Forget the polls and the horserace for a second. In this election season, the big winners will be big media.
As most people should know–but media don’t tell you very often–much of the money that flows into and around the campaigns is used to buy advertising. Which means that television and radio stations make a lot of money during the campaign season.
There are attempts to shine a light on this arrangement–such as the effort to make TV stations post advertising data online (something that–surprise, surprise!–TV stations don’t care for).
That’s what made this exchange on public television’s Nightly Business Report (4/2/12) revealing, in more than one sense. Host Tom Hudson and reporter Gregg Greenberg of TheStreet.com were talking about investment strategies:
HUDSON: What about Gannett, GCI, probably best known for USA Today but also owns a lot of TV stations. And this stock meantime is not necessarily out of favor but it hasn’t rallied as sharply as the markets. It has kind of flat lined here in the mid teens.
GREENBERG: Well, the sector is out of favor. Everyone keeps saying that newspapers are going to go the way of buggy whips. And when people think about Gannett, they think about USA Today and those lovely pie charts when they stay at Holiday Inns and hotels across the country. But Gannett also owns TV stations. And TV stations are a very good asset in election years, with all that super PAC money buying commercials. So that’s why Gannett had had actually a very good first quarter. It was up about 16 percent and a lot of people say it can go higher, despite being an out-of-favor sector.
HUDSON: All right, of course, election year with those TV ads.
There it is–a straightforward explanation of why campaigns are good news for media companies. It’s rare to see that on television. It’s strange that it would come up on a public television discussion about investment strategies, but something is better than nothing.