While David and Charles Koch prove to be a polarizing name when it comes to political spending, local TV stations have learned to view rich folk like the Kochs as the leprechaun at the end of the political rainbow.
Bloomberg reports political spending today mainly means buying airtime on TV, local TV, and the station groups are reaping the rewards.
Political ad spending on local TV hit a record $3.1 billion in 2012, according to the trade association TVB, more than double the amount spent in 2008. Spending during the 2014 midterms likely fell well short of that, but still was enough to markedly lift results at big owners of local stations.
Take a look at this chart showing Sinclair’s political ad revenue in election and non-election years.
According to Bloomberg, most of that newfound cash has given rise to the flurry of acquisitions.
When you consider that, in lots of countries, political airtime is something that broadcasters have to provide for free, this really is a remarkable situation. It would be lovely if local TV stations used this money to improve their news operations and do a better job of covering elections, and there are actually some small signs that this is happening. TV news departments saw budget increases in 2014 for the first time since 2007; Sinclair executives said in their earnings conference call this week that they plan to spend $40 million improving news and sports offerings in 2015. But in general, local TV news operations don’t amount to much. The big news-gatherers have always been the newspapers. And while several of the biggest TV-station owners got their start as newspaper companies, they’ve been spinning off print to focus on TV (Media General did this in 2012, Tribune last year, and Gannett will soon).
The money seems to be going instead into acquisitions (the Pew Research Center has been doing interesting work on the link between political spending and TV consolidation) and payouts to shareholders (Sinclair spent $194 million on buybacks and dividends in 2014). Those shareholders, in turn, should be thanking the Koch brothers.
Click here to read the entire piece with details of how each station group fared in the last political cycle.