LAUROJRM said:
here we go again.
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Can the Entercom Boston cluster be saved?
- Thread starter Fenway1912
- Start date
here we go again.
Going back to the situation of 2006 when it seemed like WBOS/Greater would have gotten Sox rights; I mentioned Greater backed off and Entercom swooped in, etc. Here's a bit more about the situation via a 2006 Fybush column:
http://www.fybush.com/NERW/2006/060320/nerw.html
March 20, 2006; Scott mentions the WBOS situation but says Greater would have had to shed
one of its FMs due to the 5-FM limit, and pretty much sell 92.9 to the team. I think later
WCRB got sold to Nassau and later WGBH and it was on 12/1/06 when country 99.5 and
WCRB 102.5 switched places.
Scott writes:
>>Based on the current ownership rules, that means the Sox would have to acquire enough of WBOS so that Greater Media no longer has an "cognizable interest" in the station. In practice, that would mean that Greater couldn't own more than 5 percent of voting stock in WBOS, nor could it broker more than 15 percent of WBOS' airtime. Effectively, then, the Sox would have to buy WBOS outright, and that doesn't sound like what the team has in mind
(A month later the Entercom deal was announced for the Sox. The headline of Fybush's May 8,
2006 issue said "A done deal? Entercom outlasts rivals for Sox radio rights")
http://www.fybush.com/NERW/2006/060508/nerwfront060508.gif
--
http://bostonradio.org/stations/23441
>>In 2006, 99.5 took on yet another new life, as Greater Media executed an unusual upgrade of its Boston cluster, buying WCRB (102.5 Waltham) from Charles River Broadcasting, then trading the WCRB intellectual property (calls and classical format) and studios, along with the 99.5 Lowell license and transmitter facility, to Nassau Broadcasting
---------------------------
By 09 Nassau sold WCRB to WGBH which took it non-commercial
http://www.fybush.com/NERW/2006/060320/nerw.html
March 20, 2006; Scott mentions the WBOS situation but says Greater would have had to shed
one of its FMs due to the 5-FM limit, and pretty much sell 92.9 to the team. I think later
WCRB got sold to Nassau and later WGBH and it was on 12/1/06 when country 99.5 and
WCRB 102.5 switched places.
Scott writes:
>>Based on the current ownership rules, that means the Sox would have to acquire enough of WBOS so that Greater Media no longer has an "cognizable interest" in the station. In practice, that would mean that Greater couldn't own more than 5 percent of voting stock in WBOS, nor could it broker more than 15 percent of WBOS' airtime. Effectively, then, the Sox would have to buy WBOS outright, and that doesn't sound like what the team has in mind
(A month later the Entercom deal was announced for the Sox. The headline of Fybush's May 8,
2006 issue said "A done deal? Entercom outlasts rivals for Sox radio rights")
http://www.fybush.com/NERW/2006/060508/nerwfront060508.gif
--
http://bostonradio.org/stations/23441
>>In 2006, 99.5 took on yet another new life, as Greater Media executed an unusual upgrade of its Boston cluster, buying WCRB (102.5 Waltham) from Charles River Broadcasting, then trading the WCRB intellectual property (calls and classical format) and studios, along with the 99.5 Lowell license and transmitter facility, to Nassau Broadcasting
---------------------------
By 09 Nassau sold WCRB to WGBH which took it non-commercial
Going back to the situation of 2006 when it seemed like WBOS/Greater would have gotten Sox rights;
GM was never going to get the Sox rights away from WEEI. Think about this on your own for a minute, instead of mining your archives for everyone else's ideas, especially since you seem to have no way of determining which are valid and which are blowing smoke.
Todays suggestion....just because somebody posts from more than 50 miles away doesn't necessarily mean they know what they are talking about.
Regards,
TSB
GM was never going to get the Sox rights away from WEEI. Think about this on your own for a minute, instead of mining your archives for everyone else's ideas, especially since you seem to have no way of determining which are valid and which are blowing smoke.
Todays suggestion....just because somebody posts from more than 50 miles away doesn't necessarily mean they know what they are talking about.
Regards,
TSB
TSBench says >>>Greater Media was never going to get the Sox rights away from WEEI.<<<
Well, it all depends on who wants them badly enough. I'm sure next year CBS is going to bid quite high for the Red Sox. And CBS's pockets are bigger than Entercom's. Would CBS figure, even if it lost money on the deal, they could bury WEEI-FM as a competitor to WBZ-FM?
On the other hand, Entercom gives the Red Sox something CBS might be unwilling to do... both an FM signal AND a 50,000 watt AM signal. Would CBS be willing to do the same? Would they put the Red Sox on 98.5 AND on 1030?
