BOB GARFIELD: With just a month to go before the recall election, the 135 candidates for California governor are in a mad scramble to get their names and their platforms out to the public, and for Californians across the state who are bracing themselves for a barrage of campaign ads from Arnold and Gary Coleman and the rest, it may be a relief to learn that radio stations owned by two media giants, Viacom and Clear Channel, are limiting or outright rejecting candidate advertising! Of course for Californians who believe in political discourse, this is not especially good news. TV Week's Wayne Freedman broke the story for Advertising Age before moving to TV Week. Wayne, welcome to On the Media!
WAYNE FREEDMAN: Hey, how are you?
BOB GARFIELD: Wayne, first of all, why in the world would a commercial broadcaster like Viacom's Infinity or Clear Channel turn down what would seem to be a bonanza of, of ad dollars? Why isn't it a good business deal for them to take these ads?
WAYNE FREEDMAN: Because there are way too many candidates for them to offer the lowest rate to go on their stations, and thereby displaced high-paying advertisers such as movie companies and fast food companies and consumer product companies, and they would end up losing, not making money.
BOB GARFIELD:So ordinarily a radio station has to give a political candidate the lowest possible price for any given spot in the middle of a campaign, and they historically have made allowances for that cause they know when elections are coming, and they put aside a part of their ad sales inventory for candidates knowing what is coming. But in this case the recall just came up on such short notice and is of such short duration that they, they can't do that.
WAYNE FREEDMAN: That's right. And it's compounded by the fact that TV and radio stations, all of them, are doing really, really well, and they've sold a lot of their inventory. You know, September is usually the re-start of a lot of advertising campaign efforts for the fall, and what that would mean is they would have to swap out the high-paying advertisers for political advertisers.
BOB GARFIELD:Let's talk about legality for a moment. Apart from having to sell air time at the lowest possible rates to political candidates, what legal obligations do stations have with respect to political advertising.
WAYNE FREEDMAN: None, at least locally. It only matters on the federal elections. When there's national federal elections. they're required to take political advertising and take the candidates, but not locally. The only way they're forced to is if they take one candidate's advertising - they then are - open themselves to taking anyone's advertising.
BOB GARFIELD:By law, a station has to give equal access, and if Arnold buys time on K-whatever, K-whatever has to also make its air waves available to Gary Coleman and the other 133 candidates?
WAYNE FREEDMAN: That's theoretically true.
BOB GARFIELD: Now we've been talking about radio stations. So far are the TV stations also rejecting recall candidate ads?
WAYNE FREEDMAN: They're not as yet. Now here's the difference between the TV stations and the radio stations. The entry point for radio stations is a lot lower than TV stations! So think about it -- you could have 135 candidates spending 25 dollars a spot - 10 dollars a spot - whatever it is - on any of these radio stations. They would be inundated, because anyone can buy a radio spot. Now, on the TV side, generally, the entry point is a lot higher, so they're not so, so worried about it. They know maybe those 4 or 5 candidates are going to spend money, and that's about it.
BOB GARFIELD:Clear Channel corporately isn't necessarily rejecting all ads outright, but it's requiring that candidates by air time in bulk on a, on a network of its stations throughout California. It's got 71 of them-- [BOTH SPEAK AT ONCE]
WAYNE FREEDMAN: Right.
BOB GARFIELD: -- and, and Clear Channel is saying yeah, you - you can buy time but -- in bulk. Is that right?
WAYNE FREEDMAN: That's right. You can buy as little as 20 or as many as 71 stations as a part of the network. They are saying they're not forbidding anyone from buying the stations individually. Media buyers are saying, no they're - actually are steering people or restricting people totally from buying them locally. You have to buy this network. So basically they're seemingly pushing people to go to their bigger network where you have to spend a little bit more, and they're anticipating maybe 5 to 7 candidates who will buy into their network.
BOB GARFIELD:Well I'm no anti-trust lawyer but that would strike me as having clear restraint of trade issues attached to it. First of all, you're shutting out people who aren't willing to make a substantial enough purchase.
WAYNE FREEDMAN: Right.
BOB GARFIELD: And secondly, in effect you're shutting some large percentage of the candidates out of the marketplace all together because they simply don't have the money to buy large numbers of stations in one bulk purchase.
WAYNE FREEDMAN: And somewhat you can see what - how Infinity is doing it, and it's a little more equitable there, because they're restricting everyone --top to bottom - Arnold to the last guy.
BOB GARFIELD:Now if this were just one station saying no, we'd rather have the more profitable commercial advertising than political stuff, that would be one thing. But because Clear Channel and Infinity have such an enormous concentration of stations in California, it has an effect of suppressing political discourse. Did your story in Advertising Age trigger any kind of response? You would think that interest groups in particular with an axe to grind in the consolidation battle would have been waving it for anybody who would pay attention as clear evidence of the danger of excessive consolidation!
WAYNE FREEDMAN: I think it's -- the reaction's more in Washington where-- the issue of media consolidation is still very hot. But in California, the issues are, you know, about the economy - about Gray Davis himself - about whether or not the recall is even viable or whether or not we should be even having a recall. It's like, oh, you couldn't get on these small little candidates. Oh, we feel so bad about it. [LAUGHTER] But they shouldn't be doing it anyway, since it's a joke anyway.
BOB GARFIELD: [LAUGHS] All right. Well, Wayne, thank you very much!
WAYNE FREEDMAN: Sure. Thank you.
BOB GARFIELD: Wayne Freedman, formerly of Advertising Age, my publication, now reports for TV Week in Los Angeles.