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The Booming Business of Ellen DeGeneres: From Broke and Banished to Daytime's Top Earner

This story first appeared in the Aug. 23-Sept. 5 issue of The Hollywood Reporter magazine.

"Let's Have a Little Fun Today" pipes through Ellen DeGeneres' 300-seat theater on the Warner Bros. lot, which on this mid-May afternoon feels more dance party than soundstage. The host pops a breath mint into her mouth and comes bounding out to near-deafening cheers. A sea of middle-aged women is on its feet, arms thrust in the air. The shrieks grow louder as she makes her way toward the audience, waving, nodding and smiling as big as her fans are.

Ellen's 82-year-old mother, Betty, a staple at the show, turns to look at the crowd assembled. "Every time," she notes, shaking her head as if she can't believe the excitement her daughter can generate. "Every time."

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Those crowds of enamored women (and, yes, a few scattered men) have remained fiercely loyal for what is an extraordinary period in the world of daytime television. On Sept. 10, the Telepictures talk show will enter its 10th season on air, a milestone few station managers predicted DeGeneres would reach back in 2003, when she was spiraling from her courageous -- and, for a three-year period, career-destroying -- decision to publicly reveal her sexual orientation. At that time, Sharon Osbourne's new (and long-since-canceled) daytime effort was the big draw, with DeGeneres' entry of limited interest. "They said, 'Who is going to watch a lesbian during the daytime?' " recalls DeGeneres, 54, of the sales process. " 'You know these are housewives and mothers, right? What does she possibly have in common with them?' "

As it turns out, plenty. In the aftermath of Oprah Winfrey's daytime departure, DeGeneres' feel-good shtick attracted an average of 3.2 million viewers last season. And those viewers -- more female, upscale and highly educated than those for the average talk show -- are as blue chip as the advertisers courting them. More impressive, the family-friendly show (no who's-your-daddy DNA tests here) raked in $87 million in spot ads in 2011, making it the second-highest-earning syndicated series behind Winfrey's in her final season, according to Kantar Media. Reports have put the show's annual profits in the $20 million range.

That's in addition to DeGeneres' earnings from the show, which, when pooled with those from her production company, record label and best-selling books, total about $50 million a year. Included in that, too, are the rich spokesmodel deals she inks with such companies as CoverGirl and JCPenney, which famously pulled ads from the "coming out" episode of her eponymous ABC comedy in 1997. (More recently, the retail chain stood by its star after the anti-gay One Million Moms group called for a boycott.)

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"Being able to be free -- literally -- and to express herself in a way that she can be 100 percent truthful with the audience has allowed them to fall in love with her," says Winfrey, who guest-starred as DeGeneres' therapist in that infamous episode of Ellen. "Honest-to-God truth: I don't believe she would have been as successful as she has become had she not come out."

Indeed, the exuberance and ease that DeGeneres brings to daytime -- even in the midst of the increasingly rancorous national debate on same-sex marriage -- can make anxious moms and tired housewives feel as if a friend is in their living room (or, thanks to segments that appear regularly on Yahoo, on their computer screen). "For an hour each day, Ellen makes you forget your troubles and feel good," says Hilary Estey McLoughlin, president of Warner Bros.-owned Telepictures. "She's an antidote for the times."

And a silly one at that. She'll pal around with kids, prank celebrities and put members of her studio audience in a dunk tank to get laughs. "People tend to gravitate toward the fun," says 12-time guest Taylor Swift, who adds, "In between segments, Ellen leans over and asks me how I'm really doing and checks in with me about what I talked to her about the last time."

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Still, no one ever won daytime just by being nice. Behind DeGeneres' laid-back on-air persona is a shrewd businesswoman who recognizes that the competitive field will grow more crowded in September with Katie Couric, Jeff Probst, Ricki Lake, Trisha Goddard and DeGeneres' NBC lead-in Steve Harvey. Her producers insist Ellen will stay its course, differentiating itself through its mix of comedy, feel-good pieces and promotable celebrity interviews.