In NYC, All-News WCBS carries the Yankees but CBS also has All-News WINS in the market, so NYC is not left without All-News while the Yankees are playing.
These days many teams are REQUIRING both AM and an FM coverage. In Cleveland, CBS's new FM Sports station WKRK was unable to pull the Indians away from Clear Channel. For years, the games were only heard on AM, via 50,000 watt Talk station WTAM 1100. Now they're being heard on Clear Channel's WTAM AND their FM Rock station 100.7 WMMS. CBS doesn't own any AM stations in Cleveland, so it couldn't make a similar offer.
But having been burned by the Indians deal, CBS was able to get rights to the Cleveland Browns by promising them a TRIMULCAST... Sports station WKRK 92.3 and Classic Rock WNCX 98.5 will both broadcast the Browns games on FM, along with AM 850 WKNR, an ESPN station CBS doesn't even own. But CBS made a deal with the local owners of WKNR to give the Browns a 10,000 watt AM station, as well as the two CBS FM stations.
So it will come down to both money and AM-FM coverage when the Red Sox choose between Entercom and CBS next year. My guess is Entercom's fortunes are SOOOO wrapped up in the Red Sox that they can't afford to let the team go to CBS. But CBS knows this. And CBS knows in Red Sox-crazy Boston, stealing the team from Entercom would almost be the kiss of death for WEEI-FM, leaving WBZ-FM as the only viable Sports station in the market.
Well, it all depends on who wants them badly enough. I'm sure next year CBS is going to bid quite high for the Red Sox. And CBS's pockets are bigger than Entercom's. Would CBS figure, even if it lost money on the deal, they could bury WEEI-FM as a competitor to WBZ-FM?
On the other hand, Entercom gives the Red Sox something CBS might be unwilling to do... both an FM signal AND a 50,000 watt AM signal. Would CBS be willing to do the same? Would they put the Red Sox on 98.5 AND on 1030?
In NYC, All-News WCBS carries the Yankees but CBS also has All-News WINS in the market, so NYC is not left without All-News while the Yankees are playing.
These days many teams are REQUIRING both AM and an FM coverage. In Cleveland, CBS's new FM Sports station WKRK was unable to pull the Indians away from Clear Channel. For years, the games were only heard on AM, via 50,000 watt Talk station WTAM 1100. Now they're being heard on Clear Channel's WTAM AND their FM Rock station 100.7 WMMS. CBS doesn't own any AM stations in Cleveland, so it couldn't make a similar offer.
But having been burned by the Indians deal, CBS was able to get rights to the Cleveland Browns by promising them a TRIMULCAST... Sports station WKRK 92.3 and Classic Rock WNCX 98.5 will both broadcast the Browns games on FM, along with AM 850 WKNR, an ESPN station CBS doesn't even own. But CBS made a deal with the local owners of WKNR to give the Browns a 10,000 watt AM station, as well as the two CBS FM stations.
So it will come down to both money and AM-FM coverage when the Red Sox choose between Entercom and CBS next year. My guess is Entercom's fortunes are SOOOO wrapped up in the Red Sox that they can't afford to let the team go to CBS. But CBS knows this. And CBS knows in Red Sox-crazy Boston, stealing the team from Entercom would almost be the kiss of death for WEEI-FM, leaving WBZ-FM as the only viable Sports station in the market.
The threshold question on Red Sox rights is what kind of deal the club is looking for. All this prattle about a traditional rights auction may not be realistic.
Some consideration may be given to keeping sales and marketing in-house, then getting added dollars for auctioning off the privilege of carrying the team's packaged programming.
Look for in-house sales and a rights fee to carry games (an maybe a few avails) on an exclusive basis, and I'm not sure the avails would be free, the team may well require rights fee to carry the games and force affiliates to "buy back" spot time. That may be what you see next from this ownership, if they can sell both spots and the programming that goes around the spots, they may well do it, they're already selling NESN and who knows what selling in combo might mean. Or maybe shaking down some desperate operator to overpay is the way to go once again, don't think the team hasn't done a financial analysis to figure out that they're making way more as a result of getting Entercom hooked in a bad deal than they would have had they held the rights and sold the air.
Some consideration may be given to keeping sales and marketing in-house, then getting added dollars for auctioning off the privilege of carrying the team's packaged programming.
Look for in-house sales and a rights fee to carry games (an maybe a few avails) on an exclusive basis, and I'm not sure the avails would be free, the team may well require rights fee to carry the games and force affiliates to "buy back" spot time. That may be what you see next from this ownership, if they can sell both spots and the programming that goes around the spots, they may well do it, they're already selling NESN and who knows what selling in combo might mean. Or maybe shaking down some desperate operator to overpay is the way to go once again, don't think the team hasn't done a financial analysis to figure out that they're making way more as a result of getting Entercom hooked in a bad deal than they would have had they held the rights and sold the air.
