The question came up during a conference call...
http://www.insideradio.com/Article.asp?id=2619463
http://www.insideradio.com/Article.asp?id=2619463
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CC Bigwig: "No Decision Made" To Move Rush To WOR
- Thread starter DToTheJ
- Start date
Duh! Why WOULD he say anything otherwise. Doing so would telegraph his move to WABC and their advertisers. Right now, Rush makes money for CC/Premiere over there.
It's a poker game, so never show your hand. In a business decision that big, they're not going to show you their business plan.
It's a poker game, so never show your hand. In a business decision that big, they're not going to show you their business plan.
It should be noted that the CC executive doing the commenting has the title of CFO, or Chief Financial Officer of the parent corporation, so he is about as far away from the section of the organizational chart where decisions over what Premier show host appears on what station are made.
This was, apparently, a routine conference call with investors, whose main interest is projections of "corporate earnings per share" in the quarters and years ahead. WNTI is right on the money, this guy gave the standard "corporate" answer.
It should also be remembered that rival Cumulus may no longer want to pay the "confiscatory fees" that CC charges it to carry Rush on WABC. Indeed, Cumulus may keep more money by having its own host take Rush's place in that time slot, and even with lower ratings, and billings, have more money in its big corporate pot at the end of each quarter.
CC was concerned enough about Cumulus dropping Rush that it spent $40-million for WOR as insurance that Rush and other Premier shows would have a decent signal outlet in NYC, so we know what they really thought was going to happen. Again, follow the money.
This was, apparently, a routine conference call with investors, whose main interest is projections of "corporate earnings per share" in the quarters and years ahead. WNTI is right on the money, this guy gave the standard "corporate" answer.
It should also be remembered that rival Cumulus may no longer want to pay the "confiscatory fees" that CC charges it to carry Rush on WABC. Indeed, Cumulus may keep more money by having its own host take Rush's place in that time slot, and even with lower ratings, and billings, have more money in its big corporate pot at the end of each quarter.
CC was concerned enough about Cumulus dropping Rush that it spent $40-million for WOR as insurance that Rush and other Premier shows would have a decent signal outlet in NYC, so we know what they really thought was going to happen. Again, follow the money.
Also there's no way the current afternoon offerings are anything but a placeholder. My guess is that when the Rush/Hannity/Levin block arrives (which the CFO admits is "under evaluation," Joan Hamburg brings in the bucks from 10 to Noon and Mark Simone becomes WOR's super-sub while doing some weekend shifts.
B
Bob1370
Guest
CC CAN'T say anything about Rush's future until his current contract with WABC is about done. Anyone know when it expires? (IIRC it's sometime late this year or early in 2014...am I right about that?) And we don't know anything about Hannity's deal, which if I'm not mistaken was a complicated partnership involving Hannity, Premiere and WABC's prior owner Citadel, something that may or may not have been affected by Citadel going bust and its assets bought up by Cumulus.
This stuff isn't just a matter for radio programmers, it's as much the province of lawyers.
This stuff isn't just a matter for radio programmers, it's as much the province of lawyers.
I'm always reminded of the opening scene in the movie Patton, where the General says, "No bastard ever won a war by dying for his country. War was won by making the other poor bastard die for his." That's my view of this situation. Clear Channel does better by getting paid by Cumulus than it would by running it on their own station. They must smile every time a Cumulus check comes in, because that's money Cumulus can't keep.
Yes, the WOR sale price was reported as $30-million, not $40-million.
Those kinds of mistakes get posted when you don't take enough time to edit yourself carefully. And I didn't.
That said, it's still a lot of money to spend for "insurance" because you think your rival is going to bounce your syndicated shows in the top market and you need to have a good backup plan in place. And all signs still point to the need for that backup plan, no matter what the CC CFO told investors in that conference call.
TimeIsTight said:
Assuming that was the reason they bought it. Another is the shortage of quality signals in the #1 market, and the fact that Cumulus seems to have a bottomless pocketbook right now. I really think had Clear Channel not jumped at the opportunity, Cumulus would have moved on the acquisition instead.
WOR was reported to be #19 in ratings, #19 in annual revenue at about $15-million a year, and had an ever declining cume standing just north of 600,000. As an AM it is likely to be worth less next year than it is today, even though it is a better signal than "most" of the NYC AMs.
If you don't have a really good reason for needing to own one of these, like CC needing to guarantee a Market-one outlet for its Premier talk shows, why put your money into a declining asset? If you are Cumulus, you'd be wiser to hold onto your money until an FM becomes available, which is exactly what they did with WFME. Remember CC didn't have the FM option. And Cumulus got WFME for only $10-million more than CC paid for WOR. In five or ten years the difference in station values will be far greater.
Cumulus made far too much noise about wanting to keep as much of its station revenues in-house by using its own talk shows on its own stations, for CC to not get the message. Now that its got WOR, CC will want its own shows on the station it owns for exactly the same reasons. While it may be nice for CC to cash the check from Cumulus for carrying Rush on WABC, it likely will be far better for the CC corporate money pot if Rush is carried on CC's own WOR and the revenue from every network and every local spot flows right to the CC bottom line with no big rival "partners" taking a share.
What happens if/when Rush moves to WOR and if/when the WOR vs. WABC ratings remain exactly the same? Is that an incentive for affiliates to carry the show?
The attraction for a station to carry Rush is the boost his show is supposed to give the station overall -- suppose that doesn't happen in NY? Opposite Huckabee this may not be a problem but if Cumulus/WABC gets its 12-3p act together it could be.
The attraction for a station to carry Rush is the boost his show is supposed to give the station overall -- suppose that doesn't happen in NY? Opposite Huckabee this may not be a problem but if Cumulus/WABC gets its 12-3p act together it could be.
That's probably the main reason Cumulus isn't likely to want to continue carrying Rush once the WABC contract is up, high "confiscatory fees" to carry the show, and lower revenue because of the national ad ban. And then there is always the danger of another, or worse, "Fluke-like" incident that will totally kill the business model.
Cumulus wants to avoid those costs and risks, and have total control over its own content, while not sharing its station revenue with its biggest national rival.
By far, the highest probability is that Rush moves to WOR as soon as the contract ends.
TimeIsTight said:
The problem Cumulus has is the lack of comeptitive talk content, as demonstrated by KABC and other talk stations without Rush. They can have 100% of the money, but 100% of Huckabee is likely less than 50% of Rush. At least for now. The Dickeys have said they don't see conservative talk as a growth area for them.
OC3 said:
We really don't know what those "fees" are. I'm sure a lot of negotiating has been done over the years, some grandfathering of certain favors for WABC, and maybe even some discounts after the controversy last year. And we don't know if CC stations pay the same fee as non-CC stations. Lotta speculation here.
I doubt of Cumulus cares what CC stations pay. They care about 3 things:
1 - They pay large fees to CC for Limbaugh
2 - Due to the controversy, a commercial sale in the Limbaugh Show is a tough sale
3 - They have a competing 12-3P show that is without an NYC affiliate.
The 90 day notice may not come from CC to Cumulus...it may come from Cumulus to CC!
1 - They pay large fees to CC for Limbaugh
2 - Due to the controversy, a commercial sale in the Limbaugh Show is a tough sale
3 - They have a competing 12-3P show that is without an NYC affiliate.
The 90 day notice may not come from CC to Cumulus...it may come from Cumulus to CC!
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