Mike Reynolds: Hi, I'm Mike Reynolds, a senior reporter covering the media industry with S&P Global Market Intelligence tech, media and telecom news team. Welcome to MediaTalk, a podcast hosted by S&P Global, wherein the news and research staff explore issues in the evolving media landscape. Today I'm joined by S&P Global Market Intelligence Kagan Research Analyst Peter Leitzinger, who specializes in the broadcast industry with expertise in TV and radio, political advertising and many other things. How are we doing today, Peter?

Peter Leitzinger: Doing well

Reynolds: Peter's going to share his thoughts on the '24 election cycle, including the rematch for the White House, battles for control of the House and Senate, and a number of ballot issues that are expected to raise interest and dollars. Let's get to it. It's an even year this time in the presidential election. The battle for POTUS aside, what do you expect, Peter, from the 2024 political cycle?

Leitzinger: Yeah, being a presidential election year, it's going to be another cycle with increased political ad spending. When looking at past elections, we're likely to see heavy spending nationally on political ads and on issues like immigration, border control, abortion laws and energy and climate policies, and just many of the other general economic issues. And, of course, locally there are many important gubernatorial, congressional, and regional races that are expected to bring in substantial political ad revenue with local TV being the biggest benefactor. And certainly the political climate across the nation is very intense right now.

Reynolds: So TV stations, they remain the medium of choice for candidates across the board. What are Kagan's projections for stations' political ad revenue for 2024?

Leitzinger: Yeah, TV still brings in the majority of political ad revenue, and I think that recipe remains for some time. Right now, we project local broadcast TV to be the biggest winner in terms of political, with nearly $4 billion in ad dollars projected. That's a 13% increase from the 2022 election cycle. Many of the largest TV station groups own multiple full-power TV stations located in the swing states where the ad revenue is most concentrated.

Reynolds: That's a pretty solid gain, so we'll see how that comes to pass when we get to the end of the year. Connected TV with its capabilities to target and provide incremental reach amid the shrinking linear universe is going to be a bigger factor in media plans this time around, Peter?

Leitzinger: Yeah, it's expected to be a larger factor as more growth continues among cord-cutters. It's an area that the campaigns can't overlook, and they certainly aren't. However, I'd say that TV continues to be still the most impactful way to reach voters and deliver strategic messages. In the last couple of election years, digital hasn't impacted TV political ad dollars the way some have thought, and really the overall pie has just gotten a little bit bigger to accommodate the digital side of things. So TV still remains the majority of the total political ad spend.

Reynolds: Is digital — we're talking, Facebook and the social media vehicles — largely for awareness and fundraising?

Leitzinger: It's a mix, but I think you're right. I think it is largely due to the fact that campaigns can quickly change their messages on the digital side. That's one of their big advantages. And they can direct voters to websites for information and really just develop trust. And it's an easy way to ask for support or donations through the website. So I think that's its main focus. But as it gets closer to Election Day, TV is still what garners the most attention, and commands those premium ad dollars in those premium time slots.

Reynolds: Peter, I know you've taken a close look here. What station groups have the best footprints to capture dollars from the toss-up states and candidates?

Leitzinger: According to our research … seven different states are considered toss up for both presidential and senatorial races — those include Arizona, Georgia, North Carolina, Wisconsin, Michigan, and Nevada. If you look at those swing states, Gray Television, Sinclair Broadcast Group, EW Scripps and Nexstar are in the best position overall with over 20 full-power. Big Four-affiliated stations in those states. Right now, Gray Television has the most stations in those swing states at 28. But as we've seen in the past, the swing states can easily shift as we get closer to Election Day

Reynolds: Republicans have a small minority in the House of Representatives while Democrats very narrowly control the Senate. What are the key battles in the House, Peter?

Leitzinger: I think in California where Republicans hold the narrow three seat majority, there's several competitive races in the traditionally democratic districts. The race to fill Adam Schiff's and Grace Napolitano's seats in the Los Angeles region — those are going to be key races and are extremely close right now. And those could definitely affect control of Congress. And then in Orange County and San Joaquin Valley, there's a number of seats that are up for grabs. So I would say out of any of the states, California is the No. 1 state to look at when you're looking at the house races for Congress. And California is currently a hotbed for political ads this year, given those close races in very populated markets. And then just the climate with [Kevin] McCarthy stepping down from Congress, there's concerns over a ripple down effect. With his exit from the California GOP and then when it comes to House races, California is the state to watch because it has 10 of the 52 congressional seats in play.

Reynolds: All right. How about swinging to the upper chamber of the Senate? What are we looking at there?