TSBench said:
^5
TSBench says >>>Greater Media was never going to get the Sox rights away from WEEI.<<<
Well, it all depends on who wants them badly enough.
????? the GM/Entercom contest over the Sox is history, not current events. Entercom won. And they were going to win, for a number of reasons.
I'm sure next year CBS is going to bid quite high for the Red Sox.
Me, too. That why I said, contrary to the poster I was replying to, that the rights fees are going up, not down.
You probably should have cited another poster for this response, cuz I think the rights fee is going up. The fellow to whom I was responding hasn't come back with his rationale for why he thinks the fees will be heading down, and precipitously so, but he might have one. You may want to ask him.
Regards,
TSB
Well, it all depends on who wants them badly enough.
????? the GM/Entercom contest over the Sox is history, not current events. Entercom won. And they were going to win, for a number of reasons.
I'm sure next year CBS is going to bid quite high for the Red Sox.
Me, too. That why I said, contrary to the poster I was replying to, that the rights fees are going up, not down.
You probably should have cited another poster for this response, cuz I think the rights fee is going up. The fellow to whom I was responding hasn't come back with his rationale for why he thinks the fees will be heading down, and precipitously so, but he might have one. You may want to ask him.
Regards,
TSB
Playing Armchair Executive here, I think I'd prefer the stability of a contract like the one that exists now, over taking the risks involved in the ups and downs of the advertising market.[/
Yep. Plus nobody is going to confuse the Sox executive suite with a room full of riverboat gamblers. The radio deal is an annuity, a gift that keeps on giving no matter how good, or bad, the team performs.
There is no conceivable business reason why the Sox would take the radio in-house, especially now.
Two sports stations competing for the rights is a situation which comes around less often than Haley's comet, in fact, it may never come along again. The idea they'd throw away an opportunity that other owners dream about doesn't sound like their way of doing business.
Regards,
TSB
Yep. Plus nobody is going to confuse the Sox executive suite with a room full of riverboat gamblers. The radio deal is an annuity, a gift that keeps on giving no matter how good, or bad, the team performs.
There is no conceivable business reason why the Sox would take the radio in-house, especially now.
Two sports stations competing for the rights is a situation which comes around less often than Haley's comet, in fact, it may never come along again. The idea they'd throw away an opportunity that other owners dream about doesn't sound like their way of doing business.
Regards,
TSB
These days many teams are REQUIRING both AM and an FM coverage.
Not the Sox, unless times have drastically changed. The Sox would prefer a network of two hundred 1000 watters rather than four 50KW clears. And they have good marketing reasons for this. Having 'BZ blanketing the Sox marketing area would not be helpful in putting together a huge networ. I watched a rights deal once blow up because of a misjudgment of how much a huge signal would impress the Sox.
I'm not saying that times haven't changed since then, but not that much and a lot of the same reasons seem to be pretty viable today.
Regards,
TSB
Not the Sox, unless times have drastically changed. The Sox would prefer a network of two hundred 1000 watters rather than four 50KW clears. And they have good marketing reasons for this. Having 'BZ blanketing the Sox marketing area would not be helpful in putting together a huge networ. I watched a rights deal once blow up because of a misjudgment of how much a huge signal would impress the Sox.
I'm not saying that times haven't changed since then, but not that much and a lot of the same reasons seem to be pretty viable today.
Regards,
TSB
As I have posted previously Red Sox broadcast rights history has been unique.
After World War II the radio rights settled at WHDH(850) - The Braves were on WNAC (1260)
WBZ(1030) WANTED the Red Sox but the team decided that having local stations carrying the games would help sell tickets.
Yawkey did allow WTIC(1080) the games so he could listen at night in South Carolina.
The lore is WHDH NEVER had a written contract with WHDH, it was a handshake agreement that just continued year after year.
What I do know to be fact was Tom Yawkey was furious when WHDH went to a soft Top 40 format after Blair bought the station from the H-T. Dick Richmond at WMEX told Yawkey he would switch to MOR and Yawkey gave WMEX the 1975 playoffs and the following year.
Dick Richmond knew that he could unload WMEX at a nice price if he had the Sox on board and he sold to Mariner (which owned WLW Cincinnati )
We all know how badly that ended and then gave us the WPLM years.
Today - how much is that contract worth? I am thinking $10M tops.
