Join Date: Feb 2006
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Reds Negotiating to Take Back Advertising for Games on The Radio
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."