The Other McCain

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When Did Newt’s Campaign Become Unsustainable? And What Was the Result?

Posted on | March 28, 2012 | 7 Comments

In reporting on the financial collapse of Newt Gingrich’s campaign — which I described last night — Michael Shear of the New York Times writes:

Mr. Gingrich has struggled to raise money for weeks as he failed to win states outside of Georgia.

Look, the Georgia primary was Super Tuesday, March 6, but Newt “struggled to raise money” for more than a month before then. Here’s what happened:

  • During the final three months of 2011, Gingrich’s campaign raised $9.8 million. He began January with $2.1 million cash on hand, with debt of $1.2 million, for a net balance (cash on hand minus debt) of $900,000.
  • In January, Newt raised $5.6 million and spent $5.9 million. He ended January with $1.79 million cash on hand, with debt of $1.76 million. So his spending exceeded his revenue by $300,000 and he also added $560,000 to his debts. His net balance entering February was therefore only $30,000.
  • The wheels fell off in February, when Newt raised only $2.6 million — a 54% month-to-month decrease — while spending $2.9 million, some of which must have gone to pay off debts, which decreased to $1.5 million, but his month ending cash-on-hand was less than his debt, so that his net balance was negative as of Feb. 29, six days before the Georgia primary on Super Tuesday.

My guess is that Newt’s fundraising peaked in mid-to-late January, between the first South Carolina debate (Jan. 16 at Myrtle Beach) and the second Florida debate (Jan. 26 at Jacksonville). The Myrtle Beach debate was widely hailed as a triumph for Gingrich, while the Jacksonville debate was one of his worst performances of the entire campaign.

Live by the debate, die by the debate. Four weeks transpired between the Jan. 26 Jacksonville debate and the final debate, Feb. 22 in Arizona. After beating Mitt Romney in South Carolina by 12 points on Jan. 21, Newt lost Florida by 14 points on Jan. 31, then lost Nevada by 29 points on Feb. 4 and never recovered.

Also: Live by the poll, die by the poll. If you’ll look at the Real Clear Politics summary of national polls, you’ll see that in the week Jan. 8-15 (from the back-to-back New Hampshire debates until the first South Carolina debate), Romney led by 16 to 25 points in four consecutive polls (Gallup, CNN, Fox and ABC), but Romney’s lead was just 3 points in a Rasmussen poll taken the day after the first South Carolina debate. Between Jan. 22-26, three polls (NBC, Rasmussen, Gallup) showed Gingrich leading by 7 to 9 points.

After Newt lost Florida, however, the bottom fell out: Having led the RCP national average Jan. 27 by 4.3 points (31.3% to Romney’s 27%), Gingrich lost more than 15 points in less than two weeks, falling to third place at 16.2% by Feb. 14. That was three weeks before the Georgia primary.

While Newt’s fundraising might have bounced up a bit between Feb. 22 (the Arizona debate) and Super Tuesday on March 6, it likely never equalled the $106,000 per day Gingrich averaged in the last three months of 2011, and certainly not his January fundraising, which averaged $180,000 per day. And there’s no telling how far Newt’s daily fundraising has fallen in the two weeks since he lost Alabama and Mississippi.

But the point — correcting the New York Times — is that things started going downhill for Newt long before the Georgia primary on March 6, and his campaign’s finances were shaky even during his best month of fundraising. His “burn rate” was over 100% in January and he actually added debt while his cash-on-hand declined. On Feb. 21, the day after the FEC reports for January were published, I said Newt’s “burn rate” was unsustainable, and it took another month before the February FEC report proved this to be true.

Three weeks from now, after we see Gingrich’s March FEC report, we’ll know exactly how deep in the red his campaign is. It is already obvious, however, that Newt ceased to be financially viable sometime in February, but managed to conceal his bankruptcy for at least three weeks. Those proved to be three crucial weeks during which Gingrich effectively delayed the consolidation of the “Anybody But Mitt” vote behind Santorum, permitting Romney to score a key win in Ohio, by less than 1 point.

Even after he lost Alabama and Mississippi on March 13, however, Gingrich spent another two weeks pretending that everything was hunky-dory — “all the way to Tampa!” — before he finally quit trying to maintain the illusion and cut his campaign staff, which was still rolling in a 10-car motorcade last week in Louisiana.

Monday, after getting back from Louisiana, I warned: “Expect to see more stories in coming days about Newt’s final meltdown.”

That was a fairly safe prediction, and didn’t take long to be fulfilled. Pretty soon, we’ll have the typical “sources close to the campaign” telling tales to reporters about the wretched excesses inside Team Newt, and not long after that (by Sunday at the latest, I’d guess), you’ll see at least one of those long, in-depth retrospective What-Went-Wrong features about the Gingrich debacle:

“It began one night in October when, after a debate in Las Vegas, the blogger Allahpundit at said, ‘Second look at Newt?’ . . .”


7 Responses to “When Did Newt’s Campaign Become Unsustainable? And What Was the Result?”

  1. richard mcenroe
    March 28th, 2012 @ 9:00 am

    Newt’s campaign is NOT unsustainable!

    He just thinks he should be free to see other voters for a while….

  2. Adjoran
    March 28th, 2012 @ 3:36 pm

    Isn’t all this just part of the same problem that caused most of Gingrich’s senior campaign staff to quit last spring when, instead of campaigning and fundraising, he and Callista went on a luxury cruise of the Mediterranean?   Newt always talked about a “different sort of campaign” – he didn’t say it, but that apparently meant using free media and debates instead of spending on organization and advertising, using the campaign money instead to fund a first-class leisurely tour of the country. 

    After all, his intent was just to boost his brand, and make more money from book sales, speaking fees, and consulting jobs.  Why not have a jolly good time doing it?  Besides, Callista don’t stay in no Holiday Inn.

  3. Adjoran
    March 28th, 2012 @ 3:37 pm

    Of course, all this emphasis on the fundraising reports could get interesting next month.  Gingrich may not be the only candidate finding money hard to come by.

  4. Dave
    March 28th, 2012 @ 5:21 pm

     Santorum has raised far more money than Newt. This is helping to disguise that his fundraising is terrible, too.

  5. Evi L. Bloggerlady
    March 28th, 2012 @ 6:30 pm

    Arguably Newt’s campaign became unstable with events such as Dede Scozzafava, canoodling with Pelosi, or trashing Paul Ryan.  

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    […] Newt has cut staff and, according to Stacy McCain, his campaign is “unsustainable.” […]

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