Rush Limbaugh's radio business model has been cracked and broken for several years. News this week of his four-year contract extension does little to repair those fractures, but does raise the specter of his eventual departure from the AM dial. Because without a solid advertising and affiliate base, Limbaugh simply cannot flourish the way he once did.
And what a difference eight years makes for the talker and the precarious state of his radio career.
Back in 2008 when Limbaugh re-upped with his syndicated radio bosses, the details of the wildly generous deal were quickly trumpeted in the press. Headlines heralded the AM talker's NBA-type, eight-year contract signed with Clear Channel, the conservative-friendly media behemoth with a soft spot for right-wing radio: $400 million! That included a 40 percent raise from his previous deal and a $100 million signing bonus.
The larger 2008 context was clear: Limbaugh had established himself as a larger-than-life media and political kingpin and this was his victory lap. Limbaugh commanded the type of money and influence that few in the media and entertainment industry ever achieve. A radio ratings hero, Limbaugh was at the top of his game. Or so Clear Channel insisted.
Compare all that 2008 contract triumph to this week's minimalist roll-out announcing Limbaugh's extension, which consisted of a single-page press release from his radio boss, iHeartMedia (formerly Clear Channel), and Limbaugh mentioning it on his program.
Conspicuously absent this time around were any details about the size of the contract, or an acknowledgement that Limbaugh might have been forced to take a sizeable pay cut thanks to his diminished stature.
On his Tuesday program, Limbaugh insisted he's never wanted his earnings to be public knowledge and so he wasn't going to discuss the details of the extension; "It was a sign of good manners." But in a 2008 New York Times magazine profile, Limbaugh openly discussed the dollar figures behind his blockbuster deal. ("He estimated that it would bring in about $38 million a year. To sweeten the deal, he said he was also getting a nine-figure signing bonus.") He also talked about how much his private jet cost ($54 million).
Today Limbaugh announced -- while obscuring the details of his new deal -- that estimating his annual salary is "kind of a joke" because he doesn't "earn a salary." He continued, "I have to perform every quarter, every six months, every year. There's no salary involved here, so throwing out numbers with this is kind of misleading in the first place."
Put it this way, if Limbaugh got a raise or another big payday this week, you can be sure the figures would've at least been leaked to the press.
"I hear the new deal has a much lower base salary and a much bigger revenue share component," Darryl Parks tells Media Matters. Parks is a former talk radio host, programmer, and self-identified Republican who writes about the radio industry at DarrylParksBlog. "With the revenue share, the company is lowering its financial risk in signing him."
And let's be clear, struggling iHeartMedia is in no position to take any "financial risk" on Limbaugh, or anybody else. Instead, the once-dominant radio behemoth is saddled with $20 billion in debt, thanks to a misguided leveraged takeover engineered by Bain Capital in 2008.
Clear Channel stock value, April 2007: $39.
iHeartMedia stock price, July 2011: Approximately $8
iHeartMedia stock price at close of Tuesday: $1.30.
But even with a sturdy corporate parent, it's likely Limbaugh was facing a pay cut thanks to the historic advertising exodus that has wreaked havoc on his business model. The widespread Madison Ave. rejection was sparked by in part by the talker's days-long sexist meltdown over Sandra Fluke in 2012. With advertisers staying away, and ratings down, station owners were suddenly less interested in carrying his expensive program.
In key major markets such as Boston, New York, Los Angeles, and Indianapolis, Limbaugh has been demoted on the AM dial, onto often struggling, underperforming stations -- the type of affiliates that Limbaugh was rarely associated with during his glory days as the king of talk radio.
Parks last week looked at Limbaugh's most recent ratings in Boston:
Limbaugh's show has been banished to WKOX-AM, a iHeart Radio owned station, and in June '16 that station ranked #23 with a 0.2. That's just two tenths of a point away from a DNS or "did not show," meaning not having enough listeners to show in the ratings.
Limbaugh's show airs on a station in Boston that basically has no listeners.
The Buffalo News recently looked at Limbaugh's local ratings and found that for the months of January, February and March this year, his audience declined "14 percent in age 12 plus, 16 percent in the age 25-54 category and 5 percent in the older age 35-64 demographic." And that was during the height of the political primary season.
The paper also reported that the Buffalo station, like so many other Limbaugh affiliates, was having trouble selling ads on the program.
As Parks wrote on his blog last week, "Years ago, Rush Limbaugh could make or break a news/talk station. But, that was many years ago and is no longer the case."
Crossposted at Media Matters for America.