasons,” TEGNA CEO Dave Lougee told Wall Street analysts in November.
TEGNA owns two stations in the state and another across the border in Columbia, South Carolina (some stations in South Carolina, Florida and Alabama overlap with Georgia markets). Gray Television owns five stations in the state, and Nexstar has three.
Another big beneficiary is Fox Corp. Not only is Fox the only Big Four broadcaster to own a station in Georgia (WAGA in Atlanta), but Fox News Channel has seen “increased interest” from advertisers focused on the runoff, the company says. ” I would imagine that we will close the first half of the fiscal year pretty close to a record [in terms advertising revenue],” Fox Corp. CFO Steven Tomsic told a UBS conference Dec. 8
Even as Fox benefits from the races, some top executives are also placing their own bets. According to filings from the Federal Election Commission, Fox Corp. CEO Lachlan Murdoch and executive chairman Rupert Murdoch each donated $1 million to the Senate Leadership Fund, a Super PAC backing the Republicans. The PAC has committed more than $44 million to the Georgia runoffs so far.
Local station owners are trying to find ways to add even more inventory, with the campaigns and Super PACs pouring money into the state. Some are squeezing extra ad slots into existing news programs, and almost all are preempting primetime programming for election specials, where they can sell their own inventory.
“It’s a good time to be a broadcaster in Atlanta,” says Patrick McCreery, the president of Meredith Corp.’s local media group, which owns Atlanta CBS affiliate WGCL as well as stations in South Carolina. “If I am a constituent in Georgia, I don’t think you can breathe or blink without seeing a political message right now. The market is really saturated.”
“You are never fully sold out because in linear TV you are in a state of perpetual auction. If there is somebody willing to come in and pay more for the spot, we churn,” McCreery adds. “I think that the spending is certainly heavier than anything we have ever seen, because the general election is done, so there is no other priority for any other campaign or advocacy group, this is it, it is the only thing on the agenda right now.”
Those high prices are also creating some unusual dynamics: “If you are over $1,000 a CPM (in Georgia), then you can start to justify a lot of ways to stay in that race,” Beach says, noting that Georgia-focused ads are now being purchased on national networks, driven in part by the high local ad prices.
Case in point: Not only are ads airing on Fox News (an obvious choice given its audience of likely voters and potential donors), but ads have also been airing on ESPN’s networks on games featuring teams from Georgia, such as the Nebraska-Georgia Tech basketball game on Dec. 9.
A version of this story appeared in the Dec. 16 issue of The Hollywood Reporter magazine. Click here to subscribe.
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