Candidates may raise the unprecedented sums of political cash being funneled through Super PACs this year, and media strategists may decide how to spend them – but the people who actually wind up pocketing much of the money are America's television broadcasters. Since the Supreme Court voided limits on political donations in Citizens United, more money than ever is being devoted to negative TV ads. Industry analysts predict that upwards of $3 billion will be spent on political advertising this year – a surge of more than $500 million over 2008.
"Election season has turned into Black Friday for broadcasters," says Bill Allison of the Sunlight Foundation, which fights for transparency in elections. "It's just a huge bonanza."
While TV stations are required by law to offer discounted airtime to politicians, Super PACs have to pay market rates. With these outside groups expected to buy more than half the ads benefiting the Romney campaign, the increased competition to place ads in battleground states only serves to drive up the price. In a key market like Columbus, Ohio, where campaign spots are already airing at a record pace, the ad buys are expected to exceed the haul from 2008, when political ads made up half of all TV spots purchased during the final week of the election.
In essence, broadcasters are now profiteering from a vicious circle of corruption: Politicians are beholden to big donors because campaigns are so expensive, and campaigns are so expensive because they're fought through television ads. The more cash that chases limited airtime, the more the ads will cost, and the more politicians must lean on deep-pocketed patrons. In short, the dirtier the system, the better for the bottom line at TV stations and cable systems. According to an analysis by Moody's, political ads are expected to account for as much as seven cents of every dollar broadcasters earn over the full two-year election cycle for 2012.
The influx of political cash also means that TV news divisions have what Allison calls a "huge conflict of interest" when it comes to reporting on campaign finance. The profit motive stifles critical coverage of top donors and meaningful reforms, such as public financing of elections. "Broadcasters have an incentive not to see the system changed," he says.
But while there's no hope of curbing campaign spending in the near term, a new FCC rule could soon give the public real-time data about who is profiting from the Super PAC marathon. In April, the commission ruled that affiliates of ABC, CBS, NBC and Fox in the nation's 50 biggest markets must post their revenue from political ads online, for all to see. (Such records have long been public – just inaccessible, kept in paper form in files at each station.) The reform would help expose some of the "dark money" spending by mega-donors like the Koch brothers, but it's only a modest start: Many communities in battleground states – like Fort Myers, Florida, and Reno, Nevada – are located in smaller markets that are not covered by the new rule. A study by the Campaign Media Analysis Group suggests that at least 40 percent of spending on over-the-airwaves presidential ads may remain exempt from disclosure.
But the rule's shortcomings haven't kept broadcasters and their GOP allies from going all out to stop it. In June, Republicans on the House Financial Services Subcommittee voted to block disclosure and enable donors to operate in secrecy. And on July 10th, the National Association of Broadcasters filed an emergency motion to postpone the rule, arguing that it will allow cable and other competitors to undercut their business. "Shifting even a small percentage of this advertising away from television," the NAB confessed, would cost TV stations "millions of dollars in revenue."
The rule is scheduled to go into effect in August – but the NAB move could delay it until well after the election. One bright spot: Time Warner has voluntarily begun posting online records of its political ad buys, even though the new FCC rule doesn't apply to cable companies. Its records are not sortable by dollar amounts – so the public can't quickly tally how much money the Obama campaign is spending on, say, ESPN2. But voters can now examine individual ad buys. In Columbus, for example, Karl Rove's Crossroads GPS, one of the largest and most notorious dark-money groups, has booked three daytime ads to run on Fox News during the last week of October. The spots may be designed to aid Romney and the GOP, but Time Warner will enjoy a tidy bit of political profiteering: The cable company is charging $24 per ad – a staggering 12 times what the same ads would have cost in May.
This story is from the August 16th, 2012 issue of Rolling Stone.