The approach of November’s mid-term elections, in which Democrats are fighting to wrest at least partial control of the federal government from Republicans, fueled ad sales at Charter Communications in the three months through June.
Net income at the Stamford, Conn.-based telecommunications firm rose 96 percent to $273 million, supported by a 12 percent increase in advertising revenue. Total sales grew 4.8 percent to $10.9 billion in the quarter.
“This is a political year and we have a lot of battleground states all over — it appears that those continue to increase in quantity,” Chief Executive Officer Thomas Rutledge told investors on the company’s earnings call. “It’s a difficult business. We’ve been investing in targeting and changing the nature of advertising itself.”
The elections are 98 days away, and advertising is likely to increase as the date draws closer, particularly in close Senate and House races.
Charter’s second-quarter profits were also buoyed by a 5.9 percent increase in video revenue and a 7.3 percent in broadband sales. Revenue at Charter’s phone business, however, tumbled 18 percent to $531 million, driven by a drop of 45,000 in residential customers.
Following AT&T’s bid for Time Warner, industry insiders have speculated that Charter could also seek to purchase a content distributor. Rutledge said that while “a lot of content companies” have approached the firm, none were pursued.
“We like our core business, we like our connectivity business,” he said. “It doesn’t mean there isn’t a possible content business that would be priced right for us, but there’s no direct synergy.”
Experts say the Department of Justice’s appeal of a federal judge’s ruling that allowed AT&T to take over Time Warner could chill future mergers in the industry.
