Television station owners are mobilizing against a new Democratic campaign finance bill that would force them to slash prices for many political advertisements.
The National Association of Broadcasters confirmed late last week that it will oppose provisions of the DISCLOSE Act, an attempt by House and Senate Democrats — and a handful of House Republicans — to roll back elements of the Supreme Court's decision in Citizens United v. Federal Election Commission.
The high court's decision tossed out most restrictions on political ad buys on television by corporations, trade associations and nonprofit groups.
The bill would require television, cable and radio outlets to offer the Republican National Committee, the Democratic National Committee and other political party committees the same deeply discounted price — the "lowest unit rate," in industry jargon — that television stations are now required to offer only to political candidates. Although advertising rates fluctuate dramatically, veteran media buyers estimate that candidates' campaigns often pay two-thirds of the retail price that regular television advertisers such as McDonald's and Coca-Cola pay.
"NAB is reviewing the bill," spokesman Dennis Wharton said in a statement Thursday. "We would have concerns with provisions in the legislation that would expand the lowest unit rate discounts now afforded federal candidates to political parties and political committees."
The upcoming fight over political advertising rates also will offer a first look at NAB President Gordon Smith in a full-scale lobbying battle. The former Oregon Senator, a moderate Republican, replaced GOP lobbyist David Rehr last year.
In the Senate, the bill is sponsored by Rules and Administration Chairman Charles Schumer (D-N.Y.) and Democratic Sens. Russ Feingold (Wis.), Ron Wyden (Ore.), Michael Bennet (Colo.) and Evan Bayh (Ind.). The House version is sponsored by Democratic Congressional Campaign Committee Chairman Chris Van Hollen (Md.) and Republican Reps. Walter Jones Jr. (N.C.) and Mike Castle (Del.).
Consultants who specialize in purchasing airtime for political campaigns were split on what the bill may mean for TV station owners. If it passes, media consultant Doc Sweitzer said, stations would bleed revenue. "It would effectively be a government mandate to lose income," he said.
But another media consultant said privately that although individual stations undoubtedly will charge less for political ads overall, that revenue loss could be replaced by a post-Citizens United surge in political ads bought by corporations, trade associations and nonprofit groups.
Although possible revenue loss is a concern, the consultant said, broadcasters are mostly worried about increased scrutiny into the often-murky world of ad pricing.
"They don't like to be told what they have to charge for a product," a media buyer said. "And someone is going to be looking over their shoulder and triple-checking their math?"
"That adds additional scrutiny, lawyers and people screaming at you," the consultant continued. "It's a big pain in the ass."
While political committees may pay lower prices, media buyers say the bill could force Members, their challengers and open-seat candidates to cough up more dough for their televised spots. With demand ultimately setting a commercial's price, a post-Citizens United influx of advertising dollars may inflate the already-discounted rate.
"When you get to prime time, there are only a certain number of breaks, and [stations] don't want to put four political [ads] back to back," a consultant said. "Groups could come in and suck up all of the time and set the lowest unit rate."
Perkins Coie campaign finance lawyer Marc Elias, a Democrat, called the new bill "good for parties." Unlike the Bipartisan Campaign Reform Act of 2002, which clipped political parties' fundraising by banning "soft money," the new proposal would help the RNC, the DNC, the DCCC, the National Republican Congressional Committee, the Democratic Senatorial Campaign Committee and the National Republican Senatorial Committee by allowing them to directly interact with candidates on how to message on television.
"Every major piece of campaign finance legislation for the last 40 years has added additional restrictions on what parties can do," Elias said. "The DISCLOSE Act, for the first time, benefits parties in a meaningful way by both correcting the proper coordination standard when they run advertisements supporting their candidates and also in providing relief from high broadcast television and radio rates during the prime election season."