Corporations Pause On Political Donations Could Hit TV Hardest

Major corporate donations are being put on “pause” due to the U.S. Capitol riotslast week. All this in conjunction with more than a dozen online platforms banning President Trump from using those services to send out messages.

What’s the bottom line for near term -- or long time -- political advertising of all types, TV, social media and otherwise? 

All this come a week after pro-Trump demonstrators rioted, storming the U.S. Capitol, resulting in five deaths. President Trump and members of the Trump family spoke during a demonstration on January 6, incited demonstrators, according to many analysts, who then went on to forcefully enter and vandalize the U.S. Capitol.

Initial corporate donation moves first started in targeting Republicans who refuse to certify the Electoral College results for Joe Biden as next President. But then it extended to all parties.



Major companies “pausing” their donations include: Marriott, International, JPMorgan Chase & Co., Blue Cross/Blue Shield, Goldman Sachs, Citigroup, Boston Scientific and Commerce Bank. Walmart, reportedly, has been mulling its political donation activities.

Separately, the PGA pulled its deal with the Trump-owned golf property in Bedminster, New Jersey, to host the 2022 PGA Championship tournament. Facebook also has stopped political donations for at least the first quarter, according to Axios, igiven the U.S. Capitol attack last week.

Corporate donations directly mean less money for political candidates when it comes to advertising -- TV and social media advertising specifically. Many companies' political advertising spending gets contributing to major PACs, which have sizable media/marketing political influence.

Those donations might only have short-term efforts. Another election is 11 months away, and bigger midterm elections are two years away.

But many wonder what happens if the donations “pause” long term -- if there is a bigger restructuring of the political advertising business. For many, reducing money in politics has always been a goal -- lower marketing influence of voters sentiment providing a more equal ground for candidates to compete.

Looking more broadly, for some it might be a prelude to changing federal statutes. In the Citizens United case in 2010, the Supreme Court said the free speech clause of the First Amendment prohibits the government from restricting all types of political spending by corporations, nonprofit corporation, and other groups.

Since then, political advertising revenues have skyrocketed.

In 2020, political advertising his another record -- $8.2 billion, according to AdImpact (formerly Advertising Analytics.). This is up from an earlier estimate of $6.7 billion. Projections say $3.5 billion to $4 billion of this went to TV stations and networks, according to other third party estimates.

There could be a lot on the line if the pause button holds.

1 comment about "Corporations Pause On Political Donations Could Hit TV Hardest".
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  1. Charles Pierce from Private, January 12, 2021 at 12:25 p.m.

    1) If you read the Citizens United decision summary, the REAL challenge for SCOTUS was that had the decision gone the other way, a lot of media company coverage of campaigns (i.e air time) could be considered a "contribution in kind", which would bring the first amendment to conflict with itself - "freedom to assemble" which is what PACs do, and "freedom of the press" to cover politics. Media companies would be exceeding the artificial and arbitrary FEC campaign limits on donations. So, the majority of the court essentially

    2) When political advertising is constrained by media, that enhances the incumbents who have name recognition. A good example of "be careful what you wish for" recently was Jack Dorsey, of Twitter, deciding to not allow political advertising. This meant incumbents with "followers" would have wider exposure than any challengers, reducing choice and awareness through Twitter's audience.

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