Local TV faces financial pinch as political ad spending increasingly moves online

By Lukas I. Alpert

Midterm ad spending on local TV stations is expected to fall 7% this cycle compared with 2022, while online spending could jump 35%

Spending on political advertising is expected to hit a record high for a midterm cycle this year, but most of it will be online, not on TV.

Political advertising has long been a cash cow for local television stations in an election year, but that source of income may be drying up.

Spending on political ads overall is projected to hit a record in this midterm election cycle, but such spending on local TV stations is expected to drop 7% compared with 2022, the last midterm election year, according to a report from the advisory firm Madison and Wall.

At the same time, spending on online political ads is expected to jump 35% this year over 2022, the report found, underscoring a long-running shift of ad dollars away from legacy media outlets and toward the internet.

In all, Madison and Wall projects election ad spending will reach $13.8 billion this year, up from $12.6 billion in 2022. But much of that growth is coming from spending online, which is expected to account for $6.9 billion this year, or 50% of the total. That's up from $5.1 billion in 2022, or 41% of the total that year.

Local television ad revenue is expected to come in around $5 billion this year, down from $5.4 billion in 2022.

That could be bad news for local television group owners like Nexstar (NXST), Sinclair (SBGI) and E.W. Scripps (SSP).

Nexstar, the largest station owner in the country, said that political ad spending in 2022 amounted to $500 million, or nearly 10% of its overall revenue of $5.2 billion that year.

A spokesman for Nexstar pointed to comments the company's president, Michael Biard, made during the company's first-quarter earnings call earlier this month, when he noted that political advertising had brought in $46 million. That was up from $23.7 million in the same period in 2022, which Biard attributed to strong spending around early primaries and gubernatorial races in several states where the company operates.

Biard said that when ad spending brought in by Tegna was added in, the figure jumped to $78 million in the quarter. Nexstar carried out a $6.2 billion merger with Tegna in March, but the deal has been held up in court.

"We anticipate a favorable 2026 political season consistent with our combined historical track records and are prepared at legacy Nexstar to manage any changes regarding access to lowest unit rate by [political action committees] and parties without materially impacting our performance," he said on a call with analysts.

In the first quarter this year, Sinclair reported bringing in $18 million in political ad revenue, which amounted to just 2.2% of its total revenue. That was down from $23.7 million in the same quarter of 2022.

A representative for Sinclair didn't immediately return a message seeking comment. But during the company's first-quarter earnings call, Chief Financial Officer Narinder Sahai said the company was projecting strong political advertising spending this year, due to "a record midterm political cycle with competitive races across several of our key markets."

Scripps reported bringing in $9 million in political ad dollars in the first quarter, totaling less than 2% of its overall revenue of $517 million in the quarter.

A representative for Scripps didn't immediately respond to a message seeking comment.

-Lukas I. Alpert

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05-21-26 1447ET