Reality TV's big bottom line: Do these stars deserve such big paydays?
Filed under: People, Media, General Electric , Viacom
There's a little secret in the world of reality shows that may be undermining the very premise of the programs -- and it's not that the shows are as unscripted as their producers would like you to believe.Once thought of as a cheap way to get programming on the air, reality shows like The Hills and The Real Housewives of New York City are facing increasing costs to meet the salary demands of their stars. In fact, some reality-show personalities are earning per-episode fees that approach or even exceed those of actors in scripted dramas or comedies.
MTV's The Hills, for example, is reportedly paying Kristin Cavallari $90,000 an episode, while the program's other top cast members Audrina Patridge, Lauren Bosworth and Heidi Montag are grabbing $100,000 per episode, according to The Daily Beast. (Montag disputed that report on Wednesday, telling Access Hollywood that she has never made that amount and adding, "I don't do it for the money.")
For comparison's sake: Jon Hamm, the actor who has won accolades for his portrayal of advertising executive Don Draper on AMC's Mad Men, earns just $75,000 per episode, according to TV Guide.
The soaring salaries on reality-show sets are starting to cause some tensions, however. In July, after the Real Housewives of New York City stars -- including LuAnn de Lesseps, Bethenny Frankel and Jill Zarin -- signed a contract to earn more than $30,000 per episode for the show's third season, a contract dispute flared. The conflict has apparently been resolved, with Bravo recently announcing that it's started production of the show's third season. Bravo spokeswoman Rachelle Savoia declined to comment, adding that the network doesn't disclose fees or salaries.
"It does pinch the profitability of the shows," says Harold Vogel, the author of Entertainment Industry Economics: A Guide for Financial Analysis and the CEO of investment firm Vogel Capital Management. "Even if you pay a per-episode fee of $75,000 or $100,000, for someone who brings in an audience, those types of salaries can be justified, but I don't know they can go much higher than they can now."
That's especially true when both cable and broadcast networks are battling a major advertising slump. According to TNS Media Intelligence, advertising spending on The Hills fell in the first half of 2009 compared with a year earlier. The show brought in $8.1 million in ad sales in the first six months of this year, compared with $8.16 million for the same period in 2008, TNS tells DailyFinance. MTV officials didn't immediately respond to a request for comment.
The higher costs can have an even greater impact on reality shows because they're typically working with smaller budgets. A scripted drama, for example, may cost $3 million per episode to produce, while a reality show might require a budget of $750,000, Vogel notes.
Combine the high-stakes money paid to reality stars with a personal crisis and the issues become even messier. Just look at Jon and Kate Gosselin of Jon & Kate Plus 8, who reportedly receive as much as $75,000 per episode. Those earnings may go up in smoke along with the couple's marriage. TLC on Thursday suspended filming of the show after Jon Gosselin's attorney barred production crews from the family's home, according to the New York Times. It's to TLC's benefit to sort out the mess, given that the show's ad revenue rose 6.9% to $19.3 million in the first half of 2009, according to TNS Media Intelligence.
There are reality programs that still hew to the winner's pot formula. Show contestants may not earn a hefty salary, but they are in the running to take home big winnings if they're the last one standing (think Survivor and its $1 million payout to the last man or woman on the island.) Dancing With the Stars, ABC's hit dancing program, adheres to a similar formula, with the stars guaranteed bonuses for each week they survive the judges.
Many of the top stars for scripted dramas and comedies still out-earn their reality-show brethren. Charlie Sheen on CBS' Two and a Half Men rakes in $875,000 per episode, while Mariska Hargitay of Law & Order: Special Victims Unit commands a fee of $400,000 per episode. And, of course, there were the stars of Friends who, in 2002, negotiated to earn $1 million per episode each.
At the end of the day, the stars of both scripted and reality shows like The Hills and Real Housewives share a common goal: Their high-flying salaries are dependent on increasing ratings. "Right now it makes sense [for reality stars] to get paid what they're paid," remarks Vogel. "Once the ratings plunge, forget about it."
For comparison's sake: Jon Hamm, the actor who has won accolades for his portrayal of advertising executive Don Draper on AMC's Mad Men, earns just $75,000 per episode, according to TV Guide.
