Could ABC dump Rush Limbaugh? Most of you are probably aware by now that CItadel is in bankruptcy and is cutting expensive talent around the country. A logical thing to do in bankruptcy is to use the process as a way to force a renegotiation of all existing contracts. Rush is synidcated by Premiere (owned by Clear Channel). It seems logical that Citadel will pressure Premiere to give them a better deal on Rush. It’s pretty unthinkable, but it has to be an option Clear Channel in considering if Citadel turns the screws too tightly….
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You don’t kill the goose that is consistently laying the golden eggs. It wold cost more in lost revenues that it would save on the bottom line.
Is it possible? Yes. Local stations are beginning to drop the show over the rights fee issues, as I discussed before, so there is precedent.
Is it probable? No. The fact is, Premiere relies on Citadel for most of its biggest market clearances, most of which are market leading or at least competitive news talkers. Given the choice between lower rights fees and having to either shop an expensive, possibly over the hill show to a smaller station (could you imagine Rush wasting away on Salem stations– gasp!) or launch a bunch of brand-new “Rush Radio” stations, Premiere would probably choose the first.
Funny you would mention Salem…. back when Citadel first defaulted on the original terms of their lending agreement, I noticed a small little news item – Salem was announcing that it was adding its programming to ABC’s satellite distribution equipment.
At the time, I floated the idea that perhaps this was in preparation for ABC Radio stations to pick up Salem’s programming if they decided to bail on Premiere as a programming source.
Hannity is in “No mans” land…. after the ABC Radio acquisition, he had an “Opt out” of his ABC contract at two years after the merger. He opted out and moved to Clear Channel – but it is a screwy deal…. Citadel controls the program on the former ABC stations, and Clear Channel handles the syndication for the other markets. Clear Channel sells the ads, and shares revenue with Citadel.
For reasons nobody has yet volunteered, Glenn Beck continues to be on no former ABC stations, denying him solid clearances in major market cities. April 1st he’s finally going into Boston on a Clear Channel AM station they are changing from Mexican music….
My instincts are to suspect that Suleman’s non-American origins would lead him to not want Beck or Savage on his stations – except that this pattern predates his acquisition of ABC Radio. It’s worth keeping in the back of your mind that Phil Boyce left WABC about a year ago and is lurking over at Talk Radio Network. He’s no longer defending the fort at WABC… WLS in Chicago just had a wholesale management change and dumped Mancow’s local show and are renegotitating Don Wade and Roma’s contract (Roe Conn just re-signed for one year). t
The lenders had the option to boot out Suleman, but they not only kept him – they appear to have green lighted him to apply his “bean counter” menyality to a business he doesn’t understand. Radio is a very high margin profitable business (think Krispy Kreme Donuts). It’s the debt service costs from the post-1996 bidding wars that have destroyed the profitability of the business (the current downturn isn’t helping – but the red ink started long before 2008)…
As Lee Rodgers points out, yes he was paid a lot – but he was bringing in much more revenue than he cost because of his reputation and loyal audience (and loyal advertisers). Going through the budget and firing all the high priced talent won’t increase your profits – it will just destroy the franchise. And with the changes in competing technology, you will never get critical mass back.
There use to be a station on the FM dial in Philadelphia called WWDB 96.5. A very healthy talk station that had Rush on at noon.
Then some bean counter came and thought they could do better without Limbaugh & Paul W. Smith in the morning. Even got rid of ‘Evil Earl Hommer’, replaced the community coffee pot with vending machines. You get the picture.
Where is WWDB these days you ask?
http://en.wikipedia.org/wiki/WWDB
Here is a site dedicated to that station:
http://www.phillytalkradioonline.com/archive/wwdb/wwdb965fm.html
A lot of interesting people went through that station.
For those who don’t know about Beasley Broadcasting, here is my research:
http://streamingradioguide.com/blogradio/?page_id=1390
It’s a bit over a year old…. I’m not sure if it is “bean counter” as much as “cheap”. Mr. Beasley was working as a school principal and decided to make a 500 watt AM radio station – building the studio by hand – , making a barter deal with a local mobile home dealer to give them a bulding in exchange for on-air promotion. He is old enough to just barely remember the Great Depression and is of that mindset about spending money. In the end, he might have the last laugh as the big guys all crumble.
Following up – the article above mentions Beasley buying the station for about $65 million in 1997 – just after the post 1996 bidding insanity began.
Beasley changed the call sign to WPTP (the point) in 2000
Then WLDW in 2003
Then WRDW in 2004
Beasley is publicly traded, but they’ve been trying hard to buy back all the publicly traded stock..
On 12/31/2009 – they applied to transfer control of the stations to a trust…. if you’re a stockholder of Beasley, he controls the company and seems to pretty much do whatever he wants.
The station is now playing “Hits and HipHop”, which probably reflects the changing demographics of the city. Frank Rizzo no longer runs the City of Brotherly Love. It’s now about the #10 station in the city…