After World War II the radio rights settled at WHDH(850) - The Braves were on WNAC (1260)
WBZ(1030) WANTED the Red Sox but the team decided that having local stations carrying the games would help sell tickets.
Yawkey did allow WTIC(1080) the games so he could listen at night in South Carolina.
The lore is WHDH NEVER had a written contract with WHDH, it was a handshake agreement that just continued year after year.
What I do know to be fact was Tom Yawkey was furious when WHDH went to a soft Top 40 format after Blair bought the station from the H-T. Dick Richmond at WMEX told Yawkey he would switch to MOR and Yawkey gave WMEX the 1975 playoffs and the following year.
Dick Richmond knew that he could unload WMEX at a nice price if he had the Sox on board and he sold to Mariner (which owned WLW Cincinnati )
We all know how badly that ended and then gave us the WPLM years.
Today - how much is that contract worth? I am thinking $10M tops.
TSBench said:
>>The Sox would prefer a network of two hundred 1000 watters rather than four 50KW clears.
In the Champlain Valley for years the Sox were on WJOY 1230 Burlington, WRSA 1420 St Albans,
and WFAD 1490 Middlebury. This was necessary because at night a station like WJOY couldn't cover those whole areas. This yr the Sox made the move to FM--WCPV 101.3--and apparently all 3 previous affiliates are no longer on the network (WRSA in fact may be silent). So instead of the 3 stations up there, yes now there's only one (96.1 from the Montpelier-Warren area, and 550
by day, can reach, too) and it's a a fairly powerful FM. But yes it the past you NEEDED
affiliates in Burl, S.A., and Middlebury to reach all those areas.
A list of Red Sox network affiliates:
http://www.weei.com/weei/shows-schedules/red-sox-radio-network
Even with WEEI-FM 93.7, there is a need (or they want) to also put it on stations in Gloucester,
Milford, Fitchburg, etc. NH, you have Laconia, Franklin, Plymouth, Rochester, Manchester,
Nashua, New London, etc. Part of the reason could be bad signal coverage and the necessity
of getting other stations to help out. Part of it also could be more income from a bunch of
stations, stations that can cater to local advertisers ("fish where the fishes are"--WBOQ).
At work the other night the C's were on WEEI-FM and the Sox were relegated to "ESPN 850"
which I couldn't get too well--but WBOQ 104.9 had them, too. Before, when the stick
was in Manchester-by-the-Money, I couldn't have picked up 104.9 too well at work in
N. Reading; now with the stick in Topsfield, it comes in.
In the Champlain Valley for years the Sox were on WJOY 1230 Burlington, WRSA 1420 St Albans,
and WFAD 1490 Middlebury. This was necessary because at night a station like WJOY couldn't cover those whole areas. This yr the Sox made the move to FM--WCPV 101.3--and apparently all 3 previous affiliates are no longer on the network (WRSA in fact may be silent). So instead of the 3 stations up there, yes now there's only one (96.1 from the Montpelier-Warren area, and 550
by day, can reach, too) and it's a a fairly powerful FM. But yes it the past you NEEDED
affiliates in Burl, S.A., and Middlebury to reach all those areas.
A list of Red Sox network affiliates:
http://www.weei.com/weei/shows-schedules/red-sox-radio-network
Even with WEEI-FM 93.7, there is a need (or they want) to also put it on stations in Gloucester,
Milford, Fitchburg, etc. NH, you have Laconia, Franklin, Plymouth, Rochester, Manchester,
Nashua, New London, etc. Part of the reason could be bad signal coverage and the necessity
of getting other stations to help out. Part of it also could be more income from a bunch of
stations, stations that can cater to local advertisers ("fish where the fishes are"--WBOQ).
At work the other night the C's were on WEEI-FM and the Sox were relegated to "ESPN 850"
which I couldn't get too well--but WBOQ 104.9 had them, too. Before, when the stick
was in Manchester-by-the-Money, I couldn't have picked up 104.9 too well at work in
N. Reading; now with the stick in Topsfield, it comes in.
Okay, let's make sure we're all talking about the same thing. The current Red Sox/Entercom radio contract is $20mil/yr for 10 years ($200 million), for the 2006 thru 2016 seasons. At the time, it was the most expensive radio sports contract in history. There was much speculation that it would be hard for Entercom to make the mad money it had traditionally made off Sox games with that $20mil/yr price tag...and further speculation that Entercom "needed" (in a loose sense of the word) that mad money to prop up the rest of the cluster. This deal was negotiated in the 2005 season, right after the Sox had just won their first WS in decades, interest in the team was at an all-time high, and it was before the economy tanked.
