Is Limbaugh’s career over?

The politico story

There is nothing new about this story to long time readers here.

Lew Dickey was hired by the lenders to Citadel/ABC to cut costs. Rush and Hannity are the single biggest line items on Dickey’s spreadsheet. It doesn’t matter how much revenue they bring in – we must cut costs!

Both are syndicated by Clear Channel, now headed by Bob Pittman, a lifelong major donor to the Democratic Party. While he has some obligations to the Clear Channel lenders, Bob Pittman is not going to lose sleep if Rush leaves the air. His contract runs until 2016.

The story states as a fact from an unnamed source that Cumukus has decided to pull the plug on their ABC Radio talk syndication deal with Premiere when it runs out at the end of the year. Clear Channel has known that for months – they saw how Dickey dumped all his own hosts and syndication with Talk Radio Network because he’s unable to see that in major markets you have to spend serious money to make serious profits. Clear Channel bought up WOR-AM in New York months ago just for this reason.

Rush’s deal with Premiere is based on part with a revenue sharing on the national ads. In March 2012, Premiere at one point unilaterally stopped selling ads. There is no doubt in my mind that was a breach of their contract. Rush has the best lawyers in the business, but even so he probably can’t force Premiere to work hard to get advertisers.

A lot of the money to Rush was front loaded so if Premiere pulled the plug, Rush has the cash. He has an iron clad contract that he can’t be fired for anything he says on the air.

Mel Karmazin is gone from Sirius/XM. Rush’s golfing buddy John Malone now controls the company. They have 25 million subscribers and it is hard to buy a car today that isn’t Sirius/XM capable right from the factory. The economics are all on the side of this happening when their contracts are up. If 100,000 new subscribers joined, that’s 100k x 12 x $20 a year = $22.4 million in gross revenue.

While Rush’s current contract is $400 million over 8 years, a lot of that was up front and inflated numbers for the industry based on optimistic revenue projections. You can see those lines cross at very low subscriber levels. The 24 minutes an hour advertiser supported business model is what has died.

Sean has a different arrangement because he was syndicated originally by ABC – when Citadel took over ABC, he had a contract provision to let him leave ABC to go to Premiere, yet let Citadel (now Cumulus) continue to have a different arrangement in how ad revenue is split. That’s probably what is ending.

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17 Responses to Is Limbaugh’s career over?

  1. polokfla says:

    The question WAS Is Limbaugh’s show over?
    It will be over along with his 20 million or so listeners, when he says it is. All these Radio rumors are just worth filling pages that do make great floors for Bird Cages.
    There are far more options today than there were 20 years ago.
    And How can a guy complain Limbaugh and Hannity are too political when they have ALWAYS been political? Rush doesn’t need them. They need Rush.

  2. Parrott says:

    LOL ‘cumulus is ate up with the dum-ass’s’
    Another reason not to listen to ‘cumu-lost’ stations.

    parrott

  3. Art Stone says:

    Rush talked about this yesterday at the start of his show. He indicated that one of the parties decided to go public after he thought things had been settled. Jerry del Colliana seems to have good sources close to what’s going on but doesn’t quite spill the beans.

    Tom Taylor has unsheathed his shiv, but after looking market by market realizes Cumulus is holding an empty bag. The only top 10 market without an obvious place for Rush to land is Chicago. WGN is the most obvious station except they carry Cubs baseball, but I think the afternoon games don’t start until after Rush’s show is over. Moving Rush to an FM station is another option – Merlin still owns two FM stations and WWIQ-FM in Philadelphia is doing well, zooming past CBS owned WPHT (although in June they were tied).

    • Little Man says:

      Rush is on FM in Pittsburgh. Hannity is lame. I think his show prep is listening to Limbaugh and recasting his broadcast.

    • Parrott says:

      But what about that ‘heavey hitter’ WNTP, in Filth e-delphia ?
      (No offense to anyone that lives there and likes Art’s blog’)

      parrott

      • Art Stone says:

        apparently Salem doesn’t subscribe to Arbitron – Arbitron stopped publicly listing ratings for non-subscribers.

        My memory is that most of the Salem secular talk stations had market shares of 1% or less. Their business model isn’t so much about selling Barbasol shaving cream as it is selling you a subscription to Townhall magazine and running infomercials on the weekends

      • CC1s121LrBGT says:

        There are a lot talk stations in the ‘burbs as well… many probably do better than WNTP. WKXW has a lot of local talk shows from the northern suburbs that are heard south to the Delaware suburbs. WILM covers most of Philadelphia, so does WAEB… Don’t forget that WOR puts a local quality signal into most of Phialdephia, so it is a complicated market.

  4. WesternMA says:

    Like him or not, Limbaugh is one of the very few radio hosts that has original thoughts. When a new controversial news item appears, I’m always curious to hear Limbaugh’s take on it. He has a way of dissecting the story with a combination of history and present day politics overlooked by others…until he brings it up. Taking him off the air, which I doubt will happen, would leave a huge void.

  5. Little Man says:

    lasong, I agree with you. Limbaugh, whether you like him or not, is entertaining. Hannity always turns the conversation to himself (kinda like Obama). He always brings up how he has worked every job in a restaurant, worked construction, fell off the third floor of a building, etc. Who cares? By the time just about anyone is Hannity’s age, 50 or so, they’ve done a lot of different things. No one cares about his work history. No one cares that he had to struggle when he was young. We all do. I see him as nothing more than a sensationalist, not too bright, and quick to jump into a controversy to further his own standing. When the Terry Schiavo case was going on in Florida, he went charging down there to broadcast his show, just to show his concern. What does that mean? How did that advance the cause? I wind up listening to podcasts of radio programs that were on earlier in the day rather than him. The only one worse than him that I hear on a regular basis is Quinn of Quinn and Rose. Don’t get me started on him.

  6. lasong says:

    I can only hope and prey it be over for Hannity, his show is horrible but Limbaugh is to good, to smart, to popular, other syndicaters are probably chomping at the bit that they drop him so they can pick him up and start generating ratings and revenue for themselves.

    • Art Stone says:

      The reality is Hannity rode into syndication on the coat tails of Rush. He never would have generated the number of affiliates he has if Rush wasn’t handing off his audience at 3 PM. Hannity’s show has the highest commercial load of any of the syndicated talk shows, and a lot of his time is spent directly or indirectly promoting his Fox TV show

  7. Nidster says:

    What is interesting is the fact that a business is likely to have lower sales volume if they avoid advertising on popular programs. Think about it this way, only a tiny, itsy-bitsy part of Rush’s listening audience would base their decision NOT to purchase simply because the listener DOES NOT like what Rush has to say, or are offended by anything he has said in the past. The vast majority of people who DO NOT like Rush are not listening to Rush. It really is that straight-forward.

    Oh, a little off-topic but look at what the government is spending our tax dollars on these days:

    http://www.610wtvn.com/articles/national-news-104668/feds-investigate-redneck-day-at-arizona-11518989/

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