The political windfall year has arrived

Happy New Year 2008! Now get ready to count the money from what promises to be a political showdown where ad expenditures will easily break past records.

Analyst Victor Miller and his Bear Stearns associate Tracy Young some time ago projected that political ad spending for the 2007-2008 cycle will total 2.5 billion bucks. That windfall will not be evenly divided, of course. Some TV groups are better positioned than others to cash in. For the presidential primaries/caucuses, spending on local stations hinges on where their state falls in the schedule. And then once the candidates are selected, the main swing-states will get the heaviest ad spend as the campaigns battle for large blocks of electoral votes that are in play. But there are also hot races at the state level which could produce heavy spending. The Bear Stearns analysts see hot US Senate races in Colorado, Nebraska, Louisiana, Maine and Minnesota. Governor races are expected to be strongly contested in Missouri, Washington, Indiana and North Carolina.

Taking into account which states are expected to be "hot" politically, based on key races and the number of electoral votes, Miller and Young matched those up with the major TV groups. Based on their analysis, they project that the CBS O&Os will have the biggest haul, taking in 164.9 million in 2008 political revenues, with Hearst-Argyle also in triple digits at 100.9 million. But while those giants are expected to get the biggest ad spending from political, the impact will likely be greater on some mid-sized companies. Gray Television is projected to get 60.5 million, a boost of 41.8% over 2006. Belo is expected to gain 21.3% to 57.5 million.

*Adjusted to calendar year. Source: Bear Stearns & Co.