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When Will The Sports Radio Bubble Burst?

In August, FX Networks CEO John Landgraf spoke at the Television Critics Association summer tour about the state of the television industry. Landgraf said “I long ago lost the ability to keep track of every scripted TV series, but this year, I finally lost the ability to keep track of every programmer who is in the scripted programming business. This is simply too much television, and my sense is that 2015 or 2016 will represent peak TV in America, and then we’ll begin to see declines coming the year after and beyond.”

On the other hand, Netflix CEO Reed Hastings shares a different point of view. Speaking last week at The New York Times DealBook Conference he said “John’s wrong. There’s not nearly enough. There’s a lot more food than ever before, there’s a lot more choice, but I think when you do great content you’re going to find viewers. It comes back to entertainment spending, and entertainment spending has been increasing faster than disposable income for decades. I think as we come up with new experiences, when you look at virtual reality and how that’s going to improve video gaming, you’re seeing continued investment in entertainment.”

toomuchBoth men raise interesting points and a case can be made for each but I’m not here to analyze whether television has too much programming. I want to spin it towards the sports radio industry because the same question deserves to be asked – are there too many stations operating the format, and does that hurt the format’s ability to generate higher ratings and larger revenues?

When you look at the sports radio landscape today, there are 5 national networks offering the product full time. If you want to include Sports Byline that makes 6.

Then you have SiriusXM which provides national content through Mad Dog Radio and Bleacher Report, and delivers targeted content on channels such as NBA Radio, MLB Home Plate, the NFL channel, NHL Radio and College Sports Nation.

That’s just the national talk part of the conversation. Now let’s add play-by-play into the mix.

Westwood One, Sports Radio USA, Compass Media Networks, IMG, Learfield Communications, and the Touchdown Radio Network all play in this space, and I may be missing one or two but you get the picture.

Now let’s take a look at the local markets. For the sake of this conversation, I’m going to focus on the Top 25 markets. If we went beyond that, you’d find many smaller markets featuring the same amount of choice which is even more alarming considering there are less people and advertisers in many of these places.

MARKET STATIONS
NEW YORK CITY WFAN, 98.7 ESPN NY
LOS ANGELES ESPN LA 710, 570 KLAC, 980 THE BEAST, AM 830 KLAA
CHICAGO 670 THE SCORE, ESPN 1000
SAN FRANCISCO KNBR 680, 95.7 THE GAME, 1050 KNBR
DALLAS 105.3 THE FAN, 1310 THE TICKET, ESPN 103.3
HOUSTON 610 KILT, ESPN 97.5, SPORTS TALK 790, 1560 KGOW
WASHINGTON DC 106.7 THE FAN, ESPN 980, CBS SPORTS RADIO 1580
PHILADELPHIA 97.5 THE FANATIC, 94 WIP, 610 SPORTS
ATLANTA 92.9 THE GAME, 680 THE FAN, ESPN 1230, FOX SPORTS 1340
BOSTON 93.7 WEEI, 98.5 THE SPORTS HUB, ESPN WEEI 850
MIAMI 790 THE TICKET, 560 WQAM, 640 SPORTS, 940 WINZ
DETROIT 97.1 THE TICKET, DETROIT SPORTS 105.1, WDFN 1130AM
SEATTLE 710 ESPN, 950 KJR, 1090 THE FAN
PHOENIX ARIZONA SPORTS 98.7, FOX SPORTS 910, NBC SPORTS 1060
MINNEAPOLIS KFAN 100.3, 1500 ESPN
SAN DIEGO MIGHTY 1090, XTRA SPORTS 1360
DENVER 104.3 THE FAN, 105.5 ESPN, MILE HIGH SPORTS 1340AM
TAMPA 620 WDAE, 1040 THE TEAM
BALTIMORE 105.7 THE FAN, WNST AM 1570, CBS SPORTS RADIO 1300
ST. LOUIS 101 ESPN, CBS SPORTS 920, 590 THE FAN, 1490 THE CHAMP
PORTLAND 1080 THE FAN, RIP CITY RADIO 620, 750 THE GAME, 910 ESPN
CHARLOTTE 610 THE FAN, ESPN 730, FOX SPORTS 98.7
PITTSBURGH 93.7 THE FAN, 970 ESPN
SAN ANTONIO ESPN 1250, THE TICKET 760, CBS SPORTS RADIO 860
SACRAMENTO KHTK 1140, ESPN 1320

As crowded as the list above might be, I’m not even close to being done.

In Pittsburgh and Boston for example, The Boston Herald and the Pittsburgh Tribune have their own full service sports radio stations online through their websites. Those count as programming options which pull away sports radio listeners.

