Reading into Entercom's Divestures

We've all been speculating on which stations Entercom/CBS would spin off for nearly a year. One thing that I don't think anyone predicted was the spin-off of KFNQ. Dumping this AM station was not a necessity, they could have kept it and been under the limit...so why get rid of it?

KFNQ has been an easy place holder for the CBS Sports Network. You can tell advertisers that their national buys will clear in Seattle (even though no one will hear their spots), so I can't understand why Entercom would give that up...unless, they're planning on flipping one of their FM's to sports.

They want/need to clear CBS Sports here and David Field has placed a huge emphasis on sports being a cornerstone of the new Entercom. Plus Seattle is one of the few major markets without an FM sports station. And with KJR still trying to rebound from Hookergate, now would be the time.

Might be a pipe dream, but it's fun to try and figure out their thinking here. Looking forward to the "do you know how expensive it is to operate a sports station" comments.

KJR already tried sports on FM about 6 years ago and IIRC it didn't really move the meter all that much. As for KFNQ - its expenses are a LOT lower than its competition.

iamarussianpirate said:

One thing that I don't think anyone predicted was the spin-off of KFNQ. Dumping this AM station was not a necessity, they could have kept it and been under the limit...so why get rid of it?

Click to expand...

Here are three simple reasons:

1. It's an AM station.
2. It's an AM station.
3. They've found someone interested in taking it off their hands.

iamarussianpirate said:

KFNQ has been an easy place holder for the CBS Sports Network.

Click to expand...

An expensive place holder.

iamarussianpirate said:

You can tell advertisers that their national buys will clear in Seattle (even though no one will hear their spots), so I can't understand why Entercom would give that up...unless, they're planning on flipping one of their FM's to sports.

Click to expand...

Telling national advertisers that their spots clear in Seattle, doesn't amount to even a rounding error in their cash flow numbers. I'll guarantee that the care and feeding of that station, is much more than they clear through national ad revenue from CBS Sports Radio.

iamarussianpirate said:

They want/need to clear CBS Sports here and David Field has placed a huge emphasis on sports being a cornerstone of the new Entercom. Plus Seattle is one of the few major markets without an FM sports station. And with KJR still trying to rebound from Hookergate, now would be the time.

Click to expand...

News or Sports talk is a very expensive format. David Field is no fool, and wouldn't needlessly sacrifice consistent revenue by taking a risk of experimenting with an FM station in Market 14. I'm confident if they were to make that change, it would be thoroughly researched first.

How much it cost to keep KFNQ on the air? Power, Rent, employees? There are no live Seattle host all off the CBS bird. If the station cleared $25k a month would that cover the basic costs?

Kelly A said:

Here are three simple reasons:

1. It's an AM station.
2. It's an AM station.
3. They've found someone interested in taking it off their hands.



An expensive place holder.



Telling national advertisers that their spots clear in Seattle, doesn't amount to even a rounding error in their cash flow numbers. I'll guarantee that the care and feeding of that station, is much more than they clear through national ad revenue from CBS Sports Radio.



News or Sports talk is a very expensive format. David Field is no fool, and wouldn't needlessly sacrifice consistent revenue by taking a risk of experimenting with an FM station in Market 14. I'm confident if they were to make that change, it would be thoroughly researched first.

Click to expand...

It's not about the national ad rev in Seattle alone, it's about market clearance. Buyers need to check markets off their list, so if they can tell their planners that they have coverage in x of the top 15 markets (however miniscule that exposure on kfnq might be) it's an important thing. Also with national buys, Seattle is considered a test market for a lot of agencies who normally just buy the top 10 markets. Seeing Seattle on a national buy sheet is a big deal to planners. That can make the difference in CBS Sports gaining or losing a major buy in all markets...that's where it hits them in the pocket book.

So again, why then dump KFNQ when you can operate it in a closet for pennies and keep the status quo?

You did a fine job telling me why sports on fm can't and won't happen, but you didn't explain why they would dump KFNQ besides saying it's an AM station that is too expensive to operate. If that was the case why didn't CBS dump it years ago?

iamarussianpirate said:

So again, why then dump KFNQ when you can operate it in a closet for pennies and keep the status quo?

Click to expand...

The fact that you use the term "operate it in a closet for pennies", tells me you have no idea how much it costs to run a 50KW AM station.

iamarussianpirate said:

You did a fine job telling me why sports on fm can't and won't happen, but you didn't explain why they would dump KFNQ besides saying it's an AM station that is too expensive to operate. If that was the case why didn't CBS dump it years ago?

Click to expand...

