SEPTEMBER 13, 2012 CORPORATES SPECIAL COMMENT US Broadcast Industry Close White House Contest and Surging Spending Leads to $2.8 Billion Ad Windfall >> 2 4 4 6 8 8 9 10 Pure-play broadcasters direct their greater-than-expected cash benefit towards repaying debt, financing acquisitions, and funding dividends Table of Contents: TIGHT WHITE HOUSE RACE AND UNLIMITED SPENDING LEAD TO ADVERTISING SURGE POLITICAL ADVERTISING WINDFALL WILL HELP DEBT REDUCTION BROADCASTERS IN SWING STATES AND CALIFORNIA TO BENEFIT MOST BROADCASTERS BENEFIT FROM CLOSE CONTESTS IN NUMEROUS STATES NEW REGULATION COULD BEGIN EATING INTO PROFITS POLITICAL SPENDING SURGE EASES PRESSURE FROM ONLINE COMPETITION APPENDIX: BROADCASTERS' POLITICAL REVENUE COMPARISON MOODY'S RELATED RESEARCH Pure-play US television broadcasters expect to earn up to 25% more in revenues from political advertising in 2012 than in 2010. Political advertising on local television will increase in 2012 by more than $500 million, the largest dollar increase ever measured over a two-year cycle, reaching roughly $2.8 billion--a record outlay for local outlets. Network and national spot political ad spending will bring the total expected amount to more than $3 billion. Most broadcasters will use their political-advertising cash windfalls to reduce their debt balances and to prepare for 2013, when political advertising virtually disappears. The sector's annual leverage ratios will fall to roughly 4.6x at the end of 2012--better than expected at the beginning of the year. Some broadcasters, including LIN Television, Nexstar Broadcasting and Sinclair Broadcast, will use the cash from political ads to fund acquisitions and expand their footprints, but FoxCo will increase debt balances with plans to issue a special dividend to its financial sponsor. This year's record spending points to political advertising accounting for up to 9% of the sector's average annual revenues over future two-year political cycles. This increase, well above the historical 6%-7% norm, reflects the close presidential race and virtually unlimited ad spending by issue groups. Major swing-state broadcasters, including FoxCo, Gray Television, LIN, Media General, Newport Television, Nexstar and Sinclair, stand to gain the most from this year's tight White House contest. Wisconsin's intense political year should boost such broadcasters as Gray, LIN, Nexstar and Sinclair. Political advertising has consistently outpaced US growth, but a surge in political ad spending in 2012 won't noticeably improve the sector's stable outlook. Core advertising for non-political segments including autos and retail--a function of GDP-- will grow more slowly than political advertising, still accounting for more than 70% of the broadcasters' total revenues. Broadcasters are expanding their platforms, offering digital and online services to enhance growth by competing directly with online alternatives. >> >> Analyst Contacts: NEW YORK +1.212.553.1653 Carl Salas +1.212.553.4613 Vice President - Senior Analyst carl.salas@moodys.com Prateek Yanati Reddy +1.212.553.1674 Associate Analyst prateekyanati.reddy@moodys.com John Diaz +1.212.553.1977 Managing Director - Corporate Finance john.diaz@moodys.com >> >> CORPORATES Tight White House Race and Unlimited Spending Lead to Advertising Surge This year marks the first US presidential election in modern times without limits on political spending. 1 Some have debated whether this development has helped or hurt the democratic process, but it's undeniably good for US pure-play television broadcasting companies. Political advertising directed at the broadcasters rose by a 10% compound annual growth rate with each election cycle since 1994. This trajectory represents far faster growth than these broadcasters see for core, non-political revenues. Historically, political advertising has made up about 6%-7% of the broadcasters' average annual advertising revenues over the two-year political cycle. That percentage is now rising, and the two-year average now approaches 9%. This rise by itself will probably not affect the ratings or outlooks of the broadcasters, but for operators it represents welcome revenue at a time when competition from other media and other pressures make all advertising vital. Based on the new environment of virtually unlimited political advertising, we have long expected that political ad sales would set records in 2012. 