Struggling Clear Channel And Rush Limbaugh's $400 Million Payday

[Swede]

Whether Limbaugh's show is in the midst of the death throes, only time will tell. But one thing is clear, the radio industry has never seen anything like the sponsorship controversy surrounding Limbaugh's once-untouchable program. And it's certainly never seen anything like the wholesale decision by his syndicator, Premier Radio Networks, to suspend barter ads for two weeks in an apparent effort to ride out the controversy. That was soon followed by news that advertisers are requesting Limbaugh's affiliated stations provide "Rush-free programming grids" so sponsors can verify that their brands aren't appearing on his show.

"It's unprecedented," Holland Cooke, a talk radio consultant, tells Media Matters. He says Premiere's startling advertising move "suggests things are worse than we know."

The question is: How long will stations be able to sustain the ad losses on Limbaugh's show, and how does the host justify his $400 million pay in the face of the advertiser revolt?

The boycott comes at a bad time for Premier's parent company, Clear Channel. A conservative-friendly media behemoth with a soft spot for right-wing radio, Clear Channel continues to struggle not only with a depleted radio audience as more and more consumers migrate away from the AM/FM dial, but it's also sagging under the weight of massive debt.

http://mediamatters.org/blog/201203160002

[Old and In the Way]

1. Couldn't happen to a nicer media group.

Eric Boehlert is all over this on Twitter. And who gets paid $400MM to tell the truth? You can get the truth for free, here.

[Skittles]

2. I hope they all crash and burn

they're Propaganda Central and they have done SO much damage to the political climate of America

[movonne]

4. I will always remember the hack job they

did on the Dixie Chicks...

[abelenkpe]

49. +1000

Wish FOX news would go away too. A world without Rush and Fox and my mom might become sane again....

[titaniumsalute]

3. Premiere (Clear Channel) has five battles to fight at once

1. The national raadio advertisers are a big part of the bread and butter for the Rush radio program revenue. Those advertisers are basically gone. That is both very bad short and long-term damage and will cost Clear Channel millions.

2. The next problem is that a huge amount of radio affiliates are owned by Clear Channel. So not only will they get hit with the loss of national advertisers, those local stations are being hit by the loss of local sponsors (such as car dealerships, insurance agents, restaurants, etc.) That creates a double whammy for Clear Channel.

3. Back to the national advertisers, a number of the Rush cancellations have also asked not to be aired in ANY political talk radio. Therefore the loss of revenue will be felt on Rush and a number of other right wing talk programs.

4. They still need to pay Rush's HUGE salary with significantly lower revenues.

5. As radio syndicate contracts come up local stations (non-Clear Channel) may very well negotiate lower dollar deals or simply drop Rush in the coming months and years. That will cost them even more.

[jbpdx]

5. Local ads

I haven't heard much about how many local advertisers are pulling out too.

[Mariana]

19. I hope a bunch of people are still following up on this.

If we want to get this lousy creep off the air, the pressure needs to stay on. We need to continue to make phone calls and write letters to the stations themselves and to any local businesses that are still running ads on his show.

[Faygo Kid]

6. Born in the same year as Rush. I pray to outlive him, and see him go down.

No American in my entire life has been more worthy of contempt than Rush Limbaugh. He has been pure evil for more than 20 years, and I have heard his hatred spewed as a peer for all of that time. I never dismissed him as irrelevant. I have always despised him, and have been inspired to work for decency and rational discourse as a result of what is clearly his insanity.

[opihimoimoi]

12. [phone] the dude is rude and evil at the same time

[KamaAina]

44. Hawai'i Island is now a Rush-free zone!

Now if only KHVH would get the message.

[opihimoimoi]

58. Heya Kama,

I didn't know about Rushie boy being deleted here....

Insanity still rules here as you can see....

Stay sane as long as you can...

[KamaAina]

60. He's off KPUA in Hilo

still on KHVH.

[opihimoimoi]

61. I hardly use AM so I guess I miss the sucker... :o)

[Tumbulu]

27. Not sure what year he was born

but I share your feelings entirely.

