According to a recent piece in USA Today, quoting from an upcoming article in More magazine, Katie Couric believes in remaining patient. She thinks that better days are ahead for her and the CBS (NYSE:CBS) Evening News broadcast.
Better days had better be ahead because, so far, Katie's been nothing short of a disappointment for the network. Katie Couric was, as we all know, a renowned personality on the Today morning program. Executives at CBS wanted a strong brand name to replace Dan Rather for its iconic news feed, and Couric seemed to fit the bill. CBS invested millions of dollars to sign her up, reportedly to the tune of $15 million a year.
The statistics relay a sad story. For the week ended March 30, Disney's (NYSE:DIS) ABC evening news show brought in 7.9 million viewers, General Electric's (NYSE:GE) NBC evening news show attracted 8.1 million viewers, and Katie Couric's CBS newscast snared about 6.2 million sets of eyeballs.
The old-guard network news broadcasts are having a tough time competing against cable news networks such as Time Warner's (NYSE:TWX) CNN and News Corp.'s (NYSE:NWS) Fox News Channel, not to mention all manner of Web outlets. In this day and age, the evening news broadcasts seem like an unqualified anachronism. With that in mind, is an annual $15 million salary too much for a network newsreader, especially one who's in third place?
This brings me to a subject I brought up in a recent article (and wrote about in an older article) relating to DreamWorks Animation and Ben Stiller. Should media companies be forced to reveal in SEC documents exactly how stars are compensated? This concept was known more commonly as the "Katie Couric clause."
I think there's no better argument for the Kate Couric clause than Couric herself. If shareholders were privy to the exact nature of a celebrity's deal, then media corporations might spend more time evaluating the risk/reward scenario of bringing an A-list person onboard. Sure, you'd still have lousy deals being made, just as we do for overpaid CEOs, but I still want to know exactly how my stockholder equity is being used.
Let's face it -- Katie Couric, simply stated, isn't competing effectively. CBS spent a lot of money on her, and it's in the news-ratings basement relative to the other networks. CBS CEO Les Moonves has stated in the past that Couric has already justified her salary thanks to the additional revenues she brought in for the news division. That may be so, but I still believe that media companies need to be careful on how they compensate talent, especially when there's no guarantee that said talent will perform to expectations and deliver a win over the competition. I do hope they resurrect that clause that Katie has made so famous.
More Takes on the media:
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Fool contributor Steven Mallas owns shares of Disney and General Electric. As of this writing, he was ranked 12,696 out of 26,062 investors in Motley Fool CAPS. Don't know what CAPS is? Check it out. The Fool has a disclosure policy.
