political action committees

With Political Ad Profits, Swing-State TV Stations Are Hot Properties

When Allbritton, the media company that owns Politico, put its seven television stations up for sale this spring, analysts quickly singled out one as the most attractive: WJLA, the company’s ABC-affiliated station in Washington. It is the biggest of the bunch, the best known and, perhaps most important, a magnet for political spending.

WJLA banked $33 million in election-related advertising last year. Only three stations in the United States earned more, and two of those were also in Washington. That’s because the stations’ signals reach citizens in a crucial battleground state, Virginia, as well as the political power brokers in the nation’s capital. If Allbritton were to sell WJLA by itself, it could fetch $300 million.

That math helps explain why Gannett paid $1.5 billion for 20 stations last month, why the Tribune Company agreed last week to pay $2.7 billion for 19 stations — and why more consolidation in the marketplace is forecast for later this year.

The increasingly expensive elections that play out across the country every two years are making stations look like a smart investment, with the revenue piling up each time a candidate says “I approve this message.”

Despite an array of digital alternatives and a rapidly transforming television business, 30-second commercials remain one of the most valuable tools of campaigns and political action committees. As Leslie Moonves, the chief executive of the CBS Corporation, which owns 29 stations, memorably said last year, “Super PACs may be bad for America, but they’re very good for CBS.”

Next year’s midterm elections will be a boon to stations as well, and “2016 could be amazing,” said Mark Fratrik, the chief economist for BIA/Kelsey, a media research firm and consultancy.

Station owners have come to dread what they call “odd years,” like 2013, when there is little political spending. For stations blessed to be in swing states, political ads routinely represent a third of their overall ad revenue in election years..

For instance, WBNS, the highest-rated station in Columbus, Ohio, grossed about $50 million in advertising last year, of which at least $20 million was attributed to campaign spending. Columbus is the nation’s 32nd largest TV market.

Contrast that to the next biggest market, KSTU, the most popular station in Salt Lake City. Kantar Media estimates that KSTU brought in about $29 million in advertising last year.

On paper, these two stations are equals; WBNS came out far ahead because Columbus was in the middle of a hotly contested race between President Obama and Mitt Romney to win Ohio’s 18 electoral votes.

Mr. Fratrik said that stations in Ohio enjoyed, on average, a 38 percent increase in total ad revenue last year, in large part because of political spending. The increases were more than 40 percent for some stations in Wisconsin, where a recall election for governor added to the political drama. One of the stations being bought by Tribune is up the road from Columbus in Cleveland. Another is in Milwaukee. Two others are in Virginia, and one is in Colorado.

As he talked up Tribune’s acquisition to investors this week, Peter Liguori, Tribune’s chief executive, made sure to mention the increased exposure to swing-state advertising.

Analysts say the surge in station consolidation this year has also been driven by low interest rates and by an enormous rise in retransmission fees for stations, which are the equivalent of per-subscriber fees for cable channels like ESPN and MTV. Some stations now earn 40 to 50 cents a month from each cable and satellite subscriber.

But those fees currently account for about 10 percent of station revenue, and even if they double in the next five years, as the research firm SNL Kagan predicts, advertising revenue will remain the most important part of the station business. Thus, political advertising is a lifeline, even if the sheer volume of ads sometimes makes viewers want to hurl the remotes at their sets.

“We get complaints from viewers,” Michael J. Fiorile, the chief executive of WBNS’s owner, the Dispatch Broadcast Group, acknowledged. “The bigger complaints are from regular advertisers who really get pushed off the air.”

“Don’t get me wrong,” he added with a chuckle. “It’s a good problem for us to have.”

Article source: http://www.nytimes.com/2013/07/08/business/media/with-political-ad-profits-swing-state-tv-stations-are-hot-properties.html?partner=rss&emc=rss

Venture Capitalists Join Push to Ease F.D.A. Rules for Medical Device Industry

Rein in the Food and Drug Administration’s uncertain approval process for new medical devices, urged the Minnesota congressman, Erik Paulsen, or Minnesota and other states stand to lose up to 400,000 jobs because of lost investment in the device industry.

Over the following month, Mr. Paulsen’s campaign committee took in $74,000 from people with a stake in device regulation, much of it from executives affiliated with venture capital funds and their spouses. Now Mr. Paulsen, a two-term Republican, is a sponsor of a bill that would make it easier to bring new medical products to market.

As Congress considers reauthorizing a law that sets the fees for medical device makers, venture capitalists are emerging as a rich and influential ally of device companies eager to remove what they say are regulatory roadblocks in the approval process. The push has alarmed patient advocates and some doctors, who have been calling on the F.D.A. to intensify its oversight of devices, particularly in light of some all-metal artificial hips that are failing prematurely at an unusually high rate.

“They have this unwritten assumption that every new device is innovative,” Dr. Rita Redberg, who is the editor of the Archives of Internal Medicine, said, referring to the venture capital funds. But some devices, she said, “are killing people or causing significant harm.”

People associated with funds that underwrite companies developing new devices and other health products have made more than $3.3 million in political donations to Republicans, Democrats and political action committees over the past five years, according to an analysis of federal contributions by The New York Times.

Though such people donate for many reasons, about 20 percent of the money from the 182 donors identified by The Times went directly to candidates and political action committees supporting a streamlining of F.D.A. policy or other issues of importance to medical products producers. The total contributions from such donors could be much higher; The Times limited its analysis to individuals affiliated with venture capital funds that have joined two lobbying associations.

Investment funds and business groups have also increased their lobbying in Washington and have generated a stream of reports arguing that regulations are crippling innovation and driving away investment.

Simply put, the industry’s champions argue that the F.D.A. suffers from high personnel turnover, an unwieldy bureaucracy and a regimen that forces start-up device companies to run new and costly tests constantly, often duplicating past efforts.

“This is about survival,” said Michael Carusi, a general manager at an investment fund in Palo Alto, Calif., Advanced Technology Ventures, who contributed $1,000 to Mr. Paulsen. “We are deeply concerned about the future.”

Medical devices encompass a wide array of products, such as heart defibrillators, artificial joints and diagnostic equipment.

Lobbying to smooth the approval process has intensified over the last year as Congress prepares to reauthorize the law that requires device producers to pay fees to the F.D.A., fees that are used to pay the agency’s operating costs. Lawmakers have an opportunity to alter the agency’s regulatory procedures for the first time since the law last came up for renewal in 2007.

An industry lobbying group, the National Venture Capital Association, has intensified its focus on device regulation. In 2010, the association, which lobbies on many issues, spent more than $2.5 million, according to data from the nonpartisan Center for Responsive Politics. About $350,000 of that was related to devices, drugs and health care, a figure that is expected to increase to $450,000 this year, said an association spokeswoman, Emily Mendell.

While it is not unusual for businesses to point to regulation as a barrier to economic and job growth, medical device investors have found a particularly receptive audience on Capitol Hill in recent months. In October alone, 10 bills have been introduced by Republicans in the House to speed up the F.D.A. device approval process; in the Senate, similar legislation has been introduced by Amy Klobuchar, a Democrat of Minnesota.

Article source: http://feeds.nytimes.com/click.phdo?i=404e82e49c14a710c5e2cbe6bfc7d872

With Political Ad Profits, Swing-State TV Stations Are Hot Properties

Venture Capitalists Join Push to Ease F.D.A. Rules for Medical Device Industry

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