Record Political Ad Sales Will Lift Broadcasters’ Q4 Results
Nexstar and Sinclair TV stations sold a record amount of ads to political candidates, their supporters and issue advertisers in the run up to Tuesday’s elections, their executives told investors Wednesday after reporting Q3 results. Both companies expect their total 2010 political sales to exceed those of 2008 despite the lack of a presidential election this year. “The category is just absolutely explosive,” said Steve Marks, chief operating officer of Sinclair’s TV division.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Oct. 1 through Tuesday, Sinclair sold $26.8 million in political ads, which would bring its total for the year to $41.9 million, a record for the company, Marks said. Sales were helped by the Supreme Court’s loosening of campaign finance laws in its Citizens United ruling, said David Smith, Sinclair’s CEO. “For the first time in a long time we saw half-hour infomercials put together that weren’t necessarily anti- any particular politician, but were more macro-oriented at political discussion.” The paid programming addressed topics such as “socialism” and “the direction we're drifting as a society,” he said.
Demand for those types of spots may continue through 2011, despite the lack of political spending that typically coincides with odd-numbered years, Smith said. “I wouldn’t be shocked if over the next 18 months we don’t see more of this kind of stuff coming from both sides of the aisle, which is fine -- we're just in the middle taking the money.” Political sales during the off-election year should increase significantly from 2009, Marks said. “Any comparisons we're going to make, we're going to be budgeting for an increase on previous odd years."
Broadcasters have high hopes for the revenue prospects of mobile DTV, Nexstar CEO Perry Sook said. “We have the preferred programming on that [mobile] screen and we have an opportunity with mobile to develop a business that may dwarf everything we're doing now,” Sook said. “Your PDA is rapidly becoming your wallet. If it also becomes your TV screen, broadcasters are in a preeminent place of delivering value to advertisers … and also to consumers."
It’s too soon to say when stations might start seeing revenue from mobile DTV, Sinclair’s Smith said. “There is no mobile revenue yet.” Before the year is over, the industry will probably announce big plans for introducing and monetizing mobile DTV service, he said. “We've been talking about this for a long time now, and it’s now time to start the game,” he said. “Once it starts … I see nothing on the horizon that impedes our ability to become the dominant player in terms of delivering video content to every device that’s out there."