Reds Negotiating to Take Back Advertising for Games on The Radio

[redsmetz]

This is the type of business move that is important for this club to succeed - particularly working to expand the wider market. One of the horrible legacies of the Marge Schott era was ceding some of Reds country just as the Indians were on the ascent. Back in the day, Cincinnati wasn't considered "small market" because we drew from a considerably wide market. I'm hoping this will help return us to that day.

Pitches could pay off
Team negotiating to take back ad sales from WLW
BY DUSTIN DOW | DDOW@ENQUIRER.COM

The Major League Baseball playoffs are here, and for the 12th straight season the Reds aren't participating. But behind the scenes, team officials are negotiating a plan they hope will help generate money to field a more competitive team.

The Reds want to take over advertising sales of the Reds on Radio broadcasts from WLW-AM (700) and employ a team-controlled model of marketing that proved successful here in the "Big Red Machine" days of the mid-1970s.

WLW has controlled ad sales since 1984, when Marge Schott took over the team and relinquished sales control in exchange for licensing fees.

By assuming control of ad sales for Reds on Radio broadcasts, the team hopes to more effectively target fans from places such as Louisville, Lexington, Columbus and Indianapolis and bring them to Great American Ball Park.

"With higher attendance comes increased payroll, and we need to draw from all areas of the Reds Radio Network - one of the strongest networks in all of baseball," said Bill Reinberger, Reds vice president of corporate sales and marketing.

Reinberger said an announcement is expected soon.

Chuck Fredrick, general manager at WLW, told The Enquirer he would not comment on the deal until it is signed, but stressed that no deal has yet been agreed to by both sides.

Reds chief operating officer John Allen also declined to comment, citing the sensitive nature of the negotiations.

Currently, WLW pays the Reds about $3.8 million a year in licensing fees to carry the games, according to advertising-buying consultant Rob Riggsbee of Inside Media. The station keeps the revenue generated by advertising during those games.

In the radio rights renegotiations with WLW, the Reds sought more marketing opportunities. WLW, which has carried Reds games since 1969, balked at paying high licensing fees.

Under the new contract, WLW no longer would pay the licensing fees. The station would be limited, however, to selling ads before and after the pre- and postgame shows and in a small capacity during the game. That would allow WLW to retain the lucrative "drive time" sales period prior to weeknight games when freeways are packed with radio listeners.

The Reds would take over promoting the games and selling advertising spots for Reds on Radio broadcasts.

Millions of dollars are at stake for the team. In 2006, WLW billed for approximately $5.3 million in ad sales, according to Riggsbee. After paying the Reds $3.8 million in licensing fees, WLW had a profit of $1.5 million in advertising sales, Riggsbee said.

Riggsbee said those numbers should be similar for 2007.

The Reds want to draw more fans outside of Cincinnati and Northern Kentucky, and they say they have more interest than WLW in boosting attendance and bundling in-stadium advertising with radio spots.

The team plans to work with local stations to conduct promotional days in the various cities, enabling the stations to do ticket "give-aways," or as Reinberger put it, "have a Reds day in Indianapolis that will help build ticket sales here."

"In our core outer markets, Louisville, Lexington, Columbus, Indianapolis, Huntington and Charleston, we can connect more actively with our fans through our local radio stations in their morning drive and daytime programming to help promote us and drive attendance throughout Reds country," he said.

An average of 25,415 fans came to the 81 home games this season, the second-lowest per-game average since the stadium opened in 2003.

According to the Reds' most recent available data, at the end of May 2007 nearly 1.3 million tickets had been purchased for the season. About 27.7 percent of those sales came from outside Cincinnati and Northern Kentucky.

The Reds' paid attendance for 2007 was 2.06 million. Out-of-town sales typically increase during summer when school is out.

Team payroll increased to $69 million this season, up from $60 million in 2006. It's not yet clear how soon the control of radio advertising and marketing will pay off in terms of creating new money to sign free-agent players or retain current ones.

"The Reds are going about this the right way," said Roger Ruhl, who was the team's marketing director from 1971-83. "When we controlled radio ads, it helped us grow beyond the intense baseball fan to reach the casual and even non-fans."

Assuming the deal is signed, the average fan listening to the radio broadcasts won't notice any changes.

Games still will be carried on WLW and the 46 affiliate stations within the Reds radio network.

The Reds briefly entertained moving their games to a different flagship station, Reinberger said, but the tradition of WLW proved too valuable to leave.

Reds games are not certain to remain on WLW, however, until the contract is signed.

Ratings for Reds on Radio are robust, despite the team's losing ways. Though the Reds have yet to finish with a winning record in either of Castellini's two seasons as owner, more people are listening.

Spring 2007 ratings, the most recent available, show that WLW's weeknight listeners from 7-10 p.m., the normal game time, increased 5.3 percent from 2004. More than 18 percent of local adult listeners were tuned to Reds broadcasts last spring during that time slot, the most of any local radio station.

The broadcasts have been outperforming even the "honeymoon period" of 2000 when the Reds acquired Ken Griffey Jr., according to Riggsbee.

"Reds on Radio has accomplished a feat that most sports radio industry observers agreed would be highly unlikely that they would be able to accomplish because of their strong loss-of-games record through the first half of the season," Riggsbee said.

"The theory is that the more games a team wins, the better ratings, but likewise, the more games a team loses the lower the ratings. Not so with the Reds on Radio broadcast."

[SunDeck]

I'd be happy if I could just get the games consistently on radio here in Bloomington. Some people are able to, but it really depends on where one lives. Anything would help- I can't stand living and hour and a quarter from Cincinnati and seeing more Cubs and Cards fans than I do Reds fans.

