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Local Stations, Viewers are Big Losers in TV’s Political Ad Money Grab


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Last year at an entertainment law conference, Les Moonves, the CEO of CBS Corporation, said “Super-PAC’s may be bad for America, but they’re very good for CBS.” After the 2012 Presidential election during which Romney and Obama spent a combined $7 billion, CBS saw their profits soar by $180 million.  The winners and losers of the modern political media complex are beginning to emerge.  

In a Mother Jones article whose title comes from the Moonves quote, writer Andy Kroll argues that the winners of this ad game are television stations in battleground states and the losers are the American people:

The lead up to the 2014 midterm election and the 2016 Presidential election and the unimaginable sums of money that will be spent on advertising is causing a major consolidation of the broadcast industry.  Looking to cash in on the phenomenon the Gannett company bought 20 TV stations for $1.5 billion and the Tribune Company paid $2.7 billion for 19 stations, many of which are in battleground states.

These companies and their stations are potential cash cows which will make large sums of money every two years — merely by existing.

Washington, DC’s WJLA, owned by the Allbritton media company, the New York Times notes, which serves both the DC and the northern Virginia markets, banked $33 million in ad spending on campaigns and issues last year. Columbus’ WBNS, owned by the Dispatch Broadcast Group, booked $20 million in campaign ad spending out of $50 million in total ad buys. Ad spending was also up at TV stations in Wisconsin and Colorado. Wherever there was a political fight, campaigns and consultants were gobbling up ads. According to the Times, WJLA could by bring in $300 million if the Allbritton media company decided to sell it (which, earlier this year, Allbritton said it planned to do).

For these companies to profit, someone has to suffer — it’s the nature of capitalism.  The general public and local businesses are the ones that pay the price for increased ads during election season.  The public has to view more commercials and suffer through extra misleading half-truths.  Small businesses lose their ability to advertise because of rising rates:

Analysts say the surge in station consolidation this year has also been driven by low interest rates and by an enormous rise in retransmission fees for stations, which are the equivalent of per-subscriber fees for cable channels like ESPN and MTV. Some stations now earn 40 to 50 cents a month from each cable and satellite subscriber.

But those fees currently account for about 10 percent of station revenue, and even if they double in the next five years, as the research firm SNL Kagan predicts, advertising revenue will remain the most important part of the station business. Thus, political advertising is a lifeline, even if the sheer volume of ads sometimes makes viewers want to hurl the remotes at their sets.

“We get complaints from viewers,” Michael J. Fiorile, the chief executive of WBNS’s owner, the Dispatch Broadcast Group, acknowledged. “The bigger complaints are from regular advertisers who really get pushed off the air.”

“Don’t get me wrong,” he added with a chuckle. “It’s a good problem for us to have.”

Another loser in the campaign is “truth.”  Television stations cannot edit official candidate ads. They can refuse to air third-party Super-PAC ads, but why would they?  As major companies scramble to buy up as many stations as possible, turning away cash because an ad is untrue seems an unlikely action. The bottom line is the bottom line and the American public once again gets trampled by being misinformed.

Timothy Karr, a senior director of strategy at Free Press, told NYT that his public interest group studied six local markets in the lead up to the Presidential election.  His group found “a near-complete station blackout on local reporting about the political ads they aired.”

“This profiteering may explain newsrooms’ reluctance to investigate the sources of political ad spending, or to vet the ads they air for accuracy,” Mr. Karr said. “It’s clear that they don’t want to bite the hands that feed them.”


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