Star TV Anchors Are On Notice: You’re Not Getting a Raise- WSJ

Oct. 6, 2024 8:00

‘Good Morning America’ co-hosts Michael Strahan, Robin Roberts and George Stephanopoulos.

The rampant cost-cutting across a media industry struggling to transition to thestreaming era is finally coming for the sacred cows: star talent.

At Disney’s ABC, “Good Morning America” anchorsGeorge Stephanopoulos, Robin Roberts and Michael Strahan, who each have deals valued at $25 million annually, will face an uphill battle in coming negotiationsto maintain that compensation, people familiar with the situation said.

At NBC, “Today” anchor Hoda Kotb said late last month she is ending her run on the show.Had she opted to sign a new deal,she would likely have faced a significant cut to her roughly $20 million-a-year contract, people familiar with her exit said.

Co-host Savannah Guthrie, whose current deal has more than a year to run, may face the same situation with her similarly-valued contract, but has some leverage given Kotb’s exit, people close to the network said. Puck earlier reported on Kotb’s exit.

ESPN, meanwhile, recently laid off senior NBA writer Zach Lowe, one of its star analysts, after it had already said goodbye to other big names like Robert Griffin III.

Agents for big stars have gotten a message loud and clear from network suits: Don’t expect a raise and be prepared for a pay cut.

“The day of the media icon, the standout, stand-alone center-stage TV personality, is coming to end,” said Frank Sesno, a professor of media and public affairs at George Washington University and a former Washington bureau chief for CNN.

The reasons for the newfound vulnerability of elite talent are manifold. Media companies are staring at diminishing returns from their legacy cable and broadcast TV operations, and their streaming businesses aren’t generating the returns to make up for the shortfall.

At that same time, many companies are making costly bets on sports rights—seen as vital to have any hope of surviving in a cutthroat business. Disney and Comcast’s NBCUniversal are each partners in a massive new NBA deal that kicks in with the 2025-26 season.

The downward pressure on talent costs isn’t limited to news and sports. Entertainment divisions have been scrutinizing budgets as well, trimming episode counts and reducing cast salaries. Wide-ranging production pacts between studios and talent to make shows or movies over several years are out of favor. Many aren’t being renewed, and even bankable producers are taking a haircut in fresh deals.

Late night also isn’t immune. Last month, NBC’s “Tonight Show with Jimmy Fallon” joined ABC’s “Jimmy Kimmel Live” and CBS’s “Late Show with Stephen Colbert” in not airing new episodes on Fridays. Some at NBC wereangling to cut Seth Meyers’s late-night show—it survived, but the band was let go and further cost reductions are in store over the course of his latest deal, a person familiar with the plans said.

“We have had a tremendous shake-up in how TV is delivered and received, and the business is going through a major struggle trying to retain and grow revenues,” said Joe Peyronnin, a former television news executive who now teaches journalism at New York University.

At MSNBC, talks are under way for a new deal with Rachel Maddow, whose current $30 million-per-year deal is up after the election.(they will get rid of her because there are no more Trump elections, if he wins, they'll keep her!)

Maddow commanded that price tag even though her prime-time show airs only one night a week. While Maddow is still considered a big draw,people familiar with MSNBC’s thinking say the network will likely seek to lower her pay package in her next contract.

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CBS News has veered away from the star system in recent years.Norah O’Donnell is being replaced as anchorof its “CBS Evening News” program in favor of a trio of anchors. Former “CBS Evening News”anchor Jeff Glor,who most recently was anchoring the Saturday edition of the CBS morning show,was recently let goas part of cost-cutting at the company.

“The days of $20 million players will be few and far between,” said one agent who represents top talent at multiple networks.

Some at NBC were angling to cutSeth Meyers’slate-night show; it survived, but the band was let go.

Stephanopoulos has already started negotiations with Disney for a new deal at “Good Morning America,” people familiar with the matter said. People close to him expect a tough negotiation and acknowledge it will be a challenge to avoid a pay cut.

In his favor, Stephanopoulos is something of a morning show workhorse, while Strahan and Roberts have lighter “Good Morning America” schedules. But Roberts is seen as the face of the show and hosts and produces prime time specials, and Strahan is seen as its future. Stephanopoulos has also cut back on hosting the Sunday morning political show “This Week.”

Roberts and Strahan each have more than a year on their current contracts, people with knowledge of their deals said.

Some industry observers think ABC News could go as far as to eliminate one of the anchors entirely to save money.ABC News insiders said that scenario is unlikely.

For years, “Good Morning America” was the most-watched morning show. But NBC’s coverage of the Summer Olympics lifted “Today” into first in viewers in the third quarter.

To be sure, there will always be a handful of talent commanding eight-figure salaries. “You have to pay your Patrick Mahomes,” said Peyronnin.

ESPN will likely have to offer a huge payday to star analyst Stephen A. Smith, a provocateur who prides himself on serving up hot takes, when his contract is up next year. Smith said in a recent interview with Chris Wallace that he deserves a substantial raise.

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My best post of the day