A recent decision by the Supreme Court combined with recent federal regulatory guidance is poised to significantly impact commercial radio station ad revenue during upcoming election cycles.
The high court ruled in National Republican Senatorial Committee v. Federal Election Commissionthat political parties can engage in unlimited coordinated spending with federal candidates. Under a prior FCC Media Bureau public notice, advertising buys that qualify as coordinated expenditures between political parties and legally qualified candidates are entitled to the lowest unit charge rather than standard spot rates.
Because individual contributions to political parties are subject to much higher limits than direct candidate donations, a substantial volume of campaign money is expected to shift into party-controlled, candidate-coordinated ad buys. For commercial radio sales managers and directors of sales, this means a far higher percentage of political advertising will demand the lowest unit charge during the mandatory forty-five day primary and sixty day general election broadcast windows.
Furthermore, these coordinated buys raise complex operational questions regarding the no-censorship provisions under Section 315 of the Communications Act, as stations must determine whether candidate involvement in a party-purchased advertisement legally classifies the spot as a candidate use. Broadcasters are advised to carefully track all political authorizations and update their disclosure files, even as a group of candidates pursues an expedited appeal in the Fourth Circuit Court of Appeals to challenge the underlying rate guidance.
Source: Supreme Court Opinion via Broadcast Law Blog