[cantbeserious]

7. 400 Million - Who Knew Oxycontin Was So Expensive!

eom

[caseymoz]

34. They exaggerate by a factor of ten.

It's $40 million a year, plus some commissions from advertising, which I heard adds up to maybe about $6 million (until recently). However, I think it is a ten year contract.

[Vincardog]

42. $40M/yr X 10 yrs = $400M

[caseymoz]

45. Yeah, if it's ten years, you're right.

Of course, I was extrapolating charitably to the figure when I said ten, as in trying to figure out how it could be close to true. My most likely, if hazy, memory was that it was six and he has a few years left on it.

And he made $24 million a year on his previous contract, I remember that clearly. So he hasn't made $400 million over ten years, nor is it likely, in my memory, that he was supposed to.

But if the author had only written more clearly, we wouldn't be having this discussion. Who cares? It's still more money than anyone can use or count or imagine.

[USArmyParatrooper]

8. My prediction, it will blow over

and Rush will continue to blow hot air for many years to come.

That is all.

[jorno67]

10. Unfortunately, you are 100% correct.

I wish you weren't, but the Republicans are very forgiving when it comes to their own kind.

[ladywnch]

11. if it were just up to Rush/Premier/Clear Channel I might agree with you,

but since the GOP can't seem to keep their feet out of their mouths for 24 hours on this subject, (and the Dems are more than happy to encourage them) I don't see it going away by the end of 2 weeks. And when he gets back on the air, I can't believe that he wouldn't be so arrogant so as to make some kind of comment about it and whip it up all over again.

[caseymoz]

38. Arrogant, and angry.

I mean, I actually do think he's blown a circuit.

[Vincardog]

43. He is on the air now. They are just not running ADDS. He is shoving his foot in his mouth as we type

[ladywnch]

53. first of all, thanks for taking one for the team in listening to that blowhard for the rest of us...

secondly, GOOD! I hope he keeps this shit front and center for quite some time to come. I"m sure he is arrogant enough to think, "I'm RUUUSSSSSSHH, no one is going to tell ME what I can talk about, say about anyone I want to, as often as I want to. I am GAAWWWD!!!!" Let us just hope I'm right.

[Aerows]

18. Not this time

He's stepped in it and lost advertisers. People aren't going to let this blow over, and any time he says something even remotely controversial - which is every time he opens his mouth - there will be bitching to the advertisers.

When money runs from you, it's time to accept that even more money will run from you if you keep doing the same thing. Rush knows nothing else, so money will keep running from him.

[tex-wyo-dem]

26. I see one of two things happening...

Less likely:

1.). The RW power structure will put pressure on advertisers to support Rush. Some will go back and the oligarchy will prop up the show for a while to make up the difference. Sooner or later, the controversy will blow over and advertisers will slowly return.

More likely:

2.). Rush will be too toxic for a majority of advertisers to return and Clear Channel will be forced to remove his program from many/most markets. Rush's EIB network will start bleeding cash unless he decides to shut the operation down or (quite likely) move on to satellite radio where he can pretty much say whatever he wants (a la Howard Stern). Unfortunately in this scenario, it's possible that he could get a substantial contract if he can convince the satellite provider (Sirius or other) that a majority of his listeners will follow him over to the subscription service.

If this is the case (#2), it's fine with me...at least we'd get his vile ass off the public airwaves.

[caseymoz]

35. I doubt it. There's a reason why he's on AM radio.

Rush's listeners, by and large, aren't that wealthy, and the few who are are also cheap. They'll listen to Rush if it's free, but they're not going to get satellite to do it.

Additionally, Rush has provided no evidence that his audience is as large as he claims. New ratings methods have made his actual audience size doubtful.

He might find a sat-channel dumb enough to pick him up, but he's likely to wilt there pretty quickly, IMHO. No, Rush is going to be doing self-supported streaming from his website, and after $40 million a year, the revenue from that is going to be a huge comedown.

Or he'll become just another angry, white conservative blogger, which seems a great destiny for him.

