Moody's Investors Service released a report Tuesday predicting
record-breaking political ad revenues for the 2012 presidential election,
beating out records set by the 2010 midterm election contests.
The "U.S. Broadcasters Get Ready for Record-Breaking Political Ad Spending
in 2012" report estimates a 9%-18% revenue growth from 2010's $2.3 billion,
according to the agency's base-case scenario for the U.S. pure-play broadcast
industry. The presidential election will not be constrained by campaign
spending limits due to the Supreme Court's 2010 decision to end spending caps
on political advertising; just as the decision benefited the broadcast industry
during the 2010 midterm elections, the industry is looking at even bigger
increases.
"Virtually all US broadcasters will benefit from spending on political ads
in 2012 but especially those speculative-grade operators that saw the biggest
percentage increases in total revenues from political ads in 2010," said Carl
Salas, VP and senior analyst, Moody's.
Companies that own broadcast operations in states poised for heated political
contest will see greater benefits, including Barrington, Local TV and Nexstar. Salas says that not all broadcasters will see the record-breaking increases, such as Belo and Sinclair Broadcast Group, due to more diverse revenue streams that rely less on political advertising. .
