When people use the word “progressive” to describe San Francisco, they are almost always talking about the city’s historic political leanings. Progressive is a good word for the radio scene in the city, too, as is evident in this conversation with Larry Blumhagen of Cumulus Media in the Bay Area.
Larry puts a lot of thought into what he says about the business. He puts a lot of thought into the actions he takes too. That is crystal clear when he talks about betting on sports gambling in a state that hasn’t legalized the practice.
That isn’t the only ground we cover though. In the latest column for our Meet the Market Managers series presented by Point-to-Point Marketing, Blumhagen and I discuss the future of marijuana advertising on radio, the future of marketing as more content is consumed digitally, and so much more.
DEMETRI RAVANOS: I want to start by asking you about the transition of KGO to The Spread. Sports betting is not legal in California and KGO is this heritage brand. Forgive the pun, but it seemed like a bit of a gamble. What information did you have about the market, though, that said the Bay Area would embrace this change?
LARRY BLUMHAGEN: First of all, let me start by saying that was not a decision that was taken lightly or done swiftly. “Heritage station” is actually an understatement. Iconic is actually the word I would use. They had a wonderful programming staff of dedicated employees that turned out really, really great content.
Our challenge was that the median age of the audience was increasing year-over-year to a point where advertisers were just, unfortunately, not as interested as I think they should have been in reaching a 60+ audience. Regardless of what market you’re in and whether you’re in radio or television, advertisers are after the 18 to 49, 25 to 49, or 25 to 54-year-old demos. Unfortunately, those of us that are beyond 54 are sort of undesirable to many, many advertisers. It’s unfortunate, but it is the situation.
I will tell you that we made the decision to go with The Spread, fully believing that the ballot measure that was on the table would fail. It appeared from the polling that we’d seen that it was not going to pass, so we did it with eyes wide open. It was about an alignment of content here with KNBR AM and FM and The Spread to give us essentially three sports stations over four signals, which would give us a wall of sports.
I’m not a sports gambler, but I will tell you that you don’t have to talk to very many people in a variety of demos that are into sports to know that whether or not it’s legal, there’s a lot of wagering that goes on in sports, regardless of the market. It may even be all in fun without any money involved. It’s a relevant subject that we believe resonates with our listeners.
DR: You said two things there that kind of piqued my interest. One is the fact that you are aware that whether or not gambling is legal in California, people are finding ways to do it. The other is that the motivation is about aligning the content with your other sports stations.
So given that that’s the case, and given that you were going in expecting that that ballot initiative would fail, is there any motivation, for you or Cumulus as a whole, to be more involved in future efforts to legalize sports betting, whether that’s through advocacy, bringing lawmakers in, or are you perfectly comfortable with the market conditions right now that The Spread could continue to thrive?
LB: I can honestly tell you, Demetri, we have no current strategy to leverage that in any way. I don’t see that as my role, and the company certainly hasn’t implied that it is at all. No.
DR: Okay. So between 810 and the KNBR brands, what concerns do you have about the direction car manufacturers are going with access to the AM band in the car?
LB: Well, I think that radio in general, regardless of whether it’s Audacy or iHeart, Hubbard or Cumulus, we all are aware that we’re content creators and content providers. There’s an evolution that is going on with how our content is reaching people. Some of it will still be a terrestrial AM or FM signal, but more and more each year, radio content will be delivered via digital assets via streaming.
I really think that people will find really good content. We know that audio in general is really healthy, healthier than it’s been in decades. People have changed how they’re consuming, that’s all. How they’re getting their audio is evolving and the stations have to embrace that.
DR: I totally agree with everything you’re saying, but I do think one thing that cannot be overlooked, especially with what is happening to AM radio, and who knows if it happens to FM in the future, is you do have to have the audience make a conscious choice to listen to your content. On digital, we kind of lose that ability for people to stumble onto and discover that “Hey, you know what? I like this show, Papa & Lund and it wasn’t on my radar before.”
Do you worry that the audience becomes smaller simply because you then, without the over-the-air element, are talking to the dedicated audience as opposed to people that may stumble upon KNBR or any other station because they are just flipping around?
LB: I don’t know that it’s any different than it was in decades past. I mean, radio stations have always had to work proactively to have listeners find those stations. You’ve always needed to have some form of marketing going on. That has also changed. It used to be that in any major city, the sides of the busses were covered with morning drive and afternoon drive talent’s faces and logos. I think that all the companies have really shifted and so much of that is done digitally now. It’s targeted with real precision at this point. I think that part really hasn’t changed.
We’ll still have to be proactive at reaching potential new listeners. We have to utilize all of our assets. Some of that will be earned media and some of that purchased media.
DR: Yeah, that’s fair. So in the Bay Area, obviously you guys have a lot of good teams, but the only one that is consistently bringing home championships since 2015 is the Warriors and they have brought home a lot of them. Obviously, their games are on 95.7. So tell me a bit about the conversations you have with your sellers about the message you want them to take to advertisers about why it is still important or why KNBR still matters to conversations about the team.
