TV stars are paid to get ratings, but salary isn’t always reflected in the viewership

July 27, 2012

Chelsea Lately” may not have a lot of viewers, but host Chelsea Handler gets paid a lot of dough for the ones it does have. Comedy Central’s Jon Stewart is likewise laughing all the way to the bank. And it’s time for CNN’s Anderson Cooper to come out . . . as possibly overpaid.

But not every TV star triumphed at the negotiating table with the network suits. Ashton Kutcher may have nabbed $17 million a year to replace Charlie Sheen on “Two and a Half Men,” but that’s not necessarily a king’s ransom given that sitcom’s popularity (it’s also less than Sheen made). Ted Danson cut CBS a real bargain for his services on “CSI: Crime Scene Investigation.” And Jennifer Lopez and Ryan Seacrest? The folks at “American Idol” got them for a song.

Those are some of the conclusions from a look at the earning power of a select group of television actors and hosts. The Los Angeles Times gathered data on the salaries of these celebrities based on interviews with talent agency representatives, managers and network officials, as well as on published reports.

Next, the annual salary was divided by the total viewers drawn by the star’s show. The quotient reveals what each personality makes per viewer, which provides a rough (sometimes very rough) measure of whether that person is overpaid.

Initial conclusion? Compensation in TV is just as byzantine, unfathomable and illogical as it is in every other field of endeavor, and there are considerable disparities in pay. Experts are not surprised.

“Whoever said there is justice in this world, much less in the broadcasting-cable-radio industries?” asked Doug Spero, associate professor of communications at Meredith College in Raleigh, N.C. “The way the networks look at it is like the way oil companies look at crude. It is the product they need, and they are willing to pay for it to make it all work, and there is still plenty of profit.”

Although talent representatives and network officials volunteered pay information on a background basis — or at least offered “guidance” if they thought a figure was too high or too low — no one dared be quoted confirming anything on record given the sensitivity surrounding the subject. Partly that’s a function of not wishing to rub the industry’s riches in the faces of the 99 percent of Americans who don’t get paid, say, a little less than $1 million for what amounts to less than a week’s worth of work (hello, Ashton!).

But it’s also a nod to how radioactive the issue of compensation is. The number of zeros on a paycheck is, after all, the ultimate signifier of a personality’s worth. And that value — or lack thereof — is nakedly apparent when it’s measured alongside the influence that personality has in terms of ratings.

Although TV stars’ pay may seem sky-high by ordinary-person standards, the money is hardly out of line with what top performers yank down in other areas of entertainment or in the pro sports world. Forbes reported that Tom Cruise earned $75 million for movie roles — and that’s just between May 2011 and May 2012. Baseball players Alex Rodriguez, Albert Pujols and Joey Votto have multi-year deals, each worth well more than $200 million.

TV networks, of course, are built to make profits, but sometimes the deals they sign are head scratchers. Current, Al Gore’s upstart cable channel, paid Keith Olbermann $10 million per year plus an unspecified ownership stake to head its news division and host a prime-time show (the figure was confirmed in court documents). That means Current was paying Olbermann more than $56 per viewer — far and away the highest ratio we encountered. That, along with much-publicized behind-the-scenes feuding, might help explain why Gore and Co. ended up this year firing the host, who responded with a pending lawsuit.

But Olbermann’s case also illustrates why TV compensation is such a thorny issue. Current was willing to take a flier on Olbermann because it’s a struggling outlet languishing near the bottom of the cable lineup, and executives believed the former MSNBC host could help raise the network’s profile. And that he did, although not necessarily in the way they expected.

“The easiest way to build a network that doesn’t have a brand is through a high-profile personality,” said Garth Ancier, formerly the entertainment president at NBC and president of BBC Worldwide America. And generally, “high-profile” means “high-earning.”

As a rule, late-night programs tend to attract young adults, the demographic that most interests big advertisers. That helps explain the relatively hefty paychecks for Stewart as well as David Letterman and Craig Ferguson. Also, these hosts crank out up to 200 shows per year, while a sitcom actor may work on only 24 half-hour episodes (sitcoms, however, have far more repeat value for studios).

Letterman’s fat paycheck also stems from making CBS a bona fide player in late night over the past 20 years, Ancier said. For decades, NBC was the master of that domain.

On scripted shows, an actor who’s part of a large ensemble is likely to make far less than an indispensable star. “Modern Family” is a huge sitcom hit, but Ty Burrell — just one of its featured actors — ranks dead last on the Times’ list, earning just 8 cents per viewer.

It’s the same story on many reality shows, including the No.1-ranked “American Idol.” The exit of Simon Cowell proved that the franchise was not star-dependent. So host Seacrest and judge J-Lo didn’t gross nearly as much as the show’s immense popularity might lead you to expect. Not that Lopez has any reason to complain: The exposure on “Idol” reinvigorated a stalled career and sent her back up the music charts. She recently quit the franchise to focus on her music and movie career.

But let’s face it: TV stars’ salaries are sky-high by almost any standard. And they’re likely to stay that way, especially as intense competition makes network executives do increasingly desperate things.

“As TV fragments, getting any kind of edge can help,” said Brad Adgate, an analyst for Horizon Media in New York.

So don’t worry, Chelsea Handler. In no time, the $16.70 you get for each viewer may look like a sweet deal for your bosses at E!

See how celebrities’ earnings stack up in our celebrity salary chart.

— Los Angeles Times

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