Stephen A. Smith's New $100 Million Contract With ESPN Is First, Last of Its Kind | Bobby Burack

Stephen A. Smith agreed this week to a five-year, $100 million new contract with ESPN, as the New York Times first reported. Previously, such a seismic investment in one television talent would set off a domino effect for further negotiations. A new benchmark for commentators, if you will. However, don't expect that to be the case. Smith might be the last of his kind – a star whom television executives created.

Today, Smith is known as the boisterous sports commentator turned potential presidential candidate. On Thursday morning, he had the fourth-highest odds to be the 2028 Democratic nominee. His new contract will likely derail those talks. Yet it wasn't too long ago that Smith was unemployed and begging a network – any network -- to give him another chance.

In 2011, Smith returned to ESPN, which had previously cut him, as a columnist and local radio host. Before returning to the company, ESPN told him that it would not use him on television, believing he was not good enough. Two years later, Smith's long-time friend, Skip Bayless, used his influence backstage to not only give Smith a chance on television but to sign him as his full-time partner on "First Take," a "Hannity & Colmes"-style sports debate show.

Over a decade later, Smith is set to become ESPN's first $100 million investment with a new annual salary of just over $20 million, an $8 million-a-year increase from his last contract in 2019. His new salary puts him in the same realm as MSNBC host Rachel Maddow, who makes around $25 million annually.

But as television commentators clamor to be the next Stephen A. Smith, they must understand the context of his leverage. In 2015, ESPN and its parent company handpicked Smith to be the face of the company, propping him up and depicting him as a respected celebrity reporter who chums with rappers and NBA players. In 2020, following the death of George Floyd, Disney then positioned Smith as an advocate for the black community, leading to a memoir that contained a precarious number of falsehoods about his own backstory.

To his credit, Stephen A. played the roles well. He is the biggest television star in sports media today. Sources tell OutKick that a point of emphasis during his negotiations was data points that show ESPN's ratings increase above the norm when Smith is on television, particularly among young black men.

Put simply, the difference in star power between Smith and any potential replacement for him is staggering. Have you ever heard of Kimberley Martin, David Dennis Jr. or Monica McNutt? Those are the types of names ESPN would have considered had it needed to replace Smith on his daily studio show, "First Take."

NEW ORLEANS, LOUISIANA - FEBRUARY 07: ESPN featured commentator and executive producer Stephen A. Smith on set ahead of Super Bowl LIX on February 07, 2025 in New Orleans, Louisiana. The Philadelphia Eagles and the Kansas City Chiefs will face each other on Sunday. (Photo by Aaron M. Sprecher/Getty Images)

There was a time when the four-letter brand had enough jet fuel to make a star of anyone it chose. ESPN used to tell viewers who the star was, and those viewers nodded along. That is no longer the case. Since Smith, ESPN has repeatedly failed to establish any real individual stardom. The company tried Jemele Hill, Bomani Jones and Maria Taylor. Each time, Smith only gained more leverage over the company.

ESPN has since turned its focus to Mina Kimes.

To make up for this lack of star power, ESPN agreed to a license agreement with internet sensation Pat McAfee in 2023 for just under $20 million a year. ESPN used to build Pat McAfees. Now, it has to buy Pat McAfees. And he won't be the last. The next big thing at ESPN is more likely to be someone podcasting on the outside than someone in-house. (Barstool's Big Cat?)

While ESPN deserves criticism for the type of people it has tried to make into stars—bratty, entitled commentators who look down upon ordinary sports fans—the reality of the changing television landscape has made the task formidable. ESPN is not the only television network struggling in this category. Networks like CNN, MSNBC, ABC, CBS, and NBC have also shown no ability to create new stars over the past decade.

The Fox News Channel, which shares common ownership with OutKick, would be the expectation, as names like Tucker Carlson, Bret Baier, and Jesse Watters have become household names since 2015. Granted, Fox News doesn't rely on the same casual viewers as its cable competition. ESPN, mostly, does.

Television executives are not the kingmakers they were. Americans don't want to be told who to follow anymore. They want to choose who to follow. And they certainly have their options because of the oversaturation of media content online. Consider that even at $20 million-plus a year, Smith will make less than Joe Rogan, Alex Cooper, and Ben Shapiro do on their own.

Thus, believing Stephen A. is one of the few remaining monocultural commentators left on television, ESPN caved to what should be a regrettable contract by the time it expires. Investing $100 million in a 57-year-old television commentator for his service on a diminishing cable channel is not, on the surface, smart business.

In addition, ESPN will receive much less from Smith moving forward. Sources tell OutKick that he will no longer be a regular on ESPN's "NBA Countdown" and will cut down his appearances on "SportsCenter." This more lax schedule will allow him to focus on his independently-owned podcast and appearances on cable news networks like NewsNation, where he is a regular with Chris Cuomo and Bill O'Reilly.

For Smith, that's great. For ESPN, paying someone over $20 million a year to host a morning television show that still averages around 400,00 viewers a day is not quite as great. The continuation of cord-cutting will likely see that average diminish significantly by 2030, the final year of Smith's deal.

In return, ESPN's investment in Smith will likely make negotiations tougher for his co-workers. Just two years ago, the company weeded out its talent division by dismissing around 20 on-air employees in an effort to shed $30 million worth of salaries. Evidently, ESPN viewed Smith as more valuable than those 30 former commentators combined. 

Again, that might say more about the others than Stephen A.

In the meantime, sources say Smith will focus the next five years on strengthening and expanding his production company, which he recently renamed Straight Shooter from Mr. SAS Productions. Smith likely views this as his final full-time deal with Disney.

Even he knows his new $100 million contract is not only the first, but also probably the last of its kind.

Related: Stephen A. told Clay Travis in 2023 he expects to be ESPN's highest paid personality.