Don of a New Era

Trump's yooooge surge puts the nomination in reach and the TV industry on the edge of its seat
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How did we get here? There were months—nay, years—of wide-eyed projections that 2016 would be a year of record-shattering presidential ad revenue flowing into TV networks, distributors and stations. Then we got to a place where the leading Republican candidate captured seven of the pivotal Super Tuesday state primaries, padding his sizable lead, despite accounting for less than 5% of overall spending on campaign ads by all candidates. (See chart at right for the spending breakdown.)

Donald Trump’s charmed path from Iowa potentially all the way to the White House may well fall short of once-lofty predictions for ad spending, given all of his free publicity. But along the way, it has put the networks’ ratings on steroids. Fox News’ overnights after its Republican debate on March 3 came in at 16.9 million total viewers. And just imagine the Super Bowl-like possibilities if the party’s summer convention in Cleveland turns into a brokered free-for-all not seen since 1968, as some predict.

More than the numbers, the way Trump has ascended has smashed the mold.

A tabloid fixture/reality TV star/real-estate developer who has never held elected office has gotten to within sight of a presidential nomination without submitting to most of the usual campaign rituals. No courting billionaire donors, no holding back criticism of large corporations, no playing nice with the media, and, perhaps most conspicuously, no detailing his policy positions. (You know, that old stuff.…)

As Ted Koppel marveled to Bill O’Reilly last week in a typical exchange between news vets who thought they had seen it all, “Nobody is able to hold Trump to account because he’s not playing by traditional rules.”

How will all of this rule-flouting alter the sectors of the TV business with the biggest stake in the outcome—news programming, regulatory Washington, local stations and media buyers? In the pages that follow, B&C’s Jon Lafayette, Michael Malone, Jonathan Kuperberg and John Eggerton explore that question. —Dade Hayes

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By Jon Lafayette

The improbably successful campaign of Donald Trump has the advertising world guessing. As a candidate in an election destined to set spending records, the businessman and reality-show host has been able to reach voters through earned media—appearances on news shows, Twitter and Facebook—spending less on paid media, such as TV commercials, than his rivals.

Elizabeth Wilner, head of Kantar’s Campaign Media Analysis Group, says that since January, Trump has been spending a couple of million weekly on TV, mostly in states holding elections or caucuses.

His spending “is considerable, it’s not negligible, but it’s not what other candidates are spending,” Wilner notes.

Wilner assumes Trump will continue to employ an approach more weighted toward media for the rest of the nomination campaign. “If he becomes the nominee, his strategy would probably be an expanded version of that—again, not necessarily spending to the same degree a non-Trump nominee would have to spend,” she says.

However, as a candidate Trump might turn additional states into battlegrounds, forcing him and his opponents to campaign more aggressively in more markets than the 60 to 75 markets blanketed with political ads in past elections. That means even if Trump was able to campaign with a lower-than-normal amount of TV spending, the Democratic candidate might have to spend more.

Would that mean Trump would spend more than the 2012 candidates spent on TV? “It’s hard to say,” Wilner said. “The Obama campaign spent roughly $500 million on TV. Romney spent a little less than that, but he also had far more spending by Super Pacs on his behalf than Obama did.”

One key question: Will Trump buy election ads himself, or will he be supported by better-funded Super PACs? That’s important to the TV business because while candidates’ ads must be given the lowest rate available, PACs are charged the going market rate.

It’s also possible Trump’s free media campaign could stop working if the things he says to get attention start to backfire. “He would have to spend more on media to slow that down,” Wilner said. “There’s no way to predict if that’s going to happen, but it’s possible.”

Seeing the insults the candidates are hurling at each other ooze from live debates to commercials, some TV executives, such CBS CEO Leslie Moonves, can’t help but rub their hands together.

“It may not be good for America, but it’s damn good for CBS,” he said. “The money’s rolling in. It’s amazing.”

For news networks such as CNN, the election has been a money maker, even if one of the leading candidates turns out not to be a big spender.

“It’s become must-watch television, that’s for sure,” says Katrina Cukaj, executive VP at CNN parent Turner Broadcasting. “It’s bigger than Trump. If he wins this nomination, it’s obviously going to be bigger and more interesting if Hillary wins on the other side.”

