Supreme Court Ruling Will Open The Political Ad Spending Floodgates (CBS, NWS)

In a Supreme Court ruling last month the limits on corporate spending to influence political campaigns were removed, opening the door for massive totals of advertising dollars ready to be infused by anyone with an agenda.

The 5-4 ruling extended the Freedom of Speech to corporations particularly for political speech in the case of Citizens United v. Federal Election Commission. The vote was hotly contested with judges on both sides widely apart in their views on the matter.

Under the ruling groups of two or more persons will be able to spend as much of their own money as they desire to.

The decision will change the landscape of political elections starting in the fall with the midterm election. President Barack Obama came out in protest of the Supreme Court ruling.

“The Supreme Court reversed a century of law to open the floodgates for special interests – including foreign companies ­– to spend without limit in our elections,” Obama said shortly after the decision last month.

Analysts had estimated that there would be roughly $3 billion spent on the elections later this year, but with the new laws, there could be an additional $300 million infused into media corporation that are traditionally used during political campaigns. This could even prove conservative.

That is a significant chunk of advertising dollars on the way, and the following advertising companies will be the beneficiaries of that new money and so will their stock values.

Leading the list of the likely companies to benefit from the Supreme Court decision will be media-giant CBS Corp. (NYSE: CBS). The company's stable of local television stations, which is the largest in the U.S., has a foothold in nearly 40 percent of the country.

CBS will benefit from a 2010 midterm congressional election season that is predicted to be fiercely battled, allowing the local stations to possibly generate record amounts of campaign dollars during the period.

Another company that will see a piece of the campaign dollar pie will be News Corp. (NYSE: NWS) (Nasdaq: NWSA). The company that owns the Fox family of networks, including the Fox News Channel was initially expected to receive a swell of political advertising dollars should expect to see even more interest in its airtime as companies compete with each other to make sure their candidate’s voice is heard.

Another avenue that will be exploited by companies who wish to invest in the political campaigns will likely be outdoor advertising. Leading candidate to prosper from this sector will be Clear Channel Outdoor holdings Inc. (NYSE: CCO). The company owns and operates roughly 908,000 advertising displays, including billboards, street furniture displays and transit displays.

Lamar Advertising Company (NASDAQ: LAMR) will also benefit from the influx of cash into political advertising through outdoor displays. The company operates in 44 states in the U.S., with 159,000 billboards among several other public displays.

Other companies that will see a boost from the high court’s ruling could be advertising agencies like Interpublic Group of Companies Inc. (NYSE: IPG) and Omnicon Group Inc. (NYSE: OMC) which provide advertising services to clients through all major markets around the world. Getting into the U.S. ad market will be key for foreign companies and the guidance provided by these agencies will prove invaluable.

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