Wells Fargo Securities analyst Marci Ryvicker has been predicting that political advertising will be $4.9 billion this year, with the biggest share, $2.8 billion, going to broadcast television. Now she’s been analyzing where those TV dollars will be spent.
By the way, Ryvicker thinks those dollar figures are conservative at this point, noting that fundraising got off to a slow start with no clear Republican frontrunner in the presidential race.
It’s not just about the race for the White House, though. The analyst notes that 12 governors, 33 US Senators and every member of the House are up for election in 2012.
Ryvicker and her staff have been doing comparative geographic revenue analyses to determine which broadcasters have the greatest exposure to the political contests, particularly those likely to be hotly contested.
“We reviewed our current 2012 political estimates for all companies under coverage to determine who could have the most potential upside. Based on the conclusions of our political analysis, we view LIN Media and Sinclair Broadcast Group as having the greatest potential upside to political forecasts. We also note that our forecasts for Gray Television, another significant beneficiary of political revenue, seem on the light side versus management commentary, so we would anticipate upside potential here as well,” Ryvicker said in a long research piece. “We are not changing estimates at this time as we are still in the midst performing channel checks on the core business, which has been relatively mixed, with Q4 a bit weaker than expected and Q1 faring ‘well’ in some categories and ‘underwhelming’ in others,” she wrote.
Of the public companies which she covers, Ryvicker concluded that Sinclair, Belo and CBS have the greatest exposure to the early primaries, with Sinclair having the greatest exposure. The analyst noted that Gannett has even greater exposure to the early primaries, but that newspaper/TV company is not in her coverage portfolio.
While the pure play TV companies have the most to gain on a percentage basis from a hot political year, Ryvicker said political revenues will still be significant to diversified media companies. Based on her analysis, CBS has the most TV and radio revenue exposure to the 2012 political races, followed by Disney/ABC, News Corp./Fox and Comcast/NBC.
As noted with CBS, radio also has money at stake in this election year, although it pales compared to TV. Check back for details on her radio political revenue analysis.
