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Locked On, Snatched Up

David Locke was audibly tired when we spoke on Friday afternoon.

As the founding executive for the Locked On Podcast Network, Locke had just wrapped up an afternoon-long and virtual office-hour session to answer questions from his hosts about the company’s sale. Two days before, the network announced that it was going to be acquired by TEGNA, the media group spun off from Gannett that largely specializes in broadcasting and local media. And given that the network has about 250 hosts in its roster, there were a lot of questions.

Still, Locke was eager to talk, despite the fact that not long after our call he was due over at his other day job: as play-by-play announcer for the Utah Jazz Radio Network, a role he continues to hold even after starting the podcast network in 2016. “I’ve never been through anything like this,” he said, of the acquisition. “This has been the most rewarding thing I’ve ever done, and the most stressful thing I’ve ever done.”

From a publishing standpoint, the Locked On Podcast Network is best described as a sprawling operation — managed remotely from Utah — that predominantly deals in short-form, daily, local sports podcasts. It’s home to over 160 shows, the bulk of which are each dedicated to dishing takes on a specific sports team in a specific local market. Those are rounded out by programs that, while not tethered to a particular team, are nevertheless pegged to a lane: fantasy sports, for example, or simply the biggest news of the day in a given league.

There has been some momentum towards the latter type of projects in recent months, but the local orientation is the network’s bread and butter. The way Locke tells it, the venture was premised on creating a company powered by a deep roster of talent who each serve as the designated expert on their respective teams. “Our model from the very beginning was daily short-form programming from local experts,” said Locke. “Your team, every day, on demand, with local experts covering the biggest stories — that was our branding mantra.”

As mentioned, he’s recruited about 250 such local experts, pulling them from a variety of sources and setting them up as independent contractors with the network. And much like Locke, the hosts usually hold other jobs in addition to their Locked On programs.

I should note: Locked On isn’t the only sports podcast operation that publishes an array of team-specific programming. To this date, we’ve seen similar efforts carried out by The Athletic and Vox Media’s SB Nation brand, among others, but Locked On is fairly distinct for a few reasons: The network aggressively defines itself as a locally minded venture, it’s aesthetically similar to the conventional sports broadcasting world, and it wasn’t part of a bigger media company.

Well, until now. Locke tells me that TEGNA approached them for the sale, and claims that the network wasn’t previously on the market for a buyer. It didn’t exactly come out of the blue, as both parties had collaborated in the past on a few local market experiments. In any case, Locke liked what TEGNA was pitching. “I thought they had an insightful vision of the future,” he said. “They made it easy in that they told us exactly what they wanted to do, and that they’d like to have myself and my business partner, Carl Weinstein, committed to stay on.”

He added, “I don’t want to make this sound too altruistic… obviously, there’s also a transaction that’s taking place.”

On that note: The exact financial terms of the acquisition were not disclosed, though the circulated press release indicates that TEGNA will “finance the acquisition through available cash on hand” and that the transaction is “not expected to have a material impact” on its financials this year. In other words, it seems reasonable to assume the deal to be somewhat modest, which makes sense for what TEGNA’s getting: a podcast operation defined by sheer publishing volume, though one that isn’t super efficient on a listens-per-episode-per-show basis.

According to the press release, the network averaged 8 million monthly listens across all its shows by the end of 2020, and ultimately accrued 80 million listens over the course of the whole year. Given the network’s considerable publishing volume, said to be around 600 episodes per week, per-episode listens are presumed to be pretty compact. Still, inventory is inventory, and given the fact that these shows tend to be a secondary gig for the hosts, it’s an arrangement that probably works out to a value-add for most involved.

Locke tells me the company is primarily monetized through advertising, which he claims continued to grow even over the past year. That, by the way, reflects the network’s ability to weather COVID-19 more broadly. “Our numbers slid, but not as much as I thought it would,” he said. “I thought we were going to zero, but I don’t think we ever lost more than 35% of our audience.” He credits his hosts, who kept conversations going despite sports leagues grinding to a halt for a few months.

It’s a tidy exit for Locked On, which was bootstrapped for much of its life. The company only took outside funding once, in late 2019, when it raised $750,000 from a small group of investors including Bruce Gordon, the former CFO of Disney Interactive Media Group; Summit Capital, a private equity firm; and Podfund, the podcast-specific investment group now controlled by TechNexus.

“We’re really happy for Locked-On and the team,” said Andrew Annacone, managing partner at TechNexus. “It’s a great match for growing the company in the future and a strong exit… for Locked-On, given its business model, Tegna is a great platform to expand commercial opportunities and scale the company further in local markets.”

And the exit may well come at a good time — at least, in Locke’s assessment.

“It’s getting really hard out there,” he said, when asked for his thoughts on sports podcasting and where the category is going. “To get advertising, your numbers have to be so big right now as an individual podcast. The giants can get that big — ESPN, Barstool, The Ringer — but we don’t see a lot of sports podcasts anymore launching that can crack through that group.”

He added: “I believe in local, still do, but it’s a basic problem: How do you launch a local podcast and gain enough listeners that brands or Ad Results or Veritone will listen to you?”

That question will mostly have to be answered by other upstarts now, including Blue Wire Podcasts, which recently raised a $5 million Series A round for its own pursuits in local and national sports podcasting. Locked On, meanwhile, will now have to figure out what life looks like inside a much bigger local media operation, and what comes next for its hosts.

“I’m excited about what we can do for our hosts in the next period of time,” said Locke. “We’ve got a lot of truly talented people… they are the next generation of great sports reporters, and we can really work to put the shine on them now.”On a slightly related note… iHeartMedia has struck a partnership with Colin Cowherd, the sports broadcaster, to launch a new sports podcast network called The Volume. The network launched yesterday with five shows, including a new podcast from Cowherd himself.

According to Bloomberg, the venture is fully owned by Cowherd, with iHeartMedia serving as the ad sales partner. Which means that it’s a little different from a similar-but-not-the-same talent deal arrangement iHeartMedia struck with the prominent broadcaster Charlamagne tha God to form the Black Effect podcast network. That company, I can confirm, is a joint venture.