It’s time to short-sell Clear Channel Communications stock if you follow the analysis by CNBC contributor and Vanity Fair contributing editor Michael Wolff. He criticized a record deal that locks Rush Limbaugh in with the radio company through the next eight years.
Wolff mocked Clear Channel’s (NYSE:CCU) decision to sign Limbaugh to the long-term agreement on CNBC’s June 2 “Street Signs.”
“I think it’s a monster error,” Wolff said. “I know – I’m sitting here saying, ‘What are these people smoking?’ You know, the truth is that Rush Limbaugh has been – he’s ridden the rise of conservatism for 25 years and I don’t, maybe nobody quite, quite has been following the news, but that’s coming to an end.”
Wolff based his assessment on the assumption Americans are shifting to the left politically, based on the success of presumptive Democratic nominee Sen. Barack Obama, of
“It’s going to be over and Rush Limbaugh in a relatively short period of time is going to look like a really kind of out-of-it kind of oddity,” Wolff said. “And I can not for the life of me imagine how someone could have made this deal.”
According to a link posted on the Drudge Report on July 2, a New York Times Magazine story will reveal on July 6 that the long-time conservative talk show host has secured a 9-figure signing bonus. The report says the total package is valued north of $400 million.
Brian Stetler, a media report for The New York Times, appeared with Wolff and maintained Limbaugh was worth the deal. However, he suggested Limbaugh may have to “be a little less conservative.”
“[I] don’t think it’s a good sign though for the ad market,” Stelter said. “I talked to Clear Channel and Premiere Radio today and they said it’s pretty much a flat-to-declining market. That said though, Rush is looking at the long-term and if he has to reinvent himself, if he has to be a little less conservative – I think he will, as long as he can retain that audience.”
However, Wolff wasn’t convinced there would be a demand for conservative talk radio – including talk radio host and Fox News Channel’s “Hannity & Colmes” co-host Sean Hannity. Even though eight of the top 10 talk show hosts on Talker’s magazine “2008 Heavy Hundred” list are conservative hosts, Wolff asserted the era of conservative talk radio is drawing to an end.
“I mean, I think that there’s another underlying thing here and this is talk radio has been the province of conservatives, if that’s going away – then there’s going to be a big problem – not just for Rush, but obviously for Sean Hannity, too,” Wolff said. “And I do not think in a major way that it’s a question of them becoming less conservative to follow a less conservative audience. They are conservative – that’s what they do. If they can’t do that anymore, they are worth much less than they are being paid.”
Still, Limbaugh has demonstrated his ability to maintain high ratings no matter who is in power. He enjoyed much of his success during the eight years of the Bill Clinton administration – a Democratic presidency, as CNBC’s Julia Boorstin pointed out.
“I think the theory here is that Rush Limbaugh has held up despite who’s been in office and he has a loyal listener base,” Boorstin explained. “These are people who tune in every single day, in the same way that people want to tune into Howard Stern. Limbaugh has his audience and they’re going to be tuning in no matter who’s president – whether it’s a conservative administration or a liberal one.”
Wolff countered Boorstin’s argument, echoing a theme reminiscent of the Obama “Change” presidential campaign. He uttered the word “change” six times in a 30-second span.
“You know, I just think that that’s myopic,” Wolff said. “Things change and when they change, they change in a big way. And we are now looking at that kind of change. It’s the kind of change, which if you run a large public corporation, you’re supposed to look at and say, ‘Hey, wait a minute. There is something here and this is something that we have to take into consideration.’ When change comes, it is going to be devastating and absolute.”
Wolff isn’t exactly batting 1.000 when comes to this sort of analysis. Jack Shafer, a media critic for Slate.com called Wolff a “sloppy, lazy media columnist” in a May 5, 2005 column.
“Gifted with a hyperactive and malicious mind, Wolff's forte is not reporting and analysis. It’s the oh-aren’t-I-naughty clever slur, a talent worth admiring if not applauding, especially when you’re the target. Which I, and the Web site I call home, am,” Shafer wrote.
