The Radio Equalizer: Brian Maloney

08 July 2008

Limbaugh's Success Contrasts With Radio's Woes


While Industry Falters, Conservative Talk Remains Strong

Too busy venting their anger over Rush Limbaugh's unprecedented contract renewal deal, the talk titan's traditional mainstream media foes have provided almost no critical insight into why such an agreement would be made in the first place.

In the face of a wildly- troubled broadcast radio industry, how could anyone, including Rush Limbaugh, warrant a nine-figure advance?

Over the past few days, we've the seen the "is he really worth it?" question raised by many, but answered properly by almost no one.

It's simple: the deal is justifiable because he remains as popular as ever. In addition, Limbaugh has a sales group that knows how to successfully market conservative talk radio.

That's no accident: Rush himself has worked to make sure his team fully understands the product it is selling.

Meanwhile, at broadcasting's most troubled firms, "programming" managers lack experience in the medium, left- leaning execs openly badmouth conservative talk hosts and almost no effort is made to build a sustainable future for the one format that can survive the iPod and other threats to radio's future.

In that environment, how could sales execs sell controversial talk when they don't understand the medium's public appeal?

Radio is only dying when and where incompetent managers attempt to force listeners to embrace unappealing programming. Several large broadcast companies are so unwilling to grasp this basic concept that they may soon fail. At the moment, some radio stocks are selling for as low as a dollar per share.

At MSNBC, this Motley Fool piece argues that Limbaugh has just signed the last big radio deal:

...this could be the last time that the radio industry waves around a nine-figure deal.


Well, terrestrial radio's appeal is waning. Hardcore commuters have switched to the mostly ad-free satellite radio, while the portability of digital music, podcasts, and Internet radio have created pocket-sized alternatives to firing up the AM and FM bands.

Even more importantly for terrestrial radio's fortunes, the merger between XM Satellite Radio (Nasdaq: XMSR) and Sirius should close later this year.

XM and Sirius have opened up their billfolds in the past to ink pricey deals. Whether they were wooing Stern, Oprah Winfrey, or Martha Stewart Living Omnimedia's (NYSE: MSO) namesake star, the satellite broadcasters have won over celebrities with big bucks and the unshackled freedom of reaching a premium radio audience. Professional sport leagues and college conferences have also been at the center of bidding wars, with XM and Sirius jockeying for eardrum magnets.

That will change. Stern is unlikely to command the same $100 million-a-year payday he's averaging today, even though Sirius' ability to close the subscriber gap with XM since Stern's arrival certainly suggests he deserved the money. The key is that Sirius-XM won't bid against itself. Limbaugh's deal is a record for terrestrial radio, but it still averages out to just $50 million a year, and that's if performance incentives are hit.

Your Radio Equalizer sees no reason to compare this deal with Stern's. The big money involved here reflects radio's sobering realization that talk radio is the only land- based format with a viable future. And Rush remains its biggest player.

As young people have abandoned terrestrial FM music stations in large numbers, their air personalities are not signing huge contracts, are they?

The one change we are likely to see in the next few years for talk radio is a sudden shift from the AM band to FM. The model may prove to be "Rush Radio", the New Orleans- based WRNO-FM. It's in sync with the audience: personality- driven.

Broadcast firms have a choice to make: they can either embrace talk radio and respect its audience, or fail. Simply because one disagrees with talk's viewpoints, why fight the one chance for success?

It's just plain irrational.

IS OLBY jealous of Rush's deal?

LIBTALKER Lionel enraged over NYT Rush piece

FOR New England regional talk radio updates, see our other site. NEW THERE: one crazy local issue after another has talkers well-positioned

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  • IS OLBY jealous of Rush's deal?

    Do moonbats leave poorly-spelled comments?

    By Anonymous Anonymous, at 08 July, 2008 11:54  

  • Rush the elitist, hysterical. Read the lionel piece, it describes Rush perfecty. A filthy elitist, who spends his mony like Gangsta rapper on status symbols. disgusting. How is he a conservative? He is an elitist pece of turd and he laughs all the wayot htwe bank at yur expene. uckilly for me, I don't listen to his sho, I have list o his advertisers, and make sure ot to spend a penny on a comany that advertises on Limbagh's show.
    I will not cvontribte to the pig man's billions.

    I do though, pray every nght that the filthy, degenerate, lacking in family values drops dead.

    The $20,000 a year earners that listen to the billionaire pig are pathetic. So proud not to be one of them, I don't listen,I dn't patronize anything that advertises on his show.

    I don't support elitist pigs. Limbaig is te most disguasting, piece of shit (non serial killer or terrorist) to ever walk the face of this earth

    and you suckers support him? Why do you suck up to the elite?

    America will rejoice at the news o his death

    By Anonymous KILLTHEPIGGY, at 08 July, 2008 13:48  

  • I am unsure about the move to Sat radio, it kind of reminds me of when we first got cable as a kid. MTV Commercial free, lol well until tons more people got cable and they figured out they could get alot more money for commercials.

    Poor KTP is having a bit of a RDS episode.

    By Anonymous ASH, at 09 July, 2008 11:41  

  • Rush is a capitalist through and through. He got one the airwaves to do one thing and one thing only, make high ratings to caommand a premium from his advertisers.
    The means by which he does that is to attract an audience that CHOOSES to listen when they can. His encouragement of "rugged individualism," menas that he is empower his audience to learn things for themselves, not follow blindly.
    Had he not chosen the career path of his youthful dream, I dare to think that this country would be in a lot worse shape politically than it is now. The electorate has moany choices from which to collect their news and it empowers them to elect qualified candidates. If good people don't get elected into local office, state office or even natioanl office, it's because the majority of the electorate is too stupid to learn about the candidates and just votes for whemever they've seen the most of in tv commercials.

    As for KILLTHEPIGGY, obviously, you have no maral compas in your life because you can't defend your argument without more that 60% (that's more than half, for those of you in Rio Linda- KILLTHEPIGGY, could you even find a map that would have Rio Linda on it) of it containing abusive, name calling, derogatory hate. That, and your can't type, much less spell. You must be a product of PUBLIC EDUCATION.
    The answer to your ONLY useful question;"How can he be a conservative?" is actually a very easy one. He believes in the greatness of America, and that as her citizens, WE and WE alone are responsible for our achievement of greatness. Government owes us NOTHING, except getting out of the way and letting us follow the unalienable rights of our great Constitution, pursuit of Life, Liberty, and Happiness.

    By Anonymous Deskpilot, at 09 July, 2008 16:55  

  • MOP “piggy” your still an idiot. Get a life looser. So worried about someone being more successful than you. Hey that’s about everyone. You need to trade your useless degree in and get something better maybe McDonald University then you will be on your way. Other than that keep pushing for the Gov. to force your company to give you a raise you don't deserve. Losers hate the capitalist market.


    By Anonymous Anonymous, at 10 July, 2008 07:54  

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