At least one small slice of the American public looks forward to the non-stop, sleazy political advertisements set to inundate viewers during the 2016 elections: media executives and their investors.
Peter Liguori, the chief executive of Tribune Company, said earlier this month that the next presidential campaign presents “enormous opportunity” for advertising sales. Speaking at a conference hosted by J.P. Morgan Chase, Liguori, whose company owns television stations, referenced Super PAC spending as a key factor for why he thinks Tribune Co. political advertising revenue will rocket from $115 million in 2012 to about $200 million for the 2016 campaign cycle.
Vince Sadusky, the chief executive of Media General, the parent company of 71 television stations across the country, told investors in February that his company is positioned to benefit from unlimited campaign spending, referencing decisions by the Supreme Court. “We are really looking forward to the 2016 elections with spending on the presidential race alone estimated to surpass $5 billion,” Sadusky said, according to a transcript of his remarks.
In 2012, Les Moonves, president and chief executive of CBS, memorably said, “Super PACs may be bad for America, but they’re very good for CBS.”
His views appear unchanged. In a February investor call, Moonves predicted “strong growth with the help of political spending,” particularly on television. He added dryly, “looking ahead, the 2016 presidential election is right around the corner and, thank God, the rancor has already begun.”
In recent months, executives from media companies such as Nexstar Broadcasting, Gannett, and E.W. Scripps Co. have told investors that they are expecting a big jump in revenue from the 2016 political ad buys.
Listen to the Tribune Co.’s Liguori’s remarks here:
Listen to CBS News Corp.’s Moonves’s remarks here:
The New York Times and Bloomberg have chronicled the rising political revenue to broadcast media companies, a trend accelerated by the Supreme Court’s Citizens United decision, which effectively removed limits on individual, corporate and union spending. A single station in Columbus, Ohio, for example, “grossed about $50 million in advertising [in 2012], of which at least $20 million was attributed to campaign spending,” according to the Times. And the 2016 campaign cycle is expected to be the first time digital advertising alone will reach $1 billion, making big money groups a lucrative source of revenue for online publications.
Media watchdog groups worry that news outlets won’t investigate the special interests buying advertisements if their companies become dependent upon the same groups for revenue. Tim Karr, senior director at Free Press, compared six television markets over a set period and found “a near-complete station blackout on local reporting about the political ads they aired.”
Reliance on political ad spending has already led some media interests to fight against reforms designed to make the American election system cleaner.
For nearly two decades, the National Association of Broadcasters, a lobby group for media corporations, has fought bipartisan efforts to provide free airtime to candidates, a reform advocates say would reduce the moneyed barriers to political entry for candidates.
Such an idea was proposed by President Bill Clinton and was a key plank of the campaign finance reform legislation championed by former Sen. Russ Feingold, D-Wisc., and Sen. John McCain, R-Ariz. But the NAB lobbied aggressively to kill the idea, eventually succeeding in stripping it out of the McCain-Feingold bill and pressuring the Federal Communications Commission to back down from pursuing the free airtime rule.
In a 2002 interview on CNN, McCain complained that the NAB is “the most powerful lobby in Washington.” Not only because they spend money on campaign contributions, but because “these are the people that shape the opinion to a large degree of the people who are your constituents,” McCain said.
Retired Sen. Robert G. Torricelli, D-N.J., lamenting “one of the great acts of corporate hypocrisy,” once said “the media that have been so critical of the campaign finance system should be ashamed that their own corporations are paying lobbyists to defeat meaningful reform.”
In more recent years, media companies have attempted to obstruct FCC rules promulgated during the Obama administration to digitize mandatory forms revealing information about political ad buys. Even that minor reform was too much. In addition to the NAB, News Corp., owner of the Wall Street Journal and Fox News; NBC Universal, parent of NBC News and MSNBC; and Allbritton, which owns television stations and Politico, were among the media companies to protest the 2012 rule, according to ProPublica’s Justin Elliott.
In spite of declining television advertising revenue expected this year, credit rating agencies recently gave broadcast companies a sunny two-year outlook. The reason, Carl Salas, Moody’s senior credit officer, told the Los Angeles Times, is that political ad spending is expected to boom next year thanks in large part to the Citizens United decision. “Political advertising revenue defies gravity,” Salas remarked.
(This post is from our blog: Unofficial Sources.)
Correction: The Los Angeles Times was spun off from the Tribune Company to Tribune Publishing in 2014.
Photo: Mark Wilson/Getty