Cumulus Media, the third largest terrestrial radio chain in the country, is bankrupt, and it’s making some drastic moves. Earlier this spring, it dropped Don Imus, the legendary—if now fossilized—morning host. And now there are rumors that Cumulus is looking to cut Michael Savage, one of talk radio’s marquee names.
Cumulus is not alone in its travails, of course: The market does not heart iHeartMedia, the nation’s largest radio chain and the syndicator of Rush Limbaugh and Sean Hannity. iHeart (née Clear Channel)is bankrupt as well, and its stock trades at about 30 cents a share.
Terrestrial radio’s woes are well known: Podcasts, streaming services like Pandora and Spotify, and satellite radio have all cut into its market share. Talk radio in particular is a tough commercial sell, even at the best of times: Skittish national advertisers—think Home Depot, which still makes huge buys on music stations—shy away from the format for fear of political controversy. That’s why even shows with high ratings, like Limbaugh’s and Savage’s, feature advertisements for “male enhancement” and other products so obscure I have to Google them. (“Try Qunol, the better cocuten.”) WMAL, a Cumulus-owned talk station in Washington, runs ads for something called “pellet therapy”—which I refuse to Google for fear of the ads that will then stalk my web browsing.
But there’s another problem dogging commercial radio—a competitor with a distinctly unfair advantage. That’s National Public Radio. NPR is a nonprofit, a 501(c)(3) that is exempt from paying taxes. And while the majority of NPR’s funding comes from grants, donations, and payments from local stations, it also receives taxpayer money from the Corporation for Public Broadcasting. The Corporation for Public Broadcasting, established in 1967, has an annual budget of about $450 million.
CPB not only makes direct grants to NPR but also indirectly funds it by giving money to local stations, which then turn around and pay NPR for programming. A similar arrangement covers PBS and local television stations. NPR likes to claim that only 2 percent of its funding comes from the government, but those local fees—which make up about 40 percent of its revenues—also come from Uncle Sam. There’s a reason NPR squeals like a stuck pig every time Congress threatens to slash funding for CPB.
Advertising is the lifeblood of terrestrial radio. It’s also—not to put too fine a point on it—annoying as hell. Who knows how many frustrated listeners tune out of their favorite news, talk, or radio stations each time they switch to commercials. NPR, through both its nonprofit and taxpayer-funded status, gets around having to broadcast these annoyances, which drive away listeners. It’s little wonder that Morning Edition and All Things Considered are among the highest-rated radio shows in America.
In other words, through the Corporation for Public Broadcasting, the federal government is subsidizing a direct competitor to a for-profit American industry. It’s as if SiriusXM were state-funded. This is a highly unusual arrangement: Indeed, during the health care debates of 2009 and 2010, it was for precisely this reason that plans to introduce a “public option”—a government-funded health insurer—were dropped. Senators feared that such an option would invariably undermine the private insurance market. Radio is no different.
NPR produces a lot of truly great stuff. The breadth and depth of its coverage is certainly unmatched by any commercial radio service (Cumulus does not have a correspondent in Kabul.) Its loss would be a serious blow to the country.
But it’s easy to see how NPR’s reliance on government ends up affecting its operation in unfortunate ways. Take NPR’s well-known liberal bent, which even its most stalwart defenders would concede. At first, it might seem logical that an entity dependent on the kindness of Congress would go out of its way to play things straight—to cultivate supporters on both sides of the aisle.
But the honchos at NPR appear to have made a shrewder choice. They probably figured that Republicans, ideologically unlikely to support even the most impartial state-funded media, would never be their strongest backers. So they decided go all-in on liberalism and build ardent support among Democrats. (Not to mention, NPR’s in-your-face liberal politics probably help it fundraise from the elite listenership it appeals to.) It was smart, strategically, but ultimately deleterious to NPR’s mission of providing fair news coverage. Liberate NPR from CPB and it can instead focus purely on its news mission and less on flattering the political party that is buttering its bread.
President Trump’s budget, dead on arrival in Congress, proposed ending CPB funding. It’s not likely to happen, but it was a good idea. NPR’s listeners are highly educated and affluent—far more likely than the average American to have college or postgraduate degrees and to earn more than $100,000. Advertisers would covet such a demographic. Freed from CPB funding, NPR could thrive and not be reduced to selling Qunol. Though from what I understand, it’s the better cocuten.