Why Rush Will Survive--and Prosper

The media world is atwitter (once again) over speculation that Cumulus Radio won't renew its contracts with Rush Limbaugh and Sean Hannity when they expire at the end of this year.  That move would cost each host about 40 affiliates nationwide, including some of the most important talk stations, such as WABC in New York; WLS (Chicago), WBAP (Dallas) and WMAL in Washington.

But as Mark Twain might observe, reports of Rush's (and Hannity's) demise are greatly exaggerated.  As we noted back in May, there are plenty of options for both hosts in those markets--and others.  In fact, Clear Channel completed the purchase of New York heritage station WOR last year, with an eye towards moving the Limbaugh and Hannity programs to that frequency, and re-formatting the outlet for conservative talk.  That would set the stage for one of the biggest radio battles in the Big Apple since WABC's days as a Top 40 outlet, when it fended off challenges from such rivals as WMCA and WNBC. 

This time around, the outcome is less certain.  Clear Channel, the world's largest radio company, clearly sees an opportunity in New York and other markets.  While the company is heavily saddled with debt, it has more assets, and (more importantly) better talent options through its Premier Radio Networks.  If Rush and Sean move down the dial from 770 to 710 AM, some radio execs believe that many of their listeners will follow them.  That will leave WABC (and other Cumulus stations) with lesser talent, but lower operating costs.  While that may help the near-term bottom line, but it doesn't bode well for long-term audience growth, or increases in advertising revenue. 

One more reason that many in the business don't believe that Rush or Sean are going anywhere in New York, Chicago, Detroit or Washington, D.C.  Negotiations between Cumulus and Premier have clearly hit a snag, and the party that wants a better deal (hellooo, Lew Dickey) is leaking to his friends in the press, who are more than happy to spin the "End of Rush and Hannity" story.  Meanwhile, Clear Channel is hanging tough, threatening to move Limbaugh and Hannity to their own stations, and give Cumulus a run for talk radio supremacy in key markets.

That alone may be enough to force Cumulus to cave.  Readers may remember that Mr. Dickey was complaining that many of his news/talk outlets were under-performing last year, a situation he blamed on Rush Limbaugh's comments about Sandra Fluke.   It was pure baloney, and everyone in radio knew it, but the mainstream press eagerly lapped it up.  No one ever bothered to ask Dickey why his stations were affected by the controversy, while other Rush outlets (like Clear Channel's KFI in Los Angeles) remained among the highest-billing--and most profitable--in the nation.