Let’s start with what I believe – I believe Robert Pittman (CEO of Clear Channel) wants Barack Obama to be reelected and wants the Democratic Party to have complete control over Congress. Why do I believe that? The last 15 years of political contributions he has made, especially the one to Barack Obama in April of 2007. State Senator Barack Obama launched his campaign in February 2007, and few people knew who he was or gave him any chance of winning the Presidency in 2008.
Robert Pittman has an obstacle in the way of achieving his goal – his employer Clear Channel owns Premiere Radio, by far the biggest provider of “Conservative” Talk Radio, which for 3 years has been airing non-stop Anti-Obama “hate”. Robert Pittman was the founder of MTV, ran AOL and has extensive ties to people in the entertainment industry and Hollywood, as demonstrated how he was able to round up folks for the iHeartRadio launch in Las Vegas. In his youth, Pittman was also a radio programming prodigy with a track record of success. There is no doubt in my mind that Pittman would be fully on board with helping the White House in any way he can, including destroying Conservative Talk Radio from the Inside.
Clear Channel is owned by its debt – something over $20 billion of it. The company is managed by two private equity firms Thomas H Lee and Bain Capital, both of Boston. Mitt Romney worked for Bain Capital, still owns a significant financial interest in it, and personally knows the people who run it. Bob Pittman did not get the job at Clear Channel unless Bain Capital wanted it. I believe, but can’t prove it outright that Harvard University’s endowment fund was a significant force at Bain Capital, at least in the early days. If Mitt Romney wins the Republican nomination, Harvard wins no matter who wins the election.
So now the smoking gun – this is going to take explanation, so I apologize for the length, but think if you care anything about radio or politics or the future of the United States, you’ll want to take the time to understand what is going on.
Tom Taylor published a leaked copy of an email that was sent to radio stations that carry Premiere’s radio shows – that would include Rush Limbaugh, Glenn Beck, and Sean Hannity. (Tom Taylor is not a fan of Conservative Talk Radio at all if you read his own writing)
“To all Traffic Managers: The information below applies to your Premiere Radio Networks commercial inventory. More than 350 different advertisers sponsor the programs and services provided to your station on a barter basis. Like advertisers that purchase commercials on your radio station from your sales staff, our sponsors communicate specific rotations, daypart preferences and advertising environments they prefer. . .They’ve specifically asked that you schedule their commercials in dayparts or programs free of content that you know are deemed to be offensive or controversial (for example, Mark Levin, Rush Limbaugh, Tom Leykis, Michael Savage, Glenn Beck, Sean Hannity). Those are defined as environments likely to stir negative sentiment from a very small percentage of the listening public.”
Now what this means – explaining some of the industry jargon and the context (Disclaimer: I’ve never worked in radio)
“Traffic Manager” is the person who has the job of managing the commercials for a radio station. The Sales Person sells the ads, the Traffic Manager schedules when the ads will run in accordance with the sales contract and the policies of the station, makes sure the ads do run, and tracks to make sure the station is getting paid for the ads that are run (and schedules “Make Good” replacements if the air staff botch the running of the ads or otherwise fail to play the ads correctly). The smaller the radio station, the more likely that some of those functions are combined into one person.
National radio advertising is sold mostly by the one remaining National Representation firm Katz Media Group which just so happens to also be owned by Clear Channel. How the other people in radio allowed this to happen is a mystery to me – when you hear an ad for Ford on your local “independent” radio station, it is very probable that Clear Channel gets a piece of the advertising revenue on that commercial and is cherry picking the best advertising time slots from its competitors.
The “Commercial Inventory” is those commercials which have been purchased by an advertiser, but not yet run.
“Barter Basis” is the most important thing to understand, and hard to pin down, because it is done fairly secretly to the public’s view. Here is an example of how barter works in radio: The Sales Guy wants to get the local Ford Dealer to advertiser on the radio station but isn’t getting anywhere. He proposes a “Barter Deal” – rather than Ford dealer writing a check to pay for the ads, the transaction is done “off the books” – the car dealer provides the radio stations with cars to use and the radio station runs advertisements and does promotions for the car dealer. Barter is done for a variety of reasons – it makes it easier to close the deal with advertisers who don’t like to spend cash, it has implications for purposes of accounting and taxes, and for the dishonest an opportunity to steal from the radio station.
