If Katie Couric is consistent in one way, it’s that she’s expensive. Yahoo!’s (YHOO) decision to hire the veteran newscaster to be its new Global Anchor, partially taking her away from ABC (DIS), where she has an estimated $40 million contract, is a decidedly bold move for a company that’s been making a number of bold moves in recent months. The question though is, is Katie Couric’s marquee status worth the money?
Couric is good at her job, there’s no question about that. But TV news requires more than just intelligence and reportorial skills; the most successful hosts also have a charisma that make you want to watch them. That’s something Couric has struggled with ever since she left the Today Show to anchor the CBS Evening News in 2006 for a $15 million-a-year paycheck. At the time, media analysts expected her to add star power and help the station expand its audience in the face of a dwindling pool of rapidly aging evening news viewers. But that never happened. Instead, Couric was criticized for being too informal for such a serious program, and viewers’ reaction to her were tepid, at best. She left CBS (CBS) in 2011 and returned to her daytime talk show roots in 2012 with Katie, on ABC, where she is now also an ABC News correspondent.
Things at ABC haven’t gone so well for her, either. