Glenn Beck's bad bet on Ted Cruz
The radio host’s plans for media dominance and political king-making are faltering.
By KENNETH P. VOGEL and HADAS GOLD 09/15/16 05:21 AM EDT
Glenn Beck’s dreams of building a dominant conservative
media empire are faltering amid a tangle of lawsuits,
financial challenges, plunging on-line readership, firings
and political feuds.
Beck, who in his days as Fox News host was among the leading voices of the anti-establishment right, invested heavily to parlay that influence into a wide-ranging media enterprise including not just a syndicated radio show, but also his own television network, news website, movie studio, book publishing imprint and clothing line.
And now a lawsuit claims that perhaps Beck’s biggest bet of all — his endorsement of Ted Cruz’s presidential campaign — further undermined his appeal.
People who previously worked with Beck described his decision to devote himself to electing Cruz — for whom he hit the campaign trail and turned his shows into de facto infomercials only months after renouncing politics and the GOP — as a last-gasp bid for renewed relevance.
But as Cruz started falling behind eventual nominee Donald Trump, Beck grew increasingly strident, calling Trump a “narcissistic psychopath” who would lead the country into civil war, and picking fights with big name Trump supporters on the populist right.
The shift concerned both his own employees and one of the constituencies most critical to Beck’s company — his advertisers — according to interviews with half a dozen people who worked with Beck.
Cruz’s conundrum: Help GOP save the Senate?
In an interview with POLITICO, Beck asserted “I haven’t suffered financially at all” as a result of his forays into the 2016 race, claiming instead that his radio audience has actually “grown by 25 percent” since he endorsed Cruz. But he acknowledged that his heightened political activism might have scared some advertisers and that it had taken a toll on him personally.
“There’s no good that comes from endorsing somebody,” he said, recalling a conversation he’d had with his wife when he was deciding whether to endorse Cruz, in which they asked each other “Are you willing to lose it all?” In the end, he said, they decided they were willing to take the risk, because “we felt this was the critical time.” Once he actually endorsed, he said, he “saw the gates of hell open up.”
For the people who have worked with Beck, many of whom had become accustomed to past claims that he was putting himself on the line to save the country from imminent collapse, this time felt different, and more desperate — like he was scrambling to save his own company.
“Endorsing Cruz was a last-ditch attempt to get back into the spotlight by a guy who craves attention, but it actually made it impossible for him to run the business,” said a former associate who was close to Beck.
Some advertisers complained to Beck’s representatives that the host’s increasing combustibility was becoming bad for business, two people familiar with the complaints told POLITICO. One longtime advertiser, a solar survivalist company called Solutions from Science (SFS), allegedly stopped paying its advertising invoices after unsuccessfully trying to pull its ads from Beck’s syndicated radio show.
That prompted a lawsuit, filed in California state court and reported here for the first time, from Beck’s syndication service, Premiere Radio Networks, seeking $2.9 million from SFS for unpaid ads. The company countersued, claiming that when Beck’s show became “almost entirely political,” it turned off the so-called “self-reliant audience” that had been drawn to Beck’s regular doomsday riffs, making his show like the Super Bowl for advertisers seeking to sell supplies to prepare for a societal collapse, including everything from gold coins and fireproof safes to shelf-stable food rations and heirloom vegetable seeds.
Beck’s attacks on Trump, including an ambiguous conversation about stabbing that led SiriusXM to suspend his syndicated radio show, “caused an extreme and detrimental decrease in sales,” according to the counter suit. It claimed that some customers tried “to return SFS solar products and demanded their money back,” while others “complained that they would not have bought SFS products due to Glenn Beck’s extreme political tone, content and messages.”
The suit isn’t Beck’s only legal headache.
In July, his umbrella company Mercury Radio Arts brought a breach of contract claim seeking to recoup some of the $13 million it paid to its former CEO Chris Balfe, whom Beck had fired in late 2014. And on Tuesday, a federal district court judge announced that Beck and his companies had settled a defamation lawsuit brought against him by a Saudi student whom Beck falsely linked to the Boston Marathon bombing.