"These days, most of talk falls into two categories: experts [Dr. Oz] and confrontation [Judge Judy]. Ellen is neither. Her show is pure entertainment, and she's unbelievably likable," says Katz Media Group vp and director of programming Bill Carroll. That DeGeneres has nabbed Swift, Justin Timberlake, Jennifer Aniston and President Clinton to do promos for her 10th season is a strategic reminder -- for fans and rivals -- of her relationship with Hollywood.

On this steamy spring day, DeGeneres is preparing for a Katy Perry interview in her industrial-chic office on the Burbank lot. Four hours before her 4 p.m. tape time, she acknowledges that she isn't planning to push Perry to talk about her failed 14-month marriage to Russell Brand. "Ellen went through a time when she was the butt of the joke, and she has been very good about never wanting anyone to feel that way," says producer Andrew Lassner. Adds DeGeneres: "I will never make someone feel uncomfortable. I'm not here to hurt people's feelings."

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Hours later, Perry will get through the three-part segment without once uttering Brand's name -- among the reasons she's likely to return. Instead, the pop star will talk about her religious upbringing, her revealing movie, Katy Perry: Part of Me, and her new favorite show, History's Ancient Aliens -- and that's before she and DeGeneres play a game of Taboo. It's classic Ellen: quirky, safe and highly entertaining.

In her near-decade on the air, DeGeneres has managed to strike a remarkable balance by being agenda-free without shying from who she is, as evidenced by frequent mentions of (and occasional visits from) her wife of four years, Portia de Rossi. Yes, she addresses bullying from time to time and even opted to fire back when the One Million Moms group said JCPenney would lose customers with "traditional values" by hiring DeGeneres. "I usually don't talk about stuff like this on my show, but I really want to thank everyone who is supporting me," she told her viewers in February. "Here are the values that I stand for: honesty, equality, kindness, compassion, treating people the way you want to be treated and helping those in need. To me, those are traditional values."

Mostly, though, her banter is apolitical. "I'd rather celebrate the things we have in common," she says, aware that the hot-button issue of same-sex marriage is likely to rear its head again as the political conventions get under way, just as it did four years ago. "We are all the same people. You're no different than I am. Our love is the same," she told presidential candidate John McCain as they debated the issue on her show during the 2008 election season. True to form, DeGeneres ended the segment on a lighter note, suggesting in jest that McCain walk her down the aisle when she wed de Rossi.

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DeGeneres' popularity among those Middle America viewers (many of whom likely voted for McCain) is not without irony. In fact, this is precisely the viewership affiliates feared a homosexual comedian would offend, if not altogether alienate, when Warner Bros. executives pitched Ellen 10 years ago. To persuade those skittish station managers, DeGeneres crisscrossed the country, making stops in each of their markets with Jim Paratore, the late president of Telepictures Productions. "They were always shocked. They'd be like, 'She didn't curse,' as though cursing were a characteristic of gay people," says DeGeneres, reflecting on the draining process of schmoozing a cadre of people fearful of who she was and, worse, what she might do with it on air.

"These stations really thought she'd have a gay agenda. It was the hardest show we've ever had to launch in the history of our company," says McLoughlin, recalling the subsequent test interviews she did prelaunch with stars including Tom Hanks, Helen Hunt and singer Alanis Morissette to show affiliates she was capable of having compelling conversations with those outside of the gay community. "I had to show them that I know how to talk to people -- like how hard is it to talk to people? -- and still a lot of them didn't want to hire me," adds DeGeneres, who confesses over iced teas at West Hollywood's Soho House in August that being on this end of an interview is the only time she is uncomfortable talking. (It is for that reason that DeGeneres, more serious in person than she is on her show, gives them so infrequently.)

