The J.Lo Effect: $15 Million Becoming the New Standard as Reality Salaries Soar
UPDATED: No longer interested in unknowns, networks are paying more than ever in their bid for big names like Howard Stern, Christina Aguilera and Jessica Simpson.
Call it the J.Lo effect. When American Idol producers agreed in 2010 to pay pop music superstar Jennifer Lopez about $12 million to replace Simon Cowell on the Fox competition's 10th season, little did they know they were setting off a gold rush. More than a year later, the C-listers that once populated the judges panels on reality shows have given way to a new crop of increasingly bold-face names demanding big-time paydays.
And networks, desperate to stand out in a crowded reality landscape, are happily ponying up. In early February, NBC re-signed The Voice judge Christina Aguilera to a new deal that will pay her roughly $10 million for the show's upcoming third season. Howard Stern will make about $15 million when he joins the judges panel on NBC's America's Got Talent this summer. Lopez is believed to be garnering in the $20 million range for her second season with Idol, according to knowledgeable sources. (Fox and NBC would not comment on the financial terms of their deals.)
"Idol is really what started the trend," says one top unscripted executive, noting that the gamble and subsequent ratings success of the Lopez casting raised the bar for other shows going forward.
"It should up the ante because you're making a serious evaluation of someone's potential career," says Clive Davis, chief creative officer of Sony Music and the exec who orchestrated Idol's nine-year deal with the label. It's a sentiment shared by others in the music business. "We need to raise the standards back up," says Michael "Blue" Williams, who manages Voice coach Cee Lo Green and Outkast. "There needs to be four relevant judges in front, so you're sitting with talent judging talent."
In fact, save for a select group of heavyweights, including Two and a Half Men star Ashton Kutcher, top reality talent now commands more money and perks than scripted actors. NBC, for instance, will uproot Got Talent from Los Angeles to New York to please Stern, who wants to maintain his radio show. The additional cost to NBC is roughly $18 million, according to one source, including the cross-country move.
Still, the eye-popping numbers are limited to the very top of the reality food chain. The other Voice coaches, for instance, are said to have received substantial raises over their first-season $75,000 per-hour fee, but they still are paid considerably less than Aguilera. Similarly, Idol judge Steven Tyler is being paid many millions, according to sources, but far less than what Lopez is banking. And NBC snagged singer-turned-style-mogul Jessica Simpson for its upcoming Fashion Star for just over $1 million for its truncated run -- an impressive sum but hardly Stern numbers. An insider says the network is reviewing all of its unscripted properties to see how to insert a dose of star power.
The desire for bigger names played a significant role in The X Factor creator/judge Simon Cowell's January decision to fire the show's less credible judges Paula Abdul and Nicole Scherzinger (along with host Steve Jones). He's now looking for his Lopez and Aguilera equivalent, say sources. "There absolutely is a pressure to be like, 'Well, now, we have to keep up with Jones,' " says a network executive. A source close to X Factor says Pink is atop Cowell's wish list -- she has credibility, Grammys and sass, plus "she can take on Simon" -- while other big-name candidates including Mariah Carey and the late Whitney Houston emerged in recent weeks (Houston was due to meet with Cowell two days after her untimely Feb. 11 passing).
Such hirings come with built-in marketing muscle. "If you know you can book them on The View or Today show or Letterman, that just makes it easier," notes one exec, adding, "To put somebody on that's not as big of a name, you're really banking on the show doing it on its own. We're all risk-averse, so why not hedge your bets."
The trend is upending the conventional TV wisdom that reality is a cheaper alternative to scripted. Where networks once paid in the $750,000 range to license an hour of unscripted programming, they're now lucky if an hour of reality costs $1.25 million, which is very close to what the networks pay to license a first season of a scripted drama. (Sources say X Factor and Voice cost between $2 million and $2.5 million per hour.)
"Reality programming was always low cost, so you didn't need big ratings and you still made money. Now the networks are playing the same game as scripted shows," explains one veteran, who noted, "If you're going to spend all of this money, you'd better deliver the ratings."
Fortunately for Idol and Voice, the strategy appears to be paying off. Though Idol's ratings have slipped in Lopez's second season, her first saw viewership rise by 4 percent to 23.1 million viewers, according to Nielsen. That uptick has translated to Idol commanding a jaw-dropping $732 million in ad revenue last season, according to Kantar Media.
Like Idol, Voice is expected to be a profit center for NBC. The series returned in the coveted post-Super Bowl spot in early February to the network's best results for an entertainment show since the Friends finale in 2004. And while the untested season one lured only $57 million in ad dollars last spring, the figure is expected to skyrocket this season.
REALITY JUDGES SELL MORE ALBUMS: Judges and coaches are raking in profits from music sales, proving contestants aren't the only talent-show participants seeing a boost from TV exposure.
Steven Tyler: The Aerosmith catalog long had been a steady seller, but since its frontman joined Idol, a new school of listeners has discovered the band's music.
- Catalog sales before and after joining Idol: In 2010, 310,000; in 2011: 650,000+260%
Adam Levine: Maroon 5's album Hands All Over was languishing on the charts until "Moves Like Jagger" came along, selling 4.5 million singles to date.
- Hands sales before and after joining Voice: +115%
Cee Lo Green: The soul man's 2010 album Lady Killer was already a strong mover thanks to smash single "F-- You." But even without another hit, sales were way up.
- Lady Killer sales before joining The Voice: 308,000
- Sales since April 2011: 155,000 (+50%)
Christina Aguilera: She hasn't fared as well as Jennifer Lopez, who sold 309,000 copies of her album Love? released mid-Idol, but 2010's Bionic still saw a slight spike.
- Bionic sales before joining The Voice: 279,000
- Sales since April 2011: 22,000 (+8%)
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