Business

Rush Limbaugh And Sean Hannity Could Go Off The Air In 4 Key Cities

If Cumulus ends up dropping Rush Limbaugh and Sean Hannity, the conservative talk radio hosts could lose access in Chicago, Dallas, Detroit, and Washington, D.C., at least temporarily.

 

Rush Limbaugh and Sean Hannity

On the redrawn talk radio map that could potentially result from Cumulus Media dropping Rush Limbaugh and Sean Hannity from its stations, four cities have emerged as key battlegrounds: Chicago, Dallas, Detroit, and Washington, D.C.

Those cities represent the only ones in which Clear Channel, whose Premiere Radio Network syndicates both conservative pundits, doesn’t currently program a news and talk radio station that it can easily slot Limbaugh and Hannity into should Cumulus not renew their contracts.

The possibility of Cumulus, the second-largest radio company in the country behind Clear Channel by station count and third-largest behind Clear Channel and CBS Radio by revenue, dropping Limbaugh and Hannity has been building for years, the seeds of which were planted way before Limbaugh called birth-control activist Sandra Fluke a “slut” on-air last year. The acquisitions of Susquehanna Radio in 2006 for $1.2 billion and Citadel Broadcasting in 2010 for $2.4 billion gave Cumulus a network to develop its own content and the scale to syndicate it. So, instead of paying Clear Channel to license shows from Limbaugh and Hannity, Cumulus is now able to use its own homegrown conservative hosts — such as Mike Huckabee, Mark Levin, and Michael Savage — on its stations, allowing it to reap more financial upside.

For the most part, the maneuvering is less the seismic shift headlines suggest and more like a game of chess with the hosts as pawns and the country’s radio market as the board. Limbaugh, for instance, is currently on about 600 radio stations, about 45 of which are Cumulus stations. In nearly all of the Cumulus markets that syndicate Limbaugh, Clear Channel operates a news and talk station that it could slide him into fairly easily.

Except for Chicago, Dallas, Detroit, and Washington, D.C. Those are huge radio markets — all rank among the 12 biggest in the country, according to Arbitron — that any talk show host needs to have a presence on to maintain a mass audience and preserve influence. That is especially true for political pundits like Limbaugh and Hannity, who can’t afford to be off the air, even temporarily, in the nation’s capital and Detroit, where that city’s recent bankruptcy provides a broad canvass for those hosts to push a conservative agenda. Should Cumulus drop the hosts, however, it appears that they will indeed be off the airwaves in those markets for some period of time.

A representative for Cumulus declined comment. A Premiere Networks representative said it is the company’s policy “not to comment on rumor and speculation.”

Clear Channel has been bracing for this moment for well over a year, and there is no doubt that the company has a contingency plan in place for those four battleground cities in particular. As one source close to the situation said, “there is too much money at stake to not have them [Limbaugh and Hannity] on in those markets.”

Among the alternatives Clear Channel could pursue include simply syndicating the hosts onto another station, such as one owned by CBS Radio or another broadcaster in the market. The problem with that remedy is that there is no guarantee another company will want to pay up for Limbaugh or Hannity, if they want them at all.

Another option would be to change the format of one of its existing stations in those cities to news and talk. Clear Channel owns 6 stations in D.C., 7 each in Dallas and Detroit, and 8 in Chicago, all of which currently program music, sports or local news. Radio station owners frequently employ this tactic for low-rated stations, though the conversion typically involves switching music styles or going from news and talk to music — Cumulus, for instance, in January converted one of its New York stations to country music and dubbed in Nash.

But changing a station format isn’t as simple as flipping a switch, especially moving from music to news and talk. There are marketing costs, talent costs (Limbaugh and Hannity can’t each be on the air for 12 hours a day), potential advertiser losses (and gains), and a host of other expenses.

“It takes a lot of money,” said Tom Taylor, a longtime radio observer who edits industry newsletter Tom Taylor Now.

Of course, Cumulus and Clear Channel must navigate a delicate divide between competing and cooperating and there exists the possibility that they could reach a deal where Limbaugh and Hannity remain on Cumulus stations in Chicago, Dallas, Detroit, and D.C. but get dropped from the others. The two companies are partners in a few ventures already, so horse-trading markets with regards to the hosts might be better than a full-scale removal.

As Taylor noted, “they both have a lot to say over the each other’s businesses.”

Indeed, losing Limbaugh and Hannity in those market could potentially ding Cumulus more than it does Clear Channel. As top-tier markets, the stations Cumulus owns in those cities factors heavily into its financial performance, and it is reasonable to assume that Limbaugh and Hannity are responsible for a large portion of their audience, and therefore their ratings and advertising revenue.

“Cumulus has to be careful about how they play this,” said Jimmy Schaeffler, an analyst with The Carmel Group. “Making the wrong move here could create an unfortunate precedent for those stations. They risk losing credibility with listeners in those markets and in others.”

Keenly aware of that fact, Cumulus Chief Executive Lew Dickey took the high road and maintained a purely diplomatic stand on the company’s second quarter earnings call today.

As part of his opening statement, Dickey cut off any possibility of using the call as a public negotiation by saying the company doesn’t comment on individual talent and that it has been “straightforward and very consistent” with regard to evaluating performance, taking into consideration such things as “listener interest, advertising demand, and costs.” When asked later on the call if Cumulus made money off Limbaugh, Dickey ducked the question.

He did hint, however, that a resolution was close and that Cumulus would have “more to say when the time is appropriate.”

It’s probably a safe bet that Limbaugh and Hannity have some thoughts on the matter as well.

Check out more articles on BuzzFeed.com!

Facebook Conversations
          
    More News
    Now Buzzing