"Home Depot's glass ceiling began with a glass basement." -- Gregory Stewart, general counsel for the U.S. Equal Employment Opportunity Commission, intervening in a sex-bias suitEDITED BY LARRY LIGHTReturn to top
RUSH FACES A REBELLION
RUSH LIMBAUGH, BELOVED by his right-leaning "dittoheads," is losing the affections of some of the 660 radio stations that carry his show. That's because his company, EFM Media, has jacked up the fees the stations pay.
He will lose some 40 stations, says media consultant Michael Harrison, who estimates that EFM pocketed up to $25 million in fees in 1996. Some station execs predict several dozen more exits as annual contracts come up. WAYY-AM in Eau Claire, Wis., is pulling Limbaugh on June 13 when the fees go from $5,000 yearly to $35,000. Says General Manager Marty Green, whose station has carried Limbaugh since 1990: "We feel betrayed. We spent thousands of dollars on TV and billboards to promote Rush."
Limbaugh, whose show has aired since 1988, used to provide it for free, earning money from commercial slots he sold. Four years ago, he also began asking for the fees, a practice found only among such heavies as Don Imus and Howard Stern. Limbaugh's people say their research shows many stations are charged too little. If stations can show how the research--based on a station's demographics and ratings--is wrong, says EFM partner Stuart Krane, "we'll back right up." Rush won't comment.By Roy Furchgott EDITED BY LARRY LIGHTReturn to top
THE UPSTART RACERS EAT SOME DUST
THE BIG-NAME RACE CAR drivers have pulled far ahead of the rival circuit sponsored by the owners of Memorial Day weekend's fabled Indianapolis 500. The Indianapolis Motor Speedway's owners started their own Indy Racing League a year ago, setting up races nationwide.
But the Championship Auto Racing Teams (CART), featuring such stars as Al Unser Jr. and Michael Andretti, bagged $331 million from sponsors in 1996, vs. $26 million for the Indy group, says the IEG consulting firm. And in 1997, IEG projects that CART will bring in $387 million and Indy $30 million.
The lure of CART's top-name drivers has kept its gilded list of sponsors intact. Some are increasing their involvement. MCI Communications has unveiled its "MCI Million"--a $1 million bonus for the driver winning four specific races. At least this year, CART won't hold a rival race on the same day as the Indy 500. Last time, the 500's TV ratings dipped 20% because of the CART event. But CART, which will run 17 races this year, is expansion-minded: To reach international sponsors, it started a race in Brazil. The Indy group, which has seven races plus the 500, says its efforts will eventually pay off.By Bill Koenig EDITED BY LARRY LIGHTReturn to top
A BOUTIQUE POACHES ON MERRILL'S TURF
HERB ALLEN IS BEST KNOWN as a media matchmaker, advising Westinghouse on its purchase of CBS and Seagram on buying MCA. But now he has startled Wall Street by arranging one of the biggest private securities sales in recent times: $1.1 billion worth of new stock for Wayne Huizenga's Republic Industries. The buyers were several of Allen's institutional clients, notably Delaware Management and Alliance Capital.
The deal is a monster in the realm of private placements, which bypass public markets. It surpasses the $1 billion in bonds Merrill Lynch sold for Sakura Capital Funding Caymans in early March.
Huge private placements are usually done by full-service Wall Street houses with their armies of analysts and investment bankers. According to IDD Information Service, Merrill is the leader--$27 billion raised in 1996. Allen & Co. (just 175 employees) has done small private placements in the past, around $5 million or so each. Now, it intends to leverage its extensive contacts, such as Huizenga, to move into this area big-time. Allen has advised Huizenga since the mid-'80s.EDITED BY LARRY LIGHTReturn to top