Campaign Cash Gushes Into Local TV, Boosting Nexstar and Gray
Campaign Cash Gushes Into Local TV, Boosting Nexstar and Gray
(Bloomberg) -- With the U.S. election season entering its final weeks, roughly two-thirds of campaign ad spending is flowing to local TV -- especially in key battlegrounds like North Carolina.
The rush of money, which could hit record levels by Election Day on Nov. 3, is providing a windfall to station owners such as Nexstar Media Group Inc., Gray Television Inc., Tegna Inc. and Sinclair Broadcast Group Inc. Nexstar alone has generated more than $300 million so far, according to Advertising Analytics data compiled by Bloomberg.
The pandemic constrained live events, forcing candidates to change their strategies. That’s created some pent-up demand for advertising, CFRA Research analyst Tuna Amobi said in a report this week. There also are more tight races this year, as well as money flowing in from political action committees.
“With a relatively healthy fundraising environment buoyed by the continued outsized influence of super PACs, the Covid-19 anomaly should not derail a likely banner year for 2020 political advertising,” Amobi said.
Joe Biden, who is challenging Donald Trump for the presidency, is the biggest TV advertiser. But state and local races, as well as ballot measures, have spread the money beyond just swing states. North Carolina, California and Florida have attracted the largest sums of ad spending, according to Advertising Analytics.
Fundraising has been mostly unaffected by the economic downturn. Presidential candidates have already raised more than twice what they did during the whole 2016 election cycle, according to Amobi. Congressional campaign and PAC fundraising hasn’t reached 2018 levels, but ultimately could set a record as well, he said.
Despite the rise of Facebook ads and other online campaigning, local TV has maintained its dominance at election time. It accounts for 66% of spending, according to Magna Global. The second-biggest beneficiary is another low-tech medium: direct mail, with 11%.
Nexstar led local-TV companies in attracting campaign money, followed by Gray, Tegna, Sinclair and E.W. Scripps Co. Last month, Scripps doubled down on local TV with a $2.65 billion deal to buy ION Media Networks Inc.
The spending frenzy creates challenges for campaigns, Republican media consultant Casey Phillips said recently.
“The small number of markets with major races and persuadable voters is shrinking, so some markets are already wall-to-wall,” Phillips said.
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