Political ads on TV to rise in 2012 elections

A Moody's report predicts a steep rise in political advertising in the 2012 elections due to the Supreme Court's decision in 2010 to remove all caps on political ads spending.

Moody's Investors Services say that the revenue spend may go up by 9-18 per cent from the $2.3 billion spent in 2010's mid-term elections, reports broadcastingcable.com. This means the revenues will go upto $3 billion.

This will be the first Presidential Campaign in a decade without such spending caps. The U.S. Supreme Court ruling allows companies and unions to spend virtually unlimited amounts of money to get a candidate elected.

Virtually all US broadcasters will benefit from spending on political ads in 2012 but especially those speculative-grade operators that saw the biggest percentage increases in total revenues from political ads in 2010, said Carl Salas, VP and senior analyst, Moody's.

Moody's says cash will flood into strong states including Florida, Pennsylvania, Ohio and Missouri. The firm also expects to see tight U.S. Senate races in Virginia, Massachusetts and Nevada.

Companies that own broadcast operations in states poised for heated political contest will see greater benefits, including Barrington, Local TV and Nexstar.

Moody's cited a handful of small- and medium-sized broadcast companies that could benefit next year, such as Barrington Broadcast Group, which has two dozen stations, and Gray Television, which has 36 stations.

The boost in revenues in 2012 will not, by itself, shift our stable outlook for the pure play U.S. broadcast television sector, as political advertising will account for less than 7 percent of all television broadcast advertising revenues for these operators over the course of the two-year political cycle, added Moody's Carl Salas, who wrote the report.

Democrats have a 53-47 edge in the Senate, but Republicans have vowed to take control in 2012. Democrats have 23 seats to defend in the Senate, compared to 10 for the GOP (Republicans).

As much as $8 billion will be spent on the 2012 elections including House and Senate said Bill Holman, government affairs lobbyist with Public Citizen, to Yahoo! News.

President Obama raised almost $750 million in 2008 and is likely to raise more than $1 billion for his re-election campaign, reports newsmax.com.