I didn't say sports on FM can't and won't happen. What I said was; that even a mid-pack FM music station runs at much better operating margins than a staffed 24/7 sports talk station. And the overall potential value of a full-market FM station is head and shoulders above any AM station. David Field isn't going to jeopardize company cash flow numbers out of Seattle or Pocatello, by changing formats on a whim.

As I said on two of the three points: I trust that Entercom, or any larger station group, would dump ANY AM station in a New York second, given the chance. In case you haven't noticed, AM stations are losing listeners (literally and figuratively) each year. That, and because of increased terrestrial noise, no AM station reaches even 60% of their designated coverage areas at night anymore. Losing 40%+ of your coverage outside of your control, adds to an already tough road for AM stations.

1090? Well, one would assume that would be automatic. Salem could want another typically Salem amplitude modulating noisemaker on the dial. So don't count them out.

You know what shocks me in this divesture? KZOK!! Was it REALLY necessary to flank two country stations?

Bongwater said:

You know what shocks me in this divesture? KZOK!! Was it REALLY necessary to flank two country stations?

Click to expand...

Just speculation, but I assume it's because Country is on the upswing or consistent with 12+ demographics and Classic Rock has evolved into what amounts to Oldies (50+).

If you have to make the choice of who stays in your group and who goes, you try and anticipate the long game, divesting where you may have to change formats in the foreseeable future. If you know your home is going to need a new roof in a couple years, and are planning to move anyway, you sell now rather than face the cost of repairs later.

As has been talked about here before, changing formats is very expensive and takes time to reap any rewards.

Kelly A said:

Just speculation, but I assume it's because Country is on the upswing or consistent with 12+ demographics and Classic Rock has evolved into what amounts to Oldies (50+).

If you have to make the choice of who stays in your group and who goes, you try and anticipate the long game, divesting where you may have to change formats in the foreseeable future. If you know your home is going to need a new roof in a couple years, and are planning to move anyway, you sell now rather than face the cost of repairs later.

As has been talked about here before, changing formats is very expensive and takes time to reap any rewards.

Click to expand...

Yes it sure can be. Take for example Power 93 - still waiting to see an ROI that would make investors happy. Lots of money, time, hard work by lots of folks and yet..... Well you know the story thus far. However if done right it doesn't have to be. Hubbard turned 92.5 around relatively fast, the $, the work and effort has paid off BIG time for them. What about KJR FM. They seemed from outside perspective to have transformed an "oldies" station into a newer current and hipper version with a HUGE ROI. Just by looking at what they bill from 2014 - now nice work there and willing to bet they didn't spend as much as they did on other properties that have had more money and time sunk into them only to yield smaller results. At the end of the day you better be sure when you pull the trigger to flip.

Bongwater said:

1090? Well, one would assume that would be automatic. Salem could want another typically Salem amplitude modulating noisemaker on the dial. So don't count them out.

Was it REALLY necessary to flank two country stations?

Click to expand...

I'm not sure what Salem would give to Entercom if they were to acquire 1090.

As for the country stations, I could see Entercom flip 100.7 The Wolf shortly after the merger closes if they think having two country stations in the same market is redundant.

miketheradioguy said:

I'm not sure what Salem would give to Entercom if they were to acquire 1090.

As for the country stations, I could see Entercom flip 100.7 The Wolf shortly after the merger closes if they think having two country stations in the same market is redundant.

Click to expand...

I don't think that would be very likely, given that they just brought in a new morning show, and it would leave the door open for another group to try country music to challenge KMPS.

fordranger797 said:

I don't think that would be very likely, given that they just brought in a new morning show, and it would leave the door open for another group to try country music to challenge KMPS.

Click to expand...

Considering that Entercom is divesting KFNQ and that Seattle is one of the major markets without an FM sports station, it would make sense for Entercom to flip 100.7 to sports.

Goi said:

Yes it sure can be. Take for example Power 93 - still waiting to see an ROI that would make investors happy. Lots of money, time, hard work by lots of folks and yet..... Well you know the story thus far. However if done right it doesn't have to be. Hubbard turned 92.5 around relatively fast, the $, the work and effort has paid off BIG time for them. What about KJR FM. They seemed from outside perspective to have transformed an "oldies" station into a newer current and hipper version with a HUGE ROI. Just by looking at what they bill from 2014 - now nice work there and willing to bet they didn't spend as much as they did on other properties that have had more money and time sunk into them only to yield smaller results. At the end of the day you better be sure when you pull the trigger to flip.

Click to expand...

