Report: News Media Looking To Tighten Talent Costs

 

The tightening economics of the TV news industry have fueled speculation that the multimillion dollar contracts its top stars have long enjoyed are set to face steep cuts, reports Mediaite.

Earlier this month, Claire Atkinson at The Ankler reported that new CNN chief Mark Thompson was scrutinizing the large salaries of big names at the network. A veteran of the considerably more frugal BBC and relatively more frugal New York Times, Thompson is working to foment a digital revolution at CNN as part of an effort to fend off the oncoming linear apocalypse. To do so, according to Atkinson, he’s eyeing some of the top salaries weighing down CNN’s balance sheet.

It’s not just CNN. Fox News, which continues to turn a billion dollar annual profit despite industry-wide headwinds, is not ruling out belt-tightening when it comes to its stars. A source familiar with the inner workings of the network told Mediaite, “The business model is evolving; they’re looking at all costs including talent.”

The business model is indeed evolving. Cord-cutting is an existential threat to what has long been an extraordinarily lucrative way to deliver news. Cable news networks make some of their money from advertising and most of their money from affiliate fees paid by cable carriers. Fox Corporation’s cable properties, which include Fox News, earned $1.4 billion in advertising and $4.1 billion in affiliate fees in 2023. Every year that second number grows smaller; the rapid pace of consumers jumping to streaming and other cheaper alternatives is a real crisis for the industry. Last year, the proportion of U.S. households paying for traditional TV subscriptions dropped below 50% for the first time.

The solution: frantically prepare for a post-linear world while profits are still high. Pull the emergency brake before the car flies off the cliff.

That has manifested mostly in layoffs; CNN, MSNBC, Fox News, CBS News, ABC News, and NBC News have all implemented staffing cuts in the last two years. Yet the salaries commanded by the networks’ stars are increasingly out of touch with this bleak reality. Networks can only afford to shrink their newsrooms a dozen reporters at a time for so long before people start to question how the big names are still making tens of millions.