REVENUE ROLLS AHEAD
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DELUGE OF ADS FROM EXPAND-
ed legalized sports betting and the return of midterm political ad spending in 2022 are expected to aid U.S. TV broadcasters’ rebound from the pandemic. At the same time, radio broadcasters are likely to bounce back more slowly. They’re impacted by a reliance on ad categories that are still affected by the pandemic as well as declines in drive-time listening. At the same time, radio’s ever-deeper move into streaming is giving the media sector additional luster. Those are some topline findings from the firm I represent, S&P Global Market Intelligence’s Kagan research group. It bases its findings on data from a variety of sources, including proprietary surveys and analyst estimates, publicly listed company reports and third-party providers. For TV stations, spending in the 2022 midterm elections is expected to reach $3.25 billion, up 7% from the last midterm election in 2018. It’s likely to be spurred by the 50/50 split between Democrats and Republicans in
the U.S. Senate – along with the Republicans’ efforts to flip the House Democratic majority. Political advertising will be spent most heavily in swing-state markets – such as Arizona, Florida, Georgia, Nevada, North Carolina and Texas. And not so coincidentally, markets in three of those six – Arizona, Florida and North Carolina – are among the top five markets that are growing most quickly, when assessed according to ad revenue growth forecasts for the 2021-2026 period. The markets and their compound annual growth rate (CAGR) over that period are: ■ Orlando-Daytona Beach-Melbourne, Fla., 7.52%; ■ Tampa-St. Petersburg (Sarasota), Fla., 7.37%; ■ Miami-Ft. Lauderdale, Fla., 7.36%; ■ Charlotte, N.C., 7.34%; ■ Phoenix (Prescott), Ariz., 7.21%. Legalized sports betting has already been a booming new ad category for broadcasters. As a result, station groups are developing new programming that relates to betting lines and best picks. Nexstar Media Group
10 The Financial Manager • January/February 2022
recently announced the launch of the SportsGrid Network, a diginet for sports wagering and fantasy sports. And Sinclair Broadcast Group’s partnership with Bally’s has resulted in a sports betting app and an upcoming direct-to-consumer streaming service. This comes in addition to Sinclair’s decision to rebrand its regional sports networks with the Bally’s monicker. Other ad categories that are forecast to outperform for TV stations in 2022 include healthcare, professional services, telecom, banking and home improvement. On the flip side, the auto, retail and travel categories are still soft. Given all of this, the U.S. broadcast station industry ad revenue is expected to reach $40.05 billion in 2022, up 13.2% from $35.39 billion in 2021. If realized, that would surpass the $39.66 billion posted pre-pandemic in 2019. EXAMINING 2021 RESULTS Because core ad categories have mostly recovered from the COVID-19-induced