Movin' beats Power because it feels and sounds local, and has a better morning show. Even though Movin' sounds stagnant right now, a local stagnant is better than Power, which sounds anything but local and drowns in national IHeart programming mandates.

fordranger797 said:

I don't think that would be very likely, given that they just brought in a new morning show, and it would leave the door open for another group to try country music to challenge KMPS.

Click to expand...

miketheradioguy said:

Considering that Entercom is divesting KFNQ and that Seattle is one of the major markets without an FM sports station, it would make sense for Entercom to flip 100.7 to sports.

Click to expand...

No major radio group owner is going to say, "we just hired a new morning show, so we can't change format".

If The Wolf changed format, there will be a new Country station within a year.

The only way Sports would make sense for CBS Seattle would be to buy KIRO-AM and FM. There are two sports stations in town already, with one of them having extremely cozy relationships with the Mariners and Seahawks. A Seattle sports start-up would be an extremely uphill and expensive battle CBS will not win.

AQH said:

The only way Sports would make sense for CBS Seattle would be to buy KIRO-AM and FM.

Click to expand...

CBS won't be around long enough for that to happen and Entercom already owned and sold KIRO-AM and FM.

I read into this that Entercom wants a younger new music listener in Country and through the End and KISW. With the country flanking you get the new listener, the old listener, you get the whole county demo with two stations. Cant do that with Rock-New music, not with two stations. KISW, the End lead the market in their formats and really they are the only ones, they may reach a wider sellable demo depending on who you are selling to. 103.7 is getting people that transition between 92.5, 106.9 and the old KUBE maybe KPLZ. 103.7 is not a market leader but if you want to try to pull in a demo where there is alot to go around and it may pull in new listeners too.

As to why they let KZOK and Jack go, they are not new listener stations and are becoming the what new listeners call Oldies, a more narrow demo for sales. They let KFNQ go because they found some one that wants to do sports and may even keep some of the CBS sports programming. This would be a Win Win for Entercom, their CBS sports product clears in Seattle and they don't have to deal with an AM station.

Could Bonneville buy 96.5 to use as a FM frequency for ESPN sports? Then they could transform 710 into ESPN Deportes, or something like that...

xmtrland said:

CBS won't be around long enough for that to happen and Entercom already owned and sold KIRO-AM and FM.

Click to expand...

What's your point? Who do you think sold KIRO-AM & FM to Entercom?

And on your first point, the company after the merger will be called CBS Radio.

xmtrland said:

I read into this that Entercom wants a younger new music listener in Country and through the End and KISW. With the country flanking you get the new listener, the old listener, you get the whole county demo with two stations. Cant do that with Rock-New music, not with two stations. KISW, the End lead the market in their formats and really they are the only ones, they may reach a wider sellable demo depending on who you are selling to. 103.7 is getting people that transition between 92.5, 106.9 and the old KUBE maybe KPLZ. 103.7 is not a market leader but if you want to try to pull in a demo where there is alot to go around and it may pull in new listeners too.

Click to expand...

You're right on the aging Classic Rock format, and I agree with your point on Country music. That's one of the reasons it would be bad for either of the Country stations to be out of CBSR's control.

xmtrland said:

As to why they let KZOK and Jack go, they are not new listener stations and are becoming the what new listeners call Oldies, a more narrow demo for sales. They let KFNQ go because they found some one that wants to do sports and may even keep some of the CBS sports programming. This would be a Win Win for Entercom, their CBS sports product clears in Seattle and they don't have to deal with an AM station.

Click to expand...

I get letting KZOK go, for the valid reasons you brought up in second paragraph. Letting Jack go is strange in how the station is an accountant's wet dream to operate with no live jocks.

Who is the owner referred to who wants to do sports on an AM signal that has no broadcast rights to any major Seattle teams and no local personalities? With its night signal, it may be better off catering to the Juneau audience. It is hard to imagine any scenario for 1090 to remain sports and make financial sense to any company. There are only so many tax audit relief, car dealer and hair club advertiser dollars to go around.

AQH said:

And on your first point, the company after the merger will be called CBS Radio.

Click to expand...

What's your source on that?

Bonneville sold KIRO 710, KIRO FM 100.7 and whatever they were calling 770 back then. Then Entercom sold Bonneville KBSD 97.3 FM and KIRO 710 and whatever they were calling 770 back then.

Just speculating on 1090. Can't wait to see who the winner is. They get the privilege of putting their inventory sticker on a slightly used Nautel, NX-50, 50KW AM transmitter already set up to broadcast in IBOC with the power savings advantage MDCL! I'm hopping it includes lunch.

Rob Piotrowski said:

What's your source on that?

Click to expand...

AQH is wrong, the combined company's name will be Entercom.