As Democratic presidential nominee Joe Biden pledged $280 million in TV advertising through the fall, local station owners Nexstar and Sinclair Broadcast Group told Wall Street they expect a record political ad haul.
In separate conference calls with Wall Street analysts to discuss second-quarter results, the top two companies addressed the political stretch run and overall advertising in the months to come. Reiterating previous guidance, they said they still expect record levels of political spending despite a broad pullback by overall advertisers during COVID-19.
“There are no guarantees in this business,” Nexstar CEO Perry Sook said, “but as close to a guarantee as I’ll give you is there will be no negative surprises with political advertising.”
Biden said he has reserved airtime in 15 key states through the election. “We think it’s important that people see him, and hear him, because it goes to the issue of leadership, and the kind of reassuring presence and stable leadership which we believe people see in Joe Biden,” the candidate’s senior strategist, Mike Donilon, told the Associated Press.
Sook noted that Nexstar, which last year leapfrogged Sinclair to become the top station group, has stations in 12 of Biden’s 15 target states.
While Sinclair will also see big benefits from election spending, its corporate narrative is more complicated now that it has deepened its investments in sports. It led a group that acquired the 21 regional sports networks previously owned by Fox and also teamed to buy the YES Network and launch a network with the Chicago Cubs.
Sports networks of all stripes have been thrown into disarray by COVID-19. While Sinclair says opening-day baseball ratings climbed 32% across its networks in July when Major League Baseball finally returned, the state of sports and the feasibility of future action remains clouded. As a result, Sinclair expects 15-22% decline in core advertising in the third quarter, despite the influx of political spending of between $77 million and $83 million.
Nexstar said political advertising in July exceeded that of the entire second quarter, which tallied $22 million, leaving Sook “confident in our political guidance.” While the company didn’t give quarterly breakouts, it reiterated earlier forecasts for the “low-$400 million range” for the full year, Sook said.
News Nation, a three-hour prime-time news block, is also launching next month on Nexstar’s WGN America, creating another venue for political messages.
TV ads, especially on local stations, have been a mainstay of recent elections, and the unique landscape of 2020 is making them all the more essential. “Without conventions to fund and without rallies to fund, the one way to reach people is through broadcast television,” Sook said. “I think we’re seeing evidence of that right now.”
Sinclair’s quarterly numbers fell short of analysts’ consensus expectations. Its stock took a dive, finishing the day down 10%. Nexstar managed to beat Wall Street forecasts but still saw its stock knocked back due to the overall 32% decline of advertising in the quarter. Shares slipped 3%, though they have leveled off after collapsing in March and April as COVID-19 arrived.
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