Thu. Dec 13th, 2018

Something To Bet On

By nature I’m passionate about the radio industry and quick to defend it. Two decades of labor, five market stops, hundreds of relationships, and countless positive experiences have shaped my views that way. I don’t apologize for that. It doesn’t mean the industry doesn’t have its share of flaws, but all things considered, it’s a pretty great business, one which I believe has more room for growth than ever before.

A few weeks ago I attended Radio Ink’s Forecast 2019 at the Harvard Club in New York City. From start to finish the event was jam packed with information, and featured a who’s who of industry movers and shakers. In what can only be described as a monumental upset, I was asked by Radio Ink officials to moderate a panel featuring ESPN Audio SVP Traug Keller, Cumulus and Westwood One SVP of Sports Bruce Gilbert, and Entercom Regional President Susan Larkin. I’d like to thank whoever spiked the punch to convince them to think of me. It’s appreciated.

Over the course of forty minutes we tackled a variety of subjects from sports gambling to gaming, improving diversity in sports radio management, attracting larger advertisers to sports radio, the state of ratings measurement, and changing the perception of sports radio being niche. One of the headlines which stood out most was Traug’s declaration of sports gambling becoming even bigger for the sports format than what initial projections suggested.

“This is bigger than people think,” said Keller. “The numbers coming out of New Jersey are staggering.”

If he’s right, which I do think he is, this is going to be a massive opportunity for sports media brands. The initial projections from Gambling Compliance, an independent provider of gambling industry data and research, listed sports betting as a 2 billion dollar industry. After the Supreme Court made their decision though, those projections increased to between 3.1 and 5.2 billion by the year 2023. The state of New Jersey supplied a small dose of what’s to come when during their first 17 days of legalized sports betting activity, the state raked in 16.4 million dollars.

You read that news and it instantly grabs your attention and gets your mind thinking about ways to capitalize. The challenge for brands is going to be setting boundaries so the airwaves don’t get polluted with non-stop gambling messaging. That means not allowing every Tom, Dick, and Harry who bills themselves as a gambling expert to gain time on shows, even if they’re offering dollars to do so.

It also means having to create systems to avoid having situations where four of five minutes of commercial breaks feature sports gambling commercials. GM’s are going to have to work with their sales managers to make sure pricing is set high enough so not everyone can play in the space. I’d also expect more hugs needed in the sales department when sales managers and GM’s have to deliver bad news to account executives, rejecting buys from other sports gambling groups because they’ve either sold out inventory or reached maximum capacity on what the programming team will allow on the air.

Regardless of the challenges, many in sports media circles expect an influx of cash thanks to sports gambling legalization. It’s the topic everyone has been talking about, and it was voted the #1 sports business story of the year in the Sports Business Journal. The only question is will the entire pot of gold be discovered in 2019, 2020 or later.

That got me to thinking about how the rise of sports gambling will influence future programming on radio, television and in print. We’ve already seen the NY Post form a partnership with VSiN to provide sports betting written content. The TVG Network also joined forces with VSiN. The new owner of the Los Angeles Times has said he plans to evolve the newspaper’s sports section by including coverage of eSports, and it’s safe to assume that sports betting will gain further attention too. Plus the upstart digital TV channel Cheddar has regularly produced content aimed at sports gaming and betting enthusiasts.

But what about traditional radio and TV outlets?

If you turn on SportsCenter with Scott Van Pelt, one of his most popular segments is Bad Beats. Tune into a sports radio station and you might hear an Action Update from VSiN or a sports betting expert appearing on a show to educate fans on potential moneymaking opportunities surrounding an upcoming game. Even FOX Sports Radio entered the fray this year by adding the weeknight show Straight Outta Vegas with RJ Bell to its schedule. FS1 did the same with the addition of Lock It In featuring Clay Travis, Cousin Sal, Todd Fuhrman, and Rachel Bonnetta. ESPN+ also followed suit by partnering with the Action Network on the show I’ll Take That Bet.

If you paid attention to industry news this week, you saw Darren Rovell announced his exit from ESPN to join the Action Network, where he’s expected to serve as an executive and cover the business of sports betting. Barstool Sports has gained strong social buzz this football season with the creation of their betting program Sports Betting Advisors featuring Dave Portnoy, Big Cat and Stu Feiner. Bleacher Report got involved in the space by launching a show with Chris Simms and Adam Lefkoe, and others such as The Ringer and Westwood One have created podcasts built around sports gambling content.

I think it’s fair to say that each of these brands understand what’s at stake. Groups like VSiN and the Action Network prepared well in advance by hiring good people, creating good content, and establishing relationships, even before the supreme court opened the door for states to make decisions on the future of legalized sports betting. Because they took the risk and got in early, they’re now in great position to take full advantage of it.

We’ve seen leagues like the NBA, MLB and NHL evolve their views on sports gambling, striking deals with the MGM casino for use of their data, logos and advanced statistics. DraftKings and FanDuel have opened locations in New Jersey and used their apps to generate larger revenues. Buffalo Wild Wings has even expressed interest in making sports betting available inside their bars and restaurants.

So what does it all mean?

Well, the obvious point is that the space is going to expand rapidly. Audiences will soon be treated to more of this type of content, and major advertisers, especially ones who are after the sports fan’s betting dollar, will be looking to sports media brands to help them build their customer base. You’ll likely see networks creating sports betting experts the same way they have sports analysts, and programming features will become part of shows you never would have expected them to be included in.

