Megyn Kelly has now parted ways with NBC as that contract to do shows with them didn’t quite work – and she’s getting the full value of the 3 year contract to leave too, another $30 million for not working there. The original contract was an eye popping $69 million which is one thing but given that the contract’s about half way through and she’s leaving she still gets that other half of the loot – that $30 million.
There will be those upset with this, why such payments for failure? One reason is that Megyn’s working in an industry where failure can happen:
Kelly is halfway through a three-year contract worth a total of $69 million — an eye-popping sum even by the inflated standards of television news.
Bowing to the terms of the contract, NBC will pay Kelly the remaining sum of money, believed to total about $30 million, two of the sources said.
Well, why is this? When the thought that the contract was going to end first came up a few months back we pointed out why there are these “failure payments“:
Two or three money failures is enough to kill any career as a movie star, three failed albums will kill a recording contract. That’s how we know that Hollywood and the music biz are thoroughly capitalist businesses. TV perhaps not quite so much in image but as we can see not meeting ratings expectations does lead to a defenestration.
So, what happens in contract negotiations? You want to tempt me away from my studio, label or channel/network? Sure, you’re going to have to pay me more than I’m getting. But you’ve also got to give me that cushion. What I would have made if I’d not taken that risk of leaving where I’m good to move up to where I might be incompetent. And that’s why pay offs in contracts that don’t work out.
Because the payoffs were written into the original contract so as to assuage if the step up didn’t work out. As Karl Marx pointed out, action creates its own reaction. That kill the failures attitude of a truly vicious industry has created that cushion of the leaving payment in the event of failure. And without such assuagement people wouldn’t take the risk of the move upwards in the first place.
The Peter Principle, the world just makes more sense when we assume it’s true. As here – Megyn Kelly’s getting $30 million because she’s not very good at this higher level job. And $30 million was the contract price of getting her to take the risk to find that out. Capitalism red in tooth and claw that is.
The reason Megyn Kelly’s getting $30 million for failure from NBC is because it was always likely that Megyn Kelly would fail at NBC.