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Radio’s Squeeze Play

As a kid growing up listening to Vin Scully’s play-by-play of L.A. Dodgers games, Larry Kahn always knew that he would be a sports broadcaster. “I’ve wanted to do this from the time I was 3 years old,” Kahn recalled. But the thought that he might someday be running his own media company never crossed his mind. That changed in the early 2000s, when frustration with the industry’s lack of sports knowledge led Kahn, a former KNX-AM broadcaster, to found radio syndicator Sports USA Inc. in Simi Valley. In its first year, the company broadcast live college football games on 30 radio stations, most of them in Southern California. Today, Kahn and his team can be heard on nearly 500 affiliates across the country, offering play-by-play and analysis of National Football League and college sports as well as syndication of the Little League World Series and even horse racing’s Triple Crown. “I never dreamed all this would happen,” Kahn said. “If you had told me in 2002 that we’d be doing this 15 years later, I’d have said you were crazy.” The number of stations carrying Sports USA content is rising, as is the number of games to which the company has broadcasting rights. To facilitate the growth, Sports USA signed on in early June recent college graduate Josh Appel, the 2016 recipient of the Jim Nantz Award for excellence in collegiate sports broadcasting. “I couldn’t be more thankful … to join the Sports USA family,” Appel said in a statement. “It’s been a dream of mine to call games at this level.” Yet even as his firm’s broadcasts reach a record number of ears, ad sales are growing harder to come by, Kahn explained. As listeners’ options widen with satellite radio and mobile video streaming, advertiser dollars are spread increasingly thin. “I don’t think terrestrial radio can be as successful in a standalone situation as we were, say, 10 years ago,” he said. Technology has reversed traditional media’s monopoly on the flow of information, explained Daniel Durbin, professor at the USC Annenberg Institute of Sports, Media and Society. No longer do fans need to tune in to the radio to keep up with a score; instead, it’s literally at their fingertips. “Today, virtually everyone turns to their cell phone for immediate news,” Durbin said. “Audiences no longer have to chase a story around the dial. … They can access it immediately through an online search.” Business model Sports USA generates revenue through the sale of national advertisements, which it conducts with the help of a large New York advertising firm and Cumulus Media subsidiary Westwood One. Sports USA places the ads in its broadcasts, the rights to which it purchases through universities or NFL teams. As an independent syndicator, it then distributes the content to local stations directly rather than through a large network. The model provides a way for the stations to sell local advertising in exchange for running Sports USA’s national commercials, Kahn explained. “Selling (a local ad spot) during an NFL game is going to get you more money than you would if you were doing it during the something like ‘The Tom and Harry Show,’” he said. “That’s our so-called ‘barter system.’… Obviously, you want an NFL game or a major college game on your station, but you also want to maximize your own revenue.” Each broadcast is conducted by a six-member crew, including Kahn, who announces NFL games. He is joined by an analyst, a sideline reporter, a statistician, a spotter and an engineer. Other broadcasters, such as former National Hockey League voice John Ahlers, announce play-by-play at college games and other sporting events. The broadcasts are uploaded in real time to a motherboard at Sports USA’s studio in Simi Valley and distributed via satellite to affiliate stations. “No one understands what we do – it just gets done,” Kahn said. “(The audience) turns on the radio and the game’s there.” Ten years ago, all that effort paid well because of advertisers, who were eager to place clients’ ads in NFL or big college games. But thanks to technology, that’s no longer the case, Kahn said. “When I started, there was no streaming of games on your phone. If you wanted to hear a major college game, you had to get it through a radio station or on TV,” he said. “We are no longer the only way to listen to these games.” Advertisers know this, and so do colleges and the NFL. Competition for the right to broadcast NFL games during primetime has driven Sports USA’s licensing fees up nearly 60 percent over the last 10 years, from $11 million a year in 2002 to $27 million last year for 51 games, Kahn explained. While his firm pays teams individually for the rights to Sunday afternoon games, rather than buying prime time packages, the rise has been no less substantial: The 32 teams combined bring in $7 million, as opposed to $2.1 million in 2002, Kahn said. Combined with falling per-ad revenue, margins are squeezed even as the number of stations carrying Sports USA broadcasts continues to climb. “We have more stations now than we’ve ever had before,” Kahn said. “But it’s not incumbent upon someone to listen to our broadcast.” It’s a problem facing every player in the radio industry, said Eric Geller, a broadcast veteran and founder of Eric Geller Media & Entertainment in West L.A. In addition to enhancing the reach of longtime broadcasters ESPN Inc.’s ESPN Radio, which now streams content through several online platforms as well as in partnership with the satellite radio division of Sirius XM Holdings, the web also has made it easier for amateur broadcasters to compete with the pros. “It’s all about the Internet – that’s where the listeners are,” Geller said. “And anybody who wants to start a radio show can do it now.” Up Next … Sports USA has one distinct advantage over broadcasters of other types of radio content as a purveyor of live play-by-play, Kahn noted. Unlike talk shows and music, sports require listeners to tune in during the event if they want to be part of the action as it happens. “What we do is ‘appointment listening,’” Kahn said. “It’s not something you record and listen to later.” The ability to draw in listeners with live events may serve to protect Sports USA from being crowded out by podcasts, which advertisers view as the “death of radio,” Kahn said. “The appeal of listening live has actually become greater because while people can listen to other things when they want to, they can only listen to (games) while they’re happening,” Kahn said. “That’s the plus side for us.” Trust is also inherent in live sports broadcasts, as listeners know the announcer is watching the game as it takes place, Geller added. And unlike 24-hour news cycles, play-by-play leaves little room for hypothesizing about the outcomes of current events, he said. “Calling games is ‘reality radio’ at its finest, because it’s actually happening (during the listening experience),” he said. “The situation is unfolding right in front of you.” That is not to say that Sports USA is not evolving. The company in early 2016 launched a smartphone app, where listeners can stream live college games as well as tune in to analysts’ broadcasts. Kahn also has been in talks to broadcast professional soccer games through the English Premier League, with which Sports USA conducted a trial run earlier this year. “(Soccer) is very big over there but it’s not as big here,” he said. “We’re keeping that option open for the future.”

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