2 This year the surge in political spending could translate to as much as $2.8 billion in ad revenue for local broadcast and cable television--more than half of the estimated $5 billion total outlay on 2012 political advertising in all media, in line with our initial high-case forecast for a 19%-27% increase for the broadcasters. Through the first six months of 2012, political ad revenues for public and private pure-play television broadcasters have increased 49% compared to 2010 (see Appendix, page 9). We believe this torrid pace will moderate, and we expect an increase of up to 25% over the $2.2 billion-$2.3 billion spent on local television in 2010, the most recent election year. Broadcasters rely on political ad spending to offset low growth in core ad revenues. 3 And despite broadcast television's higher cost, and its maturity as a medium, it still captures about 50% of total political advertising spending. Cable television, newspapers, radio and telemarketing have each captured less than 10% historically. In the past, most television political advertising tied directly to candidates. This year, the candidates have spent noticeably less money as a percentage of the total. Even so, by September 2012, the two major parties, candidates, and groups associated with them had accumulated well over $3 billion of cash earmarked for campaigns. Spending by the "super PACs"--which have no direct ties to particular candidates, but usually back a cause overwhelmingly associated with or against a candidate--has claimed the largest share of broadcast advertising inventory. The individual candidates are entitled to political ad spending at the broadcaster's lowest rates during the 60 days before the US election, while spending by the super PACs, trade unions and issue groups is not. Broadcasters also note that movement of this money, in part, reacts to increasingly sophisticated polling techniques. This volatility creates an advertising feast for broadcasters in states with close or heated elections--but little gain for stations in less-contested places. 1 The Supreme Court's January 2010 ruling in Citizens United v. Federal Election Commission overturned certain provisions of the 2002 Bipartisan Campaign Reform Act, effectively removing all limits on what corporations and unions could spend on political ads. See our Special Comment, "US Broadcast Television: US Broadcasters Get Ready for Record-Breaking Political Ad Spending in 2012," June 2011. See our most recent annual Industry Outlook, "Modest Growth for Core Advertising Outweighs 2012 Political-Ad Revenue Boom," January 2012. 2 3 2 SEPTEMBER 13, 2012 SPECIAL COMMENT: US BROADCAST INDUSTRY - CLOSE WHITE HOUSE CONTEST AND SURGING SPENDING LEADS TO $2.8 BILLION AD WINDFALL CORPORATES The tight presidential contest this year has added to the intensity of the spending, and record advertising outlays look all but certain for 2012. To enter the White House, a presidential candidate must win 270 out of a total 538 electoral votes distributed among the states based on population. According to the independent, nonpartisan Cook Political Report, 11 states representing 146 electoral votes still had not clearly tipped irreversibly by late August towards either President Barack Obama, the Democrat seeking re-election, or his Republican rival, former Massachusetts Governor Mitt Romney. In 2008, more than 87% of post-convention presidential ad spending occurred in the swing states. 4 Political campaigns spend roughly 50% of their money on broadcast television--mostly for local ads-- and about 8% on radio. This growing pot of political advertising partially offsets the broadcast industry's low single-digit growth in core ad revenues. Since 1994, their political ad revenues for television broadcasters have increased by roughly 10% annually, compared to about 3% for core advertising. For now, no other medium reaches voters as efficiently. Overall ad spending has increased for cable television at broadcast's expense, however. Nielsen data show that ad spending on English-language cable TV networks in 2011 matched network television broadcast ad spending for the first time, and now approaches the level spent on spot television (see Figure 1, below). Cable does not receive nearly as much political advertising, and the broadcasters should keep their grip on most political ad revenues over the next few election cycles. The broadcasters together reach a massive audience with many politically uncommitted viewers, while most Internet advertising resembles fundraising, directed at committed voters. Even with broadcast's advantages, cable and the Internet will increasingly cut into its share of political advertising. FIGURE 1 Spending on US Television Advertising, 2007-2012 (in US $ billions) Cable TV (47% rise, 2007-2011) Network TV (7% decline, 2007-2011) Spot TV (1% decline, 2007-2011) 30 25 in US $ (billions) 20 15 10 5 0 2007 2008 2009 2010 2011 2012 Source: Nielsen; Moody's Investors Service (estimates). Dotted lines represent estimates. 