Coverage of the campaign and debates and town hall meetings CNN has been airing have generated large audiences that have attracted advertisers that don’t usually buy news networks.

“The diversity of advertisers is much greater than I’ve ever seen in any election,” Cukaj says. “We’re seeing younger viewers watching and using our digital properties, so we’re seeing a lot of younger-based advertising on our air. So there’s a lot of new business that’s come our way.”

NEWS PROGRAMMING: NEWS OUTLETS GEAR UP FOR ‘NEW PHASE’ OF COVERAGE

By Michael Malone

Love him or hate him—and there’s not much of an in-between—Donald Trump looks for all the world to be sticking around in the daily/hourly news cycle until November.

And, perhaps, beyond.

Many in TV news say Trump’s noisy Super Tuesday victory officially elevated him from sideshow fascination to GOP flag-bearer. “He’s being anointed by the same news outlets who had underestimated him, who covered him as more of an odd, early-innings phenomenon,” says Andrew Heyward, former CBS News president. A “new phase of coverage” emerges, he adds, as that of a general election preview. That may sound like even more Trump coverage for the news networks, but Heyward notes that they have already doubled, or tripled, down on the loquacious leading man.

Trump is at times a master manipulator of the media, yet one who can’t seem to go more  than a few days without a vulgar misstatement that would doom lesser campaigns. He’s all too willing to share his Trumpiness on TV, on social media, on whatever platform will have him. When Ted Cruz stepped to the podium on Super Tuesday to speak about his wins, his was an applause-line-rich monologue. When Trump did the same, it was in a hushed, chandelier-and-flag-bedecked ballroom session at his own Mar-a-Lago club in Palm Beach, after which he took questions from—and gleefully sparred with—reporters.

Debate ratings continue to skyrocket, despite a frequency that’s starting to resemble Major League Baseball’s 162-game schedule. To be sure, many are tuning in for entertainment’s sake—What will Trump say next? What will Rubio and Cruz’s game plan be? Is that guy on the end John Kasich? And so on. “Irregardless,” as some natives of Trump’s Queens stomping grounds would say, they’re tuning in. And maybe, just maybe, some of the gestures at policy that actually matters are starting to resonate.

As his stock climbs, the media has a vital role in digging past the bravado, the brand, to find out what Donald Trump truly stands for. For a man who seems to say whatever pops into his head, it’s a challenge. “He naturally attracts the spotlight,” says Steve Capus, CBS News executive editor. “It’s our job to take a critical look at what he’s saying—and what he’s not saying—when he’s in the spotlight.”

Trump does not have many fans among the intellectually inclined mainstream media that the GOP takes such delight in deriding, and he’s had well-documented clashes with the Fox News network. News pundits say they’ve mostly seen judicious coverage of the Republican front-runner. In fact, Heyward suggests the sharpest arrows are essentially friendly fire. “I’ve seen more outrage from the GOP politicians,” he says, “than from the media.”

LOCAL TV: STATIONS PIN HOPES ON ANTI-TRUMP BUMP

By Jonathan Kuperberg

Should Donald Trump sew up the GOP nomination, despite the chaos that could unleash elsewhere, it likely would not hurt the balance sheet of local stations.

The candidate has thus far, famously, relied far more heavily on earned media and free airtime than on paid ads. While that trend has unsettled a lot of station execs over these past few eventful weeks, as they study it more closely—although forecasting anything with Trump is particularly hazardous—they profess not to be worried. Their consensus bet is that as the primary contests segue to a general-election showdown, particularly the projected race with Democratic front-runner Hillary Clinton, the dollars will start to flow.

“He has relied heavily on free media, but that’s going to become less and less true,” said Bob Papper, author of the annual RTDNA/Hofstra University survey. “It is certainly  going to be the case for the general [election]. He is going to have to buy advertising.”

That has been the sentiment publicly expressed by TV station groups. Perry Sook, chairman, president and CEO of Nexstar Broadcasting Group, echoed what his peers told investors last month during their earnings calls: “Once it becomes a nationwide campaign post-convention, money will need to be spent to win.”

