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By Austen Hufford and Rebecca Ballhaus 

The unorthodox approach Donald Trump has taken to campaigning for president took a toll on broadcasters Tuesday, as signs emerged that advertising spending in the race for the White House would be even worse than expected.

Citing the "unusual nature" of this year's election, Sinclair Broadcast Group Inc. withdrew its political-spending forecast for the year, sending stocks across the broadcast industry lower. Sinclair said it has yet to see significant advertising spending on the race; as recently as August, the company was forecasting a record year for campaign spending.

"Mr. Trump doesn't appear to be spending as much as people thought," CBS Corp. Chief Executive Leslie Moonves said at a Goldman Sachs media conference Tuesday.

In addition, Gray Television Inc. -- which owns stations in 51 markets -- withdrew its guidance for political advertising revenue for the rest of the year. The company said Mr. Trump's future campaign spending "is currently impossible to predict," and it noted the "very unusual nature of this year's late presidential campaign season."

Mr. Moonves, however, is still optimistic about election advertising for CBS stations, thanks in large part to a Senate race and several ballot initiatives in California.

Over all, political ad-spending levels for this presidential election have shrunk from 2012, as Mr. Trump has aired a historically low number of TV ads. There were 89,000 ads aired nationally in the presidential race between Aug. 19 and Sept. 15, down 42% from the same time frame in 2012, according to a Wesleyan Media Project report released Tuesday.

In 2012, Republican nominee Mitt Romney spent nearly $50 million on advertising through July. Mr. Trump spent $20 million in the same period this cycle, according to the latest figures disclosed to the Federal Election Commission, and it was spent entirely on primaries. After becoming his party's effective nominee in May and officially accepting the nomination in July, Mr. Trump's campaign didn't begin airing TV ads again until mid-August.

Since mid-August, the Clinton campaign and its supporters have aired about 62,000 TV ad spots on national television, compared with about 27,000 aired by the Trump campaign and its supporters, according to the Wesleyan report.

Industry watchers are divided over whether the lower spending is a short-term anomaly caused by the abnormal nature of Mr. Trump's campaign or a sign of a broader rollback of the importance of television advertising.

Throughout the primary, Mr. Trump relied largely on free media through interviews with cable networks, which often carried his rallies live on air.

"It seems to be more of a Trump story than a general story," Travis Ridout, a Washington State professor who wrote a book about campaign advertising, said. He added that in "this presidential campaign, everyone knows too much about Hillary Clinton and Donald Trump, and thus the ability for advertising to have any impact is really quite small."

Mrs. Clinton's ad-spending levels this election cycle are roughly consistent with what President Barack Obama spent in 2012. Through July of that year, he spent $111 million on advertising, compared with $108 million spent by Mrs. Clinton in the comparable period this year.

"While we previously anticipated a decline in presidential ad spending in the third quarter based on the late fundraising by the Trump campaign, we have yet to see significant spending, even at the levels we initially anticipated," Sinclair's Chief Financial Officer Chris Ripley said. For the third quarter, Sinclair expects to take in $46 million from political spending, down from its previous estimate of $58 million to $68 million.

Sinclair is exposed to a number of battleground states, including having 20 or more channels each in Ohio, Florida, Pennsylvania and Michigan and markets in North Carolina and Virginia. In 2012, total political spending accounted for 11% of its annual broadcast revenue.

Jan Dawson, Chief Analyst of Jackdaw Research, estimates that presidential campaigns account for about 30% of total political spending for local TV station owners; local and state campaigns make up the bulk.

Even though the revenue impact is relatively small, campaign ads are higher-margin and contribute more to a company's bottom line, said Daniel Kurnos, senior equity analyst at the Benchmark Company.

With less than 50 days until the election, it is becoming increasingly unclear if extra advertising spending in the final weeks by the campaigns and their supporters will be able to make up for the muted spending so far. Sinclair said it was "hopeful" presidential advertising spending will increase if polls tighten.

Mr. Trump's super PAC firepower on the airwaves looks likely to improve in the coming weeks, as two billionaires -- casino owner Sheldon Adelson and TD Ameritrade founder Joe Ricketts -- have pledged a combined $6 million to support the nominee. Their efforts will at least in part be aimed at erasing Mrs. Clinton's major advantage in TV advertising. Since returning to the airwaves in mid-August, the Trump campaign's ad spending has escalated each week.

"Mr. Trump's message, which he primarily takes directly to the voters on the campaign trail, is authentic, and that's why the money he has spent on television ads has been so effective," said Hope Hicks, a Trump spokeswoman.

On Tuesday, shares of Sinclair fell 9.4%. E.W. Scripps Co. shares dropped 8.7%, Tegna Inc. declined 3.8%, and Tribune Media Co. fell 4.5%. CBS shares declined 2.2%.

Joe Flint contributed to this article

Write to Austen Hufford at austen.hufford@wsj.com and Rebecca Ballhaus at Rebecca.Ballhaus@wsj.com

(END) Dow Jones Newswires

September 21, 2016 02:48 ET (06:48 GMT)

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