Thursday, December 2, 2010

Mailbag: Buyouts vs. out clauses

Grape,

I sent my first round of resume tapes out to about half a dozen of my "ideal" stations last week. I explained in my cover letter that I am under contract until summer 2011. A few days later a News Director called me and asked about contract status and if I had any outs. I explained that I didn't and I had a buyout. His interest seemed to cool very quickly at that point. I didn't know if I should say that I'm willing to buy myself out of my contract because I am concerned that throws up red flags with future employers. At the same time I'm worried about being too tentative and missing an opportunity with a station that's looking to fill a spot right now. Any suggestions on how to handle this one?

Well, since we were just talking about out clauses, let's get to this question first. Out clauses and buyouts are two very different things.

A buyout is technically known as "liquidated damages" which is a nice way of saying "breach of contract." What this means is that the station has invested in you with promotion, training, etc. (even if they haven't) and you have cost them money by leaving early. At many stations the amount of damages can be staggering, especially if you're not making much money.

It bears repeating that you really need to have a lawyer look at every contract, and this clause can be a killer if you need to leave for something other than another job. Let's say mom or dad get sick and you need to move home... wanna pay several thousand dollars for that privilege?

As for why the ND's tone changed in this case, well, when you admit you'll use a buyout you're telling a manager that you have no qualms about breaking a contract... and if you did it to someone else, you'll do it to your new station. Now some NDs don't have a problem with this, and occasionally you hear of a station willing to pay the liquidated damages to hire someone. But tread carefully in any discussions about breaking contracts.

All the more reason to have an out clause in your contract. You're not breaking a contract when using an out clause, but in the eyes of a News Director you are when you use a buyout.


Grape,

How many years do you need to spend at your first job? Some people tell me three years, but I know of people who have moved on in one.


Well, it's different for every person and the situation at every station is different. Personally, if you don't "get it" in three years you probably never will. Most rookies make a quantum leap between day one and the end of the first year, providing they are working in a good mentoring environment and getting help from management and the veterans. Others get thrown into the newsroom and never hear a word.

At some point in your first job the light bulb will go off, the clouds will part and the ray of sunshine will light up your career. You'll realize that your work has reached a certain level and you're not going to get any better working at your current station.

But that focal point is different for everyone. The key to a successful first job is to get feedback while watching the work of people in bigger markets. Combine those two things and you'll move up the ladder fast. Nothing wrong with looking for a new job after one year.

And please, rookies, don't sign a three year contract for your first job.


Hi Grape,
Do you think broadcasting is in better shape than it was a year ago?


Yeah, I really do. I think 2009 was the year of the shakeout. We're not seeing those mass layoffs anymore, and that four billion politicians spent this year was a nice infusion of capital.

The business will still never reach the levels it did years ago, but at least things are staying afloat.



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