Making sense of Rush Limbaugh's $400 million deal

Rush_lTo paraphrase Bob Dylan, Rush Limbaugh is not my cup of meat, but I have to salute him for making the free enterprise system work for him, to the tune of a $400 million contract extension for the next eight years. That’s a pretty dang enormous deal for one guy, comparable only to Howard Stern’s deal for $500 million for five years at Sirius. (Plus, Stern has to pay his show’s labor and production costs out of his own pocket.)

Now, I know a lot of people are scratching their heads over this, since $400 million seems like quite a gamble for Clear Channel to spend at a time when its own revenues are declining, and on a guy with a well-known history of health problems (including deafness and drug addiction) and whose conservative shtick seems to be going against the prevailing political winds. But I think it makes business sense for a few reasons.

First, the coming election results won’t matter a whit to his ability to do what he does best: work up an outrage over politics. He’s dissed both Obama and McCain in the past, so whoever wins, he’ll still get to play the aggrieved victim. Second, the size of his listenership doesn’t really matter. (It’s been estimated at between 14 to 20 million listeners a week on 600 stations; in any case, no other radio personality comes close to his numbers.) For the last 20 years, he’s had a loyal core of "dittoheads" who’ll follow him whether his ideology is in the ascendancy or on the wane. A station that puts Limbaugh on the air figures it can build an entire slate of like-minded talk shows around him, figuring that if his listeners will come for him, they’ll stay for the rest.

What’s important, from an industry standpoint, is Limbaugh’s ability to deliver those listeners to advertisers. In the fascinating profile of Limbaugh that runs this weekend in the New York Times (but is already available online), Limbaugh says that he’s a businessman first, and his priority is to sell airtime. What’s more, the big-ticket sponsors who advertise on his show know it’s a friendly environment for a pro-corporate, consumerist message. "I consider myself a defender of corporate America," Limbaugh tells the Times. In other words, no sponsor ever need worry that its ad will appear alongside a rant about downsizing, pollution, price-gouging, or other corporate bad behavior. (This is also, conversely, one reason why liberal talk radio hasn’t prospered: sponsors are afraid to support what they fear will be a hostile environment for their ads.)

Finally, it’s probably worth it for Clear Channel to pay him an exorbitant sum of money (and to let its competitors know how eager it was to break the bank to satisfy him) than to risk losing him to another radio network when his current contract expires. In fact, maybe the big windfall is a signal to advertisers that Clear Channel (whose radio revenues dropped $30 million in the first quarter of this year) and radio itself are still strong and viable. After all, they can afford to pay this guy $400 million — and he’s just the help.

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  • realpatriot

    I’d love to know who advertises on his show so I can boycott all of them!

    • Godsfriend

      All you need to do is listen. Then you will know.

  • Tuzo

    If things are shifting to the left (as people have said) then I think that actually plays to Limbaugh. He’ll get to play the part of the lone voice of Conservatism with daily clips of the president to take shots at.

  • dewvid

    Yet another liberal writer (I won’t even say journalist) trashing someone with conservative views. Problem is IT’S AN ENTERTAINMENT WEBSITE!! When I read or watch something from an entertainment news source, I expect it to not promote a political bias. At least Rush is ranting in the appropriate forum. This is exactly why I don’t subscribe to this magazine anymore or buy it off the newsstand.

  • Rasha

    The fact that his freak is making so much money makes me sick. He’s disgusting. I understand that people have different beliefs, but some people take it too far.

  • d$

    So… 20,000,000 people listen to him daily. He gets $400 million for the next 8 years. Good thing there’s a voice on the other side, like Air Am… wait, what? Why did they go bankrupt? What? What do you mean no one listened to them? I thought surely the country was full of liberals who hated Dubya and conservatism! I mean, according to Keith Olbermann, we’re all a bunch of bigots, racists, homophobes and narrow minded Christians!

  • McCobb

    $400 Million?!?!?! Wow! That should buy old Limpballs a whole lot of OxyContin, Viagra and weekends with Dominican cabana boys.
    I’ve always thought his loyal listeners were called “Dildoheads”. I still think that’s more fitting.

  • Silv

    NOBODY deserves $400 million, especially with today’s economy. NOBODY is worth that. ESPECIALLY this moron.

    • Ralph DePalma

      Shure could buy yourself a heap o’ pick up trucks wiff dat kind of loot, eh pardner

    • Doug

      Unless its bionce,, j-z, or some other liberal you happen to agree with.

  • To dewvid

    And yet here you are.

  • Jonny Fukamara

    I don’t subscribe to EW or buy it anymore as well (but I will go to their website for free). Their critics and writers are biased, and all they can really do these days is create and promote “lists” ala the “top 10 new video game classics”, etc. What’s next? “the top 10 shoes worn by movie villians?” It’s sad. As for Rush, I do not agree with everything he says, but the simple fact of the matter is that a great deal of America agrees with him on lots of issues, and other celebrities/personalities have been forgiven for far worse behavior than his. Somehow “prescription drug addiction” just seems so tame these days. It is not that corporations are afraid of advertising on liberal stations, it’s just that only a small percentage of the populace wants to listen to the left-wing lunacy, hate, and bile they spew daily, and hence, they are not being put in front of enough listeners. It’s the same reason that Fox News is #1. Deal with it.

  • Austin

    WOW D$, I think we are the same person.
    That was a good and funny post. The article is dead on. I listen to Rush, he is very entertaining and I do often agree with his views. The part about listeners sticking around when they are looking for Rush and don’t find him is also correct in my case. I now pretty much exclusively listen to AM, FM today is just terrible. Limbaugh’s show single handedly got me hooked on AM radio. He commands a huge audience, and often his listeners are very well-to-do themselves. This obviously makes advertising much more lucrative. I mean, would you advertise for Mercedes on the local Rap station, I think not. They gave Howard Stern $500 million and all he does is talk about the female anatomy. So what is so crazy about Rush getting $400 million when he actually has to produce logical and complex arguments.

  • Austin

    Let the liberal media tear this guy apart for making $400 million, it’s just their jealousy of him. Like Olbermann trashing FOX NEWS every single night. Olbermann could never dream of seeing the ratings that FOX enjoys. Like I heard on CNN today, he is the closest thing to a national broadcaster. No one comes close to his audience size in any medium.

  • Rush Lover !

    “realpatriot Thu, Jul 3, 2008 at 03:04 PM EST
    I’d love to know who advertises on his show so I can boycott all of them!”
    Typical liberal. Has never listened to the show, but HATES Rush !

  • A Genuine Patriot

    You just admitted your total stupidity.
    If you listened to Rush’s show 2 things would happen. #1: you might learn something other than total bigotry. #2 you’d find out the advertisers are there because of the millions of intelligent, loyal listeners who make decisions based on information, not venomous hate speech that I heard on Air America-Please don’t call yourself a “realpatriot” you don’t believe in free speech!

  • to To dewvid

    HAHAHAHAHAHAHAHAHAHA! right on dude!

  • jr

    no, he ain’t worth it. i’m a repub but i can’t stand all those far right conservatives. i’m more middle of road which is where i think most people are or that’s the direction they’re heading. in any event, mostly rush likes to listen to himself talk & likes to hear his audience tell him how wonderful he is. BORING! hanity is boring too. i wouldn’t pay either of them. & again, i’m a repub. perhaps i’m a closet dem! :)

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