(The opinions expressed here are those of the author, a
columnist for Reuters.)
By Jack Shafer
April 4 The campaign finance decision the
Supreme Court delivered Wednesday stirred all the same responses
from all the same sources, with the anti-money faction bellowing
that the Roberts court had now completed its plan - hatched with
2010's Citizens United ruling - to put democracy up for sale.
The pro-money crowd (to which I belong, by the way), heralded
SCOTUS's latest call as a victory for free speech.
Rather than rehashing that debate and defending a side to
predictable results, I'll burn my column inches identifying the
real winner of McCutcheon v. Federal Election Commission - the
media. The more money that flows into campaigning, the more
campaigns advertise. The more they advertise, the more money
they pay media outlets. And the greater the media revenue, the
more secure my profession. Whoops, I mean, the more media
properties collect, the more they can spend on the sort of
watchdog journalism that preserves democracy!
If anybody needs more money, it's the news business.
According to a fresh analysis published by the Pew Research
Center, total "revenue supporting American journalism has
declined by one-third since 2006," dropping from about $95
billion to $65 billion today. Advertising revenue has fallen
considerably. In 2006, 82 percent of revenue came from
advertising; today, only 69 percent. One result of the
turn-down, as everybody knows, has been fewer reporters and less
agile newsrooms, which I would declare non-optimal even if I
didn't belong to the trade.
More money spent on campaign advertising would be good, but
would it be good enough to solve media's financial woes?
Presidential and congressional candidates, party committees, and
political action committees spent nearly $7 billion in the
2011-2012 election cycle, according to the Federal Election
Commission. Spending by other organizations topped $1.2 billion.
According to the Wesleyan Media Project, candidates and
their backers used these riches to buy more than one million
television ads between June 1 and Election Day, about a 39
percent increase over 2008. Presidential campaigns and their
surrogates spent nearly $700 million on broadcast TV and
national cable advertising (local cable buys were not included
in the figures).
Obviously, even if you redirected that $700 million to
newspapers, it wouldn't save print's bacon. As Mark J. Perry's
famous chart points out, newspaper advertising revenues fell
from about $65 billion in 2000 to about $19 billion last year.
But there is good reason to believe that the $700 million
figure would be higher if campaigns were forced to pay the
market rate for their TV ads. Campaigns get a TV advert bargain
because of federal rules that stipulate that in the last 60 days
before the general election, broadcasters must sell air time at
the "lowest-unit rate" to campaigns (the lowest-unit rate being
the lowest they charged for any commercial in that time slot
that week). Similar rules apply to the 45-day period before
primary elections. The Supreme Court's freeing of campaigns to
tap more contributors for more cash makes it harder to justify
that discounted rate.
If my theory is correct, political ads will clog the
airwaves in the next campaign like never before, and
broadcasters will drown in news revenue. But TV outlets have a
problem. Like hotels, they have a limited inventory to sell,
they're powerless to expand their inventory in real time, and
any inventory they stockpile dissolves into nothingness if not
sold by a specific date and time.
Newspaper and their Web iterations have an advantage over
TV. Every newspaper enjoys excess capacity for print ads, and
the same is true, of course, for newspaper Web pages. As
campaigns bid up the prices of TV ads, consuming all the slots,
the spillover could benefit newspapers.
The Newspaper Association of America, a trade group, will
happily talk your ear off about the political power of print and
online newspapers. According to a study NAA commissioned, 91
percent of voters who contribute to campaigns read newspapers in
some form; 86 percent of those who voted in the last local
election read them; 58 percent of voters who rely on mobile
devices for campaign news browse newspaper websites; and my
favorite NAA fact, voters found "newspaper political
advertisingthe least 'annoying' of any medium."
Perhaps an explosion in campaign spending will lift only the
TV boat and scuttle the others. Perhaps the expected explosion
in campaign spending, if it happens, won't disturb the status
quo. Perhaps campaigns have already figured out how to raise all
the money they need by working the campaign-finance law angles.
Maybe campaigns don't want to raise more money than they already
"At some point you hit diminishing returns," as Howard
Dean's one-time campaign manager Joe Trippi told NBC in 2007.
"You couldn't spend $20 million in Iowa and have it do much more
than what you'd be able to do with $10 million."
Politics goes with money the way mud goes with glory. The
business of campaign finance has been suppressed and distorted
ever since the Watergate-era "reforms" were passed. A freer
system, to which the recent Supreme Court decisions (McCutcheon
and Citizens United) point, could result in the sort of market
discovery that ends up underwriting real news gathering.
As a matter of policy, my employers prohibit me from
donating to political campaigns, so I can't put my money where
my mouth is. But if I found the issue on a ballot, it would
easily get my vote.