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Study: Political Spending Up 25 Percent

Thanks to high-profile mid-term races and a controversial Supreme Court decision, broadcasters stand to make nearly $2.5 billion

Things may be looking bleak for the Democrats, but one group that stands to make big gains during the midterm elections is broadcasters.

Revenues from political ads this year are expected to grow by 25 percent and pull in $2.5 billion for the various stations, according to a new study by research firm SNL Kagan. The current benchmark is the nearly $2 billion generated in the 2006 midterm elections.

The reason for this surge in political expenditures is threefold, according to SNL Kagan analyst Tony Lenoir. There’s the widespread anger over the faltering economy, which has led to the birth of political movements such as the Tea Party. Add to that, a series of high-profile gubernatorial and congressional races and the very real potential that the Republicans could retake the house, and you have an increasingly engaged electorate.

Most important though is the Supreme Court’s decision last January to strike down laws limiting corporate and labor campaign contributions. That in turn has resulted in an enormous outpouring of third party advertising.

Broadcast results for the first half of 2010 show publicly traded TV companies have already generated more than $41.2 million in political advertising, up 48 percent from $27.9 million generated at the same point in 2006. That should increase many fold as the November elections come into view. Overall these pure-play companies stand to make some $300 million from political ads.

TV isn’t the only arena that stands to benefit from the political upheaval and the Supreme Court’s move to declare open season on political spending. Political ad revenue will reach approximately $560 million for radio stations.