Is cable news worth the cost?

I know, I know. In polite company you aren't supposed to discuss three things: religion, politics, and money. But who says we're in polite company? So, this week, news about Tucker Carlson got me thinking. Is cable news worth the cost, not just the dubious effects the content has on polarization and amplifying misinformation, but in actual dollars.

Whenever someone argues cable news won't change because it's cheap to produce, I bristle. I understand what they mean. The general format -- sitting guests in front of a studio camera (or these days, even cheaper, in front of their home cam) -- is inexpensive compared to the costs of actual reporting: sending a full crew to conduct field interviews, edit, and package a salient piece for air. However, I know cable outlets spend significant amounts of money on other parts of the production process and this is what I want to discuss.

What was it about Tucker Carlson that got me going this week? Eric Boehlert asked a worthwhile question, one I won't relitigate here, which is why the Fox News host is still on air after many advertisers have dropped their spending on his show. As I clicked through the various background articles, I got to Tucker's salary: reportedly, he makes $10 million a year. None of these commercial outlets are transparent about host salaries, so at this point, we have to rely on anonymous sourcing and for comparison, reportedly in 2019: Sean Hannity earned $40 million, the highest, Anderson Cooper made $12 million (from both CNN and CBS presumably), and at MSNBC, Rachel Maddow earned $9 million. Click through for the complete list of top earners.

Don't forget these hosts (and senior level producers) make bonuses if they hit their ratings targets. Again, there is no transparency in the field but 10% is the going rate as I understand it. (I'll get into this more later but those bonuses increase pressure on the decision makers to draw in the biggest audience possible, diminishing journalistic ethics along the way.)

Anyway, however they get there, those are very large salaries. And it's no wonder since the companies also are raking in very large sums. Last year, CNN reported Fox News made $2 billion in profit, while NBC reported CNN earned more than $1 billion. That is profit, what they earned after expenditures. Not revenue. (Accordingly, last week the Daily Beast reported, "The latest quarterly numbers for Fox show revenues at $3.22 billion." That's north of three billion in revenue JUST FOR THE QUARTER.)

I also happen to know that cable outlets have large budgets to cover black car service for the hosts (which can easily exceed tens of thousands per month) and guests, studios (easily $1000 per hit), and to a lesser degree, makeup for everyone.

If cable companies are spending so much, how is it they are still earning so much? Well, logic doesn't always apply to the cable news industry. Judd Legum explains how it works (or doesn't work, as it were) and it relies in part on double dipping by the networks:

Cable companies pay "carriage fees" to networks for the right to carry their channel. These fees are then passed on to users in their monthly bills. In 2020, Fox News made more money from carriage fees ($1.6 billion) than advertisements ($1.2 billion). ...

According to a survey conducted late last year, about 14% of cable TV subscribers watch Fox News regularly. But every cable TV subscriber pays an average of $1.72 a month to receive Fox News. In contrast, 31% of cable TV subscribers regularly watch FX (owned by Disney) but the channel adds just $0.81 to an average cable bill.

This means, for every actual viewer, Fox News receives a $7.75 subsidy from people who never watch Fox News. This is a higher subsidy than other non-sports channels, like FX ($1.79), CNN ($3.18), and TBS ($2.79), receive.

So, if you have a cable subscription, you are helping to fund the cable companies whether you ever flip to that channel. You probably realize that already. What you might not have known is the extent of your subsidy.

And, so, yet again, I ask: is it worth it?

By comparison, in 2019, NPR's Steve Inskeep, host of Morning Edition, the network's largest audience with about 15 million weekly, made $509,680. That is a very healthy salary (well above the median U.S. income of $68,703), but a pittance compared to Sean Hannity's $40 million. (Hannity's total audience is shy of 3 million a night. So, again, you can extrapolate and compare, as unfair a comparison as it may be.) NPR hosts even leave the studio sometimes to do their own reporting!

One of these days, if we may ever attain ethics and transparency throughout the news industry, maybe we'll have a clearer understanding of how the outlets justify expenditures. Personally, I would love nothing more than to see how nonprofit broadcasting allocates resources next to commercial TV news. In the meantime, I'm going to keep asking: is cable news worth it?