Rachel Maddow's Contract Negotiations Will Test The Future of TV News

For at least the past two decades, every news host with an opinion has dreamed of someday hosting a primetime show on cable news. Television hosts, executives, and agents view primetime on Fox News, CNN, and MSNBC as the pinnacle of the industry. Obviously, right? Primetime stars have the most money, autonomy, reach, and influence.

Up until recently, industry experts assumed all of that to be true. Then, however, new dominos fell in 2020. And now, Rachel Maddow's contract negotiations are set to test the future of both that belief and the future of the news industry.

In 2020, Penn National Gaming bought a stake in Barstool Sports at a $450 million valuation. Barstool founder Dave Portnoy subsequently cashed out with stock that put his net worth at north of $100 million. Penn got a discount by setting the market. Today, Barstool is likely worth close to $1 billion.

A few months later, Spotify acquired Bill Simmons' The Ringer for around $200 million. Then Joe Rogan agreed to a $100 million licensing deal with Spotify that still allows him to retain ownership of his show. And Alex Cooper turned her self-edited podcast, Call Her Daddy, into a $60 million business.

Dan Le Batard left ESPN television and radio to start his own podcast company, which DraftKings quickly signed for $50 million.

Many younger Americans have migrated away from morning television to short, daily podcasts, led by The Daily.

Meanwhile, Ben Shapiro, Pod Save America, Dan Bongino, Steven Crowder, Tim Pool, Charlie Kirk, and Candace Owens grew their bases and catapulted to online celebrity status.

One year ago, the view of the industry shifted. Traditional media further collapsed, while media members-turned-entrepreneurs prospered.

But not yet has a leading television talent, by choice, left their safe space, protected by eight-figure guaranteed contracts, to take the risk and go independent with proprietary relationships. Will Rachel Maddow be the first as she mulls leaving MSNBC to start her own company? 

Perhaps Maddow will ultimately re-sign with MSNBC for close to $20 million a year. NBC can throw in money for a production deal and a presence on its highly-prioritized streaming service, Peacock. MSNBC president Rashida Jones can ease the stress associated with Maddow's schedule by allowing her to pre-record episodes and take more extended vacations. All of these are possible, perhaps even likely.

Or Maddow could start her own company. Put aside your personal and political beliefs regarding Maddow and focus on her numbers. The overall MSNBC audience grows by a million viewers at 9 pm, when her show begins. She is enough of a draw to match or even exceed some of 2020's biggest earners in media. And now is the time as the podcast market may never be as lucrative as it is today.

Podcasting money is flowing in almost recklessly from Spotify, Apple, Google, Amazon, and Westwood One. A podcast service could see Maddow's reach and offer her an eight-figure deal with complete control. A competing service may entice her with an 80-20% ad sales agreement in her favor.

SiriusXM needs to expand its reach among progressive subscribers with its POTUS Politics channel. Maddow is the most influential draw in progressive media circles. In addition, digital media talents frequently agree to non-exclusive contracts, separating their audio, writing, and video.

Maddow could ink a podcast deal and sign a separate video deal. Netflix or HBO Max can offer to simulcast her audio show, or give Maddow a weekly program. HBO airs Bill Maher on Fridays and John Oliver on Sundays, leaving five other days for Maddow to appear. With 10.5 million Twitter followers, Rachel Maddow can also lucratively monetize her video clips through Twitter Media Studio, then expand her presence to YouTube's Partner Program and Facebook's Audience Network.

If Glenn Greenwald makes over a million dollars a year writing on SubStack, could Maddow make at least half of that? Of course. Thus, Maddow may receive a check from an audio service, a video distributor, and a writing platform.

And whatever Maddow builds, she can eventually sell, making back any money she lost from leaving television early on.

As I explained Thursday, podcasts and digital shows may reach fewer consumers than primetime cable news in terms of raw numbers, but their audiences are younger, more responsive, and more engaged. Digital media is not a step down from linear television.

Would you rather be Ben Shapiro or Tucker Carlson? You had to think about that, didn't you? It's 50-50. How about Anderson Cooper or Joe Rogan? It's not close. You want Rogan's life. Dave Portnoy has more fun, money, and freedom than Stephen A. Smith, who's the face of ESPN.

Maddow is seriously considering leaving MSNBC after her contract expires at the start of next year. Two years ago, that headline would have signaled to MSNBC and rival executives that Maddow was contemplating jumping to a rival network. She likely won't do that, nor should she. 

The media changed in 2020. Rachel Maddow's free agency is the natural next progression. If Maddow is not the first television ratings star to leave the medium to create her own company, someone else will be, and soon. Some network host who is currently making over $10 million a year will change the paradigm and make the right decision, starting their own media company.