Now, TSBench, you're saying that somehow the Sox will somehow squeeze Entercom for even MORE money than that? I find that EXTREMELY hard to believe. Nobody, not Entercom, not GM and not CBS, is going to pay $20mil/yr for those rights. Even if it's a five year contract, you could buy a station outright for that kind of money.
Note: there was a lot of speculation that the Sox would just buy a station and do what they did with NESN. It was valid speculation, but I think the Sox (wisely) realized that coming up with programming 24/7/365 is BOTH harder for a radio station than for a cable TV outlet, AND going to have a lot less ROI for the team. I feel pretty confident in saying that a $200mil/10yr contract with Entercom made the Sox more money than if they tried to buy their own FM outlet and run it themselves.
Back to 2016: I don't see Greater Media trying to get into the sports realm. It's possible of course, but they'd have to pony up an awful lot of cash to buy game rights and talent, and they'd still be coming into a crowded market as third banana.
CBS could be a conceivable home for the Sox. But I'm told that CBS has an overall history of NOT paying mad money for contracts. And they're already kicking WEEI's ass in the ratings; they don't really need the Sox rights. Of course, I expect them to be a competitive bidder for the Sox rights just to drive up the price and make it as painful for a competitor (WEEI) as possible to keep those Sox games.
I agree that Entercom will hold onto the Sox because without them they got nothing for WEEI, and WEEI is still Entercom Boston's big cash cow. They'll pay whatever it takes to hang onto those games. But I have to think the bidding will be starting far, far lower than it did in 2005, and that the end result will be a contract that costs Entercom a lot less.
2005 or 2006? Look up Globe articles, Fybush, etc. and you'll see that in April of 2006 (contract set to end that yr) WBOS almost wound up with the Sox but weeks later Entercom got them back,with WRKO to be flagship starting with the 2007 season.
>>for the 2006 thru 2016 seasons.
Or would it have been 07 thru 16...
Agreed re: Entercom trying to keep the Sox though the price may be lower, even if CBS
jumps in "to drive up the price"
May 1 2006
http://www.fybush.com/NERW/2006/060501/nerw.html
>>FRIDAY MORNING UPDATE: Greater Media has just announced that it's out of the running for the Red Sox rights in 2007. "...WEEI may not need the Sox at all. Conventional wisdom says that the city's biggest sports talker needs to keep the region's biggest sports franchise on its airwaves. As good as the Sox have been to WEEI in the last few years, though, there's at least some evidence to suggest that the station's brand is now strong enough to survive even without being the home of Sox play-by-play.
Scott went on to say maybe there could be TWO FM sports talkers in the Hub.If WBOS had gone sports--and yes his update said that Greater had backed down, "The likeliest scenario would move WAAF's rock to the 93.7 signal now occupied by adult hits "Mike," which would then give WEEI the huge signal at 107.3 that would more than fill the holes in the existing network of WEEI signals"
(And 1440 Worc could have then simulcast WRKO...)
From May 8, 2006's NERW: 10 years at $20 mil per.
http://www.fybush.com/NERW/2006/060508/nerw.html
>> But this week, there's no tussle - just the dotting of i's and crossing of t's on what appears to be a record-breaking deal that will keep the Sox with Entercom for ten more years and a reported $200 million in rights fees.
>>for the 2006 thru 2016 seasons.
Or would it have been 07 thru 16...
Agreed re: Entercom trying to keep the Sox though the price may be lower, even if CBS
jumps in "to drive up the price"
May 1 2006
http://www.fybush.com/NERW/2006/060501/nerw.html
>>FRIDAY MORNING UPDATE: Greater Media has just announced that it's out of the running for the Red Sox rights in 2007. "...WEEI may not need the Sox at all. Conventional wisdom says that the city's biggest sports talker needs to keep the region's biggest sports franchise on its airwaves. As good as the Sox have been to WEEI in the last few years, though, there's at least some evidence to suggest that the station's brand is now strong enough to survive even without being the home of Sox play-by-play.
Scott went on to say maybe there could be TWO FM sports talkers in the Hub.If WBOS had gone sports--and yes his update said that Greater had backed down, "The likeliest scenario would move WAAF's rock to the 93.7 signal now occupied by adult hits "Mike," which would then give WEEI the huge signal at 107.3 that would more than fill the holes in the existing network of WEEI signals"
(And 1440 Worc could have then simulcast WRKO...)
From May 8, 2006's NERW: 10 years at $20 mil per.
http://www.fybush.com/NERW/2006/060508/nerw.html
>> But this week, there's no tussle - just the dotting of i's and crossing of t's on what appears to be a record-breaking deal that will keep the Sox with Entercom for ten more years and a reported $200 million in rights fees.
