There’s no race for the White House next year, but Wells Fargo Securities analyst Marci Ryvicker is still projecting heavy spending on the 2010 midterm elections. That’s good news for broadcasters, who will welcome the boost from the 2009 ad recession, but Ryvicker notes that some broadcast companies will benefit more than others.
Ryvicker and her team at Wells Fargo are forecasting that political advertising in 2010 will reach $3.3 billion, which is actually up 11% from 2008, but down 4% from 2006 due to the tough economy. That pie is seen as including slices of $2.1 billion for television and $250 million for AM & FM radio stations. TV is far and away to biggest component, with radio 3rd behind direct mail at $650 million.
After assessing the contests for Governor, Senator and Representative in Congress on a race-by-race basis, the analysts calculated which public radio and TV companies stand to benefit the most from 2010 election spending.
The clear winner is Gray Television, which has 37% of its consolidated revenues in states and districts with “hot” races next year. Saga also gets 37% of its revenues from markets with hotly contested elections, but a lot of that is on the radio side, while TV tends to be the #1 choice for major political campaigns.
Other TV companies with high revenue exposure to the hot races include Hearst, 36%; Young, 36%; Nexstar, 32%; Entravision, 32%; and Belo, 22%.
In radio, Beasley and Regent look to be in good positions, each with 61% of its revenues concentrated in “hot” political markets. The figure is 55% for Emmis, 53% for Entercom and 53% for Salem.
For the media conglomerates the effect is somewhat less, since a smaller portion of their total revenues come from their local radio and/or TV stations. For Disney, 63% of its station revenues come from hot political markets, but broadcast station revenues only account for 3% of the company’s total revenues. Since CBS Corporation gets 10% of its revenues from its station groups, it is seen as getting a greater boost from having 46% of its station portfolio in markets with competitive political contests.
RBR-TVBR observation: Of course, there’s always the hope that even more races will become hotly contested. It seems there’s always a surprise somewhere, like what happened to now ex-Senator George Allen (R-VA) in 2006 when he was busy planning for his 2008 presidential campaign while breezing to an easy reelection victory – NOT!