The soaring salaries on reality-show sets are starting to cause some tensions, however. In July, after the Real Housewives of New York City stars -- including LuAnn de Lesseps, Bethenny Frankel and Jill Zarin -- signed a contract to earn more than $30,000 per episode for the show's third season, a contract dispute flared. The conflict has apparently been resolved, with Bravo recently announcing that it's started production of the show's third season. Bravo spokeswoman Rachelle Savoia declined to comment, adding that the network doesn't disclose fees or salaries.
"It does pinch the profitability of the shows," says Harold Vogel, the author of Entertainment Industry Economics: A Guide for Financial Analysis and the CEO of investment firm Vogel Capital Management. "Even if you pay a per-episode fee of $75,000 or $100,000, for someone who brings in an audience, those types of salaries can be justified, but I don't know they can go much higher than they can now."
That's especially true when both cable and broadcast networks are battling a major advertising slump. According to TNS Media Intelligence, advertising spending on The Hills fell in the first half of 2009 compared with a year earlier. The show brought in $8.1 million in ad sales in the first six months of this year, compared with $8.16 million for the same period in 2008, TNS tells DailyFinance. MTV officials didn't immediately respond to a request for comment.
The higher costs can have an even greater impact on reality shows because they're typically working with smaller budgets. A scripted drama, for example, may cost $3 million per episode to produce, while a reality show might require a budget of $750,000, Vogel notes.
Combine the high-stakes money paid to reality stars with a personal crisis and the issues become even messier. Just look at Jon and Kate Gosselin of Jon & Kate Plus 8, who reportedly receive as much as $75,000 per episode. Those earnings may go up in smoke along with the couple's marriage. TLC on Thursday suspended filming of the show after Jon Gosselin's attorney barred production crews from the family's home, according to the New York Times. It's to TLC's benefit to sort out the mess, given that the show's ad revenue rose 6.9% to $19.3 million in the first half of 2009, according to TNS Media Intelligence.
There are reality programs that still hew to the winner's pot formula. Show contestants may not earn a hefty salary, but they are in the running to take home big winnings if they're the last one standing (think Survivor and its $1 million payout to the last man or woman on the island.) Dancing With the Stars, ABC's hit dancing program, adheres to a similar formula, with the stars guaranteed bonuses for each week they survive the judges.
Many of the top stars for scripted dramas and comedies still out-earn their reality-show brethren. Charlie Sheen on CBS' Two and a Half Men rakes in $875,000 per episode, while Mariska Hargitay of Law & Order: Special Victims Unit commands a fee of $400,000 per episode. And, of course, there were the stars of Friends who, in 2002, negotiated to earn $1 million per episode each.
At the end of the day, the stars of both scripted and reality shows like The Hills and Real Housewives share a common goal: Their high-flying salaries are dependent on increasing ratings. "Right now it makes sense [for reality stars] to get paid what they're paid," remarks Vogel. "Once the ratings plunge, forget about it."
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Reader Comments (Page 1 of 15)
10-03-2009 @ 2:42PM
Dad said...
Crap TV and making that much??
Unbelieveable
Reply
10-06-2009 @ 12:09PM
Pinkrosebuds said...
I have to agree with you there, Not worth paying the cable bill for it,
10-05-2009 @ 11:22AM
John said...
Those payments are obscene.
10-05-2009 @ 11:44AM
Dave said...
So don't watch these show or buy their advertisers merchandise. But, guess what - we live in a capitalist society.
10-05-2009 @ 12:00PM
Sarah said...
I know it is a crazy amount of money, but why shouldn't reality stars make as much as actors? I mean a camera is in their face 24/7 unlike other television stars that go to work just like the rest of us. I think the money is deserved. It is the American's who demand this 'crap' TV. We like seeing story's simular to our everyday lives glamourized. It makes us feel like we could be a star too.
10-05-2009 @ 12:00PM
PAT said...
IT IS OBSCENE, BUT SO ARE THE SALARIES OF SPORTS
PLAYERS - JUST DON'T WATCH THEM ALL!!! HA - WE ARE OUR WORST ENEMY!!!!
10-03-2009 @ 2:21PM
Sherri said...
And we're in a recession??? It's crazy that they make more in one to three episodes that the average family makes in one year. How are there still hungry people in the world if people are making these salaries? Don't they care? They could give away half of their income a year and still bring in more than the average family. Please don't expect us to believe it actually takes that much for them to survive! It makes you plum want to quit watching TV and then they would have to cut their salaries back and find something else productive to do with the extra money!!!
