I'm not a fan of American Idol, or for that matter,
any of the reality shows which populate the airwaves
nowadays. I've only seen part of one episode. Nonetheless,
when Paula Abdul, the judge "with a heart," did not have her
contract renewed due to monetary demands, I took interest.
brings up a very interesting question: how do you judge what
you're worth in the employment marketplace?
If you have a conventional job and you do your job as well
as the next guy, you don't need to ever figure this out. The
market already knows what an accountant or civil engineer or
plumber with X number of years experience can command. If
you're better than normal at your job, you can ask for a
premium over the accepted amount, but you'll have to justify
with ample facts and accomplishments why you deserve it.
Otherwise, your salary will fall within a very near
percentage of the market-accepted remuneration for that line
Abdul didn't have a conventional job. She judged celebrity
wannabees on American national television. For this work,
she was paid between $2m and $3m annually, not a bad pay day
for the work asked of her. Before American Idol,
Abdul worked as a cheerleader for the L.A. Lakers and as a
choreographer for some pretty hot acts like Dolly Parton,
George Michael, and the Jacksons. This led to a brief
singing and recording career starting in 1988. Her first
album, Forever Your Girl, succeeded slowly, taking
over 2 years to reach the top of Billboard's album charts,
but eventually sold 7m copies. Her 1991 followup,
Spellbound, didn't do as well and sold 3m copies. The
1995 Head Over Heels was so poorly received, she went
back to choreography.
Her first two albums and the accompanying touring which
supported them must have netted Abdul a nice chunk of
change. How much I cannot say. But until Idol landed
on her doorstep in 2002, it's doubtful her choreography jobs
were bringing her $2m to $3m per year.
And if perchance they were -- only she, her
accountant, and the IRS know the answer to that one -- the
work involved in generating that $2-3m was significantly
greater than what she's been asked to do on Idol.
So what is Paula Abdul worth on American Idol?
$2-3m per year?
There are rumors afloat that Adbdul asked for $8-10m per
year. Who can
say if those rumors are true because there are other rumors
that she wanted $10m, but was offered only $8m.
The precise figures aren't all that important for
Abdul felt she was being ripped off for her work on
Idol host Ryan Seacrest saw his salary triple from $5m
annually to $15m on a 3-year deal, making him the highest
paid reality TV show host ever.
Abdul felt she
deserved a bigger piece of the pie, too.
Most of us can't imagine earning $2-3m per year, let alone
first impulse is to think Abdul was being greedy.
Abdul didn't create the show nor was she the star of
it. Even when Abdul was a recording "star", her singles
weren't hits because her singing was extraordinary or she
was a superb songwriter.
She kept company with savvy producers who picked her
hit repertoire for her.
You have to give Abdul some of the credit, just not
all of the credit.
How much of Idol's current success is due to Abdul?
If that were such a straightforward calculation, then
it would've been simple to calculate what kind of
multimillion dollar raise she might warrant.
Even then, that couldn't tell us how indispensible
Abdul is to the show.
Past success doesn't guarantee future earnings.
Abdul may have attracted a lot of fans to the show,
yet plenty of those fans will continue to stick around even
with Abdul gone from the picture.
When a poll was taken soon after Abdul announced her
departure, 51% said they'd be less likely to watch, 42% were
indifferent, and 6% said they'd be more apt to tune
Only half the viewership cares about her now, and
loyalty doesn't last all that long.
When the show finds its groove with guest judges or a
new judge, mark my words, Abdul's departure won't make much
of a difference.
In 2004, actors George Eads and Jorja Fox didn't show up for
work at the beginning of the fifth season of hit show
CSI: Crime Scene Investigation.
Both had 'only' been raised from $100,000 to
$120,000 per episode, a raise that equates to almost half a
million dollars per year, something 99% of the population
would be happy to earn as a salary.
The network let them walk.
By that time, the show had already become a
franchise, with Miami and New York versions spun off, and it
was pretty clear to all that none of the actors were really
critical to the show's success.
The format was what counted.
Eads and Fox came whimpering back a day later and
were lucky they were rehired.
The ensemble cast of Friends was able to hold the NBC
network at ransom after the show's sixth season, demanding
raises from $125,000 per episode to $800,000, because the
six agreed to a collective raise or a collective walkout.
Individually, they were just as dispensable as Eads
Without one or two of them, Friends could have gone
on. As a group
threatening to not renew their contracts, a very, very
profitable show for the network would've gone down the
Friends cast got a raise, a cut of the back end profits,
and in the last two seasons of the show, $1m per episode
In the real world -- that is, the world where people earn
human, not superhuman, salaries -- a person's worth is
determined by the type of work he does, his experience, his
degree of indispensability to the firm he currently works
for, and, most importantly, his opportunity costs.
In other words, what are that person's other options?
If he's a talented hire but only one firm wants or
needs him, he's going to be offered lower compensation than
if a dozen firms are looking for his services.
Interestingly, when you look at the opportunity costs of
Abdul, Eads, Fox, the cast of Friends, and many
others in the high income brackets, their opportunity costs
aren't tremendously high.
Their "street value" (i.e what they could command on
any random outside project) was not roughly equal to their
value on their primary day jobs, and they knew it.
