The Dan Le Batard Show Must Go Independent
Seems like ESPN and The Dan Le Batard Show might be heading for a breakup. My hope is that the business side of the show will consider taking the show independent as opposed to looking for a new corporate home.
The Backstory
If you are a fan of The Dan Le Batard Show with Stugotz I am going to assume that you are up to date with the latest drama surrounding the show. You should consider skipping down to the next section, Where is Media Going.
If you are not a fan or are not up to date with what happened last week on The Dan Le Batard Show enjoy the short recap to follow.
The public side of the story started to unfold on November 8th, when Chris Cote, a producer for the show and member of the “shipping container” shared the following message on twitter.
According to the New York Times, ESPN is laying off 300 current employees, which is about 6% of its worldwide staff and will allow 200 open positions to go unfilled.
From the same New York Times article: “Prior to the pandemic, we had been deeply engaged in strategizing how to best position ESPN for future success amidst tremendous disruption in how fans consume sports,” Jimmy Pitaro, the network’s chairmen, told employees in a memo announcing the layoffs. “The pandemic’s significant impact on our business clearly accelerated those forward-looking discussions.”
To set a timeline, November 8th, the day of Chris’ tweet is a Sunday. The Dan Le Batard Show was not scheduled to be on air Monday the 9th due to tropical storm eta.
Greg Cote, Chris Cote’s father and Miami Herald reporter publishes a story about the layoffs on the 8th and a podcast with Chris Cote on the 9th.
However, no one from the show comments publicly about the layoffs. The Dan Le Batard Show does not air on Tuesday the 10th.
Wednesday November 11, Dan Le Batard breaks the silence on The Big Suey Segment of their podcast. “The Big Suey: The Chris Cote Situation.”
Here are a few quotes from this podcast:
“The greatest disrespect of my professional career.”
“We are a family.”
“The part that makes it so hurtful to me, is that you blindsided me.”
“We are an accounting error.”
— Dan Le Batard
Dan discusses how he found out about the layoff, which he had no idea was coming. You can hear how upset he is throughout the show.
During this podcast, Le Batard announces that he has hired Chris Cote as his personal assistant, and most importantly for fans of the show, Chris will remain a part of the show and get a raise.
Casual observers might think the problem is solved. Chris was laid off, Dan stepped up and saved his job. No harm no foul right?
Insert Papi sound, “you don’t get the show.”
You can see from the quotes above. There is harm, there is a foul. While his title was officially a producer, Chris is a part of the on air show and he is a member of the “family” that was fired without as much as a heads up.
During the coronavirus related lockdown and sports-less months The Dan Le Batard Show did not skip a beat. How is that possible? A sports show that continues humming along without live sports.
Again, “you don’t get the show.”
Sure, there are sports covered on the show, but the sports covered on the show are sprinkled in like table side salt and pepper than an entree or even appetizer.
What does ESPN do when sports are starting to return to normal? They start changing the format of the show. They reduce the time on air, insert a professional sportscaster to read headlines, etc.
Looking at it from ESPN’s perspective I don’t necessarily blame them. They are a sports network, they want to focus on sports. Ok, maybe it’s just not a good fit anymore, or maybe it never was.
Remember, the chairman of ESPN told you himself. “The pandemic’s significant impact on our business clearly accelerated those forward-looking discussions.”
The relationship between The Dan Le Batard Show and ESPN is clearly on a path towards a separation. From media reports, Dan has two years remaining on his contract, whether that number is accurate or whether there is a separation or not is irrelevant.
Where is Media Going?
First it came for music, then it came for newspapers, then it came for Hollywood. Now, it’s coming for sports talk radio? Of course, we are talking about the internet.
Again, I’ll refer to the chairman of ESPN’s statement, the pandemic pulled the future forward.
Is terrestrial radio dead? I have no idea. I would guess probably not. Is change coming to the industry, absolutely.
It is not too hard to find some examples of what the most popular creators in the industry are doing.
- Spotify Strikes Podcast Deal with Joe Rogan Worth More than $100 Million.
- SiriusXM cites ‘significant progress’ on contract talks with Howard Stern.
- Spotify is Paying Up to $196 Million in Cash to Acquire Bill Simmons’ The Ringer.
People are paying hundreds of millions of dollars, sometimes annually for the type of content The Dan Le Batard Show creates. That sounds insane. But we have already seen this story play out in other mediums. What have netflix and Amazon done to compete?
Similar to netflix, spotify and siriusXM operate with subscription models. They need exclusives to ensure that you do not cancel your account.
Before we start speculating about a possible Dan Le Batard Show on Spotify or SiriusXM, I think we should consider a third and in my opinion best option. Go independent.
The Case for Going Independent
I just listed three examples of creators signing deals with large corporations for hundreds of millions of dollars, but I believe going independent is the best option.
What gives?
What if I told you that Howard Stern is grossly underpaid? Hold up. You just told me he makes almost $100 million a year and is currently renegotiating for a rumored $120 million a year.
Yes. He is massively underpaid.
Same for Joe Rogan, he is massively underpaid.
It is not every day that you get to call two very popular talk show hosts making hundreds of millions of dollars underpaid, thankfully, someone else did it for me.
Andrew Wilkinson has made the case for me in two articles.
Here is why. This is an example that Wilkinson used to illustrate why Howard Stern is getting ripped off.
Keep in mind, this article is older and used 2018 figures, guess what SiriusXM’s 2019 figures look like. I’ll spare you the time reading through financial statements, they increased.
This model assumes that instead of subscribing to SiriusXM, Howard’s audience would subscribe directly to Howard Stern. It is not that hard to imagine. SiriusXM does not publish the show anywhere else, it is exclusive to SiriusXM.