Reply
10-03-2009 @ 4:17PM
awill said...
I so agree. It's disgusting that one person can make more money in a week doing something that has no true importance in life than two working parents make in a year working a meaningful job to support their families. I wish they would come do, for a couple hours, what I do every day(I love what I do in special ed.) making what I make(barely 21k/yr) just so they can experience what it is like to truly "work" for a living. Ugh! They are so spoiled!
10-03-2009 @ 4:55PM
Mark said...
Yeah, like give the money to the network executives? They already get well paid. If people are stupid enough to watch these lame shows, then the network gets big money for the commercials. It's all about ratings. If people watch a show, the "stars" of the show should be rewarded.
10-03-2009 @ 5:23PM
Wendy said...
well said!!!!!!
10-03-2009 @ 8:23PM
Lisa said...
Or maybe YOU could give up half or your income?
10-17-2009 @ 5:35AM
alias said...
Well for starters people could quit watching trash like housewives and the hills. If you watch it those tarts are going to be making those 100,000K paydays. It is your choice, Heidi the whore makes big cash for being a big whore or you quit watching that crappy show.
10-05-2009 @ 2:03PM
emily said...
Don't want them making that money? Don't watch the show. When funding dries up the show will go away.
10-05-2009 @ 10:02AM
Jon said...
We might be in a recession, but these people sure as hell aren't.
10-05-2009 @ 11:49AM
Actually said...
I surely hope you're referring to the television "actors" and not the people that are on the reality shows. It's the actors and actresses that are being paid a RIDICULOUS amount of money to be on television and in the movies...while the rest of the country is hurting for money. They get paid millions for stupid entertainment then WHINE that WE are causing "global warming"....a downright FALSE claim that will further HURT us, the "average people" in society if Cap and Trade is enacted...making US pay several thousands of dollars a year extra in outrageous taxes (including a gas tax and fuel tax that companies WILL pass on to us, the consumers). All this while those "millionaires" get to KEEP whining while "us" that PUT them there lose even more jobs!! Why aren't THEY suffering first is what I'd like to know!!
10-05-2009 @ 11:23AM
Pam said...
Gosh...Charlie Sheen could help pay off the deficit...didn't know that TV paid that much...but I guess I did know about the Friends pay checks but had forgotten...thanks for the reminder...lol
10-05-2009 @ 11:43AM
Thnkboutit said...
Who's business is it anyway? Who cares?! If the employers choose to pay them $$$ then so be it. If you get upset on how much they make, then it's time to learn a new trade. Life is not about being fair. It's about survival. If you like the lifestyle they live. Then make your own "change" & do something about your life. Don't complain about how much better off someone else is & how much profit a company makes. That's what makes America a great capitalist nation...However, if you are the socialist type & believe that you deserve the same as the next guy...then you belong in another country & good luck begging for your next handout.
10-05-2009 @ 12:10PM
Sean said...
So because a company is WILLING to pay random people to be on a TV show that kind of money, they should give half of it to lazy slobs who don't earn a dime of their own? You must have voted for Obama, because that's Socialist behavior. I don't think those people are worth that much, but more power to them if they can get a company to pay it. Thank god for Capitalism.
10-05-2009 @ 11:59AM
chris said...
Are you an idiot? Do you have any idea how much money Charlie sheen donates to charity each year? Why dont you do some research before making stupid remarks. Let me guess, your an obama supporter arent you?
10-05-2009 @ 12:01PM
votarus4 said...
Okay, sure. You trade them for their life.
Let's see, first, give UP your husband and children because the chances of you having that in this business are less than 10%. Ready to face life alone? Yes...then let's continue.
Fund yourself for all those years you are NOT making money. It's a long, hard road for a lot of people before they can get even remotely close to the exposure or these salaries (we won't count children of stars among them...so Charlie Sheen is still a schmuck). Want to beg for peanut butter, Ramen noodles and friends' sofas? Still with me?
Okay...so now you're famous and you're making all that money! And you have to spend half of it keeping crazy people away from you, or protecting the family you're hoping you can keep, or you've become so "recognizable" in a role that now you can never do what you love again.
Remember that when these shows are done, these people don't have work for a very, very long time.
Next thing you'll say is how jealous you are of someone getting a large life insurance pay out. Wanna trade with them, too?