Last week's Supreme Court decision on campaign financing will be good for the media business.
Media companies and agencies were digesting the impacts -- more direct spending by corporations, unions and wealthy individuals, as well as more issue-oriented money pouring into the system. And much of that additional money -- $300 million, according to a Needham & Co. estimate, on top of the predicted $2.8 billion -- will flow to local TV stations. Couple the Supreme Court's decision with the Scott Brown Senate win in Massachusetts, which has "Republicans smelling blood in the water" and we'll see 10% more political ad dollars, said Laura Martin, a Needham analyst. "These two factors work together to create an arms race between corporations and unions, and the only weapons dealers are the local TV stations," she said.
With an abundance of stations in what look to be hotly-contested political markets, station groups such as Meredith, McGraw-Hill and the network-owned groups look best poised to grab political advertising this year, according to investment bank M.C. Alcamo & Co. 75% of McGraw-Hill's four stations are in markets featuring "toss-up" races, followed by 64% at Meredith, 62% at CBS and 60% at both the ABC and NBC owned station groups. Gannett's "toss-up" rate is 58%, and the Fox-owned group comes in at 52%.
