Daily Archives: Tuesday, May 5, 2009

As The New York Times noted last week, “It is too soon to say who will be the biggest loser among media companies in this recession. But Clear Channel Communications is vying for the title.”

Clear Channel’s fall from business grace remains epic in its proportions. In 10 years time the company has gone from dominating a flourishing radio industry to a corporation that now teeters on the brink. (Clear Channel stock traded for $90 a share in 2000. When the radio company went private last year, pre-crash, the stock was already down in the $30s.) Lots of over-extended, debt-ridden media conglomerates are struggling through today’s deep economic recession, but few face a future quite as perilous as the one staring back at the San Antonio radio giant.

And yet Clear Channel’s most famous employee, Rush Limbaugh, remains oblivious to it all. I sometimes wonder what Limbaugh thinks when he reads about the not-so-slow-motion collapse of his radio employer while lounging in his 24,000-square-foot Florida estate or motoring in his $450,000 car to the airport to ride in his $54 million jet. Does Limbaugh feel bad? Does he feel a little guilty? And does he ever think about giving some of his riches back so that thousands of radio colleagues wouldn’t have to be bounced to the curb?

And I wonder what those pink-slipped Clear Channel employees — some of whom spent decades working for the company — think about Limbaugh as they’re ordered out the station door and onto “the beach.” (That’s radio-speak for unemployment.)

I wonder about Limbaugh and the thousands of his laid-off Clear Channel colleagues, because the dichotomy is striking: Last July, just months before the radio economy went into free-fall, Limbaugh’s bosses at Clear Channel, who enjoy deep ties to Texas Republicans and who have been at the forefront of promoting right-wing radio, rewarded the turbo-talker with the biggest contract in terrestrial radio history. The contract included an eye-popping 40 percent raise over his already gargantuan pay, despite the fact it’s doubtful any other radio competitors could have even matched Limbaugh’s old pay scale.

The astronomical worth of Limbaugh’s eight-year pact: $400 million. The amount of money Clear Channel execs have been trying to scrimp and save this year as they lay off thousands from the struggling company: $400 million. Ironic, don’t you think?

…  But this marriage of media and politics deserves a closer look.

…Why does Clear Channel, now desperately trying to stop the corporate bleeding, feel the need to support Limbaugh with a quasi-welfare state arrangement? Why is Clear Channel so anxious to pump tens of millions of dollars into the Republican’s bank account each year?

Because here’s the real oddity about Clear Channel’s pact with Limbaugh: Last summer there was nobody else in a position to steal Limbaugh away. Clear Channel was basically bidding against itself and decided, in the end, to give Limbaugh a 40 percent raise, which included writing a $100 million signing bonus check to celebrate his contract extension. That right: A nine-figure signing bonus. At the time, it was a puzzler. Looking back at it today, the $100 million goodwill gesture, viewed against the backdrop of Clear Channel’s doomsday woes, makes no business sense whatsoever. (That $100 million bonus could have saved maybe 1,000 Clear Channel jobs this year alone.)

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