OpEdNews Article: The Rush Limbaugh advertiser backlash is knocking down the radio networks

The Cumulus and Dial Global radio networks have been adversely impacted by the advertiser boycott

The Rush Limbaugh Show is distributed to 600 radio stations via several radio industry networks. The show is syndicated by privately-held Premiere Networks, which contracts with Cumulus Media, Dial Gobal, and other networks to secure broad access in as many media markets as possible.

On Friday, November 16, Dial Global took a huge financial hit, resulting in the company voluntarily de-listing from NASDAQ. Dial Global's stock dropped by nearly 77 percent. The company identified three causes for its troubles, including "advertisers' response to controversial statements by a certain nationally syndicated talk radio personality in MARCH 2012."

Now, it is becoming apparent that Cumulus is also a troubled company. Dial Gobal appears to be on the ropes; Cumulus is, so far, failing to thrive. Both companies have publicly blamed Rush.

The Cumulus Media stock price has
fallen steadily since Rush Limbaugh
attacked Sandra Fluke. Advertisers have
boycotted the talk show, costing
the radio networks millions of dollars

Cumulus had been outperforming the S&P 500 prior to Rush Limbaugh's attack on Sandra Fluke. Since the advertiser backlash, Cumulus has been under-performing. Corporate information about Cumulus reveals why it is vulnerable:

Cumulus Media is the eighth-largest terrestrial radio operator in the United States by revenue and the second-largest in terms of number of stations owned. The company operates 314 stations in 59 markets, primarily in small to midsize cities. Through its private-equity partnership, the company operates an additional 33 stations in larger cities such as Atlanta and San Francisco. Local and regional advertising accounts for 90% of company revenue. [emphasis added]
--Morning Star: Cumulus Media, Inc. Class A CMLS

"Local and regional advertising accounts for 90% of company revenue." That means the Limbaugh advertiser boycott was, and is, a serious threat to the Cumulus business model. On November 8, Alex Fredricks reported on Cumulus:

Cumulus Media Inc. (NASDAQ:CMLS) is currently trading at $2.34. CMLS's RSI is currently at 20.58 which indicates that the stock is oversold. CMLS is trading -12.98% below its 50 day moving average and -23.08% below its 200 day moving average. CMLS is -40.76% below its 52-week high and 12.50% above its 52-week low. CMLS's PE ratio is 9.36 and their market cap is $390.41M. [emphasis added]
--Alex Fredricks: Stocks Forming a Downward Channel (Bearish) on Nov-8

Rush Limbaugh's attack on Sandra Fluke
has cost the radio networks millions

While Cumulus received some favorable reviews on their 3rd Quarter Report, the company also received some bad news. Profit dipped by six percent, and Cumulus received a downgrade by Moody's:

Cumulus receives downgraded outlook
Moody's Investors Service likes a lot of what Cumulus is doing to reduce leverage, but says uncertainties associated with the radio business as a whole and the acknowledged difficulties the company is encountering turning around 10 key stations are cause for caution, and a downgrade. [emphasis added]

--Cumulus receives downgraded outlook, November 17th, 2012

It is impossible to ascertain precisely how many millions of dollars Cumulus has lost because of Rush Limbaugh. Cumulus CEO Lew Dickey had reported in each of the two previous quarters that the Limbaugh advertising boycott was a drag on earnings, and was responsible for approximately one-third of lost revenue.

Rush Limbaugh's syndicator, Premiere Networks, is privately held, and has not released information about Limbaugh's impact on revenues. However, Clear Channel, the parent of Premiere Networks, is $21 billion in debt. The Toledo Blade reported Sunday that Clear Channel is quietly trimming staff. This comes after a Clear Channel layoff in March. The Blade reports:

Clear Channel has been strategically firing employees in small numbers so it doesn't appear that the company is undergoing large-scale layoffs, he said, adding that it would have looked bad for Mr. Romney if his former company fired Clear Channel's workers en masse.
--Toledo Blade: Clear Channel quietly pruning scores of staff, November 18, 2012

Meanwhile, the movement to hold Limbaugh accountable continues to grow, and in the only recent audience analysis (of streaming audience share) to have been released, Limbaugh has been knocked out of first place, and has seen audience share decrease by nearly fifty percent.

The diarist is active in Flush Rush on Facebook:

Rush Limbaugh's talk radio career is in a slow downward spiral in part because of the activism of consumers, volunteers, and activists who seek to hold Rush accountable for his hate speech. One very active group in this cause is Flush Rush on Facebook. Flush Rush and other, similar groups use the StopRush Database to inform advertisers about where their ads are appearing.

Please consider joining. Small donations are also accepted to fund data storage; visit StopRush for more information.