DR. Phil McGraw has landed a blockbuster, $75-million deal that will keep him on the air at least through 2014.
The big-bucks deal, according to industry sources, would pay McGraw about $15 million a year for five seasons of work.
It will make him second only to Oprah Winfrey’s $20 million a year in annual salary among daytime talk-show hosts.
But his Fort Knox-sized salary is chump change compared to the growing chunk of the show’s profits that McGraw pockets – more than $275 million in licensing and advertising fees that are split between Dr. Phil, Oprah’sproduction company Harpo Productions and his distributor, King World.
With this new deal, McGraw will take home a share of the profits that grows larger the longer he stays on the air. The potential for a bigger piece of the pie is said to have been a key element in the negotiations, according to industry sources.
Although McGraw’s current deal – he was reportedly being paid around $12 million a year – was not set to expire until 2009, King World is said to have jumped at the chance to lock him into a new deal.
The distributor – part of the Viacom media empire that includes CBS and MTV – hoped to avoid repeating its experience with Oprah, shelling out big bucks for last-minute deals to keep Oprah from retiring.
King World officials declined to divulge the terms of McGraw’s new deal.
While the salary hike was important, the right to create new shows under his own name was the big victory for him, industry analysts say.
“Phil was probably looking at the Oprah [business] model and wanted to expand his own little universe,” PQ Media’s Leo Kivijarv says.
Over the years, Oprah – one of the most savvy media entrepreneurs ever – has managed to use her show to launch a billion-dollar-plus empire.
With syndicated hits few and far between, King World is betting that “Dr. Phil” will remain popular. But some wonder if McGraw and his “tough love” approach will be able to remain on top.
“Oprah has lasted all these years because she comes across as your best friend,” says Mediaweek’s Marc Berman. “He’s a therapist. Do you really need to be in therapy for 20 years?”
Dr. Phil, launched his show in 2002, and it became an immediate hit, thanks to numerous appearances he had made on “The Oprah Winfrey Show.”
McGraw and Oprah met in the mid-1990s when she was being sued by Texas cattle ranchers who claimed she’d defamed the entire beef industry during an hour-long broadcast about Mad Cow disease.
Toward the end of her trial she hired a trial preparation and consulting firm headed by McGraw, who used psychological and behavioral research to advise Oprah on how her case would best be presented.
His show, currently in its third season, rates second only to “Oprah” in the cutthroat daytime TV ratings race.
