I’m not going to be too hard on them for this story, since Air America pretty much proves that the Left doesn’t understand much about radio at all. Their latest attempt to jab at Rush Limbaugh takes a marketing strategy from his syndicator from more than 15 years ago and attempts to turn it into an argument that Rush is, well, bargain-basement. In doing so, they not only display a fundamental ignorance of radio revenue, they also ignore Rush’s recent $400 million contract.
The HuffPo calls this a “dirty little secret”:
Here’s how a barter deal works: To launch the show, Limbaugh’s syndicator, Premiere Radio Networks — the same folks who syndicate wingnut du jour Glen Beck — gave Limbaugh’s three hours away — that’s right, no cash — to local radio stations, mostly in medium and smaller markets, back in the early 1990’s.
So, a local talk station got Rush’s show for zilch. In exchange, Premiere took for itself much of the local station’s available advertising time (roughly 15 minutes an hour) and packed the show with national ads it had already pre-sold. …
It’s a very sweet deal for local radio station owners, explained Bill Exline a respected radio broker (he helped people buy and sell local stations). “Not only does the local station get three hours of free programming,” Exline explained, “but that’s one less local talk-show host on staff they need. It makes small- and medium-market radio properties more profitable and attractive by cutting down staff expenses.”
Shocking, isn’t it, that Limbaugh would allow jobs to be cut to advance his dubious career? Not to mention helping to make small radio stations far less local?
Um, yeah … except that in order to believe this, one has to think that local-radio clearance is not potential revenue for the station. The station didn’t get the show for free. They had to give up a big chunk of saleable air time to Rush’s syndicator, not Rush himself, which cost them plenty in potential revenue. Carrying Rush made the rest of their clearance for those three hours a lot more valuable, which made them more money. If they didn’t make a profit on that transaction, they never would have agreed to it.
Mann also ignores something else. The syndicator sold the national air time, which pretty much undermines the notion that Rush was only getting stations through some sort of unprecedented legerdemain. Advertisers were lining up to get those small- and medium-market clearances. How, exactly, does that make Rush a phony blockbuster?
Tommy Christopher, who should know better, bites on this meme:
There’s a certain kind of beauty in this plan. It’s kind of like “socialized radio” if you think about it:Rush is the “government cheese” that these smaller and medium market stations use to fill the bellies of their listeners. The syndicator gets to control 3 hours of local radio in exchange, and Rush gets to blanket the country.
In a nutshell, Rush isn’t the best radio host, he’s the best radio host you can get for free.
It’s only free in the Air America, we-can’t-sell-our-adspace-to-actual-businesses context. It’s simply trading on different terms; instead of insisting on all the revenue from their own clearance and paying for the show at a price they probably couldn’t afford, they instead gave up most of the revenue in order to get increased rates on what was left without putting anything down on the product.
Do salespeople who work exclusively on commission work for free? No, and the stations didn’t get Rush for free, either.
Premiere apparently chose this aggressive marketing strategy for two reasons: to expand Rush’s audience and to allow smaller markets an opportunity to get one of the hottest radio properties on the AM band, back when Rush was still expanding his national brand. Not only did it make sense, it also succeeded. Rush just got a $400 million contract from his syndicator, who very obviously isn’t lacking in revenue from its major star.
Common sense would dictate that the guy making the biggest money in radio isn’t getting that by giving away the store. However, common sense seems to have been eclipsed by Rush Derangement Syndrome in some quarters.
Addendum: To be fair, Tommy does a better job on Sarah Palin’s AG nominee.