Behind The Opie & Anthony Deal With XM EVP/Programming Eric Logan
April 25, 2006

Yesterday morning (4/24), XM Satellite Radio Executive VP of Programming Eric Logan joined CBS Radio Chairman and CEO Joel Hollander in Howard Stern's old K-Rock studio. The occasion was to formally announce a landmark syndication deal between the satcaster and the terrestrial radio company that will place XM's Opie & Anthony show back on CBS Radio affiliates. While not the first of its kind, the magnitude of this deal far outweighs any other of its type.

"What we have done has really changed the game," says Logan. "We have clearly demonstrated how we can take satellite radio which is a terrific portfolio of content and leverage it in a way which is beneficial to CBS. They are going to be able to generate enormous ratings, charge high rates and make a lot of revenue. We're going to be able to raise Opie & Anthony's awareness, sell more subscriptions and really have exclusive content for our subscribers which is the core of why they subscribed to XM to begin with. So we expose them to more people and it is really, in every case, a win/win for both companies."

"There is significant branding and brand awareness for Opie & Anthony and XM as a result of this," Logan continues. "We wouldn't be doing this if we didn't feel that we were going to be able to further our brand. To be able to do it with a partner like Joel is terrific. Joel and CBS get it. CBS is a great content company and so is XM. It was a matter of us just getting in a room and being able to put the right deal together."

The genesis of this deal goes back to the days after Stern announced his move to Sirius Satellite Radio. "[XM President and CEO] Hugh Panero had approached Joel about this a while back," explains Logan. "I had just recently joined the company and we talked about how we could do a couple of things – really freeze the Howard Stern fans by offering compelling radio and leveraging our content in a new and innovative way and really finding a way to monetize our content."

"CBS is getting the best show in radio," says an unabashed Logan. "They are going to get a show that will generate enormous ratings for them. Being the former VP of Programming for their company, I know that is the name of the game for them. They have to get ratings, as ratings equals revenue. It's a proven show. It is a show that has been successful in New York before. And the show, over the last 18-19 months, has gotten so much better. I am really excited to see this show perform in that world now."

CBS Radio definitely gets a proven commodity to replace the miserable train wreck that was the David Lee Roth show. Could CBS Radio have given Roth more time to grow? Probably. But in today's world where artist development means "results now" and not eighteen months from now, CBS Radio needed a fix for the void left behind by Howard Stern. Replacing Stern is no easy task. Ask Clear Channel, who is now a little over two years removed from dropping Stern's program off its six stations and is still in recovery mode at some of those outlets.

And while CBS is benefiting from the return of O&A, Logan likes what the deal brings to the table for XM. "From our perspective," he explains, "We get a tremendous amount of exposure for XM through the Opie & Anthony lens and have the ability to reconnect with a lot of Opie & Anthony listeners who have not yet either subscribed, heard, or been made aware that O&A went to XM. They are one of the most popular shows on the platform and they have grown their base completely different than ever before by growing it on a national basis. The base of fans they have now comes from all across the country. Now they are going to layer in their former base and are only going to be bigger. We get tremendous branding out of it and an opportunity to further grow our superstars."

While most people know of Opie & Anthony because of one ill-conceived stunt in New York City, or maybe a couple in Boston, one of the things people are going to be surprised with is the content of their show. While Howard Stern has been accusing them of ripping him off, their show is nowhere near the over-the-top, sexual antics, not ready for FCC controlled radio that Stern's Sirius program has become. As for O&A, outside of the amount of cursing, there are very few things that they do now that couldn't be transferred to terrestrial radio.

"People think what they have been doing over at XM is this triple X, let's live across the line show and it absolutely hasn't," says Logan. "It's been some of the funniest, most creative radio that easily could be aired on terrestrial radio. One of the reasons why this deal was so easy to do is that we feel a majority of our subscribers and the O&A fans will not hear a noticeable difference in the quality of content they are going to get for the first three hours and vis-à-vis the second two-plus hours. Because the content, minus the exception of a few curse words, could be on terrestrial radio today."

And maybe reel in Patrice O'Neal a bit? "I was just on the phone with him trying to follow up on our negotiations from Friday (4/21)," laughs Logan. Not meaning to single out O'Neal, as he is a great asset to the O&A show, it's just that he brings a sense of humor to the program that few comedians dare to have today with his no-holds-barred, no race, no gender left untouched humor. He also has his own program on XM's High Voltage channel that is a quality program in its own right. Plus, don't forget that they will have a dump button at CBS.

So, is Logan worried about a noticeable difference in content during the CBS Radio portion versus the XM portion? "Look, the fact that they are doing the three hours for CBS and they are going to walk up the street every day and do the show at XM will really provide for them and their guests and everybody associated with the show an appropriate mental switch about what the show is for CBS and what the show is for XM."

And what about concerns over diluting the program or complaints from the XM subscribers that will cry foul of losing exclusivity? "You always have that fear, but it's a short-term thought process," says Logan. "Whatever short-term issues we're going to have with subscribers that feel like O&A have sold out or feel that there is going to be a degradation of the quality of content, those are all very manageable issues. Those issues are going to be very, very small compared to the significant upside and acquisition opportunities that we are going to have."

Speaking of acquisitions, one major aspect of the deal with CBS Radio was XM now has access to all their archived content from their WNEW days. Yes, even that infamous show that got them put on the beach for two years.  

"It was a big deal [to get that content]," says Logan. "There is a lot of great content there. One of the things that we believe in at satellite radio is great content is great content and we want to get our hands on it. It doesn't always have to be great content that you are making today. It could be great archive content. Opie & Anthony's early shows and the archives at WNEW is terrific and fascinating and wonderful radio. A lot of great things can come out of that. If you look at what we have done with Wolfman Jack, he is back on XM. He does a show on the 60s channel every night. We worked out a way to buy his archives. With O&A, it was very important and something we really wanted, so we worked with Bob Eatman and CBS said yes. We now have the ability to have O&A: The Early Years or some other things as well."

Could there be more syndication deals for O&A or other XM personalities or content in the future? "We're in the syndication business with O&A but we're going to take it one step at a time," says Logan. "We've been approached by a variety of companies for a variety of content. We currently syndicate the Bob Edwards show to a lot of public radio stations for a weekend show. We have been quietly executing out strategy of monetizing and utilizing our content in creative ways. It all comes down to what is right for XM and what's right for our subscribers and what's right for the brand. If the scenario and the situation is correct, we'll talk. As it sits right now, we're really focusing in on making sure O&A are very successful. This is a very high profile deal, obviously, so we are making sure they have all the resources and support from us."


** QB Content by Michael Parrish **

 
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Marissa Lanchak
APD/MD
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