LB: I think you’ll find there’s numerous examples. The 49ers had a phenomenal season last year, and whereas they may not have had the championship, I don’t think anybody would question the power of the story of the 49ers last year with the injuries, with the quarterback saga, it was movie-worthy, quite frankly. Our competitors don’t have the broadcast rights. They still talk a lot about the 49ers. Conversely, you will hear a lot about the Warriors on our station right now.
There’s multiple examples, without question, of the significant benefits in these rights deals. It doesn’t exclude anyone from being able to participate in the conversation though. We’re still having relevant, really exciting conversations about these teams that listeners want to hear.
DR: Where do things stand right now in California in terms of you guys being able to take advertising money from the cannabis industry? I got very confused by what I was reading online, trying to understand this topic.
LB: Well, that doesn’t surprise me. You know, it’s like my doctor always said “If you think something’s wrong, whatever you do, don’t Google it. You’ll just scare yourself and get confused.”
Cannabis is really a bigger question than me, because regardless of, again, if it’s iHeart or Audacy or Cumulus, the decisions are made at a corporate legal level. We’re all federally licensed. To my understanding, Demetri, and I’m not an expert on this, that overrides any state issue. Because we’re federally licensed, we have to be cognizant of what goes on at a federal level with this issue.
Now, that said, I will tell you that I’ve traveled up and down the state and there are numerous what I would call mom-and-pop radio companies that are fully taking the category. I’ve heard spots that are no question, doors wide open on the subject. Whether they believe there can fly under the radar, I don’t know, but the larger companies have to be very, very thoughtful. And we’re always going to heed the advice of our legal department.
DR: When you say full advantage, you mean like straight up going into and buying an ounce of marijuana, not just like CBD products.
LB: Correct. You’ll hear those spots in some of the smaller markets in Southern California. There are stations running ads for full-on dispensaries.
DR: I’m in North Carolina, where we’re still debating any legality whatsoever. I’m always fascinated by this category and what is happening from an advertising standpoint.
LB: Yeah, I agree. It’s different. The ones taking the money right now tend to be in somewhat smaller markets that are not owned by the big boys. They’re walking their own path.
I’m not in any way trying to call them out. It’s just the big companies have got to be very, very thoughtful about this, for sure. I don’t think you’ll see a change in any state until things change at the federal level because we’re all federally licensed.
DR: That’s interesting. I mean, your point is very well taken. So, I then wonder if things change at a federal level, are we suddenly seeing the influx of money with marijuana advertising the way we did with sports betting just two or three years ago?
LB: I think that is certainly a feasible hypothesis.
DR: You only have one music station left in your building. Even then, The Bone is led by big, personality-driven shows, particularly in mornings. Is that a reflection of how advertisers are viewing music in this age of everything you want is on demand?
LB: I think that San Francisco is really, really fortunate. We are a destination in sports programming that people are seeking. They certainly do have options digitally, but it’s not the same as being a station where you can get the latest from Pink or Lady Gaga anywhere, and having personalities like Lamont and Tonelli on The Bone also differentiates us from just simply straightforward classic rock. We all know there’s many, many options for countering that format of music. So I think we’re very fortunate to have relevant personalities and having content that, like sports, people seek out.
DR: That’s kind of the differentiator for sports as well, right? I guess it’s true of any personality-driven show or format. I was in rock formats before I made the move over to sports, and I had a program director one time tell me to tell people that our station sounded like their iPod. And I would always add “Yeah, but with a bunch of songs they hate too”.
There is a real, I think, lean-in element, and I know that’s a very common way to describe talk in personality radio, but it is almost impossible for a personality-driven show to be used as background noise the way music radio, frankly, has been for a long time.
LB: That’s true. I would just add that even if you are in a music format, let’s say even a format where there’s certainly fierce competition, there is a localization that a lot of people are seeking that you don’t get listening to Pandora or SiriusXM or any number of other elements. So what might be going on, whether it’s crazy weather that you’re having, the nightmarish traffic jam that you’re stuck in, etc…
I do believe that’s one of the advantages that radio still has is to have that local connection to communities that whether you are in a market like L.A. or San Francisco or you’re in a market like Eugene, Oregon, or Reno, Nevada, there is a desire for that local connection, regardless of market size, I believe.
Demetri Ravanos is a columnist and features writer for Barrett Media. He is also the creator of The Sports Podcast Festival, and a previous host on the Chewing Clock and Media Noise podcasts. He occasionally fills in on stations across the Carolinas in addition to hosting Panthers and College Football podcasts. His radio resume includes stops at WAVH and WZEW in Mobile, AL, WBPT in Birmingham, AL and WBBB, WPTK and WDNC in Raleigh, NC.
You can find him on Twitter @DemetriRavanos or reach him by email at DemetriTheGreek@gmail.com.
