ChineseRestaurantCapitalism

keeping the economy honest

Regis is not happy with less than $18-$20 million per year

Apparently Regis quit because he’s not happy when offered less salary for his new contract.  The show’s producers offered lower salary due to lower ratings.  Ok, even if the show didn’t get lower ratings, the network should have negotiated the salary long time ago.  I’m sure they can find some quality host who can do the job for half of Regis’s salary.  You’re probably thinking that Regis is the star of the show and no one can replace him to the same extent.  I agree, granted, a lot of people watch the show for Regis and if they brought in another host, the show will probably have a lower rating.

Let’s say, the new guy is happy to work for $5 million a year and the show had 25% less rating.  But the $13-$15 million savings is straight network’s profit and probably will compensate more than enough the lost advertising revenues.  Or the network can keep the same profit and pass on the  $13-$15 million savings to the advertisers.  That’s probably a great deal for the adverstsers.  I don’t think 25% more rating will necessarily translate to more than $13-$15 millions more in business for the advertisers which is how much they have to spend for 25% higher rating.

Anyway, all these numbers are made up and have no basis in any inside knowledge of TV show production.  But my point is that this is how free market is supposed to work and free market should decide the fair compensation of the TV show host, but is not fully tested out.  It’s like the chef in the chinese restaurant can never make too much more than his worth because the owner will replace the chef faster than chinese fast food if the chef starts to demand excessive compensation.  But it’s much easier to exercise free market in small business, on a smaller scale, and to test out competition.

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One response to “Regis is not happy with less than $18-$20 million per year

  1. Michelle January 31, 2011 at 3:03 am

    I think one thing to consider is the longevity of the show without Regis (granted, he’s getting pretty old anyway…) but let’s say they replaced Regis say 10 years ago. The show may not have survived until present day if the new host wasn’t as good… so it’s more of a long term decision than just deciding based on today’s cost savings.

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