Are celebrity judges worth the money?
The biggest names in entertainment are coming to the ratings rescue for NBC and Fox talent competitions.
TV bosses are shelling out big bucks to bring the grandest names in the entertainment industry to judge their celebrated talent shows.
Comcast's (CMCSA) "America's Got Talent" on NBC now has Howard Stern choosing the fate of the country's freshest meat, while News Corp's (NWSA) "X Factor" on Fox has paid a pretty penny for Britney Spears' involvement with the U.S. version of the Simon Cowell-produced singing competition.
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Stern and Spears don't come cheap. Stern reportedly signed a one-year contract for around $20 million to replace departed judge Piers Morgan. Holding her own weight against that hefty payout, Britney Spears will be making 15 times her new co-judge Demi Lovato's $1 million salary.
With such outrageous singular season payouts comes the question of whether these fortunes are worth spending to bring in viewers. However, history tends to repeat itself, and the mega-success that trails Spears and Stern will more than answer with a resounding, booming "Yes!" -- the cash is well-spent.
The celebrity judges are helping their respective shows go in for the kill as "American Idol" stumbles. Ratings for the 11-year-old talent show have been down by double digits this year.
Stern, 58, known for his outlandish and lucrative satellite radio show, has brought incredible success to Sirius XM Radio (SIRI). His influence is so strong that Stern was able to ink a deal for $400 million in 2010 to keep his presence constant on the show that boosted not only his career, but the overall appeal of the SIRI brand as a whole.
To this day, Sirius is experiencing profitable quarters along with confident analyst remarks, largely thanks in part to Stern himself. At the beginning of this month, the company reported solid earnings and an impressive start to the year.
"Sirius XM Radio's latest quarterly results were especially encouraging on a number of fronts. The price increase has now been implemented for 35% of the subscriber base," Barrington Research said in a recent report. "Sirius XM Radio continues its progress in the key metrics that matter."
A contract of almost half a billion dollars shows Stern's value to the satellite radio industry, and NBC is clearly hoping Stern's radio success can translate to big TV audiences.
The sweet smell of money is not foreign to Spears, either. In the midst of a continuously thriving musical career, she has managed to develop herself into a fragrant brand all her own. Sales from her 10 perfumes over the past seven years have not only provided Spears with a large paycheck, but have helped to save Elizabeth Arden (RDEN), the company that distributes Spears' scents.
Spears, 30, has always been particularly famous for stealing the show in some shape or form, but can she save a struggling television program the way she salvaged Elizabeth Arden back in 2005? Following a slew of first-season departures, ranging from Paula Abdul to Nicole Scherzinger, "X Factor" is going for a total revamp its second time around in the U.S., and Spears' star power is more than likely just what the doctor ordered.
As the competition comes to a head, Stern and Spears have both come out winners before their shows even hit the air, with record-breaking salaries and more notoriety than ever before.
"America's Got Talent" began its seventh season with Stern at the helm this week, and to no one's surprise he is receiving rave reviews. "X Factor" is scheduled to premiere its second season this Fall on Wednesday nights at 8 p.m. on FOX.
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