Trust says BBC is paying its stars the market rate
There are about 40 television and radio stars who earn more than £1m a year, an independent report into how much the BBC pays talent has revealed.
Out of that elite group of comedians, actors and lifestyle and cookery presenters, the top 10 earn £2m from appearance fees, while most of the top 40 – who work for the BBC and commercial broadcasters – can earn an additional £1m from tie-in publishing deals and royalties from repeats and DVDs.
A further 200 to 300 presenters and performers can expect to make between £100,000 and £500,000 a year, said the report, which was commissioned by the BBC Trust after concern over huge payouts to stars such as Jonathan Ross and Chris Moyles.
The review by Oliver & Ohlbaum Associates concluded that the BBC was not paying above the "market price" for talent. But Sir Michael Lyons, chairman of the BBC Trust, warned the corporation should be prepared to walk away from negotiations with big name presenters and performers who are too expensive, saying more could be done to promote new talent.
Critics seized on the findings, saying the BBC had failed to address concerns over the salaries of stars such as Ross, who is reportedly being paid £18m in a three-year deal. The report concluded: "There is no evidence that the BBC is paying more than the market price for leading TV talent. In some cases, it may well be paying less than the market price for that talent."
The study also identified areas where the BBC could improve the way in which it sets pay levels for its stars, including gathering more detailed information on how much rivals are prepared to offer and investigating what real alternatives are on offer to presenters who demand more money.
It expressed concern over whether the BBC was too cautious in making use of new talent and whether digital channels were simply being used to develop projects for existing stars, instead of investing in the genuine talent of the future.
In 2006-07, the BBC spent £242m on on-screen and on-air talent. During the past three years, spending on talent has increased by 6 per cent a year, but spending on the top 50 names at the BBC increased much faster than that.
According to the report, those inflation-busting pay increases came about because, between 2004 and 2007, the 50-strong elite increased their output by 15 per cent. They were also the result of market forces, in particular an editorial decision by Channel 4 to move into more mainstream entertainment programming and the rapid rise of multi-channel TV, the study found.
The BBC has refused to disclose how much individual presenters are paid, or even to give an average for the top 50 talent, but highly paid presenters are believed to include Graham Norton, said to have secured a £5m contract over two years, Jeremy Paxman, reported to earn £1m a year and the Radio 1 breakfast host Chris Moyles, on a reported salary of £630,000.
Sir Michael said: "The value of great entertainers, comedians, actors, presenters, journalists and interviewers is rightly very high and the BBC has a special responsibility because of its unique funding to help develop the UK's talent base for the benefit of the industry as a whole."
But he added: "The BBC has to be prepared to walk away from deals that do not offer good value to the audience and to equip itself to do that by continually bringing on new talent." The shadow Culture Secretary Jeremy Hunt attacked the findings, saying: "This report has totally missed the point. Jonathan Ross may well be worth £18m on the open market, the question is whether the BBC should be paying for this with licence fee payers' money when commercial broadcasters would be more than willing to pay it at no cost to the public."
He said the report left people "totally in the dark" as to whether paying high salaries attracted a larger viewing audience who then went on to watch less mainstream programmes.
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