Obama's Victory Could Put $ in $tatus Quo

Broadband focus to continue; media should get boost from road to 2016

After a grueling campaign with a free-flowing spend of billions of dollars, last Tuesday’s election produced essentially the status quo (also known, cynically, in conservative circles as, “more of the same.”) The White House and Senate are in Democratic hands, while the House remains Republican.

But how that status quo manifests itself could actually mean some big shifts for the industry and a chance for even fatter coffers come the next presidential election cycle.

For broadcasters, cable operators and others in the communications industry, the status quo finds Washington and the industry both trying to cope with sea changes in distribution of video and voice content. That could mean a rewrite of the entire Communications Act. But don’t hold supper: That effort will likely take years.

But that status quo—let’s agree to call it “status quo 2.0”—will also mean that the record spending on campaign advertising should get even bigger come 2016. President Barack Obama keeping his big chair now guarantees that the race to fill his seat will be wide open on both sides next time around.

Unless Congress steps in to boost disclosures or otherwise discourage big spenders—unlikely with the current divide in Congress—the next presidential campaign will bring even more ad dollars to cable and broadcast outlets. With no incumbent running, there will almost certainly be two lengthy and bruising primary battles—and they most certainly won’t come “two for the price of one.”

“There is absolutely going to be way more money spent in 2016,” says Bill Allison, editorial director of the Sunlight Foundation, which tracks money in politics.

The Obama campaign spent $377.7 million on media, says Allison, (quoting figures from the Center for Responsive Politics), while the Romney campaign spent $169.5 million. And that of course doesn’t even count the Super PAC and party spending.

Allison expects that whether the Democrats choose Joe Biden or Hillary Clinton or someone else, it will be a long haul in the primaries, with the same scenario on the Republican side if it is Chris Christie or Marco Rubio or a primary player to be named later.

“The Republicans’ bench is pretty deep, “ Allison says. “I think that you will see an awful lot more candidates, primaries going on a lot longer, plus all that outside money if nothing is done about Citizens United” and political expenditures, Allison says. And given the deep chasm that now runs through Congress, Allison believes Citizens United—a.k.a. the Supreme Court decision that allowed direct corporate and campaign funding of electioneering ads in the run-up to elections—will remain intact.

Local TV sales managers are already starting to think about the 2016 election season. “It’s got amazing revenue implications,” says Mark Fratrik, VP and chief economist at BIA/Kelsey, who did not venture a forecast figure. “It will have a tremendous impact on revenue prospects for television and other media.”

In the meantime, Obama will get another four years to advance a communications agenda that is essentially all broadband, all the time. But that agenda may or may not be steered by FCC chairman Julius Genachowski. Most Washington observers expect him to exit the agency sometime early next year, though the chairman has not sent that signal officially.

“Chairman Genachowski is focused, and plans to remain focused, on an ongoing agenda to unleash the benefits of broadband,” said an FCC spokesman, adding that the focus includes “driving economic growth and opportunity for all Americans and helping ensure that the U.S. maintains the global leadership it has regained.”

Whoever is the FCC chairman, the goal will remain to regulate or deregulate to the degree that it helps spur broadband deployment and build-out. Broadcasters—in one last bit of status quo—will need to keep making the case that they are part of that future, not an entity standing in the way of it. —with Michael Malone

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