Outdoor Channel CEO Roger Werner negotiated a new employment deal with the hunting and fishing network in February, a deal that could net him more than $5 million annually if he hits specific subscriber and revenue growth targets.
According to the agreement, filed with the Securities and Exchange Commission Feb. 7, Werner’s new deal – signed Feb. 1 -- will bump his annual base salary from $300,000 in 2007 to $450,000 in 2008. Werner’s base salary will be raised again to $500,000 annually effective Oct.16. In addition, the CEO is eligible for a performance bonus of not less than $225,000 in 2008 and $250,000 in 2009.
But the real money will come if Werner, who joined Outdoor Channel in 2006 after stints as CEO of Speedvision (now the Speed Channel), ESPN (opens in new tab) and Outdoor Life Network (now Vs.), successfully negotiates pending carriage deals and manages to significantly grow the channel’s subscriber base.
According to the document, Werner will receive a bonus of up to $950,000 if the channel successfully negotiates seven carriage deals at terms favorable to the network. The network did not reveal which operators they are negotiating with, but said one of the deals has been already completed – most likely its October agreement with the National Cable Television Cooperative.
On a conference call with analysts Feb. 1 to discuss third quarter results, Werner said that the network was close to deals with several operators.
“Don’t be surprised if we announce that we’ve done some more affiliation deals and renewed our relationships with people like DirecTV or Comcast or Cox or other large companies,” Werner said, according to a transcript of the conference call. “Those discussions are underway as I say, and I characterize them as late-stage and, in some cases, very, very late-stage. But to get them papered, to get the ink on the signature page, it could take a week. It could take three months. So we’re moving along, but we’re feeling good about the progress we’re making.”
Werner also stands to reap another $1.5 million in bonuses if he signs on 5 million additional subscribers and $2 million if the network adds 10 million additional customers. Werner would receive an additional $500,000 for every 1 million subscribers the channel adds above 10 million.
According to Nielsen Media Research estimates, Outdoor Channel had about 30 million subscribers at the beginning of February. The network has been actively trying to boost those numbers, launching a plan in March to reduce license fees paid by operators to carry the channel in an effort to gain more carriage. At the time, Outdoor Channel said that although its license fee revenue would be reduced – they said in SEC documents that most of their deals prior to the new plan were for less than 10 cents per subscriber per month – it would more than make up for the deficit in additional advertising revenue.
According to Werner’s new employment deal, he has an incentive there as well – the CEO stands to reap a cash bonus equal to 5% of the annual increase in advertising revenue compared to the prior year for both 2008 and 2009.
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