Right Wing Biz Roundup

By David Lieberman, March 28, 2023

TRUTH SOCIAL BILLION-DOLLAR DEAL ON THE ROCKS

While Donald Trump awaits a possible indictment by a New York grand jury, the investment company that wants to fund his Truth Social platform cast a decisive verdict of its own last week.

Digital World Acquisition Corp. (DWAC) – a publicly traded Special Purpose Acquisition Corp (SPAC) – said on March 22 that it had “terminated” Chairman and CEO Patrick Orlando due to “the unprecedented headwinds faced by the Company.”

Those “headwinds” apparently include DWAC’s failure thus far to persuade its shareholders to approve its Oct. 2021 deal to merge with Trump Media & Technology Group (TMTG), the entity that owns Truth Social (see yesterday’s report about the platform’s stagnant growth). The merger would provide TMTG with about $1.3 billion. In late February DWAC exercised the third of its four options to postpone a shareholder vote – pushing the deadline to June 8 from March 8.

But a few days before Orlando was sacked, The Guardian reported that federal prosecutors in New York are investigating TMTG for possible money laundering in connection with $8 million in emergency loans it accepted from two mysterious entities with ties to Russian president Vladimir Putin.

The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority also are investigating whether DWAC failed to tell potential investors in its 2021 initial public offering an important fact: Orlando had already secretly discussed a deal with TMTG. If true, then insiders would have had an unfair opportunity to pay a low price for stock that would surely pop once a deal was announced. That’s exactly what happened: the shares DWAC sold for $10 apiece when it went public soared to over $100 in early March 2022, after the deal was announced.

The air’s almost entirely out of that balloon. DWAC shares have lost more than 80 percent of their value over the last 52 weeks as the likelihood of a deal dimmed – closing on March 27 at $13.63.

A few weeks ago TMTG asked Reps. Patrick McHenry,  Jim Jordan, and James Comer to examine the SEC’s “endless investigation of the DWAC-TMTG merger” which, it said, “clearly constitutes an unprecedented attempt to kill the deal without any finding of wrongdoing.”

DWAC’s stock price could drop even more if Nasdaq delists the company. It said on March 1 that it planned to appeal a delisting notice it had received for non-payment of some unidentified fees. In September, the Financial Times reported that DWAC had not paid Saratoga Proxy Consulting for its work trying to rally shareholder support for the Trump deal.

The former president’s increasingly incendiary comments, like the ones he made this past weekend in Waco, TX, also could hurt. DWAC noted in public filings including this one last year that if he “becomes less popular or there are further controversies that damage his credibility or the desire of people to use a platform associated with him, and from which he will derive financial benefit, TMTG’s results of operations, as well as the outcome of the proposed Business combination, could be adversely affected.”

iHEART MEDIA LOVES HARD RIGHT MICHIGAN LOSER

Michigan Gov. Gretchen Whitmer trounced her Trump-supported Republican opponent, Tudor Dixon, by 11 points in the 2022 election. But iHeart Media’s Premiere Networks hears a winner in the 2020 election denier who once delivered what historian Heather Cox Richardson called “a pure white power rant.”

On March 20 the nation’s largest terrestrial radio company launched a three-times-a-week podcast featuring Dixon. It comes from a new iHeart entity called The Clay Travis & Buck Sexton Podcast Network. Travis and Sexton’s radio show inherited Rush Limbaugh’s time slot at Premiere.

Dixon said that “The Tudor Dixon Podcast” will “get to the truth about issues that affect you, your family, and our American way of life!”

For a sample of Dixon’s commitment to truth and “the American way of life,” consider this 2020 TV commentary which earned historian Richardson’s scorn.

Dixon said that Democrats planned for decades to divide the U.S. due to their resentment over the fact that “white Republicans” in the Civil War freed the slaves. She added that Democrats “fed you white guilt slowly for years” and after the George Floyd murder in 2020 they “sat back in their designer suits, eating their fillet with their nice béarnaise sauce while they watched the country rip itself apart because they were getting it all back, the slaves again.” Now they want to take “your guns, your speech and your God.” She urged Christians to “not stand in silence” noting that “those of us who honor the one true God are not white supremacists.”

It would be interesting to hear iHeart executives explain how the Dixon podcast squares with what it says is its goal to cultivate and celebrate “diversity and inclusion at every level of our company” and inspire “positive change” that helps to “solve pressing issues facing our planet.”

SALEM EXECS SCORE WHILE SHAREHOLDERS LOSE

Salem Media Group’s radio stations and multimedia commentary from right wing stars including Dinesh D’Souza, Sebastian Gorka, and Hugh Hewitt failed to pay off for shareholders in 2022. But you wouldn’t know that from the compensation that top executives received.

Executive Chairman Edward Atsinger III collected a $200,000 bonus to lift his annual compensation 19.3 percent from 2021 – when he was CEO — to $1.2 million, according to the company’s proxy out late Friday. CEO David Santrella, who replaced Atsinger as CEO in January 2022, received a $190,800 bonus as well as restricted stock and options. That lifted his compensation 81.5 percent to $1 million.

The compensation packages are far lower than you see at most media companies. Still, the increases stand out in a year when the company reported a net loss of $3.2 million, down from a $41.5 million profit, on revenues of $267.0 million, up 3.4 percent. Salem’s stock price fell 65.7 percent to end the year at $1.05 a share.

The proxy said that the board wants executives to plan for Salem’s long-term health and compensation is “generally not aligned” with its recent financial performance.

Right Wing Biz Roundup is a ongoing series of articles examining the business and finances of right wing media. Its author, David Lieberman, covered the media business full time for 30 years at USA Today and other publications before joining The New School as an Associate Professor in its  graduate Media Management program