SBJ/July 2-8, 2012/Media

Broadcasters following the cable model into sports radio

John Ourand
When I started writing for SportsBusiness Journal about six years ago, I remember being surprised by the attitude that broadcast sports departments had toward cable channels.

As late as about a year ago, some broadcast executives still looked down their noses at cable. In their eyes, broadcast TV is about delivering quality video to mass audiences. They hardly viewed cable TV — and its tonnage of seemingly cheaply produced programming — as competitors.

I recalled those early conversations last month with the news that two of the biggest broadcasters, CBS Sports and NBC Sports, are trying to develop their own radio networks.

CBS Sports signed a deal with Cumulus Media, which owns and operates radio stations, to launch a national radio network in the next six months. NBC Sports announced a partnership with syndicator Dial Global for a national radio network that will launch in September with hourly sports updates before growing into something bigger.

These moves make it clear that broadcasters don’t view cable as an inferior competitor anymore. The broadcasters have adopted the cable model. The main U.S. broadcasters already own 24-hour sports channels, like NBC Sports Network and CBS Sports Network. They have been making moves to make their online offerings good enough that they are capable of handling TV Everywhere.

Now they are investing in sports radio.

Could it be much longer before we see CBS Sports The Magazine or a broadband channel called NBCSports3.com?
The recent moves by NBC Sports and CBS Sports to join ESPN and Fox Sports in the network radio business make sense. The moves allow CBS and NBC to expand their sports content to a new platform and allow them to market their cable channels as well, almost as barker channels.

And, most importantly, the moves could help out these networks’ bottom lines.

In a recent report, Wells Fargo analyst Marci Ryvicker pegged the national sports radio market at about $150 million. While Ryvicker said ESPN now dominates sports radio, she added, “we believe that CBS’s new network could garner a significant share of the market as early as 2013.”

Some observers believe CBS Sports is in the best position to claim a large chunk of the market, after ESPN. When it launches Jan. 2, CBS Sports says, it will be carried on 67 Cumulus stations and will launch in nine of the top 10 markets.

“This looks like one of those cases where it will add up for both sides: Cumulus provides the distribution and CBS provides the content,” said Tom Taylor, a radio industry analyst with Radio-Info.

CBS Sports executives say the move is more about finding a place for its sports content than anything else.

“We think the sector has been unchallenged, and we believe we have the product that can make it work,” said Dan Mason, president and CEO of CBS Radio. “This deal puts us into this market that we haven’t participated in on a network basis.”

CBS already operates a radio network through Dial Global (which is formerly Westwood One), but that network focuses on news, not sports.

The incumbent sports radio networks — ESPN and Fox Sports — aren’t ready to cede ground to CBS Sports or NBC Sports yet.

“People have seen our growth, and they’ve seen what’s happening in sports radio,” said Traug Keller, ESPN’s senior vice president of production and business divisions. “The model is different now.”

The model is so different now that, in fact, neither of the incumbents describe their business as radio anymore.

“Radio is an antiquated term. It’s not radio. It’s audio,” said Don Martin, head of Fox Sports Radio and senior vice president of sports programming for Premiere Networks, a radio syndication company. “If you’re not solidified on all of these platforms, you should just get out of the business. You need to be where the listener is.”

Rather than adopt ESPN’s national model, in which ESPN shows are heard across the country, Taylor believes CBS Sports will follow a more regional approach. In fact, he predicts that next year WFAN’s Mike Francesa will be heard on CBS/Cumulus stations in upstate New York and New England.

“CBS’s plan allows for a lot of regionalization,” Taylor said.

Compared with television, radio is hardly a big business. But the amount of interest that broadcasters are now showing in the sports radio business demonstrates how far they’ve moved to compete on any platform.

John Ourand can be reached at jourand@sportsbusinessjournal.com. Follow him on Twitter @Ourand_SBJ.

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