MEDIA COMPANIES TO FEEL EFFECTS OF SUPREME COURT AD RULING
TV and radio broadcasters, cable and satellite companies and programmers could lose millions of dollars in ad revenue normally generated in the federal election season as a result of a 300-page Supreme Court decision Wed. In a 5-4 ruling, the court upheld key provisions of the Bipartisan Campaign Finance Reform Act (BCRA), commonly known as “McCain- Feingold” for proponents Sens. McCain (R-Ariz.) and Feingold (D-Wis.) Broadcasters were intervenors in the case, fighting BCRA on First Amendment grounds. But some industry insiders said the political ad dollars would continue to flow to the media, just in different ways.
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NAB Pres. Edward Fritts said the decision would “cause substantial changes in the manner in which federal candidates utilize broadcasting to reach the voters. This is a complex 300-page opinion that will require extensive evaluation before its full impact is understood.” NCTA declined to comment, as did the Satellite Bcstg. & Communications Assn.
Although representatives of individual media companies were reluctant to speak for attribution, several said they expected to continue to see ad revenues generated from political campaigns, but perhaps not quite as much as in the past or perhaps from different kinds of ads. Title II of BCRA ends so-called “sham” issue ads. The law prohibits corporations and unions from directly funding ads mentioning a federal candidate 60 days before a general election and 30 days before a primary election. Those traditionally had been among the sharpest of ads during hotly contested campaigns and were the most heavily criticized by proponents of BCRA.
BCRA also requires broadcasters to disclose requests for ad time by political groups or candidates and requires candidates to refrain from “attack ads” if they want the lowest rate for those ads. BCRA defines sham ads as those that promote or support a candidate for office or attack a candidate for that office regardless of whether the broadcast TV, radio, cable or satellite TV ad “expressly advocates a vote for or against a candidate.” Addressing First Amendment arguments, the Supreme Court majority wrote that Congress’s desire to avoid corruption outweighed those concerns.
Executives of 2 media companies joked that the only people who would do well by the ruling worked for the creative ad agencies on Madison Ave. and undoubtedly would find ways to create ads and still keep within the law. Justices John Stevens and Sandra O'Connor said as much in writing for the majority: “Money, like water, will always find an outlet,” they wrote. One of the media company executives said the new rules simply would steer the money toward 3rd parties that didn’t have the regulated disclosures required of the major political parties. He also said he didn’t think the restrictions in any way would affect the amount of money spent on ads. “As soon as you put in a new law, somebody finds a new loophole,” he said.
The law also put significant curbs on so-called “soft money,” which had been used to pay for some ads. Under the old law, soft money generally fell outside the old federal restrictions on individual donations from wealthy individuals and unions that went to get-out-the-vote activities and party-building programs, as well as corporate contributions directly to a campaign. For instance, these days, many companies simply are forming their own political action committees (PACs) and doing more to encourage employees to contribute to those PACs, we were told. The law stops federal candidates, including incumbents, from raising soft money, as well as political parties. Affiliates of the parties in individual states also can’t funnel money to the national organizations.
McCain called the ruling “a landmark victory for the American people in the effort to reform their political system.” McCain, Feingold and Reps. Shays (R-Conn.) and Meehan (D-Mass.) said the next important priority was to ensure that the law was “properly interpreted and enforced.”
Sen. Lieberman (D-Conn.), a Presidential candidate, also praised the ruling and used it to attack President Bush. “Money and influence must not drown out the voice and the values of ordinary Americans,” he said. Lieberman said he had fought for the bill, but Bush had “fought this law all along until his position became politically untenable.” Lieberman also took a shot at candidate Howard Dean, who has opted out of public financing.
The U.S. Chamber of Commerce was among those disappointed by the decision, saying the law would make it more difficult for voters learn about candidates and issues in the days before an election. “Prohibiting the use of TV and radio ads in the days and weeks right before an election will blindfold voters just as they are interested in learning about the candidates and the issues,” Chamber Pres. Thomas Donohue said. “This decision is a disappointing step back toward less information, fewer options and restricted speech.”
In the majority on the ruling were Stevens and O'Connor, Justices David Souter, Ruth Ginsburg and Stephen Breyer. Chief Justice William Rehnquist and Justices Antonin Scalia, Anthony Kennedy and Clarence Thomas dissented on most issues.