A DAY OF RECKONING FOR NETWORK PAYROLLS : Inflated Salaries: There’s Enough Blame to Go Around

The agents who negotiated the deals, the broadcast executives who accepted them and the multimillion-dollar media stars themselves all knew the day of reckoning was coming.

But when it happened last week with the brutal cuts that whacked through the fat and into the marrow of CBS News, none of them wanted to take the blame.

Despite his offer to take a pay cut to save jobs, Dan Rather--as well as a dozen other CBS news personalities--continue to command huge salaries in the wake of $30 million in cutbacks at CBS News.

Short-lived “CBS Morning News” anchor Phyllis George reportedly got a hike in her salary from $1 million to $1.2 million earlier this year, even though she hasn’t been on the air for more than a year.

And “60 Minutes” correspondent Diane Sawyer, who was rumored to be contemplating a jump to ABC several weeks ago, recently used those rumors to leverage a reported pay boost of $500,000 from CBS to $1.2 million--more than ABC News anchor Peter Jennings, who reportedly makes $900,000 a year.

There are several agents and lawyer-agents who negotiate contracts for these stars, but the “Big Three,” according to network sources, are generally conceded to be Ralph Mann of International Creative Management, Richard Leibner of N. S. Bienstock in New York and attorney Ed G. Hookstratten in Los Angeles.

In addition to negotiating the Phyllis George contract and getting Tom Brokaw $1.5 million a year in his current “NBC Nightly News” contract, Hookstratten is also known as the sports attorney/agent who helped escalate football players’ salaries in the mid-’70s. Neither Hookstratten nor Mann responded to phone calls from The Times on Wednesday.

But it is Leibner more than any other agent who is credited with boosting CBS star reporter/anchor salaries.

The aggressive Leibner began carving out a niche for himself as the chief agent of the major CBS news stars in the early ‘80s, when then-CBS News President Van Gordon Sauter moved from Hollywood to New York to take charge of the network news operation. Leibner is believed to have made Rather the highest paid anchorman in history with a reported annual salary of $3 million. Leibner is also responsible for Diane Sawyer’s recent coup.

Because he is currently negotiating severance pay for some of the very clients who came to him in recent years, Leibner would not talk about the cutbacks or his clients’ salaries this week. But he made no apologies for getting the best possible deal for them.

“Nobody ever signed a contract with a network news star with a gun to their head,” said one source who pointed out that CBS News would not have paid the huge salaries if it did not think it was getting its money’s worth.

“Leibner’s the one,” said former CBS News President Fred Friendly.

Friendly, who has repeatedly blasted the big salaries earned by news stars at all three networks, renewed his attack this week when CBS News--”The House That Ed Murrow Built”--took its drubbing.

“No journalist is worth that kind of dough,” Friendly said. “Most of them sit at the end of a tube and just talk anyway.”

Agents like Leibner, who played network news operations against one another, deserve some of the blame, Friendly said.

But he agrees that broadcast executives who accepted the higher money demands in a race for ever-higher ratings were equally culpable.

“They were cream puffs,” said veteran CBS legal correspondent Fred Graham, who lost his job in last week’s cutbacks. “I didn’t think it was a matter of blaming anyone at the time, because I benefited from it.”

He differentiates between agents like Leibner, who work on a percentage basis, and his own negotiator, Washington attorney Robert Barnett, who work for a flat fee. It is to the benefit of “the Big Three” to wrangle a much higher contract salary, Graham pointed out.

Still, he blames himself as well as agents and CBS management for the current bloated salaries. And much of the mentality, he believes, can be traced directly to the town that invented agents: Hollywood.

“I think some of these executives in TV in recent years were pushovers for these people,” said Graham. “I think it started with this high, wide and handsome style that they had. Some of our executives at CBS were among them. Van Gordon Sauter invented the term ‘infotainment,’ you know. A part of that was a pretty swinging style with money contracts. I was a beneficiary of that for a while and I didn’t put it down.

“But I think there is a cause and effect here. When you bring entertainment values to news, this is what happens.”

Friendly, who was instrumental in shaping the CBS News division in the early ‘50s along with the legendary Edward R. Murrow, is even more specific in pinpointing how show-biz agentry came to CBS News.

“Here’s how it works. Here’s how it all began,” Friendly said. “It began with Barbara Walters.”

Eleven years ago, according to Friendly, the ABC news division sought a high-profile news personality.

“So they went after Walters (then at the NBC “Today” show) and got themselves a million-dollar-baby that they put in a five-and-10-cent store,” he said.

Graham recalled that Walters ushered in the era of limousine service for network news correspondents. Before ABC hired her in 1976 for a reported $1 million a year, network news personalities walked to work, took the subway or drove their own cars. Though she left “ABC World News Tonight” nine years ago (Peter Jennings now anchors for a reported $800,000 a year), she still commands a salary of $1.5 million annually as co-host of the ABC newsmagazine “20/20” and as host of several of her own personality interview specials each year.

“Before Barbara Walters, the mentality was that a journalist, for so many years, was this scruffy, ink-stained type with a pencil behind the ear,” Graham said. “I think that when you confuse the journalistic values of Hollywood with the news, you can’t blame anyone when the price goes up.”

But one professional negotiator who asked anonymity says Hollywood is not the root of the problem at all. He blamed corporate greed.

“These guys aren’t talking about bringing down salaries,” he said. “They’re talking about reducing the operation of the news division. It’s like a ball player: Every time they reach a new plateau, they should be earning more than the kid at the bottom. If Jackie Robinson were alive today, he’d make $3 million. In his lifetime, he never made more than $74,000 a year.

“CBS News is just like the ballplayers. You didn’t see baseball go out of business when salaries started going up. They added 15 more teams. If agents didn’t go in and negotiate, none of these guys would have shared in the growth.”