Terms of the settlement were not disclosed. But it was not a clear victory for Beck, who had cast his team’s refusal to comply with the judge’s order to reveal the source of the erroneous claim as a First Amendment battle. “Every journalist in America should be watching this, because if this stands, I believe journalism as we know it is over,” Beck told POLITICO.
On top of all that, Beck’s company went through two more CEOs after Balfe’s firing, laid off dozens of employees in 2015, and it reportedly continues to struggle financially. It lost millions in fees and ad sales recently when the cable television provider Cablevision dropped The Blaze’s cable news channel. Meanwhile, traffic to The Blaze’s website has been down, and this month, Beck announced he was dissolving a film studio partnership.
Taken together, it represents quite a series of challenges for an unlikely figure who at one point seemed poised to make good on his boasts about reshaping American media and politics. Beck’s challenges come at a time when he otherwise might be well-positioned to play a significant role in an expected post-election reorganization of the GOP and the conservative movement.
A former shock jock who struggled with alcohol and drug addiction before getting his life together and converting to Mormonism, Beck emerged as a leading champion of the tea party conservative protest movement in 2009. He even held his own rally on Washington’s National Mall in 2010, which he billed as an historic “pivot point” that he predicted would re-center American public life around its founding principles. He was aggressively courted by Republican politicians seeking his favor, despite his periodic claims of being apolitical.
His splenetic attacks on President Barack Obama and conspiratorial lectures about liberals such as mega-donor George Soros drew huge audiences to Fox News for his show in the normally sleepy 5 p.m. time slot. And when he left the network in 2011, he fanned speculation that his fledgling media empire might one day challenge the conservative behemoth.
Glenn Beck producer defies judge's order to name sources
The Blaze recruited a staff of 300 with promises of a news organization that would be openly right-leaning, but that would be independent from any candidate or party and break news using traditional journalistic tactics.
But Beck’s attacks on Trump and cheerleading for Cruz — which included public fasts and prayer for the candidate, as well as speeches on behalf of the campaign — undermined that promise and left many within the company questioning whether its objectivity was compromised.
“It just seemed over the last year or so that he stopped caring about the journalistic aspect he had so proudly proclaimed, and just wanted to push his stuff,” said a former editorial staffer. “Now, it's not like he would have pressured them to write pro-Cruz stuff or anything like that — or if he did I didn't hear about it — but from the outside it just looked like, man, so we're not even pretending anymore.”
At the time, Beck was also spending heavily. He invested in pricey studios and offices in Manhattan and on Washington’s Capitol Hill and in suburban Dallas, where he built a replica of the Oval Office — not to mention luxury cars, personal security and a plane.
The Blaze has scaled back or shuttered its offices and operations in Washington and New York, and, after layoffs, its staff is now reportedly down to around half its peak size. Traffic to The Blaze’s website has dropped by nearly half from the same time last year, despite the intense appetite for political news during the presidential campaign. In August of 2015, The Blaze attracted 18.2 million unique visitors according to Quantcast. August of 2016 saw a drop to 8.7 million unique visitors, a pattern which repeats itself when comparing monthly traffic from 2016 to 2015.
And lately, other conservative media outlets have become more influential, most notably the populist conservative website Breitbart News, which backed Trump while openly antagonizing Beck. Breitbart’s executive chairman Steve Bannon, who has taken a leave to help run Trump’s campaign, has arguably supplanted Beck as the leading media visionary on the anti-establishment right. Beck in turn has peddled wild conspiracy theories about Bannon, whom he called “possibly the most dangerous guy in all of American politics.”
U.S. senator (R-Texas)
Cruz forks over $100K to boost endangered Republicans
In his interview with POLITICO, Beck said he was getting ready to launch a comeback plan for The Blaze, which he dubbed “Project Phoenix, Blaze 2.0.” But he also suggested that his enemies on the right and left were working to stymie him after his endorsement of Cruz.
“The world currently is punishing anyone who takes a stand. And that’s what’s so disappointing,” he said. “I’m a guy who’s used to being called names. But I was shocked at how the right plays exactly the same game as the left. I’ve always known that there were dirtbags on both sides, but the exact same tactics used to try to discredit me from the Soros left was used by the Bannon right,” he said, adding “there is no difference between those two, practically.”
