No “Salary” for Rush? What this means for local talk radio hosts.

 

So, four more years is what — The release didn’t specify that. Because I told everybody involved I don’t want any terms announced. I have never, by the way, released that kind of information about my arrangement here. Those numbers have always come from other people. My parents, my dad  always told me, “you never talk about it, son.” It was a sign of good manners, bad manners, class, and no class, and I’ve never forgotten it. It’s kind of a joke for people to throw out numbers anyway, because I don’t earn a salary. This is another thing, by the way, that keeps this fresh and young. I have to perform every quarter, every six months, every year. There’s no salary involved here, so throwing out numbers with this is kind of misleading in the first place.

-Rush Limbaugh

 

I have said it before, “As Limbaugh goes, so goes news/talk radio.”

When Rush Limbaugh signed his previous contract, word “leaked” immediately that it was worth $400 million.  The agreement’s length, Rush’s pay, a rumored nine figure signing bonus and jet.

Freakin’ sweet.

With all employment contracts I’ve signed, including with Clear Channel Media + Entertainment iHeart Media, included is what is called a “confidentiality clause.”  Think of it as legalese for the Mafia’s “omertà.” It says keep your mouth shut or else.  I’m guessing Limbaugh’s contracts have included this too.  Normally, that clause can be found somewhere in the last few pages.  It’s not hard to find.

Little has “leaked” out with Rush’s latest contract, except for Rush going on his national radio show revealing its length, talking about it and how he doesn’t get a “salary.”

Seriously?  You do know there are labor laws that prohibit this.  The government tends to frowns on people working for no pay, since American history reveals that embarrassing indentured servant/slavery thing, which caused a civil war, a president getting shot in the back of the head, thousands dead, the Hatfields and McCoys fighting in that war, battling over a pig, a pregnancy out of wedlock and the families killing each other for a few decades.  Not good.

First, a little background.

Rush Limbaugh is probably a “company,” which he owns and where he owns the content and the intellectual properties of his program, along with any other investors he’s brought along for the ride in that cool jet.  This means, he’s likely not an employee, per se, of Premiere Networks or iHeart Media.  With an arrangement like this, his “company” would be paid a fee for the radio show with his “company,” in turn, paying the expenses of certain staff and some costs of production.  Premiere Networks sells the advertising, does the affiliate sales and distributes the program to the network of stations.  It’s more of a business agreement between two companies and not the standard employer – employee relationship you may have with your job.

There are reasons for arrangements like this.  Mainly tax reasons, but there are business reasons too, like owning the intellectual content and keeping control of the Rush Limbaugh “brand.”

So does he get a “salary” like you or I get a salary?  “Technically,” Rush is probably getting the profit or what’s left over after paying the bills.

Rush, in his words, said his parents taught him never to talk about “it,” as it’s a sign of good manners.  I admire that great parental advice and my grandparents told me the same thing.  Of course, he then went ahead and announced it was a 4-year deal.

The base fee structure paid to Limbaugh is rumored to have been drastically cut and there’s a greater emphasis on a revenue share.  This means if the show has better future revenues,  Limbaugh and Premiere Networks, both share in the bounty.  If it does worse, Premiere mitigates its risks and cuts a smaller check to Limbaugh.  Either way, he won’t be hanging with the homeless people on Military Trail in West Palm Beach, Florida anytime soon.

Sign Here Talk Host 2

What does all this mean for the average local radio talk host in America?

What?  You didn’t think of that?

The most well known personality in conservative talk radio supposedly takes a massive hair cut in pay and you in a local market are expecting more when it’s time for your raise?

I don’t take any pleasure in saying this, but don’t believe any of the happy corporate press releases you read about how great things are with Rush and the news/talk format.  What does it say about the ratings, revenue and demographics of the news/talk format when Rush Limbaugh, the biggest “brand” in conservative talk radio, takes a cut in pay?  What does it say about the viability of the format moving forward?

 

Local talk radio host – You just got screwed.

 

  9 comments for “No “Salary” for Rush? What this means for local talk radio hosts.

  1. Nick
    August 17, 2016 at 11:18 pm

    Rush actually made a few side comments several months ago about ‘how long’ he might continue. Not knowing it was contract time, and looking at age, I thought he might actualy be considering a real retirement. I guess he was playing it….

  2. August 18, 2016 at 12:40 am

    Sure it’s a business and you stated it correctly that his compensation is based on the net profit of his business. The contract was between two companies that is done all the time. As long as he is motivated to keep on “keepin’ on,” he can enjoy a nice lifestyle and the perks that come with being who he is and still relevant. You’re right, even if it ended tomorrow, he would be able to ride off into the sunset comfortably. Revenues may not be where they once were, but Premiere (IHeart) doesn’t have anybody else “on-deck” to replace him. If not anything else, many of his advertisers are unique to him and considered non-traditional. Although some have become radio advertiser in other programs and venues, probably because of him. Mainstream advertisers won’t touch the show. So where is talk radio headed? He was unique when it started 28 years ago that didn’t have social media and BLOGS to also compete with. Everybody is a pundit today through social media. I’m amazed and impressed with how Rush has “re-invented” himself many times to remain relevant and to endure this long. Give him credit for that. But that burning question, Darryl, is “where is talk radio headed.” His demos are his age and older. We know where that’s going?

  3. Cris Allen
    August 18, 2016 at 12:50 am

    Isn’t this how CBS pulled off the great talent raid of 1948? By agreeing to allow talent to incorporate themselves so they could pay the lower corporate income tax rate?

    • August 18, 2016 at 10:35 am

      Yes, you are quite correct Cris. It was credited to William S. Paley. It allowed him to control his costs while benefiting the talent he wooed away from NBC. Using this tax loop hole, I believe, was something of a first at that point in time.

  4. Carter Burger
    August 18, 2016 at 12:34 pm

    Your last three posts were about Limbaugh. I’m beginning to think you are obsessed with this guy.

    • August 18, 2016 at 12:44 pm

      Nah. Just topical. I wrote the latest post before going on vacation. And remember, as I said, as Limbaugh goes so goes talk radio.

  5. August 18, 2016 at 10:05 pm

    i’m an ignorant person, but i believe local pay will be based in large part on local performance. if your show is paying the bills and the ad people are able to keep up the revenues, the host is going to be paid accordingly. i don’t expect that rush’s agreement has any direct bearing on my compensation. i think there are enough crumbs to keep paying at least some of us.

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