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

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Cross-posted from Media Matters


There was something very telling, and even morose, about the commercial break Rush Limbaugh took deep into his third hour of broadcasting on Tuesday's show. Still at the center of an advertising firestorm that rages around his program as corporate America turns its back on the AM talker in the wake of his ugly, invasive, three-day smear campaign against Sandra Fluke, Limbaugh boasted he had thwarted the left-wing attack and they were the ones "shell shocked" at the turn of events.

But the truth was that for days on his flagship station, WABC in New York, Limbaugh's show had been stripped of key advertisers. Instead, the once robust revenue-generating program had turned into a feel-good forum where during commercial breaks WABC ran non-paid public service announcements on behalf of the United Negro College Fund and New York Office of Emergency Management. That's because WABC didn't feel comfortable putting lots of advertisers on Limbaugh's show, which up and down Madison Avenue had become poisonous in this wake of his misogynistic Fluke debacle.  

So towards the end of his show on Tuesday, the nine-figure salary talk show host went to commercial break and a paid advertiser did pop up. And it was a new advertiser, a sponsor who apparently had signed on amidst the controversy. The sponsor's name? The Holy Name Cemetery in New Jersey, which was advertising a "pre-planning open house weekend."

How fitting.

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.

From a Forbes report, earlier this year:

"Clear Channel's consolidated businesses are struggling amid a sea of losses and a $19.9 billion debt load, meanwhile its largest revenue source, radio broadcasting, is a loss leader. Overall, the combined company is set to lose over $200 million in 2011 after notching $4 billion-plus annual losses during the recession."

And now comes the Limbaugh debacle. Like Fox News when it was hit with a sweeping advertising boycott of Glenn Beck's show (a boycott that eventually drove him off TV), Clear Channel executives are downplaying the impact of the current controversy. A company source told the New York Times that the advertising action had only cost the company $1 million per week in lost revenue, stressing the pain to the company's bottom line has been minimal. The source also suggested the company is simply taking advertisers who want off Limbaugh's show and finding spots for them on other Clear Channel programs.

But the boycott is only in its third week and shows no signs of abating. Worse, Clear Channel pays Limbaugh an astounding $38 million annually, or approximately $750,000 each week. So right now, Clear Channel's paying Limbaugh $750,000 weekly for a show that's shedding $1 million from its bottom line every seven days.

With regards to shifting disgruntled advertisers onto other programs, here's the reality: there are a finite number of commercials spots in radio. If you take commercials off Limbaugh's program and shift them to another Clear Channel offering, you're simply bumping  commercials that were already in place on the other program. Limbaugh's show sorely lacks national advertisers and moving sponsors onto other shows doesn't change that, nor does it make up for the lost Clear Channel revenue.

Another problem Limbaugh and Clear Channel face is the looming threat that some major talk news stations could drop Limbaugh in favor of Mike Huckabee's new national talk show, which begins to air in April and will compete against Limbaugh during the noon-to-three time slot. Huckabee's show is being syndicated by Cumulus Media Networks, whose parent company owns some of Limbaugh's most high-profile affiliates, such as WABC in New York, WLS in Chicago, and WMAL in Washington, D.C.

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Eric Boehlert is the author of Lapdogs: How the Press Rolled Over for Bush (Free Press, 2006). He worked for five years as a senior writer for Salon.com, where he wrote extensively about media and politics. Prior to that, he worked as a contributing (more...)
 

