Kara Swisher and Scott Galloway bet $30 million they know how to run a podcast better than you

I find the likelihood of Swisher earning $100 million over her slate of podcasts (but let's be honest, mostly Pivot) to be low, but I agree that the model is interesting. By making her take home a percentage this becomes essentially its own media biz running with support from Vox. I agree that's a model we'll see more of in the future for media stars.

The test here is actually for Vox. Will they be able to retain mercurial mercenary talent via effective provided services AND will they be capable of giving enough decision making and control to talent in order to make them feel like this works.

I think this is a particularly good test because you have Swisher (very public and vocal about How Things Work for her) and Galloway(sp?don't care) who thinks he knows how all business, and everything else, works. (Boy do I disagree!) Two people for whom there is a very high chance they think they know how their show should work better than Vox. This is not them making use of Vox's expertise, it's Vox depending on them to do their own thing and continue to be good at it.

If a company like Vox can make this work with this pair of podcasters it opens up a new frontier in making journalism work. Move your private newsletter to run under a major media org, take a percent of the subs instead of all of them, get an editor, real healthcare, and liability insurance.

If this operation turns out in a messy divorce it is a sign this is high difficulty mode with the biggest payoffs locked behind big unreliable egos. It's not impossible to make that work, TV and film have done so for decades now, but it is very difficult and maybe not something most non-TV newsmedia is prepared to do.

Make your biggest producers shareholders in their own work is not a new idea, but it is probably a good idea that news media has mostly ignored. I am very interested to see where this goes.

That said, it isn't great for line journalists who aren't famous who will, as a result, get fundamentally less resources out of their organization. Previously star journalists got underpaid & some of that earnings they didn't see went to non-star journalists who still did important work. But that model isn't working & instead all the journalists are getting fired

Arguably, the true problem is someone is extracting a lot of capital from media; and it isn't journalists. Better that it be mostly one journalist? I dunno man. If it keeps the doors open it is worth exploring IMO.

The big question on my mind if this model goes further than one deal: does the pipeline for creating great star journalists remain? Will there be a followup generation of star journalists who also get percentage deals? Or does this die w/the boomers like every other opportunity to make a living?

A funny (haha, not weird) thing about this is that they shopped the show around and the offers were around 40 million. Now... 40m is not 70% of 100m. So the Pivot group thinks either everyone was ripping them off or that they are worth nearly twice as much as anyone is willing to value them at.

We'll see how it pans out, but as a long-time VC-follower Swisher should note that apparently the ego-driven value of her and her podcast partner nets out somewhere around 30m. That's, as NYT puts it, the amount they are betting on themselves. Will that prove out? Only time will tell.

Final note: what happens to the media companies that can't attract star journalists in high enough numbers... or at all?

Competitive offers came in with guaranteed payments of about $40 million on four-year contracts, Ms. Swisher said. But in the end, they agreed to re-sign with Vox Media, with an unusual twist.

The deal does not carry any guarantees or upfront cash. The payday for Ms. Swisher and Mr. Galloway is instead based entirely on how much money their podcasts generate. Vox Media will pocket about 30 percent, while the co-hosts split the rest.

At the high end of back-of-the-envelope calculations — Mr. Galloway said the podcasts could generate $100 million in revenue over the four years — the pair would stand to make about $70 million excluding some costs. (A portion of the costs for their slate of shows is split among the hosts and Vox Media.)