Dollarocracy (26 page)

The matter was probably put best by Eric Greenberg, a partner of Paul Hastings Janofsky & Walker LLP, who regularly represents broadcasters in the buying and selling of television stations. A twenty-year veteran industry insider, Greenberg was blunt about the business model of commercial television: “Political advertising and elections are to TV what Christmas is to retail.”
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Keeping with the holiday motif, one public-interest advocate said, “Election season has turned into Black Friday for broadcasters. . . . It's just a huge bonanza.”
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The 2012 election exceeded even the loftiest forecasts. As Election Day approached, Erika Franklin Fowler, codirector of the Wesleyan Media Project, said, “2012 will go down as a record pulverizing year for political advertising.”
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The advertising manager at Iowa's KCRG-TV9 could barely contain himself. “It's just light years different” compared with 2008, said Steve Lake.
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Ironically, years earlier Congress tried to stop price gouging of candidates by commercial broadcasters. It passed legislation requiring that in the sixty days before Election Day, presidential and Senate candidates had to be given the lowest rate the station had charged for similar spots in the previous year. That proved entirely ineffectual in 2012. First, much of the action took place before the fall: prior to the 2012 party conventions, political candidates and groups already accounted for half of the top twenty TV advertisers.
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Indeed, the early advertising was central to Obama's reelection strategy, as postelection reviews of the campaign revealed.

“(Obama) framed the race in the summer as a choice between fairness versus tax cuts for the rich,” explained a Brookings Institution analysis. “Using attacks on Romney's finance background at Bain Capital and failure to disclose tax returns, and GOP proposals to cut income taxes by 20 percent, Democrats characterized Romney as a rich and out-of-touch businessman who had little understanding of the economic plight of ordinary Americans. By the fall,
many voters believed Romney would protect the rich while Obama would help the middle class.”
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Second, at least half the TV political ads came from third-party groups, which were not eligible for the low rates. A majority of pro–Mitt Romney ads came not from the Romney campaign but from supposedly “independent” groups. As a result, ad rates at local TV stations, especially those in swing states, shot through the roof. “Stations can and will charge outside groups as much as they dare,” Kantar Media's Elizabeth Wilner noted. These groups have “a willingness to pay whatever it takes.”
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This meant commercial advertisers were then faced with vastly higher rates for the same amount of advertising. One station in Bismarck, North Dakota, for example, estimated its rates were fully three times greater in 2012 than they would have been had it not been an election year.
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The giant Sinclair Broadcast Group announced that its political ad revenues
tripled
its expectations. “The political business . . . is an ever-expanding business,” Sinclair's giddy CEO David Smith proclaimed. “I don't see any evidence that it's ever going to go away.”
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There are three important consequences of the tidal wave of political advertising money that has flowed into the coffers of commercial broadcasters. The first consequence is that all of this spending means TV viewers were absolutely drenched in political commercials, especially in swing states for presidential ads and wherever there was a contested Senate race. “For people in those battleground states and battleground markets,” Kenneth Goldstein of the Campaign Media Analysis Group said, it was “all campaign ads all the time.”
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One Boston advertising agency executive termed it “a snowstorm on TV of commercials like we've never seen.”
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The 2012 campaign saw nearly 4 million spots on local TV stations, almost double the 2008 level of 2.3 million local spots, and there would have been many more if there had been additional time available.
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In the critical battleground state of Ohio, 207,518 presidential campaign spots ran during the course of the Obama-Romney race.
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“So many political ads. So little time. What's a TV station to do?” That was how the
Washington Post
's Paul Farhi framed the dilemma facing stations across the nation, especially in battleground states.
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Longstanding policies not to show competing political ads back to back and not to air political ads during news programs—a standard that had been established in order to
defend the integrity of newscasts—were abandoned everywhere. Indeed, local news programs became among the most desired slots in the schedule.
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One study of the Columbus, Ohio, CBS-TV affiliate's evening newscast found twenty-two consecutive political ads in one half hour; another observer counted forty-five consecutive political ads on another evening's newscast on the same station.
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The Washington, DC, Fox affiliate went so far as to temporarily add a half hour to its 6 PM newscast simply to accommodate the flood of political ads eager to be on a local news program. The ABC affiliate in our nation's capital shaved time from some of its shows to create more space for political ads.
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But political ads quickly filled all day parts, and cable TV channels and cable TV systems saw large increases in their political ad sales as well. Comcast's vice president for political advertising—yes, now an executive position!—said many of the major cable TV channels reached “maximum density” thanks to the surge in political ads.
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Even this analysis barely conveys what it felt like to countless Americans in the summer and fall of 2012. Research by Kantar Media comparing the number of presidential TV political ads for one week in August in 2004, 2008, and 2012 in several American cities was revealing. The Las Vegas market had 867 such ads in 2004, 925 in 2008, and 2,870 in 2012. Orlando had 153 spot ads in 2008 and 1,863 in 2012. What about 2004 in Orlando?
Zero
ads, and that was during a competitive year for Florida as well. Columbus, Ohio, in arguably the most contested swing state of modern times, had 608 spots during the same week in August 2004. In 2008, the number was 832. In 2012, the total was 1,842. And these figures were just for presidential ads. According to Wilner, the increase in the number of presidential ads in swing states ranged from three to twelve times greater than the levels in 2004 and 2008.
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As one reporter put it, people were “drowning” in ads.
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But the ultimate confirmation of how bad things had become came from the man who won the presidential race, Barack Obama. More than two months before the election, Obama joked, “If you're sick of hearing me approve this message, believe me, so am I.”
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The second consequence is that the popular antagonism toward political advertising, which has always been significant going back to the 1960s, absolutely exploded in 2012. And it wasn't just in Iowa and other battleground states that the revulsion was rising. Polling data, anecdotal statements—the works—all confirmed that voters across the country had by Election Day
reached the conclusion expressed by Sheree Dierdorff, a Maryland voter who said of the advertising onslaught, “It's such a waste of time and money.”
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Dierdorff was interviewed while waiting in line to vote on a gambling referendum. But what she wanted to talk about on Election Day was the nightmare of political advertising. Her proposal: “a law that limits politicians and political action committees to broadcasting ads only in the three weeks leading up to Election Day.”
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Our bet: Americans of all political views would leap to approve Sheree Dierdorff's fix.