4 Source: Campaign Media Analysis Group/Kantar Media. 3 SEPTEMBER 13, 2012 SPECIAL COMMENT: US BROADCAST INDUSTRY - CLOSE WHITE HOUSE CONTEST AND SURGING SPENDING LEADS TO $2.8 BILLION AD WINDFALL CORPORATES Political Advertising Windfall Will Help Debt Reduction During the 12 months through mid-2012, pure-play US television broadcasters as a group have used the bulk of their free cash flow to reduce debt balances. Most issuers in the sector have pushed out debt maturities, taking advantage of attractive opportunities in the high-yield market. In fact, political advertising should help the sector's leverage improve beyond what we expected even in January 2012. The sector's 12-month debt-to-EBITDA ratios will fall to roughly 4.6x at the end of 2012--better than the 4.8x-5.1x range we had expected a short time ago (see Figure 2, below). 5 FIGURE 2 US Broadcast TV Industry: Recent LTM Metrics and Projections For 2012-2014 Debt-to-EBITDA (Higher End of Revenue Forecast) EBITDA Margin (Higher End of Revenue Forecast) 12 Debt-to-EBITDA (Lower End of Revenue Forecast) EBITDA Margin (Lower End of Revenue Forecast) 40.0% Debt-to-EBITDA (Moody's Adjusted) 10 35.0% EBITDA Margin (Moody's Adjusted) 8 6.4 6 5.6 5.3 4.6 4 2010 Actual 2011 Actual LTM 6/30/12 Actual 2012 Forecast 2013 Forecast 2014 Forecast 5.3 5.5 4.3 4.5 30.0% 25.0% 20.0% Source: Moody's Investors Service. Dotted lines represent estimates. Most broadcasters will use their political cash windfall to reduce debt further, and to position themselves to operate more comfortably in 2013, when political advertising virtually disappears. Improved financial profiles have given these companies more flexibility to invest in new revenue streams. They will also provide a bigger financial cushion to protect against the next economic downturn, and potentially allow broadcasters to consider dividend increases or share repurchases. FoxCo (B2 stable) has already directed its political windfall toward launching a new financing, which will increase its debt load by at least $175 million primarily to fund a first-time dividend to its financial sponsor. Meanwhile, LIN Television (B2 stable), Nexstar Broadcasting (B3 positive), and Sinclair Broadcast Group (Ba3 stable) have all earmarked cash from the political windfall to acquire more stations in 2012, and we believe more M&A activity will follow. Broadcasters in Swing States and California to Benefit Most More political spending takes place on behalf of presidential candidates with less directed towards congressional and governors' races. Broadcasters with stations in Wisconsin--including FoxCo, Gray (Caa1 positive), LIN, Nexstar and Sinclair--will see spending directed at the state's close presidential contest this fall, as well as a tight Senate race and significant issue campaigning. This spending comes on top of about $63 million that Wisconsin had already attracted in 2012 for a fierce, nationally prominent recall election, which Republican Governor Scott Walker survived in June 2012. That 5 All forecasts incorporate Moody's standard adjustments. These estimates assume that debt is held at June 30, 2012 balances. 4 SEPTEMBER 13, 2012 SPECIAL COMMENT: US BROADCAST INDUSTRY - CLOSE WHITE HOUSE CONTEST AND SURGING SPENDING LEADS TO $2.8 BILLION AD WINDFALL CORPORATES contest alone drew roughly double the amount spent in Wisconsin's 2010 governor's race, which broke records at the time. 6 California has the country's second-largest television ad market--Los Angeles--and has high-profile voter propositions on the ballot in most elections. 7 Although the state has not drawn as much political advertising in 2012 as in past election years, California consistently takes in a large share of political ad spending, even without being a swing state, and without major Senate or governors' races. Issue-related political ad spending will benefit Newport Television (Caa1 stable), with stations ranked top or second in this state. Entravision Communications (B2 stable), a Spanish-language broadcaster, expects to see increasing demand for political advertising targeting the fast-growing Spanish-language public in California as well as important swing states (see sidebar). Not all markets have done as well as expected in 2012, and broadcasters acknowledge that all-butguaranteed ad spending can disappear suddenly. By the time Texas held its Republican primary election at the end of May 2012, Governor Romney had already solidified his hold on the nomination, capping a potential revenue boost for companies such as Bonten Media Group (Caa2 stable), Gray, LIN, and Newport. But broadcasters in Texas later benefited from a heated Republican Senate primary, offsetting the lack of spending earlier