Leitzinger: There's a lot in the Senate, but I would say that the one that stands out to me right now is in Ohio with the Democratic Senator Sherrod Brown. He's facing Republican Bernie Moreno who's expected to win the March 19 GOP primary. According to polls, Moreno and Brown are in a near tie, making that one of the closest races, probably all the way through Election Day. I mentioned Arizona before, but one other that is interesting is in Montana, where Democratic Sen. John Tester is running for his fourth term in that traditionally Republican state. He faces a tough challenge from GOP nominee Tim Sheehy, who's a former Navy SEAL and has been backed by Trump and the Republican National Senatorial Committee. Montana is not known for being a state with a lot of political ad spending, but the candidates are both in close competition and are both very well-liked.

Reynolds: You're going to see a lot of ads there as we get closer. Okay. Super Tuesday's behind us. Nikki Haley has ended a run for the GOP presidential nod. Health and legal issues aside, it's a rematch of President Joe Biden against his predecessor in the Oval Office, Donald Trump. In your Political Outlook for '24, Peter you took a look at six states that could very well decide the presidency. Maybe starting with Arizona and Georgia, where Biden scored razor-thin victories four years ago.

Leitzinger: Yeah, that's interesting. Arizona has transitioned from a Republican-leaning state to more of a swing state over the past few elections. President Biden won Arizona by less than one percentage point in 2020. But his approval ratings in the state have been coming back pretty low, meaning it really is a toss-up there. And then moving to Georgia, that's another state that Biden won in 2020 by less than a percentage point. Voters there have shown a willingness to vote for both political parties in the state. They've elected two Democratic senators, John Ossoff and Raphael Warnock. And they've held on to a Republican governor, Brian Kemp. As you know, in 2020 and 2022, the Georgia state Senate race ended in runoffs there. So that just shows how split the vote can be there and could be.

Reynolds: Some extra money again if we get to that level for the stations there. How about the flip-flopping in Pennsylvania and Wisconsin in recent election years?

Leitzinger: Yeah, Wisconsin has been one of the most important states in terms of the presidential election in recent years. Some would argue that it's pushed the last two presidents over that 270 electoral vote threshold in both of those elections. The state has flipped its vote supporting different presidential candidates in the last three presidential election cycles. So that alone highlights the importance of the advertising going on within the state. And in 2022, voters re-elected Democrat Governor Tony Evers while also reelecting Republican Senator Ron Johnson. So, early polls at the beginning of the year showed Biden trailing both Republican candidates, Donald Trump and Ron DeSantis, which just means it's almost certainly going to be a close race there.

Reynolds: How about North Carolina, which was in the Trump column last time? Leitzinger: Yeah. Former President Trump narrowly won North Carolina in 2020. And the margin was only 1%. And the presidential race is really tight there right now. And we expect the Democratic Party to make a big swing on ad spending there. So it's, it really is a true toss-up.

Reynolds: All right, that leaves us with Nevada.

Leitzinger: In Nevada, many polls have Trump leading in the state, but the primary between Trump and Nikki Haley divided some of the Republican voters since she opposed many of Trump's policies So it has been a red state dating back all the way to Jimmy Carter in the '70s. But that has shifted a bit and I think the margins are narrowing there. The early polls for president in the state show Biden a little bit behind Trump. And so there's there's been some controversy there as well surrounding the 2020 election with Republican officials falsely declaring Trump the winner of the election in the state. So it remains to be seen how that will affect the voters going into this year.

Reynolds: All right, Peter, we're getting to the end here. In 2022, there were countervailing sports betting ballots in California that drew a lot of spending and ultimately canceled each other out. And for now, the Golden State remains without legal sports betting. In Florida, there's some abortion rights measures that are expected to appear on the ballot. What are some of the ballot issues that may rise up and engender significant spending in the '24 cycle?

Leitzinger: I would say in Texas, in particular, and even other southern border states, the issue of border control is still a major needle mover for ad dollars, and it's still a major problem down there. And politicians from top to bottom are trying to solve those issues related to immigration. Other issues that are drawing attention that are relatively recent to voters are AI regulation. Affordable housing is one that's really facing a lot of regions across the nation and LGBTQ rights — these issues need policies around them and they're popping up on ballots. And they have significant fundraising and support from advocacy groups, charities, nonprofits, and they all have heavy interest in those outcomes and will use TV to deliver their messages.

Reynolds: All right. We've covered a lot of ground and that concludes this episode of MediaTalk. I want to thank Peter for spending a lot of time here. Thanks, Peter.

Leitzinger: Thanks a lot. Mike.

Reynolds: Appreciate it. This is Mike Reynolds. Thanks to all of you for listening. We'll catch up soon on the next edition of MediaTalk.