Split Predictions on Political Ads

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Ad buyer MagnaGlobal and Wall Street's Bear Stearns took separate but equal directions in gauging the size of TV stations' take in the biannual political ad bonanza: One predicts a 10% drop in spending from the 2004 cycle, the other a 10% increase.

Bear Stearns broadcasting analyst Victor Miller is pessimistic. He expects political spending on TV to drop 10% to about $1.25 billion for the upcoming election cycle. He sees an increase in hot Senate races (16 versus 13 in 2004) and contentious gubernatorial fights (35 versus 13 in 2004). But the absence of the $350 million in 2004 presidential campaign spending should cut TV's take the most.

Brian Weiser, MagnaGlobal's director of industry analysis, takes an upbeat view. Those hot governors' races fill the gaps of the absent presidential campaign, increasing TV spending 10% to $1.6 billion. He monitors surging fundraising by parties and campaigns. “We expect virtually all of the 5% growth in fundraising to be allocated to media expenditures,” he says, “resulting in our forecast for 10% political advertising growth.”

Stations that will benefit the most are in New York, California, Pennsylvania, Ohio, Michigan and Washington, Weiser says. According to Miller, station groups that will see the biggest gains include CBS, LIN TV and Nexstar. Those facing a decline in revenue include Hearst-Argyle, Belo and Gannett.

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