Evidence suggests that disdain for the political carpet-bombing of America with commercials in the run-up to elections transcends partisan and ideological lines. Indeed, it may well be that in this extraordinarily diverse nation, the one thing that unites all Americans more than anything else is their unanimous contempt for TV political advertising. (The other possible candidate: the deeply held conviction by most Americans that their local TV news is the worst in the nation.) As one New York State newspaper editor put it in the heat of the campaign, “I never thought I would look forward to seeing erectile dysfunction ads return to my living room.”
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Two frustrated Omaha pharmacists became local cult heroes when they sprung for and produced a parody of a TV political ad suggesting that “getting your teeth drilled is preferable to one more political commercial.”
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When Prime Minister of Britain David Cameron appeared on David Letterman's CBS show in September 2012, he received his loudest applause when he explained that Britain did not permit paid political advertising.
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But it is no laughing matter, especially to the commercial broadcasters. This overwhelming antipathy to what campaigns have become provides broadcasters' one great concern: that public anger might provide enough ammunition to get reform measures passed that would slow down or end the gonzo profits they are making.

The third consequence of this flood of ad dollars is that it could affect the structure of the industry. Broadcast analyst Greenberg expects that due to political advertising being so “huge,” there will likely be another wave of mergers and acquisitions among TV stations.
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This enhances a core concern in democratic theory: that media ownership should be diverse and competitive so as to prevent bottlenecks over the flow of information. Indeed, the one form of broadcast regulation that had real teeth from the 1940s to the 1980s was a
commitment to strict broadcast station ownership limits. For most of that period, even the mightiest firms were permitted to own only five TV stations. The majority of local TV station revenues was controlled by a large number of relatively small regionally based firms. In the 1980s and 1990s, ownership regulations began to be relaxed under pressure from the largest media firms, the ones that owned the broadcast networks. By 2012, a single company was permitted to own as many TV stations as it could afford until that ownership extended to audiences accounting for 39 percent of the American population. But that's an official fantasy. The system is riddled with corporation-induced loopholes and waivers, such that Rupert Murdoch's News Corporation–owned TV stations actually reached 45 percent of Americans by 2007.
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A handful of other giants have emerged to build similarly expansive TV empires. Some of these firms—News Corporation, Comcast, Disney—are media conglomerates with vast interests in film, newspapers, digital ventures, and publishing. They rank among the one hundred largest companies in the nation.

This is of particular importance because as the dominant television-owning firms get larger, their lobbying prowess only increases. And it is not as if commercial broadcasters were ever laggards in that department. The industry trade association, the National Association of Broadcasters (NAB), has been renowned as far back as the 1930s for its obsession with and near-total dominance over Congress in legislative matters. After all, commercial broadcasting is a government-created system of monopoly licenses granted at no charge to publicly owned property; controlling the various branches of government is central to the business model. The extent of competition is set by government policy; there is nothing “free market” in the equation at all. In addition to traditional business power, however, commercial broadcasters also controlled how politicians were covered on radio and TV, and how debates over broadcast policy issues were covered in the broadcast media. Consequently, few, if any, politicians wished to tangle with them.

Merge this traditional strength with the conglomerate power of a Comcast, a News Corporation, or a Disney, and the result is a political leviathan. The commercial broadcasting lobby determined decades ago that nothing would interfere with the golden spigot of TV political advertising. Today the matter is foundational to the industry's very existence. Yet its influence is rarely noted. Whole discussions about the barriers to campaign-finance reform can
play out without mention of the most powerful force agitating against reform. We have a permanent lobby for a broken status quo. These “deformers,” as clean politics advocate Ellen Miller referred to them, actually argue, “We need more corporate spending—not less.”
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And they tell us that what has developed is a natural state of affairs for American democracy. They are wrong.

America does not have a political process built on mounds of money and millions of negative commercials because Americans chose this circumstance, and certainly not because it developed organically from the founding of the Republic to the airing of the last attack ad. The politics we have today is the result of choices made over many decades. Much of the analysis of these choices focuses on campaign-finance reform legislation and judicial rulings, but choices with regard to how a media system develops are equally important. And equally definitional.

Research demonstrates that in those democratic nations with well-funded and prominent nonprofit and noncommercial broadcasting systems, political knowledge tends to be relatively higher than in nations without substantial public broadcasting, and that the information gap between the rich and the working class and poor is much smaller.
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Stephen Cushion's recent research confirmed this pattern and noted that public-service broadcasters tend to do far more campaign reporting than their commercial counterparts. One of Cushion's conclusions is especially striking: those nations that have maintained strong public broadcasting continue to have better campaign coverage (e.g., news about policy that can help inform citizens about the relative merits of a political party or a particular politician). Moreover, the effect of strong public broadcasting is that commercial broadcasters tend to maintain higher standards than they have in nations where public broadcasting has fallen off in resources and campaign coverage.
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