[pstokely]

56. Would any satellite radio subcribers here drop it if they picked up Oxyrush?

I would if they raised the rates to pay for a huge salary for him. They already paid to much for Howard Stern.

[Major Nikon]

29. I didn't think Beck would go down either

Limbaugh will still be blowing hot air, just not so much of it.

[JHB]

31. Maybe, but this time is playing out differently from previous flaps

Every other time he's pissed someone off the outrage was effectively confined, so no action gained much traction. This case comes after months upon months of recent RW attacks (threatening to default on the deficit over Planned Parenthood, getting Komen to attack PP in a manner that was actually directly against their stated mission, the parade of radical state laws like the ultrasound bills and personhood laws that would effectively outlaw contraception, etc.).

Those things were driven by forces outside Limbaugh, they're not done yet, and as long as they keep trying to shove their agenda into everybody's face (and other anatomy) Rush's foaming will stay fairly fresh in peoples' minds. He'll have a lot more trouble disentangling himself from it because he can't control it. He doesn't unilaterally get to quietly drop the matter for a few weeks to let it blow over, as he's done in the past.

Whatever happens in the end, I don't think he'll be able to completely go back to business as usual.

[pstokely]

33. They just use Oxyrush on as a loss leader

to the point where they'll lay off hundreds (janitors, part time DJs) to pay for him

[Junkdrawer]

40. Same conclusion, completely different reasoning (if not agendas)....

Limbaugh will stay on the air as long as the Joint Chiefs find him useful for troop morale...

...

http://www.democraticunderground.com/1002406917

[caseymoz]

41. Skepticism and despair are appropriate.

. . . but people thought it would even go this far. Despite what Fox spins, trying to contain the damage to Rush and not to the rest of conservatism, what Rush said offended many conservative women, too. His insult to Fluke was not the worst thing. He didn't even apologize for saying women should post pornos if they want money for contraception, because "we" want to watch. "We" as in you and other conservative pigs, Rush? Or just males with the money?

Both Rush and conservatives try to distract from this, but it isn't working.

Rush now has no female audience, and I haven't heard Sarah Palin or Michele Bachmann or anyone like that come to his defense. Maybe they have, but it hasn't been very public. The only ones who have are spinsters paid specifically to defend conservatism and all its works on Fox. And there argument is that liberal commentators said things just as bad. No, I don't think so. Rush's female audience is probably below one percent of the total now.

[2ndAmForComputers]

57. Sometimes what one thinks is skepticism and despair...

...is actually hope.

[ThoughtCriminal]

9. Clearly, they need a tax cut!

That fixes everything! Right?

[benld74]

13. More job losses brought to you by the GOP,,,

Clearchannel made its bed a long time ago. They swaggered and talked big because they were the gorilla in the room and they knew it. Now they are hurting, and the 'regular' people will be the ones who get hurt, job losses etc.

[NCcoast]

14. $400 million!? Seriously? For what peroid of time?

That's just astounding. The corporate oligarchy spends a lot of money to create and maintain an alternative reality. I guess it's worth it to them.

[caseymoz]

36. That's off by factor of ten.

As I understood it, it's $40 million a year, with some commissions from advertising amounting, as I remember to about $6 million, until recently that is. It's a multi-year contract, though, and I don't remember the duration. I don't think it's ten years, I think it's more like six.

[NCcoast]

47. That's more in line with what I heard

I heard he was pulling down $56 million. Which is still a ridiculous amount of money to pay this divisive gasbag.

[Auntie Bush]

15. Such good news doesn't happen very often.

Doesn't Mittens have interest in Clear Channel. Let's hope he loses some money on this one.

[Chipster]

16. Planning Ru$h Action Strategy

This is the last week of national advertisers being off of Ru$h Limbaugh's program; it ends Friday 3/23. Now is the time to plan an on-going strategy.