But is sports radio positioned to prosper from it? If you measure it from the over the air side, yes. Ratings, talent endorsements, and play by play associations are attractive to brands like StubHub, FanDuel, DraftKings, MGM and Buffalo Wild Wings. But it’s the digital space (where most economic projections expect bigger growth) where I have a few concerns.

I spent some time surfing thru the websites of a number of sports radio stations to see which local brands were developing original sports betting podcasts. I then examined the podcast charts by typing in ‘sports betting’ and ‘sports gambling’ to see which podcasts appeared in those categories. To my surprise, local sports radio underwhelmed.

What stood out most was that there weren’t many original local podcasts available on sports betting/gambling from local sports stations. National outlets did a much better job, along with groups like VSiN, Action Network, The Ringer, Barstool Sports, etc.. Among the few exceptions were The Sharp 600 by Joe Fortenbaugh of 95.7 The Game, a podcast done independently of the radio station, and KNBR’s Tom Tolbert, who’s hosting the Corndogs and Underdogs podcast.

Some of you reading this will be quick to point out that the iTunes charts can be easily manipulated. That’s true. They can. Which begs the question, why aren’t sports radio stations doing it then? Whether the system is imperfect or not, it’s where legions of sports fans turn to find podcasts, and advertisers judge whether or not you’re easily discovered there. If your content isn’t located under the category it’s built for on the first page, let alone the first three, good luck commanding larger dollars.

It left me wondering, if spending is expected to increase in the sports betting category, and major advertisers like DraftKings and FanDuel seek more of that content, especially digitally, why would they turn to a local sports radio station? They can find what they want on the national level, and thru popular sports digital brands, but local sports radio stations with their strong social followings, and 13-18 hours per day to promote content don’t deliver enough unique content or buzz on the subject matter.

If you’re inside of a sports radio station today, one of the most important conversations that should be taking place frequently between management and on-air talent should be about owning the sports betting space across multiple platforms. By the way, that doesn’t mean picking a part-time staff member and having them do a 30-minute podcast to say you’re present in the space. It means getting creative, and attacking the opportunity the same way you would a play by play partnership, or entering football season when you hire contributors for your main programs.

These are different times then before. When I programmed stations, I wasn’t a huge fan of sports betting content on the air. There were a lot of scammers looking to use the station’s airwaves to line their pockets, and although it may have been attractive to sales to add easy money for five minutes of garbage, I believed it was more important to put talent in a position to succeed, and respect the audience’s time.

But that was before legitimate people started creating content in the space, and before the supreme court granted authority to each state to decide their own fate. Fifteen years ago we looked at fantasy football content as a niche thing that wasn’t built for the mainstream, and now it’s a huge part of the American sports fan’s life. The same holds true with sports betting.

If there’s one major issue our business has it’s that we sometimes react too late. We’ve got to be thinking ahead and preparing ourselves to be a preferred destination when windfalls of cash become available, not walking in the door and promising to customize something after interest has picked up. Anyone can play the stock market afterwards, but it’s those who study trends, ask questions, and ultimately roll the dice who benefit the most.

Who’s your station’s go to expert on gambling? How are you elevating them across your shows, website, and social media channels? Are you hiring outside contributors or oddsmakers and building them up the same way you have ESPN, FOX or CBS NFL reporters? Do you have shows designed specifically for podcasting? Twitter? Instagram? Facebook? Have you asked the clients who have the most to gain in this space to share their ideas with you on how to create memorable content? What are you bringing to the table that isn’t available anywhere else?

If you solve those problems, I want you to ask yourself if you’re confident of your programming matching up with some of the other brands I mentioned earlier. If I walked into your building tomorrow as the buyer of DraftKings or FanDuel’s advertising, and I had seven figures to spend with one brand, could you convince me you had more to offer in this space than what those other groups have available?

This is what you’re going to be up against. Keep in mind, I’ve focused mostly on the audio part of this discussion. If I dove deep into each sports station’s social media video content and written pieces on the topic of sports betting I’d be terrified of what I’d find. It certainly wouldn’t measure up against the content being supplied by those other outlets. That points to an obvious opportunity for brands to explore partnerships with others who can bring things to the table that they can’t.

I consider this a critical conversation, and I’m thrilled that it’s going to be part of our agenda at the BSM Summit in Los Angeles in February. VSiN Chairman and co-founder Brian Musburger, Action Network Head of Media Chad Millman, and FanDuel President and COO Kip Levin have graciously agreed to spend time discussing the present and future of sports betting, lessons they’ve learned since entering the space, and what media brands can do to help themselves. 95.7 The Game morning man and Sharp 600 podcast host Joe Fortenbaugh will moderate the discussion.

Given what’s at stake from a monetization and interest standpoint, this is an area we can’t afford to miss the mark on. The reality right now is that the VSiN’s, Action Network’s, Barstool’s, Ringer’s, and Bleacher’s of the world know this space better and deliver better talent and content in it than local sports radio. So too do national brands like FOX, CBS and ESPN. If sports gambling is indeed the elixir that the sports format has been waiting for, then we’ve got to make sure we’re capable of matching up with the best that any other media brand can provide. If not, we’ll soon be waving goodbye to another lost opportunity, and this one could have grave consequences.