Can the Entercom Boston cluster be saved?

[Fenway1912]

Entercom Boston was created in 1998 when CBS had to sell off stations acquired from buying American Radio.

http://www.nytimes.com/1998/08/14/b...cbs-to-sell-5-boston-area-radio-stations.html

CBS kept American's 98.5

When the dust settled Entercom wound up paying $65M for Boston as they sold 2 Tampa stations to CBS for $75M.

15 years ago it was a good deal as WEEI and WRKO were billing well, WAAF and WEGQ were holding their own BUT the value was with 680 and 850.

Entercom would later buy 103.7 and 97.7 to improve FM coverage of the market.

What is the cluster worth today? 850 is now 24/7 birdfeed from ESPN - 680 has Howie and Rush and otherwise not much.

93.7 is not a full market signal - it has major problems in the South Shore ( but 103.7 covers that )

WAAF putters along but they never should have moved the transmitter from Paxton to West Boylston - the channel 27 tower was flawed inside 128.

Entercom's problem now is WEEI is not the golden goose it was 10 years ago. WRKO is irrelevant today.

The Boston market has 3 healthy clusters - Clear Channel, Greater Media and CBS. Entercom is on life support.

 

[TSBench]

What is the cluster worth today?

Radio stations sell for a multiplyer of their billing, with some tweaking due to intangibles. You are essentially asking for the billing numbers of the individual stationss. I don't believe Entercom breaks revenue out by market in their SEC filings, though that might have changed.

Now, I assume yours is a serious question, and not just a set-up for another M-E-G-O igno-fest of EDS.

So, for starters, what are the Entercom stations billing? If you don't have that number, you can't answer the question.

Regards,
TSB

 

[johnster]

Fenway, American Radio or Atlantic or whatever you want to call it already owned WAAF before the CBS deal.

 

[Gregg]

Fenway1912 paints a bleaker picture of Entercom Boston than the situation really warrents. In the latest ratings, WEEI-FM, WRKO and WAAF are all in the 2's. Not great but not fatal.

Entercom has had some bad luck in the last couple of years. First, getting a CBS Sports competitor on FM. In the latest ratings, WBZ-FM is well ahead of WEEI-FM. But as soon as the Red Sox ratings kick in, that will reverse. (Did you notice during TV news coverage of the Red Sox game after the alleged bomber was captured, when Neil Diamond appeared live to sing Sweet Caroline, many in the stands held Boston Strong posters with WEEI 93.7 at the top? Good marketing move! Not to make light of a bad situation, but WRKO's ratings will likely be up next month, since News-Talk stations get a boost from bad news.)

Another bit of bad luck: The decline of the Rock format. That did clear WBCN and WFNX out of the market. But it also means fewer listeners to WAAF.

Another bit of bad luck: The decline of the Talk format. That has meant the demise of SIX Boston Talk stations over the last couple of years (WTKK, WXKS, WWZN-Progressive Talk-now WUFC, WILD-Black Talk, WCAP, WTTT-now WWDJ). WRKO is the only commercial Boston station left in the Talk format. It means almost no competitors. But it also leaves WRKO with fewer listeners today than in Talk Radio's better years.

On the upside, in Boston, if you want to buy 18-49 or 25-54 men, you gotta do business with Entercom. They've got the Red Sox Sports station, as well as the WEEI Network all around New England. And they've got one of two remaining Boston Rock stations aimed at young to middle aged men. Meanwhile, if you want to buy Talk Radio, you also have to do business with Entercom. WRKO is the only commercial Talk station left in town.

Entercom is NOT on life support. And no one has to ask if it can be saved.

 

[aaronread]

I've long maintained that the $64,000 Question is what happens in 2016 when the current Red Sox/Entercom contract expires?

That contract questionable even when the Sox were winning World Series. It became a giant albatross around Entercom's neck, especially in that last two years with the Sox sucking wind. I wouldn't go so far as to say it made WEEI unprofitable, but that $20mil/yr ate up an awful hefty portion of Entercom Boston's profits, to be sure. IIRC in the fiscal year the Sox won in 2007, WEEI alone billed (gross, not net) about $36 million. That's pretty damn good, although supposedly it was more than the rest of the cluster combined was billing, but if true it puts things in perspective: Entercom needed WEEI to do really well to be profitable with that Sox contract.

Now the contract is ending in a few years, and I'm 100% sure that the Sox will not get that kind of mad money again. I'm sure Entercom is looking to cut that number in half, if not by 75%. I'm also sure CBS will bid and bid aggressively to get the Sox rights...but it's anyone's guess if the bids will be serious or just an attempt to force Entercom to pay more than they'd like. A friend and expert mentioned to me that CBS is not known for mad-money deals, and they're kicking ass and taking names with the SportsHub 98.5 just fine as things are. They don't NEED the Red Sox. Entercom, however, DOES need the Red Sox, and everyone knows it. John Henry also NEEDS a new herbal jacuzzi in his third home so I'm sure the Sox will demand insane money just because they can (even if they won't get it).

