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Lin TV Wins Big as Swing-State Cash Spreads to Local Outlets

Broadcasters are attracting record political advertising from the Republican presidential primaries, a super-PAC-driven windfall for television stations that promises to grow even larger in the general election.

The biggest winner may be Lin TV Corp. The Providence, Rhode Island-based owner of 17 stations in the 12 closely divided swing states identified by Gallup Inc. may see revenue rise 12 percent to a record $457 million this year. Hearst Corp. has 12 battleground-state outlets and CBS Corp. has 10.

The spending is fueled by court rulings including the U.S. Supreme Court’s 2010 Citizens United decision, which abolished limits on independent outlays by unions and corporations. By the Nov. 6 election, campaigns will have spent $2.6 billion, with 85 percent going to local TV, Anthony DiClemente, a Barclays Capital analyst in New York, estimated in a Jan. 31 report.

“TV stations will be the biggest beneficiary,” DiClemente said in an interview. “It’s a heated political environment and the relaxation of campaign finance laws is driving it all.”

Candidates and their super political action committees spent about $40 million combined on ads in Iowa, New Hampshire, South Carolina and Florida, said Brad Adgate, research director at New York-based ad buyer Horizon Media Inc. In South Carolina, Republicans spent $13 million, compared with $7 million in 2008, DiClemente said.

Competition for the Republican nomination is keeping the money flowing. A super-PAC backing Newt Gingrich, who won the South Carolina primary on Jan. 21, received $10 million from billionaire Sheldon Adelson, chairman of Las Vegas Sands Corp., and his wife. That was after super-PACs allied with Mitt Romney, the leader in national polls, ran negative ads in Iowa that hurt Gingrich’s support.

November Contest

Even bigger outlays forecast for the general election led DiClemente to project a 15 percent rise in campaign-ad spending from 2010’s regional contests and a 45 percent increase from the 2008 presidential year.

The Democratic Party will nominate President Barack Obama for a second four-year term at its convention in Charlotte, North Carolina, starting Sept. 3. The campaign of the president, who opposed the Citizens United decision, asked supporters to donate to a Democratic super-PAC this week.

“It’s not just the presidential elections that will spend a lot,” DiClemente said. “Super-PACs will contribute to local races, too.”

Swing States

Republicans will meet in Tampa, Florida, starting Aug. 27 to nominate their presidential candidate. Florida and North Carolina are among the dozen states that will be the focus of advertising by Obama and his Republican challenger, according to Gallup, an Omaha, Nebraska-based pollster. Ohio, Pennsylvania, Colorado, Nevada, Michigan, New Hampshire, Iowa, New Mexico, Virginia and Wisconsin are other swing states.

CBS, owner of WWJ-TV in Detroit and 28 other stations, and News Corp., owner of 27 stations including KSAZ-TV in Phoenix, will be the biggest beneficiaries, Adgate said. Michigan and Arizona hold GOP primaries on Feb. 28.

CBS will receive about $230 million in political advertising this year, DiClemente estimated in the note. Without political ads, CBS’s broadcast revenue would be unchanged from a year ago, he wrote. News Corp. owns five stations in contested states, while Comcast Corp.’s NBC and Walt Disney Co.’s ABC own two each.

Lin, owner of four stations in Ohio, three in Michigan and two in Virginia, generated $297.6 million this year through Sept. 30. It hasn’t said when it will release full-year results.

Lin TV Lift

Advertising from political campaigns has become the company’s biggest growth category, Chief Executive Officer Vincent L. Sadusky said at an investor conference in December. He was unavailable for an interview, Lin spokeswoman Courtney Guertin said in an e-mail. Lin TV collected $49.4 million in political advertising revenue in 2010 and $47 million in 2008.

“Fortunately for us, if you want to get elected in America, you do need to advertise,” Sadusky said. “Political has been very, very strong in the last couple of cycles and we anticipate it to be very strong going forward.”

Lin rose 1 percent to $4.93 at the New York close and has gained 17 percent this year, outperforming the 10 percent rise in the Standard & Poor’s 500 Media Index of 16 companies. News Corp., owner of Fox, slid 2.1 percent to $19.21. Hearst, based in New York, is closely held.

Gannett Co., based in McLean, Virginia, and Gray Television Inc., in Atlanta, each own eight stations in swing states, while Cincinnati-based E.W. Scripps Co. has five stations.

“There’s going to be a lot of money spent,” CBS CEO Leslie Moonves said at an investor conference in December. “I’m not saying that’s the best thing for America, but it’s not a bad thing for the CBS Corporation.”

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