Prominent NBC Los Angeles talent to take buyouts
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Primary KNBC evening co-anchor Chuck Henry has agreed to a buyout from NBCUniversal. Reporters Beverly White, Vikki Vargas, Angie Crouch and Kim Baldonado will also take the company up on their offer.
Henry, who has been with the station since 1994, is a well-known face to NBC Los Angeles viewers, as are the other names on the list, so audiences will see some changes on camera.
The boyouts call for employees to depart the station before the end of 2022, meaning they will likely have a chance to say goodbye to viewers on air and have their careers recognized.
Terms of the buyout were not disclosed, but these types of offers often include an agreement to continue paying the staffer’s salary for a set period along with, in some case, the continuation of certain benefits.
Buyouts allow companies a way to control costs, since they know they are only liable to pay the sums agreed to for a set period of time rather than have to continue to pay annual salaries, with possible raises, for however long a staffer remains with the organization.
In television, most on-air talent are signed to multi-year deals that outline their salary as well as potential boosts down the road. In some cases, laying off or terminating the employee may require the station to pay all or some of the remaining value of the contract, so buyouts are often seen as a way to circumvent agreements for future financial liabilities.
NBCUniversal, like many other media companies, is attempting to cut costs as the economy shows sign of weakening and fears of a recession loom. Traditional linear television has seen a decline in overall viewers and, in many cases, ad revenue, as audience habits shift toward streaming and companies look for other ways to reach potential buyers.
Salaries and benefits are often one of the biggest portions of most companies’ expenses, so shedding staff can result in significant savings.
In many cases buyouts are offered to a station’s top paid talent, since getting them off the payroll can result in higher overall savings. Such deals can be particularly attractive to talent who may be thinking of retiring soon and, thanks to their agreement’s value, mean they don’t have to take as big of a financial hit as if they lost their job altogether.
Buyouts often include non-compete clauses, however, meaning the talent can’t jump to a competitor in the same market within an agreed-upon window.
Buyouts can sometimes be a way to avoid layoffs, but they can also often be combined with an additional reduction in workforce.
KNBC sister station KVEA cut six advertising sales reps, according to the Times.
Although it’s not immediately clear how KNBC and KVEA plan to handle the responsibilities of the departing staffers, it’s not uncommon for other talent to fill in the gaps at the anchor desk.
This can sometimes include re-opening those talents’ deals if their contracts have caps on how many hours a day they anchor and result in an increase in salary in exchange for increased duties, but these types of costs are typically significantly less than the departing anchor’s salary.
In other cases, roles may be filled with younger staffers who are less expensive but often less experienced and less familiar with the market.
It may seem counterintuitive for TV stations to drop some of their most well-known faces and KNBC, like any station that cuts popular talent, risks upsetting some viewers. However, in the long run, the overall effect on viewership isn’t likely to swing significantly (especially if there are non-compete clauses as part of the buyouts).
While it’s often hard to definitely say if an anchor or reporter change results in ratings dips or increases, station management often weigh the cost of the anchor versus the potential revenue drop (combined with external economic forces).
In larger markets such as L.A., it’s not uncommon for anchors to be paid in the high six to seven figures, which is fair compensation considering the amount of ad revenue they can help bring in, but eventually a person may simply become too expensive for a station to justify keeping on-air when they can fill the role with someone less expensive.