If spatial attention acts like a "spotlight," focusing on one location and excluding others, it may be advantageous to have all targets of interest within the same spatial region. This hypothesis was explored using a task where listeners reported keywords from two simultaneous talkers. In Experiment 1, the two talkers were placed symmetrically about the frontal midline with various angular separations. While there was a small performance improvement for moderate separations, the improvement decreased for larger separations. However, the dependency of the relative talker intensities on spatial configuration accounted for these effects. Experiment 2 tested whether spatial separation improved the intelligibility of each source, an effect that could counteract any degradation in performance as sources fell outside the spatial spotlight of attention. In this experiment, intelligibility of individual sources was equalized across configurations by adding masking noise. Under these conditions, the cost of divided listening (the drop in performance when reporting both messages compared to reporting just one) was smaller when the spatial separation was small. These results suggest that spatial separation enhances the intelligibility of individual sources in a competing pair but increases the cost associated with having to process both sources simultaneously, consistent with the attentional spotlight hypothesis.