As Advertisers Flee, Is Limbaugh Losing That Much?

Although a number of companies have dropped ads from Rush Limbaugh's show following his comments about a Georgetown University law student, Limbaugh says his business is doing just fine. Robert Siegel talks to Michael Harrison, the publisher of Talkers magazine, about the radio host's media empire, his influence and how his business model works.

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ROBERT SIEGEL, HOST:

Rush Limbaugh says his advertising base is so vast that even if he were to lose 28 of his sponsors, it would be like losing a couple of french fries from the container when they're handed to you at the drive-thru. You don't even notice it, he said on his show yesterday.

Limbaugh is responding to reports that he's been losing sponsors since calling a Georgetown law student a slut and a prostitute last week. The outcry that followed was big enough to prompt an on-air apology.

(SOUNDBITE OF "THE RUSH LIMBAUGH SHOW")

RUSH LIMBAUGH: And I, again, sincerely apologize to Ms. Fluke for using those two words to describe her. I do not think she is either of those two words.

SIEGEL: But for the record, Limbaugh doesn't actually admit to losing 28 sponsors. So how big is Rush Limbaugh's business empire, and how much weight do his sponsors really have? Well, I'm joined now by Michael Harrison. He's the publisher of Talkers magazine, a trade publication for the talk radio industry. Welcome to the program.

MICHAEL HARRISON: It's good to be with you. Thank you, Robert.

SIEGEL: I mentioned the talk radio industry. How big is Rush Limbaugh in the talk radio industry?

HARRISON: Rush Limbaugh is very big. If the talk radio industry were to be compared to rock 'n' roll, he'd be Elvis Presley. We estimate that his audience is approximately 15 million per week, which puts him at the top position among news talk hosts.

SIEGEL: How many stations?

HARRISON: Approximately 600.

SIEGEL: And overwhelmingly AM radio stations.

HARRISON: Mostly on AM radio.

SIEGEL: Well, I want you to first, describe his business model to us; that is, I gather Limbaugh gives his program to the stations. And then he sells national advertising, and local stations sell local availabilities in it?

HARRISON: Basically, it's called the cash and barter method. Cash is a method in which the stations pay the syndicator cash for the show, and they can do what they want with it. Barter is a method where the network keeps a certain number of commercials for themselves to sell, and the station keeps some of what they call inventory for them to sell locally.

And in the case of Limbaugh, it's both cash and barter. Most of the stations pay to have him, and give up a certain amount of inventory for the national commercials.

SIEGEL: Do we have any idea how much all this amounts to in revenue for whatever the Limbaugh corporate entity is?

HARRISON: Well, I don't know for sure. I don't think anybody but their accountant knows. And the account probably doesn't know until tax time because it's big business, and it's complicated. But I would say it certainly is in the hundreds of millions of dollars a year, in terms of the gross revenue that the program generates.

SIEGEL: Rush Limbaugh is not on in what we called morning drive time in radio - which is, I gather, still considered prime time for most radio, when people get up or go to work. And he's not on in afternoon drive time, which - at least - was seen for a long time as the second most listened to time of day.

Is he central to the radio stations that he's on, being in a part of the day that is typically not most listened to?

HARRISON: That's a great question, and it plays into one of the reasons why he's so important to radio. He's taken a time that was considered to be not the most important time in the radio schedule and gave it its biggest franchise, appearing in what's called midday. He's either in the midmorning or the early mid-afternoon, depending on where you are in the country, in the time zone - and he's given it star power

That's all part of why he's played such a role in the strength of AM radio long after it was on the ropes, when music started to be on the FM dial, and FM sounds better for music.

SIEGEL: Do you have any sense, any gut sense, of whether the abandonment of the show by whatever number of advertisers it may be, is something that's really putting a dent in the fortunes of Rush Limbaugh's enterprise?

HARRISON: I think that he will survive, based upon whether or not listeners abandon him, and there's no sign of that. If anything, certainly this week, his audience is much larger than it was last week because of all the attention he's getting. Plus, his audience likes him.

And then there are many people who listen to him because they just love to hate him. So there's no sign that his audience is eroding. If anything, it might grow, and that is the basis upon which his financial future is determined.

SIEGEL: Well, Mr. Harrison, thank you very much for talking with us today.

HARRISON: My pleasure.

SIEGEL: That's Michael Harrison; he is the publisher of Talkers magazine.

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