Opposite Trajectories: Rush and The Newspaper Business

July 2nd, 2008 8:19 PM

UpDownGraphs.jpegRush Limbaugh's new deal with Clear Channel, as flashed by Drudge (also covered or addressed here and here at NewsBusters; here at the New York Times; and here in a very long New York Times magazine article), is north of $400 million for the next eight years.

Good tax planning too: Maharushie will get his reported nine-figure signing bonus this year before a possible President Obama does his hundreds of billions in damage. Limbaugh's tax savings, if the bonus is $100 million and Obama gets everything he wants, would be a hair under $17 mil (12.4% Social Security on all but $148,000, plus the 4.6% planned increase in the top rate).

One conclusion you can reach, based on what newspaper industry watcher Newsosaur told us earlier this week, is that Old Media covering the Limbaugh story is like zombies covering the living (link in excerpt was in original):

Newspaper shares slid $23B in 6 months

The value of 11 newspaper companies traded on the public market since 2005 dove a combined $23.7 billion in the first half of this year, falling almost as much in six months as they had in the three prior years put together.

Wall Street’s intensifying repudiation of the industry means that the companies in the group have lost a cumulative $49.7 billion in market capitalization in 3½ years, vaporizing 51% of shareholder value since Dec. 31. 2004.

To date, the decline in newspaper shares has not had a commensurate impact on the compensation (details here) enjoyed by the chief executives of several of the affected companies.

..... Journal Register Co. and the Sun-Times Media Group (nee Hollinger) suffered the worst losses in the 3½-year period, respectively shedding 99.1% and 96.9% of their value.

You really must go to Newsosaur's link to see the "Newspaper Rout" table he has created, but here are a few other lowlights:

  • The McClatchy Company and Lee Enterprises are both down over 90% since the end of 2004.
  • Gannett Co., Inc. owner of many metro papers as well as USA Today, which is one of the few papers not losing circulation, is down 73% in the same time period.
  • The New York Times Company, down "only" 60.4% in that same time frame, is the fourth-BEST performer on the list.

Limbaugh got to where he is by being entertaining, informative, and 98%-plus accurate. He also famously didn't jump on to the Internet until it could be proven that he would at least break even.

How many publishers can say that? Therein lie the reasons why Limbaugh and the newspaper business are heading in opposite directions.

Cross-posted at BizzyBlog.com.