Advertising executives at television stations and other media outlets are bracing for a multimillion-dollar windfall of ads, courtesy of the state’s rough-and-tumble politics.
The fight between Gov. Arnold Schwarzenegger and the Legislature over state budget authority, teacher tenure and redistricting could pump more than $100 million into media outlets already enriched by the seemingly never-ending political cycle that began with the recall election that put the governor in office.
But while the political ad wars may be a bonanza for media outlets, they could prove a headache for commercial advertisers forced to compete in an unexpectedly crowded and costly ad market. In addition, some product advertisers could be turned off by a nasty political season that juxtaposes their warm-and-fuzzy spots with political smears.
“Are there any off years any more?” asked Michael McCarthy, vice president of sales at KNBC (Channel 4). “I don’t know. We expect that August through Nov. 8 could be pretty active.”
Besides the Schwarzenegger-backed measures that will pit labor against business interests, the eight measures on the ballot include proposals on energy regulation and consent for minors to get abortions measures expected to draw thousands of dollars from well-heeled utilities and partisans in the abortion debate. Unions, meanwhile, are girding for a costly battle against a proposal that would make it more difficult to spend dues on political campaigning.
All told, the election could add up to a gift of $100 million to $200 million for television stations, radio stations, newspapers and direct mail firms that handle political advertising. “They’re clapping their hands,” said Barbara O’Connor, the director of the Institute for the Study of Politics and Media at California State University, Sacramento.
Fresh from a victory over Schwarzenegger’s plan to reform state pensions, the unions have coalesced into the Alliance for a Better California, which has reported $8.4 million in cash on hand. “We’ll spend as much as it takes to win,” said Robin Swanson, a spokeswoman for the alliance.
On the other side, Schwarzenegger has formed an alliance with business interests called the California Recovery Team. It did not report fundraising, but an affiliated organization, Citizens to Save California, had $8.6 million as of last week.
Like most statewide campaigns, the battle over the ballot initiatives is expected to be fought largely on television. The medium accounts for more than 75 percent of advertising budgets for most statewide campaigns, with radio and newspapers typically getting about 5 percent each and the remainder going to direct mail.
Los Angeles radio stations are appealing to both sides for a bigger share of the advertising budget, emboldened by the defeat last November of a measure that would have modified the “three strikes” sentencing law by requiring the third strike to be a violent crime. The measure was sunk, in part, by $2.5 million in radio advertisements in the final days of the campaign that raised fears of violent criminals being released.
The fate of the three-strikes modification measure, coupled with a radio-heavy campaign that derailed Schwarzenegger’s pension reform measure, strengthens radio’s hand in dealing with partisans on both sides of the Nov. 8 initiatives, according to John Davison, head of the three-station ABC Radio cluster in Los Angeles.
Davison said radio also would likely benefit if a flood of advertising overwhelms television stations and forces the campaign committees to seek other outlets. “We would expect the spoken-word stations, even the sports stations, to see a big difference,” he said. “A rising tide lifts all boats.”
Embarrassment of riches
Television stations still would be the biggest beneficiaries of any ad war, to the point that the sheer number of initiatives, and the potential for heavy advertising in the final days of the campaign, complicates matters for the stations.
Stations usually sell advertising weeks in advance, but a barrage of last-minute attack and response ads could displace commercial advertising. Initiatives, unlike ads for candidate races, are free from spending limits and do not require stations to offer discounted rates. As a result, ballot measure advertising commands market rates.
Also contributing to the windfall is the disparate nature of the measures. Consent for abortion has nothing to do with re-regulation of energy markets, which in turn is not related to legislative redistricting or teacher tenure.
The diversity of the initiatives, along with voter fatigue over two years of nearly nonstop campaigning in Sacramento, means that the partisans in the Nov. 8 election will have to spend more money to get attention, O’Connor said.
The unconventional nature of the special election also makes it almost impossible to predict who will vote, so rather than leaving things to chance, advocates are expected to saturate the airwaves in hopes of finding a receptive audience.
Roy Behr, a veteran Democratic political consultant with GMMB Inc. in Los Angeles, said that might end up turning off traditional advertisers. “The last thing you want is for your ad to be sandwiched between attack ads of various types,” he said.