Rush Limbaugh’s Desperation Is Showing
Rush Limbaugh is a millstone around the neck of the talk radio format.
The nation’s largest radio broadcasting company, Clear Channel, has been shedding jobs for a while now. Despite rebranding itself as iHeart Communications, the company remains mired deeply in debt thanks to a 2008 private-equity deal with Bain Capital and Thomas H. Lee Partners. Facing a negative cash flow, iHeart Communications is moving into digital radio because broadcast revenue is expected to be flat until 2018. Their junk bonds are among the riskiest on Wall Street, rated CCC, which means “currently vulnerable to nonpayment,” “substantial risk” and “extremely speculative.” Rather than pay off their debts, iHeart Communications is finding creative ways to delay the inevitable - and offering higher interest to attract capital to their very risky terms.
Clear Channel has never been profitable since the Bain deal, but the fiscal year ending in June 2013 saw the company’s first cash-flow deficit in four years. So what happened in 2012? StopRush is what happened. Limbaugh’s disgusting three-day tirade of misogyny against Sandra Fluke spawned a huge reaction in social media and blogs, leading thousands of volunteers to start a divestment effort aimed at convincing sponsors to pull their ads from his program.
When iHeart Media Chairman and CEO Bob Pittman recently told Bloomberg about his company’s positives, he listed Ryan Seacrest - but not Rush Limbaugh. In fact, the talk format is fading from the FM band as Limbaugh keeps losing stations and declining in the ratings. In May 2013, Lew Dickey, the CEO of America’s 2nd largest broadcaster, Cumulus Media, specifically blamed Rush Limbaugh’s toxic brand for low revenues, while Radio Ink reported that 48 of the top 50 network advertisers had excluded Rush from their ad orders.