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Today, to the degree that celebrities such as The Big Bang Theory's Jim Parsons, Star Trek's Zachary Quinto and White Collar's Matt Bomer can identify themselves as gay without the fear of tarnishing their brands, comedian Wanda Sykes credits DeGeneres. "Ellen took the bullet for everyone else," she says, having come out at a rally for same-sex marriage in 2008. "When you come out now, it's a celebration, not a kiss of death, and we have her to thank for that."

DeGeneres came out to her own mother when she was 20 years old. The words, "Mom, I'm gay," were accompanied by sobs from her and a degree of denial from her mother. In time, Betty DeGeneres would not only come to accept her daughter's sexual orientation but also become the first nongay spokesperson for the Human Rights Campaign's Coming Out Project. Her father and his new wife were less accommodating. Upon hearing the news, they asked that she move out of their house to avoid influencing their two younger children.

She had no intention of coming out publicly, much less having her character do so, when she took the gig on ABC's Ellen in 1993. But the incongruity between who DeGeneres was onscreen and who she was off made her increasingly uncomfortable, until one evening when she had a dream that would change the course of the series -- and her career. DeGeneres was holding a pet finch in her hands, and as she put it back into its beautiful, multitiered cage by the window, she became the bird. "I suddenly notice that the bars against the window, which was open, were wide enough to fly out, and that they'd always been wide enough to fly out," she says, before waking up and thinking to herself: "Jesus Christ, do I have to have it spelled out? You're in a beautiful cage. You have a great view. You have an amazing life. But you don't need to be here." The next day, she went to the show's executive producers and told them that she wanted her character to come out.

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The show's executive producers loved the idea, but Disney balked. "It's a public company … and creating something that's sure to be controversial is not something the Walt Disney Co. takes lightly," says former Walt Disney Television president Dean Valentine, who acknowledges that then-CEO Michael Eisner was resistant at first. "All he could think of were all of the battles that he'd have to fight and all of the grief he was going to get for it." After several conversations, the company finally acquiesced. "It was clear that this wasn't a situation where the genie could go back in the bottle," adds Valentine. "She phrased it as a 'May I,' but it was not a 'May I'; it was a, 'This is what I'm going to do,' and the only other choice was to cancel the show."

The "puppy" episode, as it was code-named, aired April 30, 1997, timed to coincide with the Time magazine cover titled "Yep, I'm Gay" and a small cadre of sit-down interviews in which she, like Ellen Morgan, announced she was gay. In the episode, Morgan would realize that she had fallen for a woman, played by Laura Dern, prompting her to come out to her therapist (Winfrey). "I did it because she asked me to do it, and I wanted to support her," says Winfrey. Other celebrities, including Demi Moore, Billy Bob Thornton and Melissa Etheridge, also had cameos to show their support.

The episode garnered a Peabody Award and a record 42 million viewers -- as well as the wrath of advertisers (Chrysler was among the brands to pull ads) and affiliates. Rev. Jerry Falwell famously called her "Ellen DeGenerate," religious groups staged protests and execs like Valentine were on the receiving end of death threats that required security at their homes. "It was the worst backlash I had ever received," recalls Winfrey. "And it always turns to race. I got all of the, "N-----, go back to Africa. Who do you think you are?' I'd never experienced anything that bad before."

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Ellen's ratings quickly plummeted -- to this day, she blames a lack of promotion -- and the series was yanked from ABC's schedule the following season. "I assumed there would be some fallout, but I didn't realize the amount," she says, her cornfield-blue eyes welling up. "I was that person before, and I thought, 'How did I lose my entire fan base?' It's not like all of a sudden I ripped some mask off."

Within months, DeGeneres' disappointment had turned to outrage; she retreated with then-girlfriend Anne Heche to Ojai, Calif. "I was heartbroken. I thought, 'I don't want to be a part of this business. It's shallow and superficial. I work my ass off and do something that I think is important and this is how I'm rewarded?' " she allows, acknowledging now that she has some regrets about the way in which she handled the news, including publicly blasting Disney and threatening to quit on more than one occasion. (She insists she no longer holds a grudge against ABC, where she had a comedy pilot starring her wife in contention last season.)