in the year. In Pennsylvania, when former Senator Rick Santorum departed from the presidential race in April, two weeks before the Republican primary vote in his home state, political advertising dried up for Allbritton Communications (B2 stable), Local TV (B3 stable), and Sinclair. Meanwhile, political spending in Missouri dropped below expectations after a highly publicized controversy in the Senate race--a possible setback for broadcasters there, including Barrington Broadcasting Group (B2 stable), Belo (Ba2 stable), FoxCo, and Nexstar. In Massachusetts, both major candidates in this year's close Senate race have agreed not to accept money from outside groups. US Audience of Spanish Speakers Grows The 2010 US Census showed the US population grew by 27.3 million since 2000, and that more than half of this growth--15.2 million--spoke Spanish as a first language. Roughly 12.2 million Spanish speaking voters nationwide will cast ballots in 2012, comprising 8.7% of the expected total votes, compared to roughly 9.7 million in 2008. By 2050, the US Census Bureau expects the Spanish-speaking population to reach 132.8 million, up from 46.7 million in 2008. We can expect to see campaigns and political groups increasingly targeting these voters by spending much more on advertising with broadcasters in the big Spanish-language markets. President Obama and Governor Romney have already agreed to attend televised bilingual forums addressing concerns of Hispanic voters. Pure-play Spanish-language broadcasters in the US--including Entravision, LBI Media (Caa2 negative) and the Spanish Broadcasting System (Caa1 stable) radio network--can expect meaningful increases in political ad spending in 2012 and beyond. Historically, these three broadcasters have seen modest political advertising, reaching less than 4% of total revenues during election years, compared to 10% for non-Spanish language broadcasters. A number of swing states, particularly Florida and Nevada, have high percentages of Spanish speakers. The Spanish-speaking population of Virginia--which includes the expensive Washington, DC advertising market--continues to grow rapidly. 6 7 Source: iWatch News, a publication from the Center for Public Integrity, a non-partisan research organization. While New York City represents the largest US television advertising market, pure-play television broadcasters have limited presence there. 5 SEPTEMBER 13, 2012 SPECIAL COMMENT: US BROADCAST INDUSTRY - CLOSE WHITE HOUSE CONTEST AND SURGING SPENDING LEADS TO $2.8 BILLION AD WINDFALL CORPORATES Political ad spending typically spikes towards the end of the year, with roughly 25% taking place in the first two quarters, another 25% in the third quarter--and about 50% flooding in during October and the days in November that precede election day. Two months before the 2012 election, more than half of the year's likely spending outlay had yet to appear, and broadcasters with leading news stations in their markets, including Gray and Newport, expect to reap up to 20% of their annual overall revenue in mere weeks. This year's particular political calendar could add to the expected windfall. Since the final advertising push traditionally begins on October 1, this year's November 6 Election Day means four more days of advertising revenue than in 2010, and two more than in 2008--both record-breaking years for political advertising. Certain operators, including FoxCo, Gray, Media General (Caa1 positive), Newport and Sinclair will reach the high ends of their initial political revenue estimates for 2012. Core advertising from the retail, auto and services segments often gets pre-empted by the more lucrative political spots from super PACs or other groups. Many large advertisers shun the final stretch of a campaign period, avoiding the higher cost for spots and advertising adjacent to negative political ads. Radio broadcasters and cable operators tend to benefit during the peak political period of October and early November, when political advertising gobbles up ad capacity on broadcast television and core advertisers depart. Radio generally receives about 8% of all political ad spending, while broadcast television gets roughly 50%. Cumulus Media (B1 stable) expects to raise up to $30 million this year from radio political ads--some 2%-3% of its total net revenues for the year--and Entercom Communications (B2 stable) expects a similar lift. Such results would help radio advertising revenue exceed the flat or low-single-digit percentage growth expected in 2012. Broadcasters Benefit from Close Contests in Numerous States According to the non-partisan Cook Political Report, roughly 21 states will host close contests this year for presidential, Senate, or