Talking is cheap? Not for the biggest stars of the podcast world.
In recent months, several wildly popular podcast personalities have signed mega deals with audio platforms that promise them payouts in order of A-list actors.
These include controversial comedian Joe Rogan’s multi-year, $250 million deal with Spotify; Alex Cooper (host of “Call Her Daddy”) signs deal worth up to $125 million with SiriusXM; and the football-famous Kelce brothers sign a deal for their ‘New Heights’ show with Amazon’s Wondery worth more than $100 million. Wondery also landed an $80 million deal for Dax Shepard’s “Armchair Expert,” and SiriusXM signed the trio behind “SmartLess” — Will Arnett, Jason Bateman and Sean Hayes — to a contract worth more than $100 million.
All of these agreements, which have a term of approximately three years, include exclusive distribution and advertising sales rights. In some cases, they cover other areas, such as rights to develop and sell merchandise and first-look options for new content. Each of these podcasts was in the top 20 US shows on Spotify in 2023.
“It’s clearly a very healthy sign for the industry that these checks are being written for great talent,” said Josh Lindgren, head of CAA’s podcast division, which brokered the SmartLess deal with SiriusXM.
One factor behind the new war for podcast talent with mass appeal was Spotify’s recent change in strategy. When the audio giant got into podcasting in 2019, it spent hundreds of millions of dollars buying up studios and tech companies, and striking deals with big names like Rogan, Cooper and Shepard to make their shows available exclusively on Spotify. Last year, the company decided to end its platform exclusivity for podcasts because those deals underperformed in ad sales, according to CEO Daniel Ek. Plus, podcasters don’t like to focus on one service. “The creator clearly wants to be present on many different platforms and have as large an audience as possible,” Ek told analysts earlier this year.
In February, Spotify re-signed Rogan to a non-exclusive distribution deal, with “The Joe Rogan Experience” now available on competing services like Apple Podcasts and YouTube, but SiriusXM stepped in to acquire Cooper’s “Call Her Daddy,” and Wondery struck a pact with Shepard. from “Armchair Expert.”
“When the [podcast talent] deals expire, other companies have to invest to keep up,” said Michael Rueda, partner and head of U.S. sports and entertainment at global law firm Withers. “And they have to pay market rates.”
During the coronavirus crisis, some companies made “irrational” exclusive podcast deals with celebrities who had no track record as podcasters, says Dan Granger, founder and CEO of audio advertising agency Oxford Road. Case in point: Spotify’s pact with Meghan Markle and Prince Harry, which ended after the couple produced just one series.
Now, Granger says, companies are modeling how the deals will pay off based on historical data. Podcasting continues its upward trajectory: After a slowdown in 2023, when US podcast advertising revenue rose just 5% following a pandemic-driven surge, the sector is expected to return to double-digit growth this year , with an increase of 12% to $2.16 billion. This is evident from a study by PwC for the Interactive Advertising Bureau.
The latest nine-figure deals, while they seem pricey, are rooted in solid projections of the advertising dollars they could generate. “These are tested shows – these are not big risks these companies are taking,” says CAA’s Lindgren. He notes one downside to the trend: Because podcast companies spend a lot of money on big shows, it has reduced opportunities for smaller, lesser-known podcasters.
SiriusXM, for example, is diversifying its podcast selection as its biggest star, Howard Stern, may be ready to hang up his hat. Stern has been the highest-paid radio personality for years, reportedly earning more than $100 million a year under his long-term SiriusXM contract. Stern, now 70, first signed with satellite radio in 2004; his current contract expires at the end of 2025. Regarding speculation that Stern may not renew, SiriusXM content chief Scott Greenstein said during the company’s April earnings call that if a “single talent” chooses to retire, “you come up with a strategy of what is your current demo and your target group and you look at what fits best at what time.”
A popular podcast can create a halo effect, giving distributors a way to bring other programs to listeners. “New Heights,” which debuted at the start of the 2022-2023 NFL season, quickly gained a fan base for the Kelce brothers’ comedic banter about football, their daily lives and topics spanning everything from PB&Js to UFOs.
And of course, it helps that Travis has been very much in the public eye as Taylor Swift’s boyfriend.
“’New Heights’ is, at first glance, a sports podcast, and sports is a highly listened to category,” said Jen Sargent, CEO of Wondery. “But it has become a cultural phenomenon – they are in that cultural zeitgeist.”
(Pictured above, left to right: Joe Rogan, Alex Cooper, Jason and Travis Kelce)