Howard Stern’s audience is used to paying someone to listen to his show. Who they pay doesn’t really matter to them. You can also make an argument that fans might prefer to pay Howard directly.
In our argument we can use Howard Stern’s show as the subscription only example.
There is also a middle ground. If an audience, let’s use the Dan Le Batard Show’s audience as an example in this case, currently receives their programming for free, there might be some resistance to making the show only available via subscription. No problem.
You can offer a hybrid approach where you give away 99% of the content for free and only charge for premium or extra content. Most people continue to receive the show where they want and when they want and super fans or super supporters can pay a little bit extra and receive bonus materials. There is software available to make this relatively painless.
Subscription is not the only way to monetize. Traditional advertising models also work. This is the current model ESPN is using to monetize the show.
Here is what an average day on the podcast looks like in terms of advertising spots:
- Local Hour — 1 pre-roll
- Big Suey — 1 pre-roll
- Hour 1–1 pre-roll, 1 mid-roll and sponsored segments
- Hour 2–1 pre-roll, 1 mid-roll and sponsored segments
- Post Show — 1 pre-roll
Not including the sponsored segments, there are about 7 ad reads. Here are some more wild estimations, let’s assume that The Dan Le Batard Show gets about 1 million downloads per month. If we assume a CPM on the low end at $18, that is ~$18,000 per ad read per month * ~7 ad reads for a total of $126,000 per month.
I have no idea what the show’s actual numbers are in terms of downloads or CPM’s. However, it isn’t hard to imagine I am drastically underestimating both the CPM and the download numbers. The numbers get very attractive and very profitable quickly.
Luckily there are some sources of data available. For example, here is a list of the highest paid podcasts on patreon:
Most of these creators have free tiers and offers incentives and bonuses for joining their patreon. I am too scared to listen to most of these, I am unsure if they are also reading ads, but ads and sponsorships are still an option for additional earnings.
There is More to the Show than Audio
If you are pulling out the calculator and looking for additional earnings, you should point the calculator directly at youtube. Similar to the podcast networks, youtube does all of the work distributing your content.
The Dan Le Batard show is currently simulcast on ESPN+, whatever that is. It is not important that no one knows what ESPN+ is. What is important is that the show has a format that can also simulcast on youtube.
Social Blade Estimated Earnings Youtube Channel:
- Joe Rogan: $320,000 — $5,126,000
- Pat McAfee: $91,800 — $1,468,800
I have no idea who owns the current studio or equipment, I am just trying to lay out as many options as possible in making an argument for the show to go independent.
Youtube is a viable option for additional revenue.
Will it Work?
Your guess is as good as mine, but there is reason to believe that The Dan Le Batard Show can see massive success as an independent entity. We can use the purest of all internet sanctums as a rosetta stone, reddit.
Reddit communities are user generated. The size and activity of communities serves as a good proxy for how engaged an audience is.
Here are a few reddit communities. You can see from the activity levels that The Dan Le Batard Show subreddit is as active as other communities with more subscribers.
What does any of this mean in terms of revenue or profit? I have no idea. However, it is clear that there is an active community and if you have an active community you can most likely easily monetize a small fraction of them.
I hate to even use the term monetize. It removes value from the equation. I am sure that there are several members of the subreddit that would find tremendous value in extra access or exclusive content and would be happy to pay a small price to get it.
It Can’t be All Good News
Going independent is not all good times and glamour. Speak to most business owners and they will tell you exactly how hard running a business of any size is. The next thing they will typically say is that they cannot see themselves doing anything else.
Being a media personality and running a business are two very different things. Most of the skill sets are diametrically opposed. Creators want to create, business owners want to profit. The magic happens somewhere in the middle.
Joe Rogan has mentioned this several times on his podcast. He doesn’t like looking at the numbers. He does not want to know how many people listen. He is afraid that it might ruin the show. He enjoys talking to people that interest him with as little overhead as possible. Turn on the mic and record.
Why not let a corporate overlord handle all of the messy stuff. It comes at a cost, but it is a price he is willing to pay.
There are other factors with going independent. Loss of prestige is an issue. Working at ESPN is a dream come true for most sports journalists. I’m sure leaving the worldwide leader in sports is scary.
There are also content concerns associated with leaving the ESPN umbrella. There is a chance you will lose some guests that you are currently booking with ESPN’s help. Granted, I do not think this is an issue for The Dan Le Batard Show, as many of their best shows do not feature any “sports guests.”
Upfront money might be another issue. Dan Le Batard’s contract reportedly has two years remaining. That contract is rumored to pay him $3.5 million annually. It is hard to walk away from that kind of money into the uncertainty of having to generate your own income.
Instead of automatically collecting your paycheck every few weeks, you are now paying for production and hoping there is some profit left over. It is a big change.
The good news for my going independent argument is that there might not be too many places that can cover the salary requirements.
Dave Portnoy spoke about this recently. Dave did not think Barstool was a good home for The Dan Le Batard Show. First, he mentioned Dan not liking him and second, he makes too much money. Barstool has paid up for big stars and it does not always work. Dave pretty much said it never worked with the exception of one time.
Please Go Independent
As a fan I want the show to continue uninterrupted. As a business owner I want the show to go independent and share their journey along the way.
I have listed a few options, there are many more out there. I will listen to the show either way, but I would love to hear the show talk about the new media as members, instead of talking about how new media is killing their current corporate home.
As an independent creator / show you will never have to worry about an outsider messing with your family, but you do have to worry about feeding them. Hopefully, that is a risk worth taking.
-Robert (@rbustamante)
