The disruption in the entertainment industry has taken on new urgency for hundreds of mid- and senior-level executives in the past year.
The voluntary buyouts accepted last month by 400-plus long-serving employees of 21st Century Fox are the most visible example of a generational transition under way in the showbiz workforce. Other companies — including NBCUniversal, Warner Bros., Turner, Viacom, and Disney — have recently taken similar steps to prune their payrolls of positions that have become less vital or even outmoded in the new world order.
All of this means there is a wave of seasoned, well-connected execs flooding into the job market. These are people who came up the ranks in the ’80s, ’90s, and early 2000s — a time when TV, particularly cable TV, was flush with profits and promise.
Fox’s goal is to save $250 million in staff overhead costs next year. Discovery Communications is looking to slash $40 million-$60 million in personnel costs with a voluntary buyout program disclosed last month. Inevitably, such cuts hit hardest among older executives with long tenures, who pull down bigger salaries than their younger colleagues.
Fox’s buyout was specifically targeted to those with 15 years or more service under their belts; that set the age parameters from the get-go. The program was voluntary, but the execs knew that layoffs would follow if Fox didn’t get enough takers for the buyouts, which by all accounts were extremely generous (and included confidentiality agreements).
|“Fox Sports lost many experienced hands in a year when it is tasked with producing the 2017 Super Bowl.”|
In economic terms, show business is experiencing a classic Joseph Schumpeter scenario: Creative destruction of existing hierarchies and jobs frees up resources and makes room for companies to be innovative and adapt to changing times. When a half dozen MVPDs dominate the U.S. pay-TV distribution landscape, it’s hard to argue that a company needs dozens of people working in affiliate sales and marketing. Or that it needs dozens of syndication sales executives to serve the new mega-size station groups like Tribune, Sinclair, Tegna, and Media General. (Both of those were areas hard hit in the Fox buyouts.)
In human terms, it’s a transition that can be painful, liberating, and infuriating — usually at the same time. The executives who exit are flung headlong into the real-life cliché of having to reinvent themselves. Meanwhile, those who are left behind are forced to reorganize on the fly to absorb the most urgent duties. One division, Fox Sports, lost many experienced hands in a year when it is tasked with producing the 2017 Super Bowl — an all-hands-on-deck effort if ever there was one.
Adam Sanderson left Disney recently. He worked in marketing and brand management for Disney Channel and ABC, and spent his last two years as senior VP of corporate communications. After a few weeks as a free agent, he admits that it’s daunting, but also invigorating, to figure what he wants to do next.
“While it’s never easy to leave a company, especially one that has been my home for 19 years, the prospect of doing something new is incredibly exciting,” he says. “The skill set and relationships I have developed over the years have prepared me to take the next step in my career.”
The executive exodus from media conglomerates amounts to a massive transfer of institutional knowledge from corporations to individuals. In this case, knowledge isn’t so much power as it is capital. It will be interesting to watch how that capital is deployed — some of those exiting may benefit from a swell of entre- preneurial shingle-hanging — and how acutely the loss is felt on the corporate side of the ledger.