TV stations stand to gain in campaign

Democrat Barack Obama's decision to eschew public campaign funds, and spend as much as he wants on his presidential race, gave television executives a rare opportunity to smile.

TV station owners including Scripps Howard, Hearst-Argyle and Post Newsweek — with strong newscasts in hotly contested states including Florida, Pennsylvania, Ohio and Michigan — stand to benefit most from Obama's plan to blow past the $84 million limit on publicly financed campaigns.

Yet the extraordinary amount of cash to be spent on TV ads for Obama and Republican John McCain, who's accepting public limits, also could boost stations that don't usually see a presidential campaign windfall — as well as cable networks that want in on the fast-growing political business.

Obama's decision "probably adds a couple of states to the (spending) mix," including North Carolina, Georgia, Mississippi and Arizona, says Evan Tracey, chief operating officer of TNS Media Intelligence's Campaign Media Analysis Group. "He'll go 20 cable channels deep. There won't be something for him that's considered too risky," he says.

McCain should still be competitive, even if his campaign has a cap.

"The Republican national party has a lot more money than the Democrats," says Leo Kivijarv of PQ Media, a research and analysis firm.

Candidates and issue groups at all levels will spend $3 billion on TV ads for this year's election, up from $1.7 billion in 2001 and $1 billion in 2002, TNS says. The presidential campaign will account for about 27% of this year's total.

But forces beyond candidates' control may influence where the money goes.

For example, they may have to spend more on cable, weak TV outlets or other media if key stations run out of ad time in coveted time slots, including newscasts, prime-time shows and sports.

Chances for that increased last year. A U.S. Supreme Court ruling freed private groups to buy ads that mention a candidate right up to the election; in 2004, that stopped 60 days beforehand.

But stations expect to have lots of inventory as sales of car ads, which account for about a third of most stations' revenue, plummet. Political spending will offset those losses for only one or two station groups, says Jack Poor of the Television Bureau of Advertising.

And federal law requires stations to provide candidates with "reasonable access" to ad time. "They pretty much have first dibs," says Kathleen Keefe of Hearst-Argyle Television.

Still, Obama and McCain are paying attention to cable.

Obama's current purchases at CNN include ads on its website, says Greg D'Alba, executive vice president for CNN ad sales. Last week, McCain started running ads on CNN and several Discovery Communications networks, including the Military Channel.