WASHINGTON/NEW YORK The presidential election is 14 months away and with as many as 17 candidates now running, U.S. television and radio broadcasters are elated at the prospect of billions more in advertising dollars.
Many states have set their 2008 nominating contests for earlier than ever, forcing candidates to spend millions on ads sooner as they fight to get noticed.
Wall Street analysts predict television stations alone could bring in a record $2 billion to $3 billion from the 2008 election cycle, up from $1.6 billion in 2006 and $900 million in 2004.
Companies expected to benefit include CBS Corp., Hearst-Argyle Television Inc. and Meredith Corp., with the latter two particularly seen benefiting in the early voting states.
The presidential sweepstakes could have an additional bonanza, reinvigorating broadcast mergers and acquisitions, though the number of deals will likely depend on financing, which has dried up amid turmoil in the credit markets.
"If (the market) comes back around and strengthens then you may see a resurgence in that," said John Blackledge, entertainment and broadcasting analyst at J.P. Morgan.
Republican presidential hopeful Mitt Romney, a former governor of Massachusetts, spent more than $1.8 million during the first half of 2007 on broadcast media, helping his standing in early polls.
"We were faced with competing against other candidates who enjoy universal name identification levels," said his spokesman Kevin Madden.
The Republican candidate leading in national polls, former New York Mayor Rudy Giuliani, has yet to run any television commercials but has done some radio spots in the early voting states of Iowa, New Hampshire and South Carolina to coincide with visits.
"We're inching closer to January, this is just the beginning," said Giuliani spokeswoman Maria Comella.
Democratic candidate John Edwards, who has been running neck and neck in Iowa with national front-runners Sen. Hillary Clinton and Sen. Barack Obama, has run few broadcast ads so far.
"It will change as we get closer (to the early 2008 primaries) for the obvious reason that more people are engaged and pay more attention," said senior campaign adviser Joe Trippi.
"Broadcast, cable is still more powerful than 'Net advertising at this point," Trippi added. "You're going to see more broadcast and cable advertising eating up a large part of the message budget."
Not to be outdone, Clinton of New York, who has more than a 20-point lead in most national polls, launched television ads last week across Iowa, the first state to hold caucus voting. Democratic candidate Sen. Joe Biden of Delaware also debuted his first spots there this week.
AD REVENUE COULD DOUBLE
J.P. Morgan estimated in June that more than 2 percent of CBS's 2008 estimated revenue would come from political advertising -- some $207.7 million -- more than double the $97.8 million it earned in the last presidential election.
CBS owns stations in expensive ad markets like Los Angeles, San Francisco and Sacramento, cities in a state rich with electoral votes and likely to be the scene of a bruising battle when Republicans and Democrats select their candidates.
While broadcast television will likely be where candidates spend most of their money, political experts say they will also spend heavily on cable television and the cheaper Internet medium to target certain voters.
"You're going to see a lot more Internet. People are more comfortable with it, know how to do it and are convinced of the persuasive power of it," said Carol Darr, director for the Institute for Politics, Democracy and the Internet at George Washington University.
In addition to presidential and congressional candidates, there will be so-called issue ads by outside groups trying to influence voters, further boosting broadcasters.
But whether the additional spending will fuel mergers and acquisitions will depend on financing market conditions.
Political spending "fattens the coffers and brings more money in," said Frank Kalil, president of Kalil and Co. Inc., which buys and sells radio and television stations. "The aggressive good operators are still out there buying."