Jay Leno, the talk show host, summarized it by saying
that "You have to get what you can while you can in this
business" because the window for getting it is usually a
One's prime earning power is condensed into a very tiny time
frame which can only amount to a decade or less.
Each of the Friends ensemble was only worth
$1m per episode on Friends, not elsewhere.
Once Friends ended, none of the cast were
offered $1m per episode salaries on new shows.
Eads and Fox aren't the household names the
Friends cast became.
Once CSI is canned, it's not unforeseeable
that neither will ever work a steady TV gig again.
Abdul's opportunity costs were most likely a lot less than
the $2-3m per year she was taking home from Idol, and
that didn't give her a lot of bargaining power.
Nor does it help that she's on a reality show as a
judge, a position very easy to replace with another
It must be very easy to get drunk on your own self
importance when you're earning multimillions, to convince
yourself that your presence played a major part in the
success of the venture you're participating in.
For entrepreneurs, I wouldn't argue with that
Entrepreneurs, however, take bigger risks.
As their projects get underway, they usually don't
take home $22,500 per week, the salary for the Friends
cast during the initial season.
In most show biz cases, the project made the actor,
the actor didn't make the project.
Did actor Daniel Radcliffe turn the Harry Potter
movie franchise into a success or did Harry Potter turn
Radcliffe into a multimillion dollar success?
Did Leonardo DiCaprio's charms make Titanic
into what was once the highest grossing film of all time or
did Titanic's rich takings make DiCaprio into a high
I argue that the projects would've succeeded with any
competent professional filling the shoes.
If Eads, Fox, DiCaprio, Radcliffe, the cast of
Friends, and yes, Abdul, had had their shoes initially
filled by another, all their most recognized projects would
still have succeeded without them.
Their successes are more the result of lucky breaks
they were prepared to grab and run with.
If this weren't true, if the success of all the projects
rested with the actors themselves, then the Friends
cast would all have cushy six figure per episode jobs by now
on other shows, their involvement turning those other shows
into stellar successes along the lines of Friends. Or
each would be offered millions of dollars for every feature
they appeared in today, not just when Friends was
still in production. Eads and Fox wouldn't have had
to return to CSI with their tails between their legs.
Their presence would have had other network execs
begging for their involvement in other shows.
DiCaprio went on to other huge paydays and big
Titanic highlighted that he was an actor the public
enjoyed watching. In
his case, his street value because equivalent to his project
value, at least to those paying his checks.
Still, his presence alone does not guarantee a
His involvement just guarantees a project will get
Hence, the producers of American Idol were smart not
to give Abdul a raise to $10m per year.
Idol reignited Abdul's fame, not the other way
being impossible to calculate Abdul's exact contribution to
the show's success, the producers hedged their bets by
giving her some raise nevertheless -- why risk altering a
formula that's working?
Abdul walked anyway.
Why would she walk?
A swelled head after 7 years of top ratings and easy
earnings would have affected anyone's ability to think
logically, for one.
Another possibility is her relative income disparity
next to others associated with the show.
Pretend you have the chance to earn either $50,000
per year or $100,000 per year.
But if you choose $100,000, all your colleagues will
make $25,000 more than you;
at $50,000/year, all will earn $25,000 less than
is still more money than $50,000, and one can buy twice as
much with it.
Nonetheless, in a Harvard study, more people chose the
With $50,000, they're relatively richer.
With $100,000, they're relatively poorer.
People, including Abdul, want to feel richer than
those in the circles they frequent.
We, as outsiders, look at Abdul's salary demands as
be happy to have her job, even if it paid a quarter of her
That wage still put her in the top half percentile of
earners in Hollywood.
But Abdul from the inside, watching host Ryan
Seacrest and acrid star judge Simon Cowell raised to epic
salaries triple her own, felt poor and unappreciated.
Leno was right when he said you have to get what you
can while you can, but when "what you can" is already a
pretty generous figure and you've not situated yourself in
an irreplaceable situation, the results could -- and most
times, will -- backfire on you.
Abdul could've learned a thing or two or ten from the past.
A quick call to Eads and Fox would've proven
might also have been wise to ring up Suzanne Somers, who
felt she contributed a greater share to the 1970's-80's
sitcom Three's Company's success than was actually
the case. When
the producers of Three's Company fired Somers and
replaced her with other blondes, the show continued to
other examples exist, too many to list here and risk boring
you to death with.
What surprises me is that if I, as a non-viewer, can size up
that someone like Abdul doesn't warrant a raise to
$10m/year, why couldn't she, with the help of her
professional management, do the same?
This isn't rocket science.
Word gets around quickly in show business circles if
so-and-so is being offered lucrative side deals.
Producers have an approximate idea of a candidate's
opportunity costs at a given moment in time.
Negotiations being as they are, the producer will
offer less than they are willing to pay, and the candidate
will ask for more than s/he's willing to accept, but in the
end, a fair figure -- don't judge fair by what applies in the
real world -- will be arrived at.
That is what a mega-someone is worth and for that
Maybe when you're surrounded by yes-men telling you how
much of a god or goddess you are, you start believing you're
worth an extra zero or two on the end.