In most of these markets, you’ll find News/Talk brands that also dabble in sports. To shed light on a few, KMOX and KTRS in St. Louis, have produced sports talk at night and on the weekends along with carrying play by play. KOA in Denver, WGN in Chicago, WOR in New York, and WCCO in Minneapolis have all followed a similar strategy.

thexThen you have music brands which also get involved. In Pittsburgh, 105.9 The X offers music throughout the day, and Mark Madden’s afternoon sports show and Pittsburgh Penguins hockey. 102.5 WDVE which is also in Pittsburgh and a classic rock brand, is the home for Pittsburgh Steelers football.

I haven’t even touched on the stations that offer sports programming in Spanish. When you add them into this conversation, it becomes even more congested.

As of January 2015, the sports format was the 4th largest at 794 stations in the United States. Only Country, News/Talk and Spanish formats received more clearance. Growth has been consistent for nearly a decade, and to put it in perspective, in 2005 there were 500 sports stations, which means that there’s been nearly 60% growth during the past 10 years.

But is that a good thing?

In many of these markets, stations are clearing the programming and using the clearance to justify larger dollars from national advertisers, but the performance is minimal. While the industry loves to tout the number 794 to illustrate massive interest in the programming, it’s a case of smoke and mirrors. Yes there are brands doing a phenomenal job to captivate audiences, but there are also hundreds who are filling air time with national content, and not generating ratings or revenue.

listeningWhat becomes more puzzling is when you look at the total percentage of audience who consume sports radio. The format’s success is largely dependent on Men 25-54, and even if you stretched the demographic to Men 18-64, an entire market might produce 15-25% of listening. Certain cities like Boston and Detroit may outperform that number, but as a whole this is where we are.

If that’s the percentage of listening that’s available, then how can 4-5 brands operate the format in one local city and expect to run a successful business?

Some folks will point to stations that only offer national content on a smaller brand and say that they shouldn’t count, but the way I see it, if a station can be heard in a local market, and sports programming exists on it, then it counts. If that station pulls in a half a point of listening, that’s a half a point that didn’t go to one of the other sports radio brands in the market.

You can make a case that a city like New York which has close to 15 million people and 9 professional sports teams, can support three sports stations. Dallas and Houston have already demonstrated that three can work, but Los Angeles, Chicago and San Francisco haven’t had the same luck. However, I can’t see three to four sports brands being successful in a market like St. Louis, Portland, Pittsburgh, or Baltimore.

Seattle and Minneapolis (which have a larger population than each of those four cities) tried to introduce a third sports talker over the past few years only to fail. Another similar sized city, Tampa, saw its only FM sports brand (98.7 The Fan) get flipped when the station was sold by CBS to Beasley. The feeling was that the pie wasn’t large enough, even though The Fan had started to make inroads.

chooseIt may sound good when we tell people the format is nearly 800 stations strong, but the performance can’t match the distribution. Many in the industry today believe there are too many networks offering national programming. The same can be said of play-by-play providers, and local markets with too many choices and not enough people to listen to them.

With digital listening growing, it’s only a matter of time until the options for consuming content become even smaller. Television is on the verge of an ala carte viewing world, and radio will experience the same fate. The listener today has less time, more distractions, and they want more control, and once the inside of their vehicle matches their cell phone or computer, it’s going to be a game changer. It won’t matter if you have distribution, it’ll matter if your brand and personalities are important enough to be consumed.

To put it in simpler terms, a personality like Bill Simmons will be more valuable than an entire radio station. Users won’t care if the content is distributed through radio or a podcast. If it’s digital or terrestrial radio. If the show is on a station with a big signal or a digital channel that can be picked up by having a wifi connection. You can offer them ten different local outlets to enjoy sports programming and they’re going to go to the one that supplies them consistently with the best content experience.

This discussion started with two CEO’s disagreeing over whether or not there is too much programming on television. I connect more with FX Networks CEO John Landgraf who says there are too many choices, and I believe the same holds true for sports radio.

Being available as an option on the dial is one thing, but standing out on it is another. It’s not about quantity, it’s about quality. That’s what sports radio groups need to focus on because without high quality programming it’s only a matter of time before a brand is obsolete.

I can’t help but think about how much better our format would be in local markets if the best content and people weren’t so divided between so many stations. They say there’s strength in numbers, but I’m not so sure that’s accurate in this case.

Crunching The Numbers:

WDAE in Tampa enjoyed a good October book. The station finished 7th with a 4.9 in the desired Men 25-54 demographic. That was up from 3.8 in September, and a 4.3 during the same time last year.

KNBR in San Francisco turned in a great October, finishing 1st with a 6.3 with Men 25-54. Year to year the station was down nearly three points (9.2) but but that’s largely due to the San Francisco Giants winning the World Series last year.

95.7 The Game in San Francisco had a strong month finishing 6th with a 4.1 with Men 25-54. The station was up from 3.9 in September, and beat KNBR in the 12p-3p timeslot. The Game’s “Papa and Lund” finished in that slot in 3rd with a 5.2. KNBR’s “Fitz & Brooks” were 4th with a 4.7.

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