The current Red Sox/Entercom radio contract is $20mil/yr for 10 years ($200 million), for the 2006 thru 2016 seasons.......Now, TSBench, you're saying that somehow the Sox will somehow squeeze Entercom for even MORE money than that? I find that EXTREMELY hard to believe. Nobody, not Entercom, not GM and not CBS, is going to pay $20mil/yr for those rights.
The Sox deal is around 13.5, and in an all-out war for survival, I can easily see that going to 15-17.
Pretty easy to believe it, too. WBZ-FM gets the deal and blows their only real competitor out of the water, and has a license to print money for the foreseeable future. WEEI doesn't get the deal and goes from being worth 60-70 million to being worth, maybe 20, the melt value for the signal and physical assets.
Like I say, it ain't rocket surgery.
Regards,
TSB
The Sox deal is around 13.5, and in an all-out war for survival, I can easily see that going to 15-17.
Pretty easy to believe it, too. WBZ-FM gets the deal and blows their only real competitor out of the water, and has a license to print money for the foreseeable future. WEEI doesn't get the deal and goes from being worth 60-70 million to being worth, maybe 20, the melt value for the signal and physical assets.
Like I say, it ain't rocket surgery.
Regards,
TSB
Fenway1912 commented on the Red Sox radio rights over the years: said:
Actually, both teams were on the old WNAC (home games only) through 1946, with 'HDH picking-up the home games of both teams from 1947 through 1949.
In fact, it was the acquisition of baseball (along with Boston Bruins' hockey games, a 1946 format change to personality DJ's playing recorded music, and a 1948 power increase to 50,000 watts) that turned WHDH from a minor player in Boston radio to one of the top two or three radio stations in New England.
It was not until 1950, when the Braves broke away and went back to WNAC, did away games of either team get broadcast on local radio.
In fact, until 1950, the same announcer (Jim Britt in the late 1940's) did both teams.
I also think that through 1949, Naragansett Brewing ("Hi Neighbor, Have A 'Gansett!") actually held the broadcast rights to both teams, with the aforementioned stations picking up the rights in 1950, though Narragansett continued as a sponsor of the Sox games though the 'Sixties.
There may have been another reason why WBZ-1030 didn't land the Sox if they made a run for the team in 1975: Had 'BZ landed the Sox in 1975, a large number of early-season games probably would have been shunted off to FM to accommodate Bruins and Celtics playoff broadcasts on the AM.
The Red Sox rights increase over the course of the existing deal. If the average is $20MM it will be higher than that by the end. By the time the deal ends in 2016, the likelihood of it being profitable as a stand alone was always going to be slim, and that was through the prism of the business in 2006. The climate is much more competitive and challenging in 2013. ETM did that deal to keep a competitor off the air and to maintain WEEI's dominant position. Neither of those conditions exist anymore. There are good arguments for the speculation on both sides of this thread. Based on my experience having worked for multiple rights holders and having negotiated with the Red Sox, my guess is the following:
-The Sox don't want to sell their own radio rights - they already are challenged with 300+ game spots per week to sell on NESN and that is arguably too many. TV and radio deals are generally not packaged together on the agency level so that is separate conversations with separate buyers and separate sales people. I think this route is very unlikely.
-CBS is not going to take on a loss leader just to kick a competitor who is already down. CBS would not want to take a significant margin hit in Boston because they need to report to Wall Street every 13 weeks and it would be a slow bleed over the course of a multi-year deal. CBS local management would never advocate taking on a money losing deal of that kind of magnitude and they are too smart and risk averse to think they are going to bill $25MM+ in Red Sox.
-The Sox are worth more to ETM than they are to anyone else so they will end up paying more than anyone else to retain them.
-Digital rights are carved out of the deal by MLB, so it will be a challenge for ETM or CBS to justify the deal at $20MM/year unless something changes the game in the next couple of years.
-I believe that the Sox will give ETM a renewal price that is too high, there will be some sort of open negotiating period where CBS will get involved, blogs such as this one will be aflutter. None of the other players will contend unless there is a significant change in their Boston distribution channels. The sales and finance people at ETM and CBS will crunch all kinds of numbers and ETM will end up retaining the Sox for somewhere around $15MM/year with escalators or some kind of upside opportunity.
-Of course there could be a bidding war, but based on the current value of the property in the marketplace, I don't think either of the combatants would choose to blow their own brains out, and I don't believe the broadcasts are worth as much as was speculated in 2006.
-The Sox don't want to sell their own radio rights - they already are challenged with 300+ game spots per week to sell on NESN and that is arguably too many. TV and radio deals are generally not packaged together on the agency level so that is separate conversations with separate buyers and separate sales people. I think this route is very unlikely.