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A case study in the art of astroturfing:" While Ca... by Natalie Oberman on Sunday, Mar 18, 2012 at 4:12:51 AM
Why aren't you barefoot, pregnant, and in the kitc... by David Weaver on Sunday, Mar 18, 2012 at 10:58:38 AM
How very "spiritual" of you!  Thanks for your... by Natalie Oberman on Sunday, Mar 18, 2012 at 2:52:34 PM
You came in picking a fight, and now you're crying... by Terry Adcock on Wednesday, Mar 21, 2012 at 2:58:12 PM
No Terry, actually you're joining David at the art... by Natalie Oberman on Sunday, Mar 25, 2012 at 3:41:01 PM
Is there something to that charge, or are you just... by John Sanchez Jr. on Sunday, Mar 18, 2012 at 6:59:11 PM
You're either ignoring or missing my point(s) John... by Natalie Oberman on Sunday, Mar 18, 2012 at 11:45:12 PM
for confirming that its just the right wing parano... by John Sanchez Jr. on Monday, Mar 19, 2012 at 7:20:39 AM
"just right wing paranoia"?  Not sure what yo... by Natalie Oberman on Monday, Mar 19, 2012 at 12:25:16 PM
"  Bill Clinton can rape, abuse and hara... by J. Edward Tremlett on Monday, Mar 19, 2012 at 1:12:32 PM
Sorry .... misplaced comma.  Of course the ra... by Natalie Oberman on Monday, Mar 19, 2012 at 10:20:25 PM
and of course facts aren't germane to those exerci... by John Sanchez Jr. on Monday, Mar 19, 2012 at 11:00:21 PM
""  Bill Clinton can rape, abuse and har... by J. Edward Tremlett on Monday, Mar 19, 2012 at 11:25:48 PM
My goodness J. Edward.  I specifically clarif... by Natalie Oberman on Tuesday, Mar 20, 2012 at 1:26:06 AM
You could assume that, but no.How about you just a... by J. Edward Tremlett on Tuesday, Mar 20, 2012 at 9:57:11 AM
I did J., if you could just ...... read?  "So... by Natalie Oberman on Tuesday, Mar 20, 2012 at 11:39:53 AM
Now publicly apologize to President Clinton for ha... by J. Edward Tremlett on Tuesday, Mar 20, 2012 at 9:31:49 PM
Dear President Clinton,I'm sorry I misplaced a com... by Natalie Oberman on Saturday, Mar 24, 2012 at 5:20:08 PM
Now see? That wasn't so hard.And, like your friend... by J. Edward Tremlett on Sunday, Mar 25, 2012 at 12:33:38 PM
No it wasn't hard; in fact it was fun and fruitful... by Natalie Oberman on Sunday, Mar 25, 2012 at 4:39:25 PM
Quit while you're behind?No, really. ... by J. Edward Tremlett on Sunday, Mar 25, 2012 at 8:27:54 PM
Behind?  Really?  In what possible unive... by Natalie Oberman on Tuesday, Mar 27, 2012 at 1:25:51 AM
It's just that you seem to have no comprehension o... by J. Edward Tremlett on Tuesday, Mar 27, 2012 at 8:25:11 AM
How far back must we go?  Bush was appointed ... by Vicki Friedman on Thursday, Mar 22, 2012 at 9:43:02 PM
I'm using Clinton to illustrate a phenomenon that ... by Natalie Oberman on Sunday, Mar 25, 2012 at 4:56:51 PM
tried to gloss over Rush's offense, admittedly, mo... by John Sanchez Jr. on Monday, Mar 19, 2012 at 1:51:29 PM
It's about hypocrisy, John, same subject.  So... by Natalie Oberman on Monday, Mar 19, 2012 at 9:48:52 PM
has illustrated that amply.... by John Sanchez Jr. on Monday, Mar 19, 2012 at 10:57:57 PM
OK John if that's all you got.  You're not re... by Natalie Oberman on Tuesday, Mar 20, 2012 at 1:40:25 AM
Don't you remember Bill Maher?... by John Sanchez Jr. on Tuesday, Mar 20, 2012 at 7:41:16 AM
You support Rush, you support the right wing liars... by Vicki Friedman on Thursday, Mar 22, 2012 at 9:06:03 PM
Not quite Vicki.  If you'd read things correc... by Natalie Oberman on Saturday, Mar 24, 2012 at 5:46:45 PM
There is nothing, NOTHING, that anybody else in th... by Bronski Bomb on Wednesday, Mar 21, 2012 at 4:52:42 PM
By all your equivocations, Bronski, you help to vi... by Natalie Oberman on Sunday, Mar 25, 2012 at 4:18:13 PM
It's an old story but it's still true that money t... by ORAXX on Sunday, Mar 18, 2012 at 12:09:01 PM
The numbers are not the only things Rush can't get... by Phil Linehan on Sunday, Mar 18, 2012 at 5:55:42 PM
It could'nt have happened to  a more deservin... by ELBABYRAMON on Thursday, Mar 22, 2012 at 1:34:55 PM
Rush Limbaugh is one of the meanest most rabid bul... by Vicki Friedman on Thursday, Mar 22, 2012 at 8:50:30 PM