After about three years without work, DeGeneres came dangerously close to broke -- unlike other sitcom stars of the era, including Tim Allen and Jerry Seinfeld, she had no backend on Ellen. "It felt like it was the end of the world, like nothing was ever going to change, and I was never going to work again," she says. With stand-up her only shot at reviving her career, she began writing material on a series of legal pads for what would become The Beginning tour. Slowly, fans started to re-emerge. She lent her voice to Finding Nemo (she's in negotiations for the sequel), booked a short-lived sitcom on CBS, The Ellen Show, and agreed to host the 2001 Emmy Awards, which were pushed back twice following the Sept. 11 attacks.

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"I feel like I'm in a unique position as host," she said at the time. "Think about it: What would bug the Taliban more than seeing a gay woman in a suit surrounded by Jews?" The joke, like much of what she delivered from the Emmys stage, went over brilliantly. She earned a standing ovation at the show's end. Soon after, Lorne Michaels' team asked her to host Saturday Night Live's Christmas episode and then again months later to do a daytime talk show. (Her reps were more interested in late-night and pushed ABC to consider DeGeneres for the slot that ultimately went to her friend Jimmy Kimmel, whose show she watches nightly and considers an inspiration.)

But it was Paratore who ultimately won her over by sending her a pricey bottle of Petrus wine and a tongue-in-cheek note saying how happy he was that The Ellen Show was canceled. Until his death earlier this year, the former Warner Bros. exec continued sending bottles of Petrus to commemorate other big moments in DeGeneres' career, of which there have been many. Before Paratore left for France, where his life was cut tragically short by a heart attack, he visited DeGeneres. "It was our last week of shows before summer hiatus," she recalls of his mid-May visit, fighting back tears, "and he said: 'You're starting your 10th season. Can you believe there was a time when nobody wanted to buy you?' "

Born in New Orleans, DeGeneres was raised by her insurance-agent father and speech-therapist mother before moving to east Texas as a teen. Although Johnny Carson was a hero of hers early on, she envisioned a career as a veterinarian or home designer. "I will do it someday," she says of the latter, noting that friends often ask her to design their homes. (She has a knack for finding them, too, says music manager Scooter Braun. When he was looking to move to Los Angeles, she sent him "at least eight houses a day with full property descriptions like she was the broker," he says. "I'm talking finds! It blew my mind.")

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After a few weeks at the University of New Orleans, DeGeneres dropped out to pursue a career in comedy. Still, she needed to pay the bills, leading to a series of odd jobs, including a shampooer at a hair salon, a vacuum salesman and an employment counselor. But as her act improved, stand-up became a full-time gig. "She did a lot of observational stuff, and she was always clever, clean and very confident," says David Spade, who met DeGeneres -- with whom he confesses he tried to flirt -- on the stand-up circuit. (At one point, the duo was paired for a brother-sister TV comedy, but the project never made it to air.) After every performance, she'd come out and take questions from her audience, always scared to death that one would be about her sexuality. She never was asked, a fortunate thing as she had no response prepared.

Then one night, as a 27-year-old DeGeneres was performing at The Improv in Los Angeles, a few supporters -- including Jay Leno, whom she had opened for a handful of times -- turned to Carson's booker and suggested he pay attention. "There are comedians who people laugh at but don't like. That's not Ellen. When you see her, you like her and you want to laugh," says Leno, adding, "She understands that being a good comic is about making people happy, and that's what she does." Weeks later, DeGeneres was booked on The Tonight Show Starring Johnny Carson. "That was the turning point in my career," she says of the segment, during which she became the first female comedian to be invited to join Carson on the couch. "That's very clever, very fresh. I mean it, it is good material," he told her at the time.

Sitcoms came next. First Fox's Open House, in which she played a receptionist at an L.A. real estate firm; then Laurie Hill, where she was a nurse; and finally Ellen, which catapulted DeGeneres to household-name status. The latter earned her four lead actress Emmy nominations and a writing win during its five-year run. There were films, too, including the now-ironically titled 1996 romantic comedy, Mr. Wrong, with DeGeneres starring opposite Bill Pullman.