-CBS is not going to take on a loss leader just to kick a competitor who is already down. CBS would not want to take a significant margin hit in Boston because they need to report to Wall Street every 13 weeks and it would be a slow bleed over the course of a multi-year deal. CBS local management would never advocate taking on a money losing deal of that kind of magnitude and they are too smart and risk averse to think they are going to bill $25MM+ in Red Sox.
-The Sox are worth more to ETM than they are to anyone else so they will end up paying more than anyone else to retain them.
-Digital rights are carved out of the deal by MLB, so it will be a challenge for ETM or CBS to justify the deal at $20MM/year unless something changes the game in the next couple of years.
-I believe that the Sox will give ETM a renewal price that is too high, there will be some sort of open negotiating period where CBS will get involved, blogs such as this one will be aflutter. None of the other players will contend unless there is a significant change in their Boston distribution channels. The sales and finance people at ETM and CBS will crunch all kinds of numbers and ETM will end up retaining the Sox for somewhere around $15MM/year with escalators or some kind of upside opportunity.
-Of course there could be a bidding war, but based on the current value of the property in the marketplace, I don't think either of the combatants would choose to blow their own brains out, and I don't believe the broadcasts are worth as much as was speculated in 2006.
The Red Sox rights increase over the course of the existing deal. If the average is $20MM it will be higher than that by the end.
The best numbers I've seen on that deal came from the Boston Globe, which reported at the time that it was 14 mil a year (no mention of escalators). Jim Rushton (spelling ?) when asked to comment said that number was a 'little on the high side." Therefore, I used the 13.5 number. If you have a source at least as authoritative as the Globe (which was pretty wired into the Sox front office) saying it was 20 million I'm all eyes. And why would Entercom agree to an escalator when they were already the last man standing after the competitive bidding? The Sox weren’t going to get a better offer.
-CBS is not going to take on a loss leader just to kick a competitor who is already down.
Why not? The blew up one the country's legendary stations to roll the dice with sports radio, because CBS LIKES sports. They didn't do that with the idea that "hey, wouldn't it be great to be good guys and split the sports audience with another group so everyone can pay their bills?"
WEEI, back before the economy went into the dumper, was billing a reported 35 million as the sole (for all intents and purposes) sports station in Boston. With an improving advertising environment WBZ-FM, if they became the only sports station in town would probably beat that number easily, and WEEI didn't have the Pats when they were turning the big billing numbers. And, with Red Sox audience influence spread across the entire station, the real question is what is a rating point, even a male one, worth. Millions is the answer. Knocking WEEI out of the box would be, as I stated, a license to print money for the foreseeable future. And since when did CBS become the Charitable Broadcasting System? The radio side bloodline (Infinity, Viacom) carries the DNA of some of the most scorched-earth hardball players in the biz.
CBS would not want to take a significant margin hit in Boston because they need to report to Wall Street every 13 weeks
Huh? CBS is a 30 billion dollar company with close to 15 billion in sales and banked about 1.6 billion last year in a static economy. The worst case scenario losses anyone could imagine resulting from laying out more than 15 mil for the Sox in order to put their competition out of business would be, in those quarterlies, the equivalent of a rounding error. Plus, as the leading play-by-play radio company in the country, they are continually subject to the vicissitudes of a business where luck plays a major role and and they are only partially the masters of their own fate. If the main office suits, and the shareholders, don’t understand that, well, the pool is too deep for non-swimmers.
and it would be a slow bleed over the course of a multi-year deal. CBS local management would never advocate taking on a money losing deal of that kind of magnitude and they are too smart and risk averse to think they are going to bill $25MM+ in Red Sox.
If they were the only sports player in town they’d probably bill 50-60 million. Even discounting any conceivable Sox right fee and the Patriots deal, that margin is one that would make Carl Icahn blush.
-The Sox are worth more to ETM than they are to anyone else so they will end up paying more than anyone else to retain them.
They are only worth more to ETM because they need them for WEEI to survive but they're also worth more to CBS for WBZ-FM to thrive, or dominate. Therefore, the rights will sell for well more than the current deal. And it will be a bloodbath.
Regards,
TSB
The best numbers I've seen on that deal came from the Boston Globe, which reported at the time that it was 14 mil a year (no mention of escalators). Jim Rushton (spelling ?) when asked to comment said that number was a 'little on the high side." Therefore, I used the 13.5 number. If you have a source at least as authoritative as the Globe (which was pretty wired into the Sox front office) saying it was 20 million I'm all eyes. And why would Entercom agree to an escalator when they were already the last man standing after the competitive bidding? The Sox weren’t going to get a better offer.
