2020 was rough in many respects, but it was a great year for political ad spending.
Five of the largest TV station owners were among the big beneficiaries of that spending, as TV remains the principal means by which candidates and parties disseminate their messages. The broadcasters said robust fourth-quarter 2020 spending capped a record year for political ad revenues. The bounty has executives already looking ahead to the category's prospects during what is expected to be a competitive 2022 mid-term cycle.
Nexstar Media Group Inc., the largest operator of TV stations through its 2019 purchase of Tribune Media Co., surpassed the half-billion mark in political ad revenue in 2020, headed by $298.3 million in the fourth quarter.
TEGNA Inc. generated political advertising revenue of $264.0 million in the fourth quarter, as part of its overall category haul of $445.5 million in 2020. The total encompassed $50 million generated in the fourth quarter from the Georgia Senate run-off elections that ultimately gave control of the chamber to the Democrats.
Gray Television Inc. CFO James Ryan pointed out on the company's recent earnings call that the fourth quarter yielded $245.0 million in political ad revenue, a total that surpassed its total category take for all of 2018.
E.W. Scripps Co. saw political ad revenue of $272.1 million in 2020, aided by larger reach from stations acquired from Nexstar and Cordillera Communications LLC. The total was an increase of 94.9% over the company's 2018 total.
Meanwhile, Sinclair Broadcast Group Inc. was at the low end of the political revenue growth curve compared to its compatriots, registering a 46.8% gain over 2018 to $374.0 million. By comparison, Gray, which boosted its footprint via its Raycom Media Inc. acquisition, set the growth pace among this group 177.3% for the year, with the company totaling $430 million in political ad revenues in 2020.
Patrick LaPlatney, president and co-CEO at Gray, told analysts on the company's recent earnings call that the company generated $17.57 of political advertising revenue per TV household in 2020, up from $8.80 in 2018 and $9.63 in 2016.
The executive said Gray ranked first with the measure among all publicly traded TV station group owners for those periods.
The political arena's impact served to improve the overall fourth-quarter ad sales performances, tightening inventory within a market still feeling the economic impact of the pandemic.
Looking ahead, the full-year 2020 political season stands to create tough comparisons for first-quarter 2021 results. Nexstar Chairman and CEO Perry Sook, on the company's recent earnings call, said the current period will mark the toughest comparison because 2020 started strong — fueled by pre-pandemic spending and unprecedented outlays from Democratic presidential hopeful and billionaire Michael Bloomberg.
But the latter part of 2021 could see a benefit from early spending ahead of the 2022 mid-term elections.
Timothy Busch, president of broadcasting at Nexstar, envisions "yet another robust race, probably starting a little earlier in 2021." He said on the earnings call that 2022 looks favorable as 370 of the 435 House seats, 31 of the 34 Senate races and 85% of the 36 governors' contests fall within the company's footprint.
Brian Lawlor, president of Local Media at Scripps, pegs nationwide political spending at $9 billion for 2022, when the company expects to succeed its 2020 take.
Lawlor cited several reasons for optimism, including Scripps' stations "being home" to 17 gubernatorial and 18 Senate races next year, as well as Census redistricting that will shake up races in a number of states, including Arizona, Colorado, Florida, Michigan, New York and Texas.
TEGNA President and CEO David Lougee said the company's anticipation is that 2022 will be another "extraordinary off-cycle," with its portfolio of Big 4 station affiliates in numerous battleground states. He added that U.S. Senate seats are up for grabs in such competitive states as Arizona, North Carolina, Georgia, Ohio, Pennsylvania and Wisconsin, where the station group garners spending from the neighboring Minneapolis market.