In Syndicated Radio, how shows are paid for varies, depending mostly on the clout the show has and how many stations are willing to compete to give something of value up to get the show. Shows with no clout just give the show away for free to any radio station who wants to run it (or even pay the radio station to run it) – the syndicator sells ads or products to pay for the show, and leaves holes in the programming for the local stations to run their advertisements to pay their bills.
On the other extreme is Rush Limbaugh – Rush’s ability to attract a desirable audience is well proven for over 20 years. Unless a radio owner is blinded by their own political convictions, they would all jump at the chance to carry Limbaugh. When Premiere is faced with a contract renewal, they have significant leverage to force radio stations to do things the radio station may not want to do. A radio station may outright pay for the rights, but more commonly as alluded to in this letter, the stations agree to a barter deal with Premiere – they agree to take ads from Premiere and run them at other times of the day (like during the desirable morning drive time). The station is not paying cash to get Rush, but is giving up advertising time that it would otherwise be selling to local advertisers. They may have to run “Rush Limbaugh Minutes” during other parts of the day (with the ads embedded), may be pressured to carry other Premiere shows (If you want Rush, you have to carry Hannity), run the show for all three hours live and have no sports preemptions, run “Best of” shows on the weekends, maybe carry Ryan Seacrest on the music station the company also owns. Clear Channel used to own LiveNation and put pressure to promote concerts at venues managed by Livenation, and demand stations run music from artists who had signed to appear at LiveNation concerts. LiveNation has since been spun off as its own company, in part due to pressure from musicians and threats of an antitrust investigation.
“Rotations” is requirements about how the ads are to be run, i.e…. “No more than one per hour, no more than 2 in a daypart, no closer together than 30 minutes, no more than 20 a week, not during the last 15 minutes of the show”…. to generally set the rate at which the ads should be played – if McDonalds is running McRib ads for a month, they may want them spread out over the month, not all played in the first 2 days.
Daypart is industry jargon for “Time of Day” and day of week. For almost all radio stations, “Morning Drive” daypart is the prime advertising that demands the best advertising rate. An ad at 7:45 AM as people are close to arriving at work is much more valuable than one at 1:15AM when the audience is asleep and the people who are listening have little disposable income.
Now to the bullet: The memo doesn’t say content that “Some may find objectionable” – Premiere outright says the list of shows that ARE objectionable in the eyes of advertisers, and gives specific examples:
- Mark Levin – syndicated by Cumulus Media, not Premiere
- Rush Limbaugh – Syndicated by Premiere
- Tom Leykis – Tom Leykis has not had a radio show in about 5 years since the end of Free FM on CBS. He is about to return to radio as his CBS non-compete runs out. The only reason he is on this list is to make it look like Clear Channel is being even-handed and not targeting Conservative Talk Radio
- Michael Savage – Syndicated by Talk Radio Network
- Glenn Beck – syndicated by Premiere,
- Sean Hannity – originally syndicated by ABC radio, but now syndicated by Premiere with a special arrangement for the former ABC radio stations now owned by Cumulus Media
Missing from that list are former Air America host Randi Rhodes, who IS syndicated by Premiere, and at least as caustic and controversial, and any of the “Progressive” hosts syndicated by Dial Global – Bill Press, Ed Schultz, Thom Hartmann, Stephanie Miller, Mike Malloy
So with that background, this is what that message means in blunt language. You are receiving programming provided by Premiere. In order to keep the show, you must run advertisements for free that Katz media (us) have sold to national advertisers, but you may not run them during our offensive shows, nor offensive shows from our competitors if the host is a controversial talk show host [on the list provided to us by the White House].
So you as the station owner now have a choice – you can keep carrying Rush, with almost no national advertisements and also give up the valuable local ad time during other shows – which are how you pay your own bills – or can dump Conservative Talk shows and put on more “Acceptable” shows that won’t be offensive to the people at Media Matters and Think Progress and the New Black Panther Party. Oh, by the way, your banker is on the phone and wants to discuss this with you too if you decide to fight us – the banker whose bank was bailed out by TARP funds.
What’s your decision? Are you ready to die on this battlefield? How important is it to keep radio “free” of government control of your programming content? How much pressure from the FCC over your license are you willing to fend off in the future against claims that you weren’t acting “in the public interest”? Are you willing to “out” the list of advertisers who are blackmailing you into staying silent?