Sometimes in competitive sales situations, we may be pressed into selling all the stations in our cluster at a group discount- except one. Some of us have that one station that runs at 80%+ sold months in advance and NEVER discounts its inventory and is sold as a stand-alone station. The rest of the stations are often grouped into a package and sold at a deep discount because they don’t attract much value on their own like the 80%+ station. Other times, we have a dominant afternoon show and the rest of the station is either syndicated or has ½ the audience, so the rates are always held in afternoons and discounted everywhere else. We may even package in some afternoon spots with a lot of other dayparts to get on the buy. You get the picture.
That’s where we have something in common with the NCAA-sort of. The NCAA, like us, is the seller looking for buyers. And, when they shopped their men’s and women’s sports play by play, they wanted a long-term deal to give their schools budget planning security. The Men’s basketball tournament was the bell cow in the deal and was sold separately for almost a billion dollars to CBS. The women’s tourney, and the rest of the Olympic sports , were all packaged together for one lump sum. ESPN paid $500 million dollars and the contract doesn’t expire till 2024. They have been on a series of multi-year contracts for 20 years.
We in radio have been stuck on the annual contract most often being the longest we ever let a buyer commit. Only in play-by-play sponsorship sales have I seen multiyear contracts. The length of deals between the NCAA and CBS or ESPN are often 10 years with options to add 5-6 years.
The women’s tournament is now growing. Articles are being written that the NCAA sold off the women’s tourney too cheaply and should have had asked more for it. I think the mistake the NCAA may have made was not putting a renegotiation clause in there to address a dramatic increase in ratings for one of the 24 sports. So, what can be done?
In reality? Nothing. We all must wait for the contract to get closer to expiration to renegotiate.
If this were our annual scenario in radio, and we had a surging morning show for example, we should be contacting the buyer to make them aware of the value they have and what that is in terms of savings. Then, when we negotiate the new deal, value will be established, and you can justify an increase to guarantee access to the hot new morning show for example.
We could also build in targets during an annual for ratings. If a target is made during the length of an annual contract, a renegotiation can take place at the stations option. At least, we have a valid business reason to go back to the buyer and take credit for the improved ratings. It’s all about having options which it appears the NCAA has none.
Jeff Caves is a sales columnist for BSM working in radio and digital sales for Cumulus Media in Dallas, Texas and Boise, Idaho. He is credited with helping launch, build, and develop Sports Radio The Ticket in Boise, into the market’s top sports radio station. During his 26 year stay at KTIK, Caves hosted drive time, programmed the station, and excelled as a top seller. You can reach him by email at jeffcaves54@gmail.com or find him on LinkedIn.
