Politico reported that, as of yesterday, at least 29 companies had withdrawn advertising from Rush Limbaugh’s radio show. Are these withdrawals worth it for the companies? The controversy started over insensitive comments Limbaugh made about a Georgetown law student and liberal activist. Sandra Fluke, wittingly or unwittingly, was part of a coordinated campaign by Democrats to distract attention on President Obama’s contraception mandate. Catholics are rightfully incensed over the administration's lack of respect for their religious beliefs on the issue. President Obama has attempted to make this a women’s rights issue and use it for his re-election campaign, which is why Fluke was invited to testify before Congress. Republicans see it as another example of coercion by the administration.
What has been the effect on the companies who have withdrawn their support? The one highlighted by conservatives the most has been Carbonite (CARB). Why? Because the stock dropped nearly 9% yesterday. Many of the other advertisers were larger, such as J.C. Penney (JCP), Sears Holdings (SHLD) and AOL (AOL), and the controversy hasn’t seemed to affect them. Then again, if you’re a Sears’ shareholder and this is the reason you dump the stock, as opposed to the plethora of other reasons that can be imagined, you may not necessarily be a rational actor.
Carbonite, though, is a business that is easier to boycott. They’re in a tough position because liberal activists could call for a boycott if they continued to advertise with the show, and conservative activists may now boycott since they pulled their ads. Their CEO, David Friend, announced the withdrawal of their ads on Saturday afternoon. It took until Monday at 2:30 in the afternoon to see a drop in the price of their shares.
It’s tough to peg that drop specifically on the Limbaugh event. Investors had Saturday night, all day Sunday, and most of the day on Monday to consider it. Other companies who pulled their ads didn’t have shareholders bail any more than the overall market. The fact is, few people will remember this controversy and base any buying decisions on it six months from now anyway, so any boycott or reverse boycott damage will be minimal.
Ultimately the effect will probably be less advertising for politically active radio and television shows in the future, both for the left and the right. Each perceived slight will be especially highlighted this election year. It’s probably a net negative for society to have corporations bullied in this way and will only encourage them to curry more favor with whoever holds office. That’s how we got Obamacare in the first place.
I’m a conservative, though I’m not a fan of the tactics of Rush or Glenn Beck. I’m also not a fan of the tactics of the liberal organizations that threaten companies who advertise with them. It would benefit everyone if we stop projecting the activities of the hosts, whether its Rush on the right or Rachel Maddow or Bill Maher on the left, from the companies that advertise with them. The advertisers don’t have anything to do with contributing to a “more civilized debate” as Friend said he was doing in Carbonite’s statement. Advertisers will go where the eyeballs and ears are. They’re mercenaries. They react. And they should get off their high horses.
Who would have thought Maher would be the voice of reason when he tweeted this: “Hate to defend
#RushLimbaugh but he apologized, liberals looking bad not accepting. Also hate intimidation by sponsor pullout[.]”
Disclosure: No holdings