[Hoosier Red]

Originally Posted by SunDeck

I'd be happy if I could just get the games consistently on radio here in Bloomington. Some people are able to, but it really depends on where one lives. Anything would help- I can't stand living and hour and a quarter from Cincinnati and seeing more Cubs and Cards fans than I do Reds fans.

What side of town do you live on SunDeck? When I was in school, WLW was the best AM reception(including 1370) unless I was on the 45-46 bypass. Inexplicably it always went out there.

[Unassisted]

No matter how this shakes out, we should give credit where credit is due. The guy who refused to comment for the story is likely the driving force behind it. Way to innovate, John Allen!

[traderumor]

Originally Posted by Unassisted

No matter how this shakes out, we should give credit where credit is due. The guy who refused to comment for the story is likely the driving force behind it. Way to innovate, John Allen!

My guess is its Phil Castellini and the influence of the Williams' brothers.

[REDREAD]

Originally Posted by Unassisted

No matter how this shakes out, we should give credit where credit is due. The guy who refused to comment for the story is likely the driving force behind it. Way to innovate, John Allen!

Actually, John Allen kept the status quo the way Marge left it.
The radio contract was renewed under his watch.
My guess is that it's Cast's people that are thinking bigger.

[Unassisted]

Originally Posted by REDREAD

Actually, John Allen kept the status quo the way Marge left it.
The radio contract was renewed under his watch.
My guess is that it's Cast's people that are thinking bigger.

Maybe John wanted to do this before, but the previous regime wouldn't let him? Regardless, he's the point man on it, so if it works, he should get some credit.

[REDREAD]

Originally Posted by Unassisted

Maybe John wanted to do this before, but the previous regime wouldn't let him? Regardless, he's the point man on it, so if it works, he should get some credit.

Nope, John Allen had total control of all media contracts. I remember Richard Hand suggesting that Allen could use a little help in that area to him at Redsfest, and Allen not being very pleased.

I will say that maybe Allen has learned from his past mistakes.. maybe, but I doubt it. Allen is ultraconservative. He'll gladly take the guaranteed $1 over the $10000 that might have a little risk involved. There are countless examples of his priorities. For example, he once made a comment that he didn't care that attendence was down for the year because higher ticket prices made up for it.. He didn't care that the Reds' brand was eroding under his watch, as long as he made his numbers for that year.

I find it hard to believe that Allen came up with anything innovative after watching the Reds stagnate for the approximately 10 years he was in charge.

[WVRedsFan]

Originally Posted by REDREAD

Nope, John Allen had total control of all media contracts. I remember Richard Hand suggesting that Allen could use a little help in that area to him at Redsfest, and Allen not being very pleased.

I will say that maybe Allen has learned from his past mistakes.. maybe, but I doubt it. Allen is ultraconservative. He'll gladly take the guaranteed $1 over the $10000 that might have a little risk involved. There are countless examples of his priorities. For example, he once made a comment that he didn't care that attendence was down for the year because higher ticket prices made up for it.. He didn't care that the Reds' brand was eroding under his watch, as long as he made his numbers for that year.

I find it hard to believe that Allen came up with anything innovative after watching the Reds stagnate for the approximately 10 years he was in charge.

Bob Castellini is the fire behind this. Bob said "do it" and John jumped right on it. That's John.

IMHO, we have GABP because of John's bean counting. I really like GABP, but I look at other new stadiums and wonder what it would have been without John watching every penny.

[Yachtzee]

I've been waiting for them to expand their marketing beyond Hamilton County for years. Nice to seem them coming around.

[MartyFan]

And if these negotiations fail, the Reds will eventually buy their own radio station and broadcast the games on that station...it is a no brainer because of the amount of inventory it opens up to them.

It is in these two paragraphs that explain why it makes sense to take the Reds games to a smaller signal in Cincinnati.

The team plans to work with local stations to conduct promotional days in the various cities, enabling the stations to do ticket "give-aways," or as Reinberger put it, "have a Reds day in Indianapolis that will help build ticket sales here."

"In our core outer markets, Louisville, Lexington, Columbus, Indianapolis, Huntington and Charleston, we can connect more actively with our fans through our local radio stations in their morning drive and daytime programming to help promote us and drive attendance throughout Reds country," he said.

The flame thrower of WLW in this instance is a minus, not a plus.

[KronoRed]

This would be a good thing, the Reds should be in charge of their product

[WVRedsFan]

This is particularly good news for those of us who live in outer-lying areas. There once was a time when all the towns in
WV had the Reds on radio. Charleston, Huntington, Logan, Beckley, Bluefield, and yes, even my little town. Today there is only Charleston and Huntington with low-powered AM stations and no promotion. I think there are three of us left in my town who follow the Reds. Part of it has to do with MLB (and the Pittsburgh freaking Pirates) claiming this area as "home", cutting us out of TV broadcasts.

Luckily, Directv's EI package fixed that for those of us with dishes and Suddenlink cable's unusually sane decision to carry all of the Reds FSO games on a dedicated channel separate from their FS normal outlet -- Fox Sports Pittsburgh. Adn then there's XM, but all three require a paid subscription.

[Chip R]

Originally Posted by KronoRed

This would be a good thing, the Reds should be in charge of their product

Hopefully they can market it better. It's like the dog who chased cars and he finally caught one. Now what does he do with it?

[BCubb2003]

strong loss-of-games record

I don't think I've ever heard it put quite that way.