Millions Lost: Rush Limbaugh Continues To Be Bad For Business

ANGELO CARUSONE/Media Matters for America

Yesterday, Cumlus Media, a major affiliate of Rush Limbaugh's show reported millions of dollars in losses attributable Limbaugh's advertiser troubles.

During a call with investors Cumulus CEO Lew Dickey acknowledged Limbaugh's "drag" on business while being careful not to mention Limbaugh by name: 

On Thursday, speaking to investors again, Dickey said that, though his profits were up in his latest quarter, his revenues were down thanks to ten out of the 570 stations he owns. These stations, he said, were mostly "news/talk" formats in major media markets.

Dickey chalked up the sluggish performance -- the top three stations cost him $5.5 million, he said -- in part to "some extraordinary issues," such as "the boycott that we saw from some remarks in a talk radio show." That, he said, had "impacted us."(emphasis added)

Dickey made news when Cumulus last reported earnings in May when he said that the Limbaugh advertiser efforts lost his company millions of dollars in the first and second quarters, but indicated that things would be back to normal in June. Limbaugh's defenders heralded Dickey's projection as proof that the efforts to hold Rush Limbaugh accountable had failed. Back then, I analyzed the report and explained why Dickey's prediction would likely prove inaccurate.

As it turns out, my analysis was correct. Things did not return to normal in June. On yesterday's call, Dickey informed investors that he anticipated the drag on business to continue for at least another six months to a year.

Dickey has good reason to anticipate a continued drag.

First, Limbaugh's advertiser troubles are far from over.

• Last week, Carbonite's CEO told shareholders that although dropping their major endorsement deal with Rush Limbaugh had a short term impact on revenue, he did not regret the decision. Notably, the CEO added that "things would have been worse" had Carbonite not dropped Limbaugh.
• Advertisers continue to exclude their ads from running during Rush Limbaugh's show. Over the past few weeks, big name advertisers, like Sam's Club and eBay, as well as lesser known advertisers issued issued public statements confirming that that their ads will not run during Limbaugh's show. And, this doesn't account for the scores of local advertisers that refuse to advertise on Limbaugh's show.

Second, Limbaugh continues to engage in the same kinds of vitriol and reckless attacks that put his intersecting business interests and affiliates in this position in the first place, like his renewed attacks on Sandra Fluke or a recent statement that "feminism was established" so "unattractive women" could have "easier access to the mainstream." This continued recklessness signals to advertisers that Limbaugh remains volatile. For many advertisers, this volatility is what keeps them away. They look at Limbaugh's long record of vitriol, they see the damange to businsess it can unpredictably create sometimes, they recognize that he continues to engage in similar conduct and they rightfully conclude that the risk just isn't worth it.

Bottom line: Rush Limbaugh continues to demonstrate that he's bad for business.

And, onward we go...

Corporate America Turns Its Back On Rush Limbaugh

by Eric Boehlert/Media Matters:

I wonder if besieged AM talker Rush Limbaugh has dialed up Glenn Beck to commiserate about what it feels like to have corporate America lose confidence in you. I wonder if the two far-right talkers have compared notes about how difficult it is to stop a Madison Avenue stampede once it starts rushing away from your program in the wake of shockingly offensive comments and insults.

Watching advertisers flee Limbaugh at an alarming rate last week, Beck must have felt a sense of déjà vu regarding the cavalcade of television sponsors who abandoned him after he insulted the president as a "racist." (Not to mention a socialist -Marxist -Nazi.) It was an advertising exodus that eventuallycost Beck his job at Fox News.

Like Beck before him, Limbaugh has announced the mass migration is no big deal. Yet like Beck before him, Limbaugh last week learned the overdue lesson that there are real-world consequences for trafficking in hate speech. The talk titan learned there are free-market penalties, such as when companies like Carbonite and AOL walked away from their existing ad commitment to Limbaugh's show. Other hallmark marketers including Allstate, Capital One, J.C. Penney, Netflix, and Sears announced  that any commercials of theirs that had run on Limbaugh's show had been put there by mistake and that they did not want to be associated with his program in the wake of his three day attack of a student.

Imagine how painful the sting must feel for Limbaugh who practically worships at the alter of big business, to know corporate America, via the beloved free marketplace, has spoken so loudly and so clearly about Limbaugh's creepy, misogynistic taunts of Sandra Fluke.

Keep in mind the companies now making sure to keep their distance from Limbaugh represent some of the most dedicated radio advertisers in the business. Combined, Sears and JC Penny purchased more than 60,000 radio ads last month alone. Meanwhile, Allstate spends approximately $40M on radio each year. These are not newbies to the AM dial. These companies have been buying talk radio for years and understand its often-unseemly and controversial content. Yet Limbaugh's unprovoked outburst against a law student convinced the retail and insurance giants they simply cannot be associated with the widely disliked  talk show host.

And they're not the first blue chip corporate citizens to come to that conclusion. Today's exponential retreat by advertisers is reminiscent of 2009 when NFL team owners soundly rejected Limbaugh's attempt to become an owner of the St. Louis Rams. National Football League owners know branding better than perhaps any other group of sports professionals, and they knew instinctively that Limbaugh's presence would be poisonous for their business. It's the same conclusion Netflix and Carbonite and Allstate have all come to this month.

Meanwhile, why is Limbaugh unable to stem the Madison Avenue tide? Why is Limbaugh's program, as heard on his flagship station, WABC in New York, suddenly a bastion of unpaid public service announcement, instead of revenue-generating spots?

The first short Answer: Female spending power:

Reality: Women are the primary consumers in the United States. Women represent an economic powerhouse, making over 85% of the consumer purchases (in the United States) and influencing over 95% of total goods and services.  Women's consumer spending is $3.7 trillion and business spending is $1.5 trillion.  Women also purchase 50% or better in traditional "male" categories like automobiles, consumer electronics, and PCs.

Brands today across the consumer spectrum must maintain a healthy, positive relationship with female consumers. That's a relationship Limbaugh badly damaged when he called Fluke a "slut" and demanded she post videos online of herself having sex, as well as suggesting Fluke had intercourse at age 12. Why would advertisers risk a backlash by paying to support Limbaugh's increasingly erratic show?

The second short answer:  Corporate America has no interest in being tied to controversial hate speech. That's what was so revealing about the news that Limbaugh's Clear Channel-owned radio syndicator, Premier Radio Networks, recently informed affiliates that lots of corporate sponsors, including Ford, GM and Toyota, are very uncomfortable with lots of right-wing radio hosts, and want nothing to do with their scornful style of talk. The political hosts that advertisers are demanding be kept away from their brands? Limbaugh, Beck, Sean Hannity, Mark Levin and Michael Savage. (Along with controversial "Hot Talk"pioneer Tom Leykis.) 

Noted John Avalon and Daily Beast:

When big money starts shifting, it is a sign of a deeper tide that is difficult to undo, even if you are an industry icon like Rush Limbaugh. It is a sign that the times are changing.

Make no mistake, big money is shifting. It's shifting away from Limbaugh, just like it shifted away from Beck. Corporate America has no interest in that ugly, radical brand of contempt