(The opinions expressed here are those of the author, a columnist for Reuters.)
By Jack Shafer
April 4 (Reuters) - The campaign finance decision the Supreme Court delivered Wednesday stirred all the same responses from all the same sources, with the anti-money faction bellowing that the Roberts court had now completed its plan - hatched with 2010's Citizens United ruling - to put democracy up for sale. The pro-money crowd (to which I belong, by the way), heralded SCOTUS's latest call as a victory for free speech.
Rather than rehashing that debate and defending a side to predictable results, I'll burn my column inches identifying the real winner of McCutcheon v. Federal Election Commission - the media. The more money that flows into campaigning, the more campaigns advertise. The more they advertise, the more money they pay media outlets. And the greater the media revenue, the more secure my profession. Whoops, I mean, the more media properties collect, the more they can spend on the sort of watchdog journalism that preserves democracy!
If anybody needs more money, it's the news business. According to a fresh analysis published by the Pew Research Center, total "revenue supporting American journalism has declined by one-third since 2006," dropping from about $95 billion to $65 billion today. Advertising revenue has fallen considerably. In 2006, 82 percent of revenue came from advertising; today, only 69 percent. One result of the turn-down, as everybody knows, has been fewer reporters and less agile newsrooms, which I would declare non-optimal even if I didn't belong to the trade.
More money spent on campaign advertising would be good, but would it be good enough to solve media's financial woes? Presidential and congressional candidates, party committees, and political action committees spent nearly $7 billion in the 2011-2012 election cycle, according to the Federal Election Commission. Spending by other organizations topped $1.2 billion.
According to the Wesleyan Media Project, candidates and their backers used these riches to buy more than one million television ads between June 1 and Election Day, about a 39 percent increase over 2008. Presidential campaigns and their surrogates spent nearly $700 million on broadcast TV and national cable advertising (local cable buys were not included in the figures).
Obviously, even if you redirected that $700 million to newspapers, it wouldn't save print's bacon. As Mark J. Perry's famous chart points out, newspaper advertising revenues fell from about $65 billion in 2000 to about $19 billion last year.
But there is good reason to believe that the $700 million figure would be higher if campaigns were forced to pay the market rate for their TV ads. Campaigns get a TV advert bargain because of federal rules that stipulate that in the last 60 days before the general election, broadcasters must sell air time at the "lowest-unit rate" to campaigns (the lowest-unit rate being the lowest they charged for any commercial in that time slot that week). Similar rules apply to the 45-day period before primary elections. The Supreme Court's freeing of campaigns to tap more contributors for more cash makes it harder to justify that discounted rate.
If my theory is correct, political ads will clog the airwaves in the next campaign like never before, and broadcasters will drown in news revenue. But TV outlets have a problem. Like hotels, they have a limited inventory to sell, they're powerless to expand their inventory in real time, and any inventory they stockpile dissolves into nothingness if not sold by a specific date and time.
Newspaper and their Web iterations have an advantage over TV. Every newspaper enjoys excess capacity for print ads, and the same is true, of course, for newspaper Web pages. As campaigns bid up the prices of TV ads, consuming all the slots, the spillover could benefit newspapers.
The Newspaper Association of America, a trade group, will happily talk your ear off about the political power of print and online newspapers. According to a study NAA commissioned, 91 percent of voters who contribute to campaigns read newspapers in some form; 86 percent of those who voted in the last local election read them; 58 percent of voters who rely on mobile devices for campaign news browse newspaper websites; and my favorite NAA fact, voters found "newspaper political advertisingthe least 'annoying' of any medium."
Perhaps an explosion in campaign spending will lift only the TV boat and scuttle the others. Perhaps the expected explosion in campaign spending, if it happens, won't disturb the status quo. Perhaps campaigns have already figured out how to raise all the money they need by working the campaign-finance law angles. Maybe campaigns don't want to raise more money than they already do!
"At some point you hit diminishing returns," as Howard Dean's one-time campaign manager Joe Trippi told NBC in 2007. "You couldn't spend $20 million in Iowa and have it do much more than what you'd be able to do with $10 million."
Politics goes with money the way mud goes with glory. The business of campaign finance has been suppressed and distorted ever since the Watergate-era "reforms" were passed. A freer system, to which the recent Supreme Court decisions (McCutcheon and Citizens United) point, could result in the sort of market discovery that ends up underwriting real news gathering.
As a matter of policy, my employers prohibit me from donating to political campaigns, so I can't put my money where my mouth is. But if I found the issue on a ballot, it would easily get my vote. (Jack Shafer)
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