New Hampshire station poised to rake in record haul in ads

In many ways, the 2016 presidential race is nothing like those that came before it. For WMUR-TV in Manchester, N.H., the year is likely to be a standout, too, with a river of money flowing to the station from political advertising.

As the only network affiliate based in the state, WMUR is leveraging its deep market penetration to lure advertising dollars — an anticipated nearly $40 million this cycle, according to one projection — from campaigns vying in the first-in-the-nation presidential primary.

The proliferation of super PACs and the large number of 2016 candidates has helped the station's bottom line. In an era when broadcast television has had to scramble to keep up with competition from cable outlets and digital media, WMUR has had the ballast of campaign spending.

"WMUR is positioned completely beautifully," said Susan Walker, director of the graduate program at Boston University's College of Communication.

The station's prodigious haul is a flashpoint in a dispute between its parent company, Hearst Corporation, and the union that represents production workers. The International Brotherhood of Electrical Workers Local 1228 says the company is trying to strip pensions from some of its employees because they decided to join the union.

Union officials point to the station's windfall this year as evidence they are withholding in contract negotiations.

"If they are taking in a record haul, there should be no reason they can't continue to fund the pension," said Fletcher Fischer, business manager and financial secretary for IBEW 1228.

The dispute took on national dimensions last week when the Democratic National Committee announced it would not include WMUR as cosponsor of its Dec. 19 debate because the station declined to schedule negotiations prior to the debate.

Tom Campo, a Hearst spokesman in New York, declined to comment on the station's finances. He offered a statement, attributed to the station manager, Jeff Bartlett, that was issued last week after the DNC's announcement.

"We will continue with the policy we've followed with the many prior union negotiations we've successfully concluded — to negotiate in good faith, and directly and not through third parties," the statement said.

Negotiations are set to resume Tuesday for the new bargaining unit.

So far, WMUR has sold $33.5 million in political advertising for the 2015-2016 cycle, according to figures provided by Echelon Insights, a political research firm. The sum includes advertising aired to date and reservations for ads through the New Hampshire primary.

The ABC affiliate is projected to take in $39.8 million, using historical 2014 data as a baseline, Echelon Insights estimates.

Of that amount, $20.8 million has been spent to date, with $4.1 million on the Democratic side, $15.2M for Republicans, and the rest by outside groups.

Observers say that WMUR is positioned particularly well this year because of the large Republican field. Several GOP contenders — New Jersey Governor Chris Christie, former Florida governor Jeb Bush, and former Ohio governor John Kasich — are relying on wins in New Hampshire, which means having to buy advertising on New Hampshire's largest television station.

In addition, super PACs are flourishing in the wake of Citizens United, the 2010 Supreme Court ruling that restructured the campaign finance landscape. Super PACs can accept unlimited donations, though they must disclose contributions and sources.

Super PACs and nonprofits are charged a higher rate for the ads than political candidates.

While some candidates are holding off on ad spending for later in the season, the super PACs have jumped into the fray early by reserving air times.

Right to Rise, Jeb Bush's Super PAC, was among the quickest to claim reserved air time for its ads — about $700,000 worth in broadcast time as of Nov. 13, according to Kantar Media's Campaign Media Analysis Group, which monitors political ad spending.

The uptick for WMUR mirrors a national trend.

Political advertising spending on TV is projected to hit $4.4 billion in the 2016 election cycle, up from $3.8 billion in 2012, according to Kantar.

Local broadcast stations are expected to take some 75 percent of that, according to Kantar.

While digital advertising has made some inroads, television advertising remains key in politics because older viewers have remained loyal — and older people are more likely to vote.

In New Hampshire, no station's market share and penetration comes close to that of WMUR's. There are Boston channels that reach into New Hampshire, but advertising on them is more expensive. Burlington, Vt., and Portland, Maine, stations reach only some New Hampshire voters. There is an upstart cable channel, NH1, but its reach is not WMUR's.

Indeed, an analysis by Kantar Media/CMAG showed that presidential advertisers made up 18 percent of all ads on WMUR during the week of Nov. 9, compared with 7 percent for leading Iowa stations in Des Moines and Cedar Rapids.

"It's a cash cow," said Travis Ridout, a political science professor at Washington State University and codirector of the Wesleyan Media Project, which has tracked political ads aired in the US during the last three elections. "It's about the only game in town."

The station's haul is especially stark compared with the last presidential cycle. In 2012, there was no Democratic contest, and former governor Mitt Romney's early commanding lead meant that he had little reason to spend cash on ads. Meanwhile, his cash-poor opponents shied away from making big ad buys given Romney's dominance.

Campaign spending that cycle on WMUR's air was 40 percent less than expected, according to a 2012 interview with Bartlett, the station manager, in the New Hampshire Business Review.

A golden political year for the station was 2008, when it aired a record number of ads, "something over 16,000," Bartlett said in the interview.

WMUR-TV first hit the airwaves in March of 1954. The channel was started by former New Hampshire Governor Francis P. Murphy. Hearst-Argyle Television Inc. purchased the station in 2000 from Imes Communications Group of Columbus, Miss., for $185 million.

Its state-of-the-art studios are known as "the house that Steve Forbes built" — as in, the publishing magnate who spent $37.4 million chasing the Republican nomination in 1996.

Political observers said WMUR's near-monopoly means that they are able to swiftly process requests for political advertising, the rules for which are complex.

Other stations haven't jumped into the market, observers say, because while the political cycle is rich, there are only so many local advertisers to go around in non-presidential-election years.

"There's probably not enough car dealers to make it worthwhile," Ridout said.