Steve Schwaid, VP of digital strategy at consulting firm CJ&N, said Trump would have to change the way he campaigns if he makes it to the general election. In order to detail his business acumen to voters, Trump will need to buy ads. “He’s going to have to get those messages out, and a message in Texas is different than Pennsylvania,” Schwaid said.

Adds one political media-buyer with a rival campaign: “How is he going to react when Hillary is running attack ads? He’s going to have to fight back.”

However, even if Trump’s paid media does not increase markedly, money will still be coming in from many other sources. GOP candidates, to begin with, still have a mathematical chance to overtake him over the next few weeks. There will more and more anti-Trump PACs on both sides, in a general election especially, and Democrats will surely increase spending dramatically to keep him out of the White House.

Plus, more states could be up for grabs. “We might see a lot more of that money being spread out to places that don’t normally get dollars,” Papper said.

A lot of Republicans who have said they won’t support Trump could become worried about a lack of a coattail effect and, in turn, spend more money than originally anticipated in their races, whether for U.S. Congress or their respective state houses. And if they spend more, so will their opponents.

“Keep in mind, a lot of stations make more money on state races than presidential” contests, Schwaid added.

Electoral math is always tricky, but one thing is for sure, Papper said: “We’ll see a staggering amount of money to stop Donald Trump.”

WASHINGTON: HOW ‘PRESIDENT TRUMP’ MIGHT REGULATE MEDIA BUSINESS

By John Eggerton

Donald Trump for months has been viewed inside the Beltway as engaging political theater, a party renegade, and a gift to pundits on both sides of the aisle.

But after his Super Tuesday delegate haul—not a sweep, but a strong showing that solidifies his front-runner status, the honorific “President Trump” is no longer a laugh line.

Democrats are using the prospect to raise money for their candidates, while the Republican establishment is trying to wrap its trunk around the idea that the former reality-show star and anti-Washington candidate has bellowed his way to the front of the line. What’s more, his “D.C. is bad, business is good” approach favors a business deal model for statecraft. In his speech on Super Tuesday, in front of a row of American flags, Trump derided the Obama Administration’s record on trade negotiations. “We have the greatest business leaders in the world on my team already and, believe me, we’re going to redo those trade deals and it’s going to be a thing of beauty,” he said.

So, what would a President Trump mean for the media? That appears to be something of a question mark given that if he has a telecom policy team, it has not surfaced in his online policy positions. According to one analyst, top Republicans also don’t know who, if anyone, is working on those issues.

For journalists, Trump would likely be great copy but a constant antagonist. Candidate Trump has called most journalists horrible, awful people, using them as a rallying point for a campaign dedicated to the proposition that government is broken, America as currently run is a loser and the media are almost all against him.

But he has ramped up his criticisms. Two weeks ago, he vowed that, if elected, he would try to “open up” the libel laws so that journalists’ “hit pieces” can be penalized. Last fall, Trump tweeted that the FCC should fine a journalist for “foul language” on a Fox News broadcast—despite the fact that the FCC does not regulate language on cable.

One highly placed Republican was still not ready to consider the President Trump prospect, but pointed out the candidate would be no fan of the FCC’s Title II regulations—and would likely name a similarly minded FCC chairman. Trump tweeted following the President’s 2014 video calling for Title II: “Obama’s attack on the internet is another top down power grab. Net neutrality is the Fairness Doctrine. Will target conservative media.”

Cutting the business tax rate to 15%, as he has promised, could also win Trump some friends in the media industry.

Analysts New Street Research pointed out that while Trump talks about America losing to other countries, telecoms argue the opposite, saying new regulations are not needed. But the firm said rhetoric aside, it thought Trump’s pro-business bent would “trump” that narrative.

How did we get here? There were months—nay, years—of wide-eyed projections that 2016 would be a year of record-shattering presidential ad revenue flowing into TV networks, distributors and stations. Then we got to a place where the leading Republican candidate captured seven of the pivotal Super Tuesday state primaries, padding his sizable lead, despite accounting for less than 5% of overall spending on campaign ads by all candidates. (See chart at right for the spending breakdown.)

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