-CBS is not going to take on a loss leader just to kick a competitor who is already down.
Why not? The blew up one the country's legendary stations to roll the dice with sports radio, because CBS LIKES sports. They didn't do that with the idea that "hey, wouldn't it be great to be good guys and split the sports audience with another group so everyone can pay their bills?"
WEEI, back before the economy went into the dumper, was billing a reported 35 million as the sole (for all intents and purposes) sports station in Boston. With an improving advertising environment WBZ-FM, if they became the only sports station in town would probably beat that number easily, and WEEI didn't have the Pats when they were turning the big billing numbers. And, with Red Sox audience influence spread across the entire station, the real question is what is a rating point, even a male one, worth. Millions is the answer. Knocking WEEI out of the box would be, as I stated, a license to print money for the foreseeable future. And since when did CBS become the Charitable Broadcasting System? The radio side bloodline (Infinity, Viacom) carries the DNA of some of the most scorched-earth hardball players in the biz.
CBS would not want to take a significant margin hit in Boston because they need to report to Wall Street every 13 weeks
Huh? CBS is a 30 billion dollar company with close to 15 billion in sales and banked about 1.6 billion last year in a static economy. The worst case scenario losses anyone could imagine resulting from laying out more than 15 mil for the Sox in order to put their competition out of business would be, in those quarterlies, the equivalent of a rounding error. Plus, as the leading play-by-play radio company in the country, they are continually subject to the vicissitudes of a business where luck plays a major role and and they are only partially the masters of their own fate. If the main office suits, and the shareholders, don’t understand that, well, the pool is too deep for non-swimmers.
and it would be a slow bleed over the course of a multi-year deal. CBS local management would never advocate taking on a money losing deal of that kind of magnitude and they are too smart and risk averse to think they are going to bill $25MM+ in Red Sox.
If they were the only sports player in town they’d probably bill 50-60 million. Even discounting any conceivable Sox right fee and the Patriots deal, that margin is one that would make Carl Icahn blush.
-The Sox are worth more to ETM than they are to anyone else so they will end up paying more than anyone else to retain them.
They are only worth more to ETM because they need them for WEEI to survive but they're also worth more to CBS for WBZ-FM to thrive, or dominate. Therefore, the rights will sell for well more than the current deal. And it will be a bloodbath.
Regards,
TSB
Please note that I said "IF" the average is $20MM, not that it was $20MM, but the deal absolutely had multiple steps up over the course of the contract.
I actually do have a better source than The Globe, but then I'd have to kill you, or me, or you and then me...I'm not sure exactly how it works.
If we were chatting in a bar I might share more specific knowledge, but it wouldn't be right to do it here.
As I said, you may be completely right and I'm just speculating about the future based on past experience and a some knowledge of the parties involved.
Keep up the good work, you are one of the saner contributors on this site and I look forward to reading your posts.
I actually do have a better source than The Globe, but then I'd have to kill you, or me, or you and then me...I'm not sure exactly how it works.
If we were chatting in a bar I might share more specific knowledge, but it wouldn't be right to do it here.
As I said, you may be completely right and I'm just speculating about the future based on past experience and a some knowledge of the parties involved.
Keep up the good work, you are one of the saner contributors on this site and I look forward to reading your posts.
I actually do have a better source than The Globe, but then I'd have to kill you, or me, or you and then me...I'm not sure exactly how it works. Smiley
As I was getting ready to hit the send button on my last post, my wife looked over my shoulder and said, "You know he's going to come up with some uncheckable BS story about a friend of someone's brother-in-laws cousin whose name he can't reveal, knows an accounts receivable clerk at Fenway Racing who overheard John Henry and Tom Werner while taking a leak..... etc, etc. If he does, you owe me dinner."
"No, said I, "this guy isn't the usual Radio-Info four-flusher just blowing smoke and working though the lexicon of weasel words. He may actually know something the rest of us don't."
The tab at Teatro on Tremont came to $142.00.
And the tab for the Sox stays at 13.5 mil.
Regards,
TSB
As I was getting ready to hit the send button on my last post, my wife looked over my shoulder and said, "You know he's going to come up with some uncheckable BS story about a friend of someone's brother-in-laws cousin whose name he can't reveal, knows an accounts receivable clerk at Fenway Racing who overheard John Henry and Tom Werner while taking a leak..... etc, etc. If he does, you owe me dinner."
"No, said I, "this guy isn't the usual Radio-Info four-flusher just blowing smoke and working though the lexicon of weasel words. He may actually know something the rest of us don't."
The tab at Teatro on Tremont came to $142.00.
And the tab for the Sox stays at 13.5 mil.
Regards,
TSB
- Status