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Media Corporations to See Massive Windfalls From 2012 Elections

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For months now, the news media has been consumed with stories surrounding the multi-million dollar "super PACs" supporting the 2012 GOP presidential candidates. We’ve learned that, to date, Mitt Romney’s Restore Our Future has spent the most at $7 million. Rick Perry’s Make Us Great Again comes in at a distant second with $3.4 million and John Huntsman’s Our Destiny PAC lags further behind with $2.1 million.

And now, late night news satirist and registered Democrat, Stephen Colbert, after polling ahead of John Huntsman in New Hampshire and out-performing the former Utah governor in South Carolina, has even formed his own super PAC. Citizens for a Better Tomorrow, Tomorrow has reportedly spent its first $10,000 leading up to the South Carolina primary on January 21. It’s a pretty expensive joke, although it’s an investment that will likely pay off for his show and Comedy Central’s owner Viacom.

So what exactly are these super PACs spending their money on? The very entity making the fuss about them in the first place: the media. By analysts’ estimations, 2012 is projected to be the biggest election cycle windfall for these stocks in history.  

The dollars have and will continue to be spent primarily on airtime for campaign ads in local broadcast segments.

Forget the title-holder of the office of the president, according to investment bank Barclays Capital, the real winner this year will be CBS Corporation -- whose revenue will jump nearly 10% from ad revenue. General Electric’s NBCUniversal should rake in a total of $9 billion in broadcast and cable ad revenue this year. Other projected major beneficiaries this political season will be ABC’s parent company Disney and News Corp’s Fox affiliates.  

“If you look at what our estimates are, and they may be conservative, we're looking at $2.6 billion dollars of political ads spent in 2012,” said Barclays Capital managing director Anthony DiClemente. “That's a growth of 15 to 20% versus the 2010 spent and it's up 45 to 50% off of the 2008 election cycle.”

The record numbers we’re seeing this political season are certainly not surprising. Given the Supreme Court’s Citizens United decision -- the 2010 ruling deregulated campaign finance laws by allowing unlimited contributions to political campaigns from citizens and corporations -- the only curveball coming out of the loosened restrictions is that donations haven’t been higher. 
POSITION:  No positions in stocks mentioned.