Stephen A. Smith Offered $18 Million a Year by ESPN

Stephen A.’s $18 Million Offer

ESPN and Pitaro have put an $18 million-per-year offer in front of their generational star. It’s an insane amount of dough for a TV personality… but it still might not be enough.

In many respects, ESPN has made Stephen A. the face of the network over the past several years. Photo: Allen Berezovsky/Getty Images

A generation ago, when he was just a rake in his progress on the set of The Sports Reporters, no one would have guessed that the New Yorker turned Philly sportswriter Stephen A. Smith would one day become the biggest name on ESPN—the heir to Schaap and Berman, Patrick and Olbermann, Mike and Tony, etcetera. But Smith has undeniably become that star, volubly manifesting his talents from First Take to the network’s NBA coverage. As David Zaslav knows from the success of Inside the NBA, it is hard to make a studio show stand out. And Smith has proven that he can help differentiate a TV show in a way that boosts ratings and captures sponsorship dollars. In the process, Smith has become that rare talent who is more famous than most of the athletes he interviews, the sort who can gas up a jejune studio show into performance theater.

ESPN, which has parted ways with a lot of its signature on-air talent during the past few years, knows this. Stephen A., for better or worse, is their Rachel Maddow: homegrown, polarizing but beloved, beyond parody. And probably one of the only remaining sports media talents worthy of old-school dough. ESPN has been working hard to re-sign Smith, whose contract ends in a year; last week ESPN made its initial offer of $18 million per year for five years. I’m told ESPN execs pitched Smith’s WME agents that he would be their highest-paid star, earning more than Monday Night Football’s Troy Aikman or Joe Buck.

Will that be enough? Smith has reportedly been seeking some $25 million per year. While $18 million might seem like a ton of dough, I’m told Stephen A. wants McAfee bucks. Indeed, WME’s response to ESPN was to point to Pat McAfee’s deal, which nets close to $30 million per year between his studio show and College GameDay appearances. WME also had the chutzpah to use ESPN’s $700 million deal with Peyton Manning’s Omaha Productions as a comp.
ESPN, of course, is crying foul on those comps, pointing out that neither is a talent contract and that they are both production deals. ESPN buys McAfee’s show, which includes all the costs he pays for the production and staff. It has a similar deal with Manning, who produces the popular ManningCast and some other ESPN shows through Omaha Productions. But that doesn’t mean Smith sees it that way.

The Maddow Effect

In many respects, ESPN has made Stephen A. the face of the network over the past several years, having him front NBA coverage in addition to First Take, his daily studio show, which has been on a ratings run, posting an incredible 22 consecutive months of audience gains. Last month, the show posted its most watched episode, a wild feat considering the distribution drop all networks have faced.

ESPN’s ultimate decision on Stephen A. will be fascinating, considering the network’s trimming of its high-priced talent in recent years. Smith has been a focal point of ESPN’s strategy to invest in a few stars, like Mike Greenberg, Scott Van Pelt, etcetera, and his appearances on different shows—First Take, SportsCenter, NBA Countdown—and provocative on-air statements have helped drive the conversations on other ESPN studio shows. Jimmy Pitaro and Burke Magnus have a choice to make: Does ESPN want to go higher than $18 million? After all, Smith is not driving viewers to the live games that pay ESPN’s bills. How much would First Take viewership really drop if Shannon Sharpe, who Smith personally recruited last August and who just signed a multiyear extension with ESPN, took his place? Is Smith truly a Maddow? What if he’s more like Tucker Carlson or Megyn Kelly—stars who never quite transcended the network that spawned their success?

ESPN should tread carefully. While Smith almost certainly wouldn’t jump to another TV network, there’s a big market for a bona fide star—including the streamers looking to break into sports, the gambling companies looking to stand out, and the satellite radio networks. One point that probably bears repeating: Stephen A. is represented by WME, the agency that convinced MSNBC to bump Maddow’s salary from $7 million to $30 million. Let’s see if they can work their same magic here.