governors' races, promising localized surges in political advertising (see Figures 3 and 4 below). Unlike governors' races, nearly all tight Senate races attract national attention--and spending--no matter how small the market. Wisconsin has tight races for all three categories--including the recall election that took place in June--as well as heated issue-related political spending. FIGURE 3 Broadcasters' Exposure to Highly Competitive Statewide Contests in 2012 White House toss-up Governor toss-up Senate toss-up Allbritton Barrington Belo Bonten Entravision FoxCo Gray Television LIN TV Virginia Colorado, Iowa, Ohio Virginia Virginia Colorado, Florida, Nevada Colorado, Wisconsin, Virginia, Ohio Colorado, Florida, Nevada, Virginia, Wisconsin Florida, Ohio, Virginia, Wisconsin Wisconsin* Wisconsin* Wisconsin* Washington Montana Virginia New Mexico, Ohio Virginia Montana, Virginia Florida, Massachusetts, Nevada, New Mexico Wisconsin, Virginia Nevada, Virginia, Wisconsin Massachusetts, New Mexico, Virginia, Wisconsin 6 SEPTEMBER 13, 2012 SPECIAL COMMENT: US BROADCAST INDUSTRY - CLOSE WHITE HOUSE CONTEST AND SURGING SPENDING LEADS TO $2.8 BILLION AD WINDFALL CORPORATES FIGURE 3 Broadcasters' Exposure to Highly Competitive Statewide Contests in 2012 White House toss-up Governor toss-up Senate toss-up Local TV Media General Newport Nexstar Sinclair Iowa, Virginia Florida, Ohio, Virginia Florida, Ohio Florida, Wisconsin Florida, Iowa, Nevada, Ohio, Virginia, Wisconsin Montana, Wisconsin* Wisconsin* Virginia Virginia Montana, Wisconsin Hawaii Maine, Massachusetts, Nevada, Virginia, Wisconsin NVT Networks (New Vision) Iowa, Ohio * Recall election, June 2012. Source: The Cook Political Report (White House analysis as of August 28, 2012; Senate analysis as of August 23, 2012; Governor analysis as of August 17, 2012); Moody's Investors Service. Based on this list of states, we expect certain broadcasters to benefit from the tight political contests in their markets this year: FIGURE 4 Broadcasters' Exposure to Moderately Competitive Statewide Elections in 2012 White House lean Governor lean Senate lean Allbritton Barrington Belo Bonten Comm. Corp. of America Entravision FoxCo Granite Gray Television LIN TV Local TV Media General Newport Nexstar NVT Networks (New Vision) Sinclair Pennsylvania Michigan North Carolina North Carolina Pennsylvania North Carolina Michigan Michigan, North Carolina Michigan Pennsylvania North Carolina Pennsylvania Michigan, Pennsylvania Michigan, North Carolina, Pennsylvania Missouri Missouri, North Carolina, West Virginia North Carolina Florida, Ohio Florida, Ohio Florida, Indiana, Michigan Ohio Florida, Michigan, Ohio North Carolina, West Virginia Missouri, North Carolina Ohio Indiana, Michigan Florida, Indiana, Michigan Florida, Indiana, Michigan, Ohio Missouri Missouri, North Carolina North Carolina Indiana Michigan Source: The Cook Political Report (White House analysis as of August 28, 2012; Senate analysis as of August 23, 2012; Governor analysis as of August 17, 2012); Moody's Investors Service 7 SEPTEMBER 13, 2012 SPECIAL COMMENT: US BROADCAST INDUSTRY - CLOSE WHITE HOUSE CONTEST AND SURGING SPENDING LEADS TO $2.8 BILLION AD WINDFALL CORPORATES Potential New Regulation Could Begin Eating into Profits The emergence of the super PAC has increased ad revenues for broadcasters. (Indeed, some have noted that new, unlimited political spending benefits only broadcasters.) The Federal Communications Commission (FCC) now requires affiliates of the Big Four networks 8 to post their ad rates online to show what they charge candidates and interest groups for political ads, and will demand that all other television stations do the same by 2014. Broadcasters insist that they already make this information available (though not always online), and that the FCC has singled them out when other media also benefit from increasing political advertising. Broadcasters face other regulatory risks. The current Supreme Court will probably not adjust its decision on Citizens United v. Federal Election Commission, but some opponents of the ruling believe broadcasters should direct some of their political ad profits towards the voter--perhaps through enhanced news coverage of political issues. Another credit risk is that new federal or state regulations could impose restrictions on political ad spending that effectively eat into profitability. Such measures could indirectly make 2012's spending increase of $500 million or more--the high-water mark for growth in political ad spending for local television. Political Spending Surge Eases Pressure from Online Competition Our ratings look across the typical two-year US political cycle. Most political advertising