It’s an even-numbered year and you know what that means: midterm election campaigns are heating up across the country. For consumers this means the airing of a seemingly endless stream of political ads. For many media companies these often-zealous – and increasingly expensive — races can mean a boost to their bottom line.
In Chicago, where I live, the election season officially kicked off Jan. 15, so we’ve been subject to campaign ads for well over two months. It’s part of what makes this country a special place. As it turns out, though, despite the influx of revenue these ads can bring, there are some complications around political advertising that may serve as a pitfall for broadcasters.
The March/April issue of TFM, the publication for members of the Media Financial Management Association for which I serve as president-CEO, includes a very timely and rather eye-opening column, titled “Political Ad Pitfalls.”
Authored by legal eagle Dawn Sciarrino, a member of the law firm Sciarrino & Shubert, PLLC, the piece offers a tutorial and advice around third-party ads, which are more complicated than they may first appear. While these ads can be big moneymakers for radio and local TV stations — and have become the mainstay of many political campaigns over the past decades — there are a raft of rules broadcasters must wade through in order to avoid legal snares.
First, a definition of third-party ads: In general, third parties can be any individual or organization that participates in political activities during the election period (from the day the election is called to election day), provided they aren’t registered political parties, electoral district associations or candidates. In other words, ads sponsored by someone other than the legally qualified candidate or their official campaign committee.
Second, what types of commercials are considered third-party advertising? According to Sciarrino, attack ads, produced and paid for by either a political party or an opposing candidate, are deemed to be third-party ads. In addition, ads taken out on behalf of a candidate by political action committees (PACs), SuperPACs and advocacy groups also fall into the third-party ad category. Third-party ads now make up the largest slice of political advertising pies in most states.
Knowing how prevalent these ads are — and possibly being seduced by the amount of money they could represent to radio and TV stations — it could be easy for broadcasters to skim or ignore some of the rules, including the Communications Act and the FCC’s rules and regulations around third-party advertising. Fortunately, Sciarrino has provided us with a number of definitions and rules that apply to third-party ads that broadcasters must follow. Below are what she considers to be most critical.
LUC Rates: This is the rule that makes third-party ads so attractive to broadcasters. Third-party ads around a particular election or issue are not entitled to lowest unit charge (LUC) rates. That perk is reserved only for legally qualified candidates for public office during the 45 days preceding the primary and 60 days preceding the general election. And, no matter when a third-party ad runs, broadcasters may charge any applicable rate — including their highest rates for certain time periods.
Censorship: The Communications Act prohibits censorship of an ad sponsored by a legally qualified candidate for public office, but third-party ads don’t carry those same statutory protections. That means broadcasters aren’t protected from defamation suits around third-party ads filed on behalf of candidates.
Broadcasters are, however, responsible to ensure third-party ads are truthful. This typically means the advertiser running the ad must provide documentation verifying their claims to the broadcaster. The broadcaster also has the right to accept or decline a third-party ad for any reason — or for no reason.
No Tit for Tat: Since the elimination of the Fairness Doctrine in 1987, opposing viewpoints are not entitled to airtime to make their counterpoints, either in ads or in program content.
Labeling: Third-party ads must contain a sponsorship identification tag — typically a printed or voiced statement advising viewers or listeners who is behind the information in the ad. This often runs as a declaration that the ad was “paid for” or “sponsored” by the legal name of the party or individual responsible.
If a commercial doesn’t come with a sponsorship tag, a broadcaster has the right to add one. If the third-party sponsor refuses to allow the tag, the broadcaster has the right to refuse or pull the ad. If the identity of the sponsor is unclear or appears to be a disguise for another entity, the broadcaster is duty-bound to investigate and identify the true sponsor in the ad.
Recordkeeping: While the FCC almost never inspected a broadcaster’s public files in years past, the advent of online public files has made these examinations easier and now frequent. Broadcasters are being subjected to consent decrees that require them to self-report public file violations to the commission. To keep a public file in compliance, broadcasters should submit the required information about a given political ad in the online public file no later than one business day after the ad has been received.
Sciarrino points to a form the NAB created to capture this documentation, called the “Political Broadcast Agreement Form for Non-Candidate/Issue Advertisements,” — more commonly known as PB-19.
Further, she advises that rather than waiting to receive every piece of the required information before uploading them to the online public file, broadcasters should consider uploading pieces as they receive them as a way to most easily manage what can be a time-consuming process. Legally, the information should be maintained in the online public file for two years, after which broadcasters are allowed to purge the information from the file.
Finally, for broadcasters who are unsure about best practices or specific issues related to political ads, Sciarrino recommends they ask their FCC counsel. The regulations can be complex, and the legal ramifications are serious enough that it’s worth investing resources up front rather than paying the consequences if a broadcaster is discovered to have breached any of the rules.
The evolving legal landscape is just one topic that professionals from all sectors of the media industry will hear about when we meet for MFM’s annual Media Finance Focus conference, which is just around the corner. If you want to stay abreast of a plethora of media issues, plan to join us May 23-25 in Tampa, Fla. “Blue Skies Ahead” offers informative sessions, distinguished keynote speakers, interactive industry roundtables, networking events, and an exhibit hall showcasing the latest industry products and services. The early-bird discount ends on April 15, so be sure to register within the next week to take advantage of these significant savings.
Joe Annotti is president and CEO of the Media Financial Management Association and its BCCA subsidiary, the media industry’s credit association. He can be reached at [email protected] and via the association’s LinkedIn, Facebook, Instagram and Twitter accounts.
16 May 2024
23 May 2024
Comments (0)