Political Ad Spend Will Dip In '14

by , Jan 21, 2014, 5:57 PM
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Don’t look for more political TV dollars this year. But two years from now, the situation will change.

Financial credit rating agency Moody's predicts a 10% decline in political advertising spending to $2.6 billion for 2014 -- down from the $2.9 billion.

Moody’s says it’s only the second time since 1980 that political advertising will decline in a non-recession election year. Increasingly, TV station groups are dependent on the two-year cycle of higher political advertising -- as well as higher retrans fees.

For 2014, Moody’s says Lin Television and Sinclair Broadcast Group will benefit the most, having key stations in critical battleground states for statewide or federal office campaigns.

At the same time, Moody's says E. W. Scripps and Gray Television will likely be most impacted this year from the drop in political advertising. “Political advertising accounted for more of their 2012 broadcasting revenue than it did for peers,” stated Carl Salas, vice president, senior credit officer for Moody’s.

Other insights: Entravision Communications and Granite Broadcasting will see the smallest drop in political ad revenue in 2014, “since they have low exposure to political advertising demand.” Entravision Communications is expected to be a beneficiary of increased attention on Spanish-speaking voters.

Also, Gannett and Tribune have greater diversification in their businesses than other TV groups.

But not to worry long term: Moody’s says the 2016 political season is expected to “more than make up for this year's reversal.” Political advertising will “reap massive revenue gains” because of big primary battles among both major political parties.

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