There are more close congressional races than there were earlier in the summer, and that could help TV-station operators.
Evercore ISI analyst Vijay Jayant wrote Sunday that TV-station companies already are benefiting from higher-than-expected political ad spend, and he thinks the closeness of races could further that trend.
He found that 66 House races either are tossups or merely “lean” toward one party, using data from the Cook Political Report, up from 57 races at the end of July. There are also 16 “hotly contested” Senate race, compared with 10 in July.
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Jayant wrote that Tribune Media Company TRCO, -0.27% has a portfolio of stations with “relatively high exposure to close House races.” Nexstar Media Group Inc. NXST, -0.19% meanwhile, could be a “relative beneficiary” of increased spending on the Senate side.
In terms of gubernatorial races, Tegna Inc. TGNA, -0.87% serves customers in numerous key cities, per Jayant. The company has stations in Dallas, Houston, Minneapolis, Phoenix and Tampa.
He notes that Verizon Communications Inc. VZ, -0.53% has “high exposure” to tight Congressional races while AT&T Inc. T, -0.19% has a strong footprint in areas where there are fiercely contested gubernatorial elections.
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TV-station companies on the whole reported better-than-expected results from political spending in the second quarter, according to Jayant. Tribune, Nexstar, Tegna and Sinclair Broadcast Group Inc. SBGI, -0.18% reported over $100 million of political-ad revenue in the period, whereas he was only expecting about $60 million since the second quarter tends to be seasonally slower.