The attacks on Soros’s tactics seem to echo the theme of Beck’s 13th book, “Liars: How Progressives Exploit Our Fears for Power,” which was released recently and became a New York Times bestseller.
A Soros spokesman declined to comment on Beck, as did Bannon.
Bill Heid, the CEO of Solutions from Science, who has known Beck for years, asserted “delusions of grandeur got the best of Glenn Beck.”
The host “became a man possessed when it came to Ted Cruz," Heid said.
“You know, you can be for a candidate without hating the other side,” Heid said, lamenting “all the name calling and picking fights” with Trump defenders ranging from Matt Drudge and Sarah Palin to Breitbart News and Sean Hannity.
“I mean, it was nothing short of poisonous,” he added. “And from a marketing standpoint, the tea party/conservative media demographic is small enough the way it is, without creating so many factions and so much ill will.”
Heid told POLITICO that before breaking the contract, he made several attempts to stop what became “a disastrous advertising schedule, but Glenn's ad rep assured me that Cruz would eventually lose which would take Glenn off the campaign trail and back him into the studio again."
Another company that continues to advertise on Beck’s radio show has been monitoring the host’s program for signs of rhetoric that might alienate potential customers, according to the CEO.
The CEO said Beck hasn’t reached that point, partly because, as the CEO put it, “we’re all getting inured to extremist positions by pundits. It’s like the WWE. 80 percent of the audience knows it’s just theater. The radio personalities don’t honestly believe what they’re saying. They’re just selling tickets, I think.”
And the company’s analytics show that Beck’s show has remained among the most effective advertising platforms, according to the CEO, who did not want to be identified.
“We’re agnostic to the message. We’re about selling our product,” said the CEO. “And Glenn Beck is someone who we did a lot of testing with, and we haven’t seen any signs of drop-off. If we noticed it, we would reduce our spend. The only thing we see now is the same performance or better, particularly in an environment where his listeners are extremely engaged.”
Indeed, Beck’s syndicated radio show, which is the most traditional and longest running of his media platforms, remains the third-highest rated conservative talk radio show, behind those hosted by Rush Limbaugh and Sean Hannity.
Rachel Nelson, a spokeswoman for Premiere Radio Networks, said no advertisers have complained to her company about any decline in effectiveness from ads on Beck’s show.
“The Glenn Beck Program has experienced increased revenue and audience levels over the past several years, and is pacing ahead in 2016,” she said. “Many of Glenn’s sponsors are long-term partners that have had significant success advertising with his radio program and plan to continue their affiliation with him well into the future. These sponsors choose to advertise their products and services with Glenn because they believe in the value and effectiveness of his relationship with his very loyal audience.”
Beck’s show had served Heid’s company well in the past, accounting for about 80 percent of the business done by Solutions from Science, which grew to 48 employees, becoming the largest employer in Heid’s small town of Thomson, Illinois.
“Now I’m down to less than half that because we just don’t have the business to support it anymore,” Heid said, calling it “heart wrenching to have to lay off so many fine people.”
Beck said his lawsuit against Heid’s company “was definitely not because of my stance” in the 2016 race. “That was because they couldn’t pay their bills. They owed us three quarters of a million dollars. And I don’t take advertising from people who can’t pay their bills,” he said.
Perhaps ironically, one of the entities from which Beck recently accepted payment is Trump’s presidential campaign, which paid to rent The Blaze’s email list for fundraising appeals.
If Beck is truly driven by ideology over money, Heid asserted, he wouldn’t rent his list to someone he “thinks is so dangerous for America … It doesn’t make any sense.”
It makes perfect sense to Beck, who explained that “my audience should have access to everyone,” adding that he would rent his list to Trump’s Democratic rival Hillary Clinton if she asked. “I sell advertising, I’m a recovering alcoholic and a Mormon and I would take a beer distributor. I won’t take things that are illicit or illegal, but as far as I know, neither Donald Trump nor Hillary Clinton are illegal or immoral. I can’t say immoral, I shouldn't say immoral. Illicit.”