Why Obama’s Money Is Worth More Than Romney’s

When is a dollar not worth a dollar? In presidential politics.

According to a Bloomberg News analysis of the latest campaign finance disclosures, the Romney campaign, the Republican National Committee and allied conservative super-PACs together ended August with $165 million on hand. Their equivalents on the Democratic side had far less -- a combined $101 million.

However, the two money pots may be closer in value than they appear. Obama's $101 million may even buy more than Romney's $165 million.

How? The price of television spots is influenced by reach -- how big is the market? -- but also by supply and demand. Markets in Florida and Ohio, for example, both of which also feature U.S. Senate races, have high and rising demand. One effect of the flood of super-PAC money is to make such advertising more expensive for everyone.

But not everyone pays the same price. Due to a surviving remnant of campaign finance regulation, television stations are required to offer candidates advertising time at the "lowest unit rate." They are not required to do the same for super-PACs or political parties.

Why does this matter?

The Obama campaign (excluding super-Pacs and the party) entered September with about $88 million compared with about $50 million for the Romney campaign (ditto on the exclusions). So almost all of the pro-Obama money -- $88 million of $101 million -- is eligible for lowest unit rate while less than one third of the pro-Romney money -- $50 million of $165 million -- is. In recent months, television rates for super-PACs have cost several times -- sometimes even five or six times -- the rate paid by candidates. As the election nears, station inventory contracts and prices rise for candidates, that differential will shrink. But super-PACs will still probably pay double or more what candidates pay for advertising time.

Not all of the campaign and super-PAC money is going to fund television ads. It also pays for campaign workers and consultants, phone banks, direct mail and more. But television will suck up an impressive share. So if you're running for president, a mass-donor funding base of regulated donations is significantly more valuable than an equivalent amount in unregulated billionaire bucks. This is one corner of the world where the little guy's dollar counts more.

(Francis Wilkinson is a member of the Bloomberg View editorial board. Follow him on Twitter.)

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