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Five Thoughts on Tony Romo’s Record-Breaking CBS Deal

The announcing contract, which will pay Romo about $17 million annually, affects the NFL rights bidding war, the sports media landscape, and more

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CBS has signed Tony Romo to a deal worth about $17 million a yearfive times what he was making, and the highest amount ever paid to an announcer, even when adjusting for inflation. The money is incredible. But what’s really interesting is why CBS coughed it up. Here are five thoughts:

1. The most common “comp” for Romo’s bidding war was the one John Madden enjoyed in December 1993. Madden was offered the no. 1 job by three networks (one offered to throw in a train car to ferry him between games) and wound up being paid more by Fox than any player in the NFL at the time.

Here’s the difference: The networks pursuing Madden in ’93 had just signed new NFL rights deals. Romo’s suitors are trying to sign new rights deals. They regarded hiring Romo as their opening bid. By becoming a free agent before the negotiations began, Romo had unbelievable timing. It was the kind of superb luck he never quite had as a player.

Romo’s two bidders, CBS and ESPN, were desperate for different reasons. For CBS, re-signing its NFL deal is no less than an existential imperative for the network. CBS has to make a new deal without Robert Kraft pal Les Moonves, who left after accounts of sexual harassment and assault. Moreover, the newly merged ViacomCBS is tiny (worth about $25 billion) compared to competitors like Disney and Comcast. “With Moonves’s departure, they need to show they’re still in business,” said one source briefed on the Romo negotiations.

Awash in Star Wars and Marvel money, meanwhile, ESPN and Disney aren’t quite so desperate. But they have a huge shopping list for the upcoming NFL negotiations. They want to add playoff games (they currently have one per year); elbow their way into the Super Bowl rotation; add flex scheduling for Monday Night Football; put Sunday- or maybe Thursday-night games on their schedule; and continue the larger “reset” in league relations their executives have bent over backward to pursue.

Plus, ESPN wanted Romo to make Monday Night Football a more watchable TV show. “I think they believe [Romo] helps them with everything NFL-related,” the source said when ESPN was still in the hunt.

2. A week ago, Romo wasn’t a lock to return to CBS. “Bob Bakish”—the president and CEO of ViacomCBS—“became heavily involved in the elevation of the money,” the source said. “He and Shari Redstone”—ViacomCBS’s chairwoman—“perceived it as a must-keep in order to maintain their position on re-upping their NFL rights.”

Romo’s salary climbed to $17 million in the past week, the source said, allowing CBS to sign him before their exclusive window closed on March 3.

3. So CBS signed Romo. The thing is, that won’t guarantee the network a new NFL rights deal. The NFL, which has maximum leverage over its partners in the dying days of network TV, isn’t handing out deals because it likes how Romo can predict plays.

The better way to think about CBS signing Romo is as a network finalizing its pre-negotiation preparations with style. CBS is crossing t’s and dotting i’s—“improving the micro things to get the macro transaction they want,” the source said.

4. Announcer salaries are hard to pin down. But CBS can’t sign Romo for twice what his A-team network counterparts reportedly make and not expect it to have side effects. The biggest is that every announcer who considers themselves Romo-adjacent is going to ask for a raise. Like, on Monday. Romo is akin to a free-agent quarterback who just reset the market—except TV networks don’t have salary caps. “If you think about Troy Aikman or any of those folks, it becomes, ‘Hey, what about me?’” said the source.

Because of the sheer number of egos at ESPN, signing Romo would have presented a massive internal challenge for president Jimmy Pitaro. If ESPN had paid $15 million or more for Romo, why wouldn’t, say, Kirk Herbstreit ask for a bump? How would Romo’s deal have affected Stephen A. Smith, who just signed to be ESPN’s highest-paid personality by declaring “I consider me the American Dream”? Pitaro lost an announcer but avoided a massive headache.

5. A second side effect of the Romo bidding: Network executives are remembering the importance of developing a no. 2 analyst. In an ideal world, every network sports chief would have a no. 2 ready to be promoted if the no. 1 announcer switched networks, left to be an NFL team president, or simply ran out of juice, like Phil Simms. Once upon a time, John Lynch and Matt Millen were solid no. 2s—essentially, their network’s backup quarterbacks.

What the Romo bidding revealed is that none of the networks have no. 2s they’d feel completely comfortable promoting. (CBS has Dan Fouts; Fox has Charles Davis; ESPN and NBC show one game per week.) That’s why two networks have bent the knee to Peyton Manning; why executives await the retirements of would-be announcers like Drew Brees, Philip Rivers, and Greg Olsen; why Jay Cutler—whom Fox hired as a no. 2 before he returned to play for the Dolphins—may get another chance at a being on a TV show that doesn’t star his wife.

For all the talk about the $17 million, the great Romo bidding war will be remembered by the networks as a cautionary tale. When you don’t have a bench, you have to overpay the starters.