High Court Delivers Potentially Low Blow To '04 Political Ad Blitz

By the narrowest of margins, the U.S. Supreme Court let stand Wednesday a controversial campaign finance reform law that severely restricts political advertising in the weeks before an election.

The ruling will almost immediately affect media outlets, which depend on a flurry of political advertising in the days and weeks leading up to an election, not only by the candidates and political parties (already controlled by law) but also by sometimes-shadowy issue-based organizations. The timing means that the law will be enforced in time for the first presidential primaries, the Iowa caucus and New Hampshire primaries in late January.

One major part of the law prevents the issue organizations and individuals from naming a candidate if they've already contributed the maximum for a candidate. Mary M. Collins, president/chief executive officer of the Broadcast Cable Financial Management trade organization, said it would place an additional requirement on the group's members.

Just what impact that would be depended on who you talked to Wednesday. The National Association of Broadcasters, a Washington, D.C.-based group that represents many in the broadcast industry, warned that the effect could be enormous.



"The decision by the Supreme Court will cause substantial changes in the manner in which federal candidates utilize broadcasting to reach the voters," said NAB President/CEO Edward O. Fritts. "This is a complex 300-page opinion that will require extensive evaluation before its full impact is understood."

The media industry, particularly local TV stations, are counting on a windfall in 2004 to help them improve the bottom line. TV stations in particular have been suffering this quarter from bad comparisons and, with the weak advertising economy, having a difficult time making up for the millions of dollars they raked in unexpectedly in the fall of 2002 during hotly contested state and local races. Many companies made millions - sometimes more than $10 million - on political advertising in September, October and early November 2002.

Gannett, which owns TV stations throughout the country, said it wasn't clear yet how the Supreme Court ruling would affect its advertising revenues and how much it gained from the political season. But its stations are located in states with key races and prime battlegrounds for the presidential election next November. Craig Dubow, head of Gannett's broadcast-stations unit, expected the company's stations would get a significant boost from political advertising in 2004 although it could change due to the Supreme Court ruling.

"Whatever the amount, from the positions of our stations, we're poised for a very strong performance," Dubow said Wednesday afternoon.

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