The BBC paid more than £16 million to top talent in 2011/12, according to its accounts.
That is down from more than £21 million the year before.
The BBC does not disclose individual salaries despite calls for it to do so, but instead details the number of individuals in separate bands of £500,000 to £750,000, £750,000 to £1 million and from £1 million to £5 million.
Accounts published today show 16 top earners shared around £16.4 million in 2011/12.
Among the names widely reported to earn more than £1 million a year are Match of the Day host Gary Lineker.
In 2010/11, 19 people filled the top three bands pulling in pay of more than £21 million.
Stars reported to have taken pay cuts include Graham Norton and Jeremy Paxman.
Speaking to reporters today, out-going director-general Mark Thompson said the BBC faced a "resurgent market for talent" and said it was partly caused by the expansion in original programming by Sky.
The report also showed network hours of sport on BBC One were down from 697 to 580 year on year.
The hours of broadcast sport were also down on BBC Two from 965 in 2010/11 to 763 in 2011/12.
Entertainment was up to 709 hours on BBC One from 585 hours in 2010/11 and also increased on BBC Two and Three, while the amount of drama on BBC One was down from 808 hours in 2010/11 to 690 in 2011/12.
Mr Thompson said the figures reflected the corporation's move away from bought-in dramas during daytime broadcasting and late at night and showing more repeats from the BBC "archive".
He said the BBC had delivered "quality output", saying: "We have cut costs, yet delivered a creative revival of drama on TV and radio."
Mr Thompson said the "rediscovery of ambitious mainstream drama" on BBC1 was one of the main achievements of his time in charge at the broadcaster.
He said changes in broadcast hours for drama and entertainment was part of "a reduction of acquired drama in daytime and off-peak" and quoted the example of the BBC pulling Murder She Wrote from its daytime schedules.
He said they were now showing "many fewer acquired hours late at night and in the early hours on our networks and characteristically we've replaced this acquired drama with archival drama and comedy from the BBC's own archive and that's the principal reason you see the entertainment hours going up".
The BBC's chief financial officer, Zarin Patel, said the corporation had seen "significant falls in staff", with 70 senior managers leaving in 12 months, taking £7 million off the senior pay bill.
She said the BBC's talent was made up of 52,000 individuals with average earnings below £4,000.
BBC Trust chairman Lord Patten said people were willing to work at the BBC for a "70% or more discount" in their pay because it was "the best broadcaster there is".