Toss in the fact that Joe Castiglione is 66 now, and has been there since dinosaurs roamed the outfield. ;D When he retires, it will undoubtedly be something of a bumpy transition to a new voice...and that could happen right at the same time as the contract talks.

Certainly this will be an interesting 2015 in terms of radio contracts!!!

 

[raccoonradio]

Jeff Katz lost his job when 1200 changed but now he's back on local radio--60 seconds at a time--
on WCAP. Well it's a start.

>>The Katz Commentary will return to the air starting Monday April 29. "Not Left, Not Right, Just Real" will be a daily sixty second feature which will air during morning and afternoon drive on the legendary New England station WCAP-AM 980. (Katz on FB)

 

[raccoonradio]

>> in the fiscal year the Sox won in 2007, WEEI alone billed (gross, not net) about $36 million.

I remember hearing that figure. btw technically the flagship of the Sox that yr was WRKO with
some games on EEI but whatever.
I had heard a $20M/yr figure and later some thought it was closer to $14M/yr...

Recall (you can look it up) in April of 06 the Globe reported Greater was making a deal to put
the Sox on 92.9 with the team owning part of the station. Weeks later it was reported Greater
pulled out and Entercom was back in. What if... (for one thing, HAD Greater then gone ahead
and made it a sports station--who knows if they would have done that, or done music-plus-Sox--
we would have had our first FM sports talker, and would CBS have bothered by '09 to convert
98.5? Of course CBS had two teams to air, so maybe they still would have.)

>>I'm also sure CBS will bid and bid aggressively to get the Sox rights...
Not sure what sort of conflicts there would be if so, Sox vs. Pats or B's...maybe they would
put the displaced team on one of the other FMs, or even 1030...

>>They don't NEED the Red Sox

..at this point, true.
Good points all.

 

[dyeingeye]

Whatever the figure for the rights is, how do the affiliate stations figure into the cost of broadcasting the Red Sox? Does WEEI sell the broadcast rights to the affiliates as an offset to its contract with the Sox or do the affiliates' fees go right to the team?

 

[TSBench]

I've long maintained that the $64,000 Question is what happens in 2016 when the current Red Sox/Entercom contract expires?

It's not exactly rocket surgery to know that keeping that contract is the key to keeping WEEI afloat.

That contract questionable even when the Sox were winning World Series. It became a giant albatross around Entercom's neck, especially in that last two years with the Sox sucking wind. I wouldn't go so far as to say it made WEEI unprofitable, but that $20mil/yr ate up an awful hefty portion of Entercom Boston's profits, to be sure.

And I'll submit that there is no way of determining the worth of that contract unless you know what the WEEI and WRKO would have done without it. Just comparing the billing vs the contract certainly isn't the way, since the Red Sox whole is definitely creater than the sum of the parts. All the attendant goodies and intangibles are worth a bundle.

Entercom needed WEEI to do really well to be profitable with that Sox contract.

Just the opposite. Entercom needed that Sox contract for WEEI to do well and the cluster to make lots of money and stay competitive. They were going to stay 'profitable' with or without the Sox.

Now the contract is ending in a few years, and I'm 100% sure that the Sox will not get that kind of mad money again.

Possibly, if not probably, they'll get more. The last contract was let without real competitive bidding.

I'm sure Entercom is looking to cut that number in half, if not by 75%. I'm also sure CBS will bid and bid aggressively to get the Sox rights...but it's anyone's guess if the bids will be serious or just an attempt to force Entercom to pay more than they'd like.

Nope, it will be serious as a heart attack for both stations. It is pretty well known in the biz that the Red Sox PbP contract is the gold standard for Boston rights deals, the only one REALLY worth having. If CBS captures it, you can probably start dimming the lights at WEEI. If WEEI retains it, they stay a player in the Boston sports radio wars. That is already obvious to all the parties involved.

Being in the middle of an existential fight between Entercom and CBS will make the John Henry's accountants think they've died and gone to heaven.

Entercom, however, DOES need the Red Sox, and everyone knows it.

Ummm...Now you're undermining and contradicting your own argument.

I assume that 'everyone' you cite includes Entercom, CBS, and the Sox. If that's the case, why would you think the rights fees are going to come down? If Entercom needs it to keep WEEI alive, and CBS getting the rights would put their only real competitor out of business and make them the only sports game in town, and with John Henry holding all the cards, this would shape up as the Boston radio bloodbath of all time.

Regards,
TSB

 

[wickedwritah]

You're assuming Henry & Co. owns the team in 2016 and that may be a stretch.

 

[4CX1000A]

Another bit of bad luck: The decline of the Talk format. That has meant the demise of SIX Boston Talk stations over the last couple of years (WTKK, WXKS, WWZN-Progressive Talk-now WUFC, WILD-Black Talk, WCAP, WTTT-now WWDJ). WRKO is the only commercial Boston station left in the Talk format. It means almost no competitors. But it also leaves WRKO with fewer listeners today than in Talk Radio's better years.

Talk radio hasn't declined; only the subject of discussion seems to have changed (from politics to sports).

If the old formulas aren't working as well as they used to, that is the nature of radio. This is show business. New talent and a new approach are what is called for.

