Talent loses leverage as the market shifts
“All the networks have held very firm to predetermined budgets and seemingly are prepared to let even the most high-profile talent explore their options if something is better,” said Reed Bergman of Playbook, who represents on-air personalities like Dan Patrick and Rich Eisen. “There’s been a market correction that I started feeling in the last six months.”
The tighter market for on-air talent came to light recently when ESPN declined to renew contracts for two of its higher-priced, strong-willed personalities in Bill Simmons and Keith Olbermann. ESPN described both moves to not renew on-air stars as “business decisions” — even though both had been suspended by management at various points earlier this year.
Essentially, the decisions were cost-cutting moves — something the industry had not seen come out of Bristol since John Skipper took over as president in 2012.
Given Comcast’s increased investments in NBC Sports Network and the 2013 launch of Fox Sports 1, ESPN under Skipper paid on-air personalities handsomely to keep people from going to competitors, creating a frothy market for on-air talent and their agents, as they frequently leveraged one network against another.
“You were sitting there in a bull market — it was unbelievable, seeing people get paid money at all levels of the business,” said Steve Herz of IF Management, who represents on-air personalities like ESPN’s Dan Shulman and Seth Greenberg. “I’ve been doing this job for almost 25 years now and have seen a lot of trends come and go. But the last five years has been a pretty bull market overall.”
“It just so happens that because we have so many high-profile people, we end up in the news a lot,” said ESPN’s Laurie Orlando. “I wouldn’t say that there’s a difference in
|ESPN recently declined to renew contracts for two of its higher-priced personalities, Keith Olbermann (top) and Bill Simmons, as part of what it called “business decisions.”
Some of ESPN’s tweaks, though, come amid a sweeping business change that has seen most cable networks lose subscribers.
Since Fox Sports 1’s August 2013 launch, ESPN and ESPN2 have lost nearly 5 million subscribers each, according to Nielsen. TBS and TNT have lost nearly 4 million subscribers each.
“Part of it has to do with the unbundling of cable,” Herz said. “What’s the value proposition in how you measure the value of on-air talent?”
Another reason for the change has to do with live sports rights, which drive the sports TV business. The NFL’s new TV deals started last season; the NBA’s new deal starts with the 2016-17 season. ESPN, for example, is paying an annual average of $1.9 billion for the NFL and $1.4 billion for the NBA.
Those kinds of rights payments combined with a declining subscriber base means networks like ESPN, Fox and NBC will be looking to manage costs elsewhere. In many cases, that has given on-air talent little room to negotiate new deals.
Several agents said that studio hosts have been hit particularly hard by this change in negotiating leverage, so much so that Herz said his company has started to represent more play-by-play announcers, “where there is a little bit more of a demand for the good ones.”
“There used to be a marketplace for a guy in the $300,000-$600,000 range,” he said. “Now, people have an opening, but they’re not willing to pay more than $250,000 for it.”
Some host positions for national sports networks have been offered for as little as $150,000 — with no room for negotiation, sources said. Those figures are far lower from the industry norm of just a few years ago.
Both talent agents and network executives say that on-air personalities need to become multidimensional to have job security on television.
“I’ve always been looking for talent that’s going to supply content — not just read off prompters or read scripts,” said NFL Network’s Eric Weinberger. “They need to be able to write, read, interview, do a lot of different things. That’s what I’m looking for because we’re trying to feed into an entire media group. We’re not just trying to feed into a linear television channel.”
Herz offers his clients similar advice.
“There’s going to be a lot of room for people that are perceived to be difference-makers if they can separate themselves and figure out a way to set themselves apart,” Herz said. “You have to have something. You can’t just be a run-of-the-mill host of show.”