Beware of Entercom’s FanDuel Deal

Whatever happened to the business of radio?

Townsquare is a digital play not a radio company deriving half its revenue from digital.

iHeart is anything you want it to be but call it “audio” not radio.

As of yesterday, Entercom became a new age sports partner of betting app FanDuel while their radio stations are relegated to being a computer in a closet.

  • But get this – almost 32 million people ran out to buy Entercom stock (ETM) Thursday based on the Entercom/FanDuel “partnership” when an average day’s trading for ETM is only 1.1 million.

Why are radio companies distancing themselves from their core business and more precisely what is Entercom up to wrapping itself in sports betting when their stations are being stripped down for cost savings?

What does the market know about Entercom?

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The Return of Live & Local

Entercom, Cumulus and iHeart’s recent decision to regionalize and nationalize programming to save money is going to be the end of any vestiges of live and local radio.

Other groups are sure to accelerate replacing local talent with out of market solutions dealing a suicidal blow to the radio industry.

Smaller markets could also use the savings from syndicated programming solutions because all radio groups are suffering from the coronavirus economy not just the major operators.

Except, if you knew what some of the smaller, more independent owners are going to do because, honestly, they have no other choice – you would be wondering if the big three consolidators aren’t about to walk into a fatal trap of their own making.

With all these cost savings by debt-ridden consolidators, we’re starting to get a look at how other operators are going to respond by taking advantage of this gift to reject local content that iHeart, Entercom and Cumulus dropped in their laps in markets where they compete

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Nielsen To Retaliate Against Non-Subscribers

Madder than hell, Nielsen isn’t going to take it any more: 

  • The onerous new rules for non-subscribing stations who are doing nothing illegally starting in January 
  • Lost revenue projected for radio groups from $25-40 million 

  • Making it harder for agencies to buy radio

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Owners Giving Up on AM Radio

A number of strategies to get out from under failing AM stations:

  • Desperation moves to save money
  • The surprising list of licenses being turned in
  • Major groups reverse their thinking on what to do with AM stations

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New Developments in Liberty’s iHeart Takeover

What’s taking so long – why is Liberty slow rolling the iHeart takeover it asked (and received) the DOJ to pre-approve?

  • Strategy change that has iHeart’s owners worried
  • Study Mel Karmazin and Tim Westergren’s demise at the hands of Liberty’s John Malone for a clue of the hardball tactics to come

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