Rush Limbaugh's reported mammoth, eight-year, $38 million-per contract with Clear Channel has quickly sparked two very different reactions: It's given hope to a bloodied radio industry and simultaneously angered legions of talk-show hosts who aren't making enough to buy entire emerging-market nations.

But news of the contract "is a great affirmation by Premiere"—Premiere Radio Networks syndicates The Rush Limbaugh Show—"and by the advertisers that there's great reach still in radio," argues Jeff Haley, chief executive of the Radio Advertising Bureau.

That "great affirmation" comes as ad revenue evaporates and audiences vanish. Annual revenue for radio has been spiraling. In 2007, overall revenue for the U.S. radio industry declined 2 percent, to $21.3 million, from the year before, wiping out meager 1 percent gains in 2006.

Haley says (surely with fingers and toes crossed, and eyes fixated on heaven) that podcasts and streaming internet broadcasts will likely be incorporated into Limbaugh's new contract, as Clear Channel and its ilk struggle to capture and retain tech-savvy listeners, bored with the standard radio box. And as that evolution takes place and the medium modernizes, "it's only natural that these strong franchises," like Limbaugh's, "will expand," he says.

Limbaugh himself is a complete stranger to audience woes. He claims to have 20 million listeners (other industry analysts peg it at closer to 14 million), and he's available on the AM dial, readily accessible to anyone with a bare-bones radio and a tolerance for ads, no subscription necessary. His bombastic personality and conservative views have paved the way for the likes of Sean Hannity and Glenn Beck. And the new contract marks him as central to the success of Premiere's business plan.

Despite that, the contract may serve as a mixed blessing to the rank and file of the radio industry as a whole. Sure, it’s a vote of confidence for the viability of radio as a successful medium for ads. Sure, it offers some glimmer of hope to aspiring talk-radio hosts.

More immediately however, it is causing untold frustration among other up-and-coming hosts. Michael Harrison, editor of radio industry trade publication Talkers magazine, says many have called him in frustration to complain that they aren't making enough.

Another high-profile radio personality, Howard Stern, made headlines four years ago after signing a reported $100-million-a-year contract with the subscription-only Sirius Satellite Radio. That arrangement, too, was based on capitalizing on emerging technology to garner new listeners, but has had mixed results so far: Stern has failed to drum up an audience bigger than somewhere in the estimated "single-digit millions" for his channel, according to Harrison.

Still, Sirius's investment in Stern was a wise one, he says. The star brought the fledgling company significant notoriety and can be expected to build a more solid audience given time now that Sirius has merged with rival XM.  

Amid the fuss, it's worth remembering that the contract's financial details were revealed by Limbaugh himself, hardly an impartial source, in a profile in the New York Times Magazine. The deal is reported to be worth $400 million over eight years, not including a nine-figure signing bonus. But none of this has been confirmed by Premiere. And, like any contract, Limbaugh's is no doubt peppered with protective clauses and contingency plans to shelter the company signing the checks.

The host is "going to have to continue to do a heck of a job for that figure to come to fruition," says Harrison, in terms of ratings, revenue, and other performance metrics. Premiere will likely expect revenue growth to at least keep pace with the cost of living, say 3 percent a year—and ratings goals will reflect similarly high expectations.

Still, if the contract numbers are real, they may be justified. In radio, "there's a powerful personal connection that happens. That's what drives Rush's reach and the valuation of his programming," says Haley. "The new contract will absolutely pay off."