More recently, DeGeneres has looked to expand her footprint offscreen. She launched a record label, eleveneleven, and signed her first artist, YouTube breakout Greyson Chance, in 2010. The move followed DeGeneres' one-season stint on American Idol's ninth season, which expanded her reach but proved a poor fit. "It was hard for me to judge people and sometimes hurt their feelings," she said at the time.

She has beefed up her production company, too, which focuses on sitcoms, reality and talk shows. Among them: Bethenny Frankel's daytime effort, which generated impressive ratings during its trial run this summer. (DeGeneres acknowledges she's an obsessive watcher of the Real Housewives franchise, where Frankel got her start.) Although DeGeneres is mum on details about future efforts, she's working on a feel-good TV effort with Justin Bieber and his manager Braun as well as a project with YouTube stars-turned-frequent guests Rosie McClelland, 5, and Sophia Grace Brownlee, 9. "Since the train has left the station," she says of the young duo, "I might as well be the conductor."

The Ellen DeGeneres Show has been renewed through the 2013-14 season, but its host will likely stick around longer. There will be adjustments to the format, however, including a push to be a bit more topical this season. (Bookers are courting Republican candidates Mitt Romney and Paul Ryan, who should be comforted to know that DeGeneres refrained from making a single Sarah Palin joke during the 2008 election.) The shift is a push by DeGeneres, who feels her day-to-day life lacks fodder: "It's really hard to constantly come up with things to talk about. If I had a kid, I could go, 'You wouldn't believe what she did today. But I can't really go, 'I gardened today,' " she smiles about a daily routine that often involves tending to her farm, playing poker, swimming, riding bikes, seeing friends (Aniston is among her closest) and staying current with TV (she watches everything from Housewives to The Colbert Report).

You don't need to spend much time on the Warner Bros. lot to know that DeGeneres has a heavy hand in her own success. She begins her workday at 10 a.m. and has a role in every element of the hourlong show, including booking her guests (still on her wish list are Bono in-studio and Kate Middleton). "Ellen has had a vision for what she's wanted this show to be from the beginning: really funny and always positive, and she's been unwavering about that for 10 years," says Ed Glavin, who has produced Ellen alongside Mary Connelly and Lassner since the talk show's launch in 2003.

To hear Scooter Braun tell it, that environment is the reason his client, Bieber, has appeared 12 times, including for birthdays and a graduation. "He doesn't feel like she's trying to talk at him. He feels like he's talking to a friend," he says, noting that DeGeneres' show has helped kick-start Bieber's career as well as those of Carly Rae Jepsen ("Call Me Maybe") and The Wanted.

In fact, sales for Jepsen's single jumped 32 percent in the two weeks following her mid-March performance on Ellen; after The Wanted sang "Glad You Came" on a January show, the song saw its best-selling week since its release some five months earlier, according to Nielsen SoundScan. Adds Braun: "I've definitely seen an impact in sales, but even more so you see an impact on culture. It's the first time people feel connected to that artist more than the song."

The executives at Telepictures have spent the better part of a decade trying to better understand what it is about DeGeneres' show that has enabled it to cut through the daytime clutter in a way that most shows don't -- or can't. What they've found, according to Telepictures executive vp current programming David McGuire, "It's all based on Ellen not trying to be anybody but who she is."

The irony is not -- nor will it ever be -- lost on DeGeneres, who made a pact with herself long ago to be fully herself, on air and off. "I know that every time I list something that I am, I am potentially alienating a whole group of people. Publicists and managers will encourage you not to say what political party you belong to, what you eat, what you don't eat, who you sleep with and all that stuff," she says, pausing to think through what will come next.

She continues: "I just think it's dangerous. People need to have all kinds of examples and heroes on television who stand for something."

Additional reporting by Shirley Halperin.