Why your local news anchors are smiling
“Non-competes are flat out unfair…”
Your local news anchors and reporters could be forgiven for smiling more than usual this week, because they may no longer be subject to a clause in their employment contracts that hinders their ability to move to a different station and make a lot more money in the process.
Nearly all on-air staff and some behind-the-scenes news producers are required to sign employment agreements with their stations. Those contracts typically run two or three years and lay out things like salary, immoral behavior that could void the contract, and the ever-present non-competition clause.
That clause bans the employee from going to work for an in-market rival for a period of time after the employment contract ends, typically for one year. For example, let’s say Station KAAA has an opening for a main anchor. Across town, the competing Station KBBB has a weekend anchor that the first station would like to hire and pay a lot more money to make the main anchor. Assuming the anchor is near the end of his or her contract, the anchor still could not cross town to work for KAAA unless the station agreed to wait a full year. That means either the anchor sits at home for a year with no pay, or KAAA agrees to pay the anchor for a year without actually going on air. The economics make both scenarios unlikely.
The anchor thus loses a great opportunity to be promoted to a more important role and loses a chance to make more money. The anchor likely signs a new contract with the original station or looks for an opportunity out of town, forcing them to move.
TV news staffers hate non-compete clauses because it robs them of career opportunities and potential raises.
From station management perspective, non-competes have been justified with the following line of thinking. We hire people early in their careers, we invest in them, we hire on-air coaches for them, and we spend thousands if not millions of dollars promoting them on air to viewers. And just when they become valuable employees for us, they want to cross the street to another station and compete against us?
You can see why this will have a big economic impact on TV journalists and the stations where they work. Stations are going to have to pony up more money to keep their valuable staff or risk losing them to the competition. Either way, the anchors and reporters stand to make a lot more money.
News people despise non-competes
I asked my TV news colleagues on Facebook this week what they think about non-compete clauses.
· A former anchor said, “Non-competes are flat out unfair to the employee.” “If a local competitor sees a greater value in that person than the current employer, the employee should have the right to walk across the street.”
· Another former anchor said, “If you want (an) employee to stay, pay them, just like every other industry.”
· A former print sports reporter: “Sounds like the installation of the transfer portal. Overdue.”
· A former anchor/reporter: “So this means a main anchor could do their regular 10pm show and then anchor the competition’s newscast the next day? That would be hilarious – I look forward to the first time it happens.”
My take
Non-compete clauses affect a lot more industries than TV news, so this FTC decision is likely to be appealed in court. Keeping in mind I spent 30 years as a news manager, here’s my take.
For very top talent, a non-compete clause makes sense and is fair. Stations ought not to lose a top anchor after investing so much in their development and promotion. BUT stations should be willing to amply compensate those top people for agreeing to a non-compete clause.
I also think stations have abused these clauses for lower-level staffers. It makes no sense to hire a newbie reporter or producer, pay them typically low beginner wages, and force them to sign a non-compete clause that limits their ability to advance their career without having to move their family to a different market.
Non-compete clauses have suppressed wages for worker bee journalists for way too long. If they go away, that makes a career in TV news a lot more attractive and helps pay staff members a fairer wage.
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Expert opinion from an expert! Thanks, Dave
Dave, you mentioned news producers. Holding on to them was a big problem. There are few people, especially experienced ones, who want to be producers. Before producers were put under contracts with no-competes NDs would often “steal” them from another station in town where they were paid less. As an ND I was on both sides of that situation.