will vanish after November 6, 2012 and not re-appear until 2014. Since our ratings and outlooks already account for this cycle, even this year's big surge will not change the overall credit quality for pure-play US broadcasters. Political advertising could provide broadcasters with up to 9% of their total average annual revenues across 2012 and 2013--up from less than 7% for 2009 and 2010. For certain operators such as Gray, the percentage will be closer to 11% until it further develops some additional revenue streams, including retransmission fees, digital or other online services, and possibly mobile television. The broadcasters plan to grow their multiplatform offerings and diversified revenue streams to compete against faster-growing Google (Aa2 stable), Hulu (unrated) and Facebook (unrated)--all of which are increasing their take of US advertising. Yet the broadcasters will see no immediate rating impact from the political advertising spending boom. Core advertising still makes up more than 70% of the broadcasters' total revenues--and we do not expect core ad demand to grow as quickly as political advertising has since the Citizens United ruling in January 2010. 8 Walt Disney's (A2 stable) ABC Network, CBS Corp. (Baa2 stable), News Corp.'s (unrated) Fox, and NBCUniversal Media LLC's (Baa2 stable) NBC. 8 SEPTEMBER 13, 2012 SPECIAL COMMENT: US BROADCAST INDUSTRY - CLOSE WHITE HOUSE CONTEST AND SURGING SPENDING LEADS TO $2.8 BILLION AD WINDFALL CORPORATES Appendix: Broadcasters' Political Revenue Comparison FIGURE 5 Political revenue growth for public broadcasters, June 2012 vs June 2010 Net revenues (in millions), Jan 2010-Jun 2010 Net revenues (in millions), Jan 2012-Jun 2012 % Increase Public broadcasters Allbritton * Belo Entravision ** Gray LIN TV Media General ** Nexstar * Sinclair $5 $9 $1 $8 $7 $8 $10 $8 $2 $11 $2 $18 $11 $14 $9 $17 -62% 26% 73% 115% 44% 71% -12% 101% 48% 53% 49% Average increase for public broadcasters Average increase for private broadcasters *** Combined average increase FIGURE 6 Political revenue as percentage of total revenues for broadcasters, 2010-2011 Political Revenues in 2010 (millions) 2010 Political Revenue as % of Total Revenue Political Revenues in 2011 (millions) 2011 Political Revenue as % of Total Revenue Total Net Revenues in 2010 Total Net Revenues in 2011 Public broadcasters Allbritton *+ Belo Entravision ** Gray LIN TV Media General ** Nexstar * Sinclair $15 $56 $5 $58 $42 $42 $39 $42 $208 $687 $133 $346 $408 $307 $349 $768 7% 8% 4% 17% 10% 14% 11% 5% 9% 10% 10% 7% $1 $10 $1 $13 $8 $5 $6 $8 $195 $650 $131 $307 $400 $279 $338 $765 0% 1% 1% 4% 2% 2% 2% 1% 2% 2% 2% 6% Average for public broadcasters Average for private broadcasters *** Combined average Two-year average * Reported as gross revenues rather than net revenues. + Calendar-year revenues. ** Television only. *** Barrington, Bonten, CCA, FoxCo, Granite, Local TV, Newport, and NVT Networks (New Vision). Source: SEC, company information 9 SEPTEMBER 13, 2012 SPECIAL COMMENT: US BROADCAST INDUSTRY - CLOSE WHITE HOUSE CONTEST AND SURGING SPENDING LEADS TO $2.8 BILLION AD WINDFALL CORPORATES Moody's Related Research Special Comments: >> >> >> >> North American Media and Entertainment: An Arms Race: Limited Growth Spurs Rising Equity Returns Amid High Cash Levels, June 2012 (143313) US Media Industry: Rebounding Auto Sales To Fuel Advertising Windfall, March 2012 (140812) U.S. Broadcast TV Station Owners and Operators: Networks Threaten Key Revenue Source For Pure-Play US TV Broadcasters, November 2011 (137407) Broadcast Television: US Broadcasters Get Ready for Record-Breaking Political Ad Spending in 2012, June 2011 (133811) US Broadcast TV: Modest Growth for Core Advertising Outweighs 2012 Political-Ad Revenue Boom, January 2012 (139492) Global Broadcast and Advertising Related Industries, May 2012 (138324) Industry Outlook: >> Rating Methodology: >> To access any of these reports, click on the entry above. Note that these references are current as of the date of publication of this report and that more recent reports may be available. All research may not be available to all clients. 10 SEPTEMBER 13, 2012 SPECIAL COMMENT: US BROADCAST INDUSTRY - CLOSE WHITE HOUSE CONTEST AND SURGING SPENDING LEADS TO $2.8 BILLION AD WINDFALL CORPORATES Report Number: 145128 Author Carl Salas Production Associate Masaki Shiomi (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. ("MIS") AND ITS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND CREDIT RATINGS AND RESEARCH PUBLICATIONS PUBLISHED BY MOODY'S ("MOODY'S PUBLICATIONS") MAY INCLUDE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBTLIKE SECURITIES. 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