Friday, July 27, 2012

Will Rush Limbaugh Be Done In By His Vulture Capitalist Hero’s?

   The pill-popper has already lost a boatload of advertisers, and that is still continuing. It looks as if his hero’s are beginning to ransack Clear Channel, which is the parent company of conservative blabbers syndicator, Premiere Networks.

Richard Myers on Tue Jul 24, 2012      Original

Rush Limbaugh has lost countless millions in advertising revenues for his syndicator and other radio networks, and the drip-drip-drip continues: Wal-mart's "Sam's Club" has just pulled advertising, and eBay has also joined the exodus. These follow closely on UPS abandoning Rush. Yet the greatest long term damage is likely to come from the exit of hundreds of small companies that do not make the news. In spite of the media largely losing interest in the Limbaugh boycott story, the StopRush effort is continuing to grow. For example, a new video featuring Rush Limbaugh's incessant attacks on working people and unions and a recent Daily Kos diary that made the front page brought in hundreds of new activists.

No one knows how many total advertisers (national and local, large and small) have dropped, but estimates I've heard put the number well above seven hundred. Radio stations have been forced to seek new sponsors for Limbaugh, and also for other radio talk show hosts impacted by collateral damage from the boycott.

Rush Limbaugh's response to the social media firestorm has largely been ineffective. Rush appears to have given up on Twitter, and the only two posts in the past six weeks on his "Rush Babes For America" Facebook page simply linked to his thoughts on a popular erotic tome -- which one might have thought a hot topic for the Rush Babes. Unfortunately for Rush, the absence of new content over the last six weeks has resulted in a drop-off in interest, as indicated by the dramatically lower number of Rush Babe responses.

A few months ago Mark Frauenfelder predicted a "perfect storm" for right wing talk radio: listener demographics, technological change, and the advertiser backlash all have been taking a toll. But another threat to Rush Limbaugh, Sean Hannity, Glenn Beck, Michael Savage, et al, looms on the horizon, and comes from a very different direction: vulture capital. None other than Mitt Romney's Bain Capital owns Clear Channel, which is the parent of the conservative talkers' syndicator, Premiere Networks. Clear Channel recently downsized, simultaneous with Bain Capital squeezing the company through a forced 2.2 billion dollar dividend. (This is one of the mechanisms by which Mitt Romney and friends have amassed their fortunes -- sucking cash out of troubled corporations, subsequently allowing some of them to go bankrupt.) Clear Channel was already 19.2 billion dollars in debt, and is facing a shareholder lawsuit related to loans between different Clear Channel entities that were used to cover the huge payout. In spite of crushing debt, Clear Channel is "splashing the cash" in "an attempt to rebrand itself as a hip digital music giant." Meanwhile, some are downgrading Clear Channel Outdoor Holdings, the Clear Channel billboard entity, and recommending investment in their competition.

Essentially, the corporate structure is Bain Capital on top, pulling strings through Clear Channel Media Holdings, which is the parent to the other Clear Channel entities. Clear Channel Outdoor Holdings was tapped for a loan to finance the dividend, and this has enraged its shareholders. Clear Channel Outdoor Holdings isn't Clear Channel, but the two sibling companies are closely related, with nearly ninety percent overlap according to one source. Therefore, one might expect the health of one corporate subdivision to reflect the health of the other. Since the dividend payout to Bain Capital in March, the stock price for Clear Channel Outdoor Holdings has dropped by two thirds.

More privately held Clear Channel's valuation is not so easy to determine. Even so, what is the future of a company deep in debt that is "splashing the cash", and what might the impact be on conservative shock jocks? Obviously, Rush Limbaugh is extremely useful to the conservative cause, and is likely to survive (even while bleeding advertisers) through the next election, and possibly for many months beyond. (It took 20 months to force Glen Beck off of Fox News.) But Clear Channel has payments of "$2.8 billion due in 2014 and $12.2 billion due in 2016." The question becomes, will Clear Channel succumb to vulture greed the way so many other companies have?

StopRush is obviously damaging to Rush, but what irony that the very cutthroat capitalism Rush Limbaugh so strenuously champions may pound the last few nails into the coffin of conservative talk radio, at least as presently constituted. (If you're on Facebook, join the StopRush cause here.)