Here are 35 reasons that show Limbaugh has a *pattern* of breaking FCC regulations: http://bit.ly/yJZ8od

Bad as Ru$h's language was about Fluke, the real reason he should be off our public airwaves is that he used them to solicit pornography ("post videos on the Internet so we can all watch.&quot

You can file an online complaint with the FCC at:
http://esupport.fcc.gov/complaints.htm

ElRu$hBo is facing some new competition, too, according to the Wall Street Journal.

With the slogan "more conversation, less confrontation," the syndicator behind "Huckabee," Cumulus Media Networks, has been pitching the new show to advertisers as a less combative alternative to Mr. Limbaugh. Cumulus is a unit of Cumulus Media Inc., CMLS +0.89% which owns 570 radio stations.

http://online.wsj.com/article/SB10001424052702303863404577285963776745648.html

[Aerows]

17. Rush is going down

Everyone knows it. He's become toxic goods and a threat to conservatives.

[caseymoz]

37. He insulted conservative women, too.

I mean, suggesting that women wanting contraception should post pornos to earn the money, because "we want something for it. We want to watch?" Even Jenna Jameson is affronted by that.

His audience is probably now 96% male.

[sadbear]

20. I've been waiting for Clear Channel to go under ever since they switched KLOL's format

DUers from Houston should know what I'm talking about.

[workinclasszero]

21. Crash and burn right wing capitalist bastards!

The very system you value above everything, above the life of the 99%, above the rights of women, above the hunger of children, above peace and justice and above the ecology of the only planet that we must all live on will be the very thing that brings your filthy lie machine crashing down to the ground!

Lord I hope to see the day that evil anti american, anti Christian lyin devils like Rush Limbaugh, Hannity, Savage and all the other lessor right wing demons drown in their own bile!

Maybe we can still stop these homegrown taliban bastards before they impose their sharia law on us all and extinguish the freedom that so many Americans died to give us.

[Dawson Leery]

24. +1000

[progressoid]

22. Waaaah

[unionworks]

23. Flush Rush

This s.o.b.s final signoff is long overdue.

[Mopar151]

25. How many brazillion has Clear Channel lost on previous misadventures?

The concert business? Motorsports? They bought USHRA (IIRC)/Monster Jam (monster trucks) and IHRA (Drag racing), ended up selling both to Feld Entertainment, who also owns Ringling Bros.. IHRA was purchased from the Bader family, owners of the Norwalk, Oh. track. Bill Bader quit as head of IHRA, and his successor, Aaron Polburn screwed the pooch pretty well, including a tieup with Evan Knoll / Torco Race Fuel - who had his checkbook taken away by his family (Knoll Gas), amidst reports of an "old head injury", now under indictment for massive tax fraud involving tax rebates on non-highway gasoline.

[PearliePoo2]

28. Hey Rush!

How many French fries are left in your carton now?? Enough to make a "Happy Meal"?
LOL!

[AsahinaKimi]

30. OH PLEASE...

Make Clear Channel sink LIKE

[Atman]

32. Karma

[Matariki]

39. Good.

Good riddance, in advance.

[Blue Owl]

46. Sagging under the weight of...

hmm, I could think of something other than massive debt...

[patricia92243]

48. I think the President calling and apoligizing to the young lady made a HUGE impression.

Everything is political and the advertisers know it. If President Obama continues to be President, Rush is history. Hopefully it will happey way earlier than the election.

Wasn't Connie Chung and Dan Rather "retired" when they came up against a president.

[pstokely]

55. Where would Oxyrush be without Clinton?

His power rose with Clinton

[Hubert Flottz]

50. RUSHing to the Exits...

The blob is wounded.

[opihimoimoi]

59. I am hoping the wounds he has sustained is of the terminal stage, err, make that Fatal....

[BumRushDaShow]

51. ENOUGH

Time for him to go. NOW.

[Initech]

52. Could it be these companies are struggling because they pay one person way more than they're worth?

Limpballs is not worth the $400 million his contract stipulates not in a million years. Outrageous executive / crony pay and workers make shit. If you ask me I say they deserve what they get unless they start fixing this.

[pstokely]

54. They'll lay off thousands to pay his salary

They'll find ways to keep him on, unless stockholders protest