Election Issues – Lowest Unit Rate for General Election Starts September 4th

Today is primary day in New York State. Primaries are being held for the presidential election, congress as well as state and local offices. The Lowest Unit Rate period for the general election will begin on September 4, 2020.

As you know, the COVID crisis had a significant impact on the price of advertising throughout the state.  We are often asked if the lower prices given to commercial advertisers due to the COVID crisis impact a station’s lowest unit rate.  The short answer is yes.  Lowest unit rate is based on the price you would charge your best commercial customer for the same class of time on the date the advertisement is broadcast.  If your prices declined due to a drop in business during the Pandemic, that must be reflected in your lowest unit rate.

There is one important exception. A number of stations have offered their best clients “free advertising spots” during the pandemic. These “free spots” will not be calculated into a stations lowest unit rate, if there was a separate contract for the spots.

“Given the current circumstances, the public interest dictates that broadcasters and other regulatees that are subject to Section 315(b) may exclude the free time that they provide to commercial advertisers when calculating their lowest unit charges, provided the free time is not associated with an existing commercial contract for paid time or otherwise considered bonus spots. We do not believe that broadcasters should be discouraged at this time from airing free advertisements because of the impact that doing so could have on the calculation of their lowest unit changes.”

These arrangements must be documented.  For example if a client called you and asked for free spots because business was bad you will need to document in writing that it was a separate agreement.  Alternatively, if you gave the client a 2 for 1 deal (50% off your normal price) this lower price must be considered when calculating your lowest unit rate.   The key here is documentation of the free spots as a separate agreement.

To see the FCC decision click HERE.

For more information on the FCC political broadcast rules go to the NYSBA website HERE.

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