It’s the one haircut cable news anchors don’t like. Photo by Michaela Rihova/CTK via AP Images.
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.
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.
As a matter of fact, some already are — an industry insider told Mediaite that tensions are “percolating” between the rank and file and major stars. “They’re starting to look at each other. It’s like Survivor,” they said. “A relatively small pay cut for the highest-paid talent could save dozens of jobs — and make the product better.”
The phenomenon of sky-high television salaries isn’t a new one. Cable and broadcast news stars are, after all, personalities known by millions; their fame translates to cash, and sometimes resentment from their off-camera colleagues. As the Los Angeles Times noted all the way back in 1992: “Envy, especially among print reporters, is couched behind much of the bitterness toward the television personalities, who make such obscene sums of money for doing so much cheesy reportage.”
In a precarious cable news market, contributors are the first to get hit. Networks have cracked down in recent years on their contributor rosters, slashing pay or declining to renew contracts entirely. Gone are the days when Roger Ailes would toss $500,000 contributor deals to the likes of John Bolton. For many executives the calculation is simple: why pay pundits for commentary they’ll eagerly provide for free?
“The contributor business is dead right now,” one industry insider said. “If you’re getting an overall deal, it’s a fraction of the price. Others are just getting paid per appearance.”
As for top anchors, some marquee stars have already seen their paydays slashed. The New York Post reported in 2022 that CBS News anchor Norah O’Donnell had her annual salary cut by more than half in 2022, from $8 million to less than $4 million.
Others are facing external scrutiny. On top of Atkinson’s reporting, another piece from The Wrap’s Emily Smith suggested that CNN chief Thompson wants to “fund his digital-first transformation by cutting anchor salaries.” The rumors prompted a minor industry panic. In Smith’s somewhat speculative piece, which cited former CNN executives and industry analysts, she singled out the network’s whales: Anderson Cooper, Wolf Blitzer, Jake Tapper, and Chris Wallace, who a source said pulls in $8.5 million a year.
Fox News and MSNBC pay even more to their top stars. Sean Hannity makes an estimated $25 million. Rachel Maddow famously cut a deal to reduce her nightly show to just one night a week but still pocket $30 million. Joe Scarborough, upon hearing of Maddow’s deal, got word out he wanted $30,000,001.
A big problem for well-heeled TV news stars, sources said, is dwindling cash for competition. Gone are the days when Mr. $10 Million Anchor and his agent could walk into the boss’s office and warn that the rival network down the street was offering $12 million. Rising stars are also facing tougher negotiations with network executives, who aren’t handing out the millions they used to.
Some personalities are more expendable than others. One former industry executive who reigned when the cable cash cow was at its fattest told me, “the key difference will be between the irreplaceable hosts and the rest, who are the vast majority.” They pointed to key personalities like Hannity, Maddow, Lawrence O’Donnell, and Laura Ingraham, who have built relationships with their audiences that transcend the connection between viewer and network. Hosts that draw an audience merely by virtue of their presence on a network are more vulnerable.
“The old formula isn’t crumbling so much as shifting,” said one industry insider who’s more optimistic about its future than most. “If you can be nimble and entrepreneurial about your work, deliver five different things, you’ll be even better off.”
Some high profile ousters offered relief to the networks. Fox will soon be out from under Tucker Carlson’s annual wage, which a source with knowledge pegged at $15 to 20 million. CNN no longer has to shoulder Don Lemon’s hefty annual levy after coming to a separation agreement that paid out his remaining three-year contract in full.
Still, network executives recognize that while budgets are shrinking, the power of personality is not. Despite all the hemming and hawing about Thompson’s digital putsch, a source at CNN pointed out his comments on the importance of talent in his memo laying out the future of the network.
“I also passionately believe that outstanding and high-profile talent will continue to be a central thread in the CNN story, while recognizing that we have much more to do to find pathways for our top names to multi-platform audiences,” Thompson wrote, pointing to Cooper’s hit podcast All There Is as an example of successful branching out.
Other networks have made promising forays beyond the linear product. Fox News now boasts a burgeoning streaming platform, a books division, and weather network. CNN still has the most-read news website in the world. That success is a bright spot in an uncertain time, but doesn’t overcome the fact that those revenue sources remain nowhere near as lucrative as the linear product that has kept salaries fat for decades.
Despite the handwringing, cable television remains a profit powerhouse. “The cable bundle remains our largest and most important revenue stream,” Fox Corp. CEO Lachlan Murdoch said in November. “We believe that it will remain our largest for years to come.” He’s right of course; the linear cliff is still a few miles down the road. The industry is starting to brace for it now.
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