EXCLUSIVE: This morning I have more information behind the scenes and about the future of the daytime diva’s decision to end her syndicated The Oprah Winfrey Show in 2011. (I was first to report this back on November 5th, and she’ll announce the news on her show today — her last live show of the calendar year.) Yesterday, Oprah called the two Hollywood moguls who needed to know. First, her close friend Disney CEO Bob Iger whose owned-and-operated ABC affiliates long have made up Oprah‘s core station group. And then CBS Inc chairman Les Moonves whom she reached Thursday night (NY time).
“I just announced it to my team and I feel great about it,” sources tell me Winfrey said to Moonves.
“So you’re going to do the show on Discovery?” he asked.
“No,” Oprah assured him. “I’m not bringing The Oprah Winfrey Show to cable. I’ll do something else with that channel.”
So what is that “something else”? Besides overseeing programming, my sources say that, instead of a carbon copy of her longtime daytime talker, she’s now privately talking about hosting a show “that’s smaller and different” on the Discovery Communications start-up OWN, aka the Oprah Winfrey Network, which boss David Zaslav decreed two years ago would replace the Discovery Health Channel and reach into 70 million homes.
That show won’t be based in Chicago: it will move to Los Angeles where the OWN headquarters is based, according to my sources who also say she wants to divest her real estate in Chicago “as soon as possible”. [5 AM UPDATE: I’m receiving no definitive word on what happens to her Chicago-based company Harpo.] She explained to insiders, “Why would anybody stay in Chicago? It’s freezing here, and I have a mansion in Montecito that I haven’t been able to enjoy.”
Another reason she hasn’t is taxes. My sources say Oprah and her people have long limited the time she spends in Montecito so she doesn’t exceed the number of days mandating her to pay exorbitant taxes as a California resident.
Oprah was supposed to reveal whether or not she’d continue The Oprah Winfrey Show to Moonves in early October. Instead, she kept telling CBS, which syndicates Oprah under a deal re-signed in 2004 with King World which is now part of CBS Television Distribution, that she hadn’t decided anything yet and would make a decision “very shortly”. And Moonves never really believed she’d quit a pulpit that gave her such a huge amount of influence, and a pulpit with such a hefty paycheck. He thought a 1- or 2-year extension was possible and probable. Oprah and Moonves had a number of conversations that kept CBS dangling. “Look, if I do it, it’s with you guys.” That news appeared to knock Sony out of the box even though its television syndication arm had been courting her hard in the hope of handling any extension of her daytime talker. Sony had successfully launched this season Dr Oz, Harpo’s latest daytime talk show star. And Sony had just announced it would syndicate the next star from Oprah’s stable, interior designer Nate Berkus.
But my information is that Winfrey never truly negotiated with CBS. Moonves had scheduled a face-to-face with Oprah and her personal and professional posse at her Montecito compound in October to discuss her future plans. But then her bodyguard passed away. So the meeting was canceled. Moonves offered to drive up to Montecito another time to see her.
My sources explain the daytime diva told the CBS boss: “I love you. You’re a great salesman. But what are you going to say to me to make me want to do the show? Don’t bother spending 2 hours to drive up here.”
“Les Moonves, Bob Iger, and Sony will flip out. The only winner is David Zaslav,” one of my insiders warned me back in early November 5th if Oprah canceled her syndicated show and focused only on OWN, which the Discovery Communications boss had been begging her to do before the end of 2011, to the point of giving her an ultimatum that she’d lose her channel altogether.
CBS again is reiterating that, because its deal with Oprah from a few years ago called for an increasingly lower distribution fee, “it’s so low it doesn’t hurt us,” an insider told me last night. “Les isn’t happy this happened. But it doesnt hit us until 2012.” Still, the news could hurt CBS’ stock price today.
I know Moonves was surprised by my scoop on November 5th that Winfrey had already made a decision to stop her syndication show when the contract expires. My reporting back then showed Oprah’s decision was so definitive that she and her advisers were already trying to figure out what to do with her mini-city in Chicago, and which personnel she can and will move out to LA in the next six months. In late October, Oprah called a confab in Los Angeles and met with everyone associated with OWN. She also personally heard programming pitches.
Yesterday, late in the afternoon (Chicago time), Winfrey told her Oprah staff of her decision. Harpo Inc president Tim Bennett also sent out a missive to her show’s business partners informing them that the daytime diva would announce the end of The Oprah Winfrey Show on air today. Word began to spread, and TV affiliates began to report the news on local newscasts as the mainstream and Hollywood press got wind of the coming announcement. Naturally, Oprah wanted to the biggest audience possible for her live swan song. After all, it is November sweeps. And no doubt she’ll keep the tension mounting in a countdown to her last show on September 9th, 2011.
Leaving the extraordinary visibility she enjoyed through syndication is a huge gamble for Oprah as a TV brand. Oprah is viewed by an estimated 7 million people a day (though that audience has fallen by half over the past 10 years) and in 140 countries. It has been estimated that she currently earns about $275 million a year in showbiz income. Long the No. 1 rated daytime talk show, Oprah also made Winfrey into the richest African American woman worth $2.3B at last count, a worldwide media personality with a powerful media empire around her, a celebrated actress who doubled as a film and television producer, a force in both book and magazine publishing.
But there’s also no question that Oprah is a much more controversial figure now than she’s ever been before because of her very public wealth and fame and politics and beliefs. For many years she was enjoying high ratings and fat cash license fees from TV stations and big popularity. But her ratings have been in double-digit decline in recent years. And given the financial crisis which has put TV stations on life support because of the plunge in advertising, Oprah was unlikely to be able to demand another big cash raise to continue her show in syndication — especially in today’s climate when stations are bartering with syndicators, not paying them. “It had the potential to bankrupt stations. She would have wanted all cash up front. GMs would have told her to go away,” one source explains to me. When Oprah leaves syndication, it will open up time slots and free up station cash not just for existing daytime talk show stars but also new ones.