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Top 5 Pay-TV Beneficiaries From Presidential Election Advertising

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With less than a month to go before Election Day, Charter Communications Inc. has emerged as the multichannel provider likely to benefit the most due to its footprint across key Electoral College states, according SNL Kagan's assessment of political advertising.

The quirks of the Electoral College system benefit broadcast and multichannel companies with assets in crucial, heavily contested battleground states. Based on poll aggregator Real Clear Politics, 12 states fell in that category as of Oct. 6. The identified footprint counted an estimated 28.6 million multichannel subscribers in the second quarter, according to SNL Kagan MediaCensus.

Top 5 MPVDs in 2016 presidential battleground states

That said, not all states within that footprint are equal. A handful, such as Florida, Ohio, Michigan and North Carolina, weigh particularly heavily in the balance due to the number of electoral votes they offer. As such, they are heavily targeted by presidential campaign advertising. For perspective, the four states listed above contribute an aggregate 78 votes to the Electoral College, or roughly 29% of the 270 votes needed to take up residency in the White House.

"Follow the convention" is a reliable axiom to determine top campaign priorities as national party conventions typically are held in states identified as either winnable, in the danger zone or contiguous to prized areas. In 2016, the Republican Party held in national convention in Cleveland on July 18-21. A few days later, the Democratic Party hosted its national convention in Philadelphia on July 25-28.

Charter has the most multichannel subscribers across battleground states thanks to its recent acquisitions of Bright House Networks and Time Warner Cable.
Charter has the most multichannel subscribers across the battleground footprint at 7.1 million with its recent acquisitions of Bright House Networks LLC and Time Warner Cable Inc. Charter is followed by DIRECTV Group Holdings LLC, and Comcast Corp.rounds out the top three. Of note, Charter ranked fifth prior to its high-profile mergers at only 1.7 million video customers.

Broadcast stations, which allow for mass blanketing of political messages, typically receive around 75% of political ad dollars. But political strategists are finding multichannel's value proposition increasingly compelling. Elections often hinge on turnout and competing campaigns' success in boosting enthusiasm, rallying the targeted bases and getting the vote out.

Therein lies the strength of the multichannel universe: its ability to pinpoint demographics in specific areas. This competitive advantage is expected to be increasingly leveraged in the future. However, the value proposition could be impacted by FCC Chairman Tom Wheeler's push to open up the market for set-top boxes.

However, political ad spending could come in below expectations this year, due to Republican nominee Donald Trump relying, so far, very little on television advertising, a first since TVs made their way into American living rooms. The Trump campaign had spent $27 million on advertising through the first week of October, NBC News reported on Oct. 4. Spending by outside groups supporting the New York businessman brings team Trump's total to $50 million.

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Democratic nominee Hillary Clinton has spent $113 million in advertising in the race for the White House so far. Money spent by supporting organizations brings total ad spending to $189 million, 4 times the amount spent by, or on behalf of, her opponent. The gap is not likely to be filled in the remainder of the campaign. Clinton's overwhelming advertising advantage means her campaign spending could slow down in the final stretch, to the detriment of the TV ecosystem.

In an Oct. 7 article, Bloomberg News said Clinton would spend $51.4 million and Trump would spend $31.7 million on television advertising in the last five weeks of the election cycle. Both camps will be aggressively targeting battleground states. Team Trump's booking reportedly arrives late in the game, which should result in higher spot rates.

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