Limbaugh's $400 Million Contract Is an Even Match for Clear Channel's Layoffs
Even for a pancaked industry like radio broadcasting, which has become somewhat numb to years' worth of mass layoffs triggered by hyper, corporate consolidation, and more recently by an over-the-cliff advertising recession, last week's HR wave of mutilation unleashed by industry giant Clear Channel Communications must have felt like a pile-on.
Drowning under massive debt and desperate to cut more costs, Clear Channel took an ax to its payroll -- again -- and hacked hundreds of radio pros out the door. Program directors, morning show hosts, production pros, news anchors -- all of them tossed over the side. A "bloodbath," one newspaper called it. (In Albany, New York, the entire on-air staff at a Clear Channel music station was sacked; same with a radio outpost in Exeter, New Hampshire)
The most recent blizzard of pink slips (one industry report pegged it at "nearly 1,000") came in the wake of a January purge, in which 1,850 Clear Channel employees were let go. So already this year the company has shed nearly 3,000 employees, or 12 percent of its workforce. Also, last week, Clear Channel's parent company announced it was suspending its matching contributions to employee 401(k) retirement programs.
Clear Channel, the conservative-friendly media behemoth with a soft spot for right-wing radio -- and which emerged earlier this decade as the poster child for everything that's wrong with runaway media consolidation (aka "The Evil Empire") -- is now hanging on for dear life. "It's a house of cards," radio watcher and Clear Channel expert Alec Foege recently told me, noting the company's crippling debt payments, which are due at a time when advertising revenues are vanishing. (Foege is author of 2008's Right of the Dial: The Rise of Clear Channel and the Fall of Commercial Radio.)
As The New York Times noted last week, "It is too soon to say who will be the biggest loser among media companies in this recession. But Clear Channel Communications is vying for the title."
Clear Channel's fall from business grace remains epic in its proportions. In 10 years time the company has gone from dominating a flourishing radio industry to a corporation that now teeters on the brink. (Clear Channel stock traded for $90 a share in 2000. When the radio company went private last year, pre-crash, the stock was already down in the $30s.) Lots of over-extended, debt-ridden media conglomerates are struggling through today's deep economic recession, but few face a future quite as perilous as the one staring back at the San Antonio radio giant.
And yet Clear Channel's most famous employee, Rush Limbaugh, remains oblivious to it all. I sometimes wonder what Limbaugh thinks when he reads about the not-so-slow-motion collapse of his radio employer while lounging in his 24,000-square-foot Florida estate or motoring in his $450,000 car to the airport to ride in his $54 million jet. Does Limbaugh feel bad? Does he feel a little guilty? And does he ever think about giving some of his riches back so that thousands of radio colleagues wouldn't have to be bounced to the curb?
And I wonder what those pink-slipped Clear Channel employees -- some of whom spent decades working for the company -- think about Limbaugh as they're ordered out the station door and onto "the beach." (That's radio-speak for unemployment.)
I wonder about Limbaugh and the thousands of his laid-off Clear Channel colleagues, because the dichotomy is striking: Last July, just months before the radio economy went into free-fall, Limbaugh's bosses at Clear Channel, who enjoy deep ties to Texas Republicans and who have been at the forefront of promoting right-wing radio, rewarded the turbo-talker with the biggest contract in terrestrial radio history. The contract included an eye-popping 40 percent raise over his already gargantuan pay, despite the fact it's doubtful any other radio competitors could have even matched Limbaugh's old pay scale.