 

[TSBench]

You're assuming Henry & Co. owns the team in 2016 and that may be a stretch.

Talk about picking the fly poop out of the pepper.

The only thing I'm really assuming is that the Sox wll still be playing baseball in the foreseeable future, which is a pretty good bet. I only mentioned John Henry since he's probably the guy who will still be calling the shots at renewal time. If it's not him, someone else will be raking Entercom and CBS over the financial coals (unless either CBS or Entercom buys the team, which is highly unlikely.)

Regards,
TSB

 

[raccoonradio]

Younger and younger audiences prefer talk about
the NFL draft to politics. The recent bombings did
get discussed on sports radio due to the shocking events
and their proximity to us (yes they did take place at
a sporting event but in this case a news event did
attract listeners who might normally not get into
news. Most water cooler discussions ( other than the
bombings could well be about sports, not, Hey! Did you hear
that Senate debate on Dan Rea's show, or Howie Carr's?

Younger--and more wide ranging in all ages demoes--audiences,
attractive to advertisers. People tired of politics.

 

[Bosch94]

Entercom would have been better leaving STAR 93.7 With Ralphie and Karen Blake and progressing from there... The end of STAR sounded good... They clearly just didnt know what they where doing to market it and format it correctly for Boston... and shows they dont know what they are doing now.... Just my two cents welcome or not... Lol.

 

[reelyreal]

Whatever the figure for the rights is, how do the affiliate stations figure into the cost of broadcasting the Red Sox? Does WEEI sell the broadcast rights to the affiliates as an offset to its contract with the Sox or do the affiliates' fees go right to the team?

Each station pays rebroadcast rights to WEEI. It's a different figure for every station depending on your market (or lack of market) and the length of time you've been an affiliate factors in as well. The number is really all over the place, but it's not a substantial sum. The network makes money between rebroadcast fees and the airing of the network breaks every inning.

 

[raccoonradio]

A couple yrs back the affiliates in southern NH at 900 and 1250 temp. lost the games due to
lack of payment

 

[Fenway1912]

You're assuming Henry & Co. owns the team in 2016 and that may be a stretch.

Talk about picking the fly poop out of the pepper.

The only thing I'm really assuming is that the Sox wll still be playing baseball in the foreseeable future, which is a pretty good bet. I only mentioned John Henry since he's probably the guy who will still be calling the shots at renewal time. If it's not him, someone else will be raking Entercom and CBS over the financial coals (unless either CBS or Entercom buys the team, which is highly unlikely.)

Regards,
TSB

If the Red Sox went on the market I suspect Comcast would at least look at it as they pay millions a month in NESN fees.

 

[brightonboris]

You're assuming Henry & Co. owns the team in 2016 and that may be a stretch.

Talk about picking the fly poop out of the pepper.

The only thing I'm really assuming is that the Sox wll still be playing baseball in the foreseeable future, which is a pretty good bet. I only mentioned John Henry since he's probably the guy who will still be calling the shots at renewal time. If it's not him, someone else will be raking Entercom and CBS over the financial coals (unless either CBS or Entercom buys the team, which is highly unlikely.)

Regards,
TSB

If the Red Sox went on the market I suspect Comcast would at least look at it as they pay millions a month in NESN fees.

Actually, it's the subscribers who pay the fees.

 

[Fenway1912]

You're assuming Henry & Co. owns the team in 2016 and that may be a stretch.

Talk about picking the fly poop out of the pepper.

The only thing I'm really assuming is that the Sox wll still be playing baseball in the foreseeable future, which is a pretty good bet. I only mentioned John Henry since he's probably the guy who will still be calling the shots at renewal time. If it's not him, someone else will be raking Entercom and CBS over the financial coals (unless either CBS or Entercom buys the team, which is highly unlikely.)

Regards,
TSB

If the Red Sox went on the market I suspect Comcast would at least look at it as they pay millions a month in NESN fees.

Actually, it's the subscribers who pay the fees.

Ahhh but if Comcast took over NESN they would keep those fees. ;D

 

[MR. JAROME_CALVIN]

Entercom would have been better leaving STAR 93.7 With Ralphie and Karen Blake and progressing from there... The end of STAR sounded good... They clearly just didnt know what they where doing to market it and format it correctly for Boston... and shows they dont know what they are doing now.... Just my two cents welcome or not... Lol.

If they have programmed it better, they would've been around today. With that being said, on a simular note, if "HOT 96.9" doesn't widen their playlist, they also will not last longer. For a station called "HOT" especially if it's (Rhythmic AC) and with their best signal inside the whole Boston area, they should highly, besides, and noticed I said (Besides) what they are playing now, besides what they are playing, they should highly consider playing NEW Urban AC music. If they do that, they will be much better.
Another thing they should consider is looking into putting on "The Quiet Storm" (Superadio.com) Monday-Thursday nights.
If they do either both, or one of those, they will be much better, as well as adding some (Urban AC Syndicated weekend shows). For an Assistant Program director that recently worked at "KISS 98.7", you'd think they'd be better by now.
I'm still happy and glad we have this station