As David Letterman finishes his storied career as a late-night talk show host by stepping away from CBS's (NYSE:CBS) Late Show with David Letterman, he closes out not only a 33-year-run, he ends an era.
Letterman was the last of the late-night hosts who spoke to a nation. Though he was rarely the ratings leader and competed in a much more crowded field than his idol Johnny Carson, Letterman followed in that tradition. Some people may have preferred Jay Leno, or in more recent years, Jimmy Kimmel or Jon Stewart, but Letterman was the country's talk show host.
Letterman served as a cultural touchstone and was also a pioneer who evolved the talk show format.
On his original post-Carson Late Night and later on Late Show, the host broke new ground and created the blueprint for today's viral videos.
Letterman was always a bit of an outsider, never as acceptable or mainstream as Leno, but he used that to his advantage, pushing the envelope and creating new comedic norms. Without Letterman there would be no Kimmel, no Stewart, and no Jimmy Fallon.
Letterman was well paid
When Letterman hosted Late Night beginning in 1982, he was the perceived heir to Carson. He lost that gig to Leno, Carson's longtime guest host, in a bit of gamesmanship that's well detailed in media columnist Bill Carter's book The Late Shift. When he lost that job Letterman's pride was wounded, but in some ways it was a blessing. Hosting the Tonight Show comes with certain concessions to mainstream appeal -- a lesson which Conan O'Brien learned all too well during his short stint at the helm.
Being freed to leave for CBS allowed Letterman to take his Late Night act and refine it. Late Show was not his 12:30 a.m. product moved to 11:30 p.m., but it retained an anti-establishment authority that may not have been possible on The Tonight Show.
Going to CBS was not only a break in disguise for Letterman, it was very good for the network, which had no late-night presence before Late Show (unless you count failures like Crimetime After Primetime). Securing Letterman's services in 1993 was not cheap and the host signed a lucrative deal, according to The New York Daily News.
The annual cost to CBS of the three-year contract for the services of the cynical "Late Night" host is a reported $40 million -- $16 million in salary, the rest in production fees.
In later years Letterman would see his annual salary increase to the low $30 million range, dropping back to around $20 million for his last few years on the show, according to TV Guide. In some years the host made as much as $50 million between salary and production fees paid to his company.
Letterman was a producer too
In addition to starring in Late Show, Letterman also produced the program as well as the Late Late Show which followed it under his Worldwide Pants company. That production company also created Everybody Loves Raymond, Ed, Dave Grohl's Sonic Highways, and a number of other shows.
Letterman is the majority owner of Worldwide Pants, but has never disclosed what percentage of the company he owns and how much his partners have. The production house's share of the money on Raymond syndication alone is worth around $100 million, according to Forbes.
Pants will continue after Letterman steps aside from Late Show and, in addition to its ongoing syndication revenue, it has a number of new projects in development. It will also be interesting to see what the company does with its Late Show archive as Letterman, not CBS, owns the program.
What is David Letterman's net worth?
In addition to his salary and share of Worldwide Pants, Letterman also owns multiple homes including a Manhattan apartment he lives in while in production on his show, an estate in North Salem, New York, and the 2,700 acre Deep Creek Ranch in rural Montana. He has also purchased several adjoining plots for the property which is a working bison ranch
The outgoing host also owns a fleet of Ferrari's which was "assessed at more than $1.2 million, according to Danbury's 2011 grand list of all the motor vehicles in the city," The Danbury News Times reported. He also co-owns Rahal Letterman Racing, an Indy Racing League team.
Combined, Letterman's salary, his cut from Worldwide Pants, as well as his real estate and other holdings, give him a fortune of around $400 million according to Celebrity Net Worth, a number echoed by Travelers Today and About.com.
Of course, Letterman has always been very quiet about his finances and he has been an avid discreet philanthropist, so the actual number could vary somewhat as is generally the case with net worth predictions. It's fair to say that talk shows made Letterman rich, but as he goes forward without one, he may continue to pad his fortune as both a producer and perhaps as a rancher.
It's not a stupid human trick, but it's pretty impressive.
Daniel Kline owns shares of Apple. He was never a guest on Late Show. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.