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Skating Around The "R" Word


On the Tuesday earnings call, when asked specifically about the network business and the impact of the talk segment, CEO Lew Dickey answered without naming names. "We've had a tough go of it this last year. The facts are indisputable." It's been a few days of fighting between Cumulus and the Rush Limbaugh camp with anonymous leaks coming from both sides.

On Monday, Rush's people made it clear they were not happy with Dickey blaming any past company revenue shortfalls on Rush and they didn't want to hear it again on Cumulus' quarterly conference call. Both David Hinkley at the New York Daily News and Politico were sent words of warning aimed at Dickey by anonymous sources. Dickey never mentioned Rush by name in the call, only the statement above. Then, a very high ranking Cumulus official sent the following statement to Radio Ink, and asked not to be sourced. "Forty-eight of the top 50 network advertisers have “excluded Rush and Hannity” orders. Every major national ad agency has the same dictate." That's a stat Premiere Radio flat out denied. “That statement is completely inaccurate. A number of the top spenders in the medium use talk radio to promote their brands and sell product, and many of them use The Rush Limbaugh Show and The Sean Hannity Show as the driving force of their marketing efforts.”

Cumulus was hoping to challenge Rush, who this year celebrated 25 years in syndication, with Mike Huckabee. Huckabee surprised a lot of people by suggesting he may not continue his radio show as he reaches his first anniversary in syndication. The subject of Mike Huckabee never came up on the Cumulus call yesterday. Add to all that the fact that Clear Channel is waiting in the wings to scoop up Rush and put him on stations like WOR-AM in New York City once his contract with Cumulus expires on WABC. Dickey singled WABC out as a station that is now growing for Cumulus, despite also saying the talk radio "continues to be challenged."



All ears will be on Lew Dickey this morning. The Cumulus CEO will report first-quarter numbers to Wall Street, and everyone listening to the 11 a.m. conference call will want to hear if Dickey responds to Rush Limbaugh. Someone close to Limbaugh spoke anonymously (although very little gets out without his approval) to Politico and the New York Daily News, voicing frustration that Dickey has blamed some of Cumulus' revenue struggles on Limbaugh's Sandra Fluke comments.

We should also get an update from Dickey on the turnaround at Cumulus' news/talk stations. Dickey has said, 10 major market news/talk stations were a revenue drag on Cumulus and should break even by the middle of 2013. "We expect them to break even in the second quarter and we'll make up the difference in the back end of the year. We're on target to achieve that objective." In August of 2012, Dickey said these 10 stations, including WABC-AM in New York, KGO-AM in San Francisco, and KABC-AM in Los Angeles, were "under-invested vehicles for syndication," and accounted for about 10 percent of Cumulus' total revenue.


No doubt, hoping to have an impact on what Cumulus CEO Lew Dickey says tomorrow when he reports first quarter earnings to Wall Street, a source inside the Rush Limbaugh camp leaked a few unflattering comments aimed at Dickey about some of his previous statements about the king of talk radio. Both The New York Daily news and Politico were strategically contacted by the "source," and the story is making headlines everywhere, including the lead on The Drudge Report. 

For several quarters, Cumulus CEO Lew Dickey has reported the company's major market news/talk stations have been revenue under-performers. Ever since the Sandra Fluke incident, Dickey has placed some of the blame for the revenue drag on Rush Limbaugh. This past weekend, New York Daily News reporter David Hinckley says someone close to Rush told him, "Lew needs someone to blame, (so) he’s pointing fingers instead of fixing his own sales problem.” The source is not named. To this point, Limbaugh and his representatives have not said anything public about Dickey's lost revenue claims. They have said the show revenue lost during the Fluke incident was quickly replaced.

Limbaugh is heard on Cumulus-owned WABC in New York, while Clear Channel recently purchased WOR-AM in the city from Buckley Broadcasting. Clear Channel also owns Premiere Radio Networks, which syndicates Rush. Cumulus has been pushing Mike Huckabee since they started syndicating him, but he is nowhere near the ratings star Limbaugh is.

Hinckley's source also told him, “Dickey keeps complaining about falling revenue, but his stations have long lagged behind their competitors in sales by a substantial margin. Rush Limbaugh's ratings have outperformed every other program on WABC and many other Cumulus stations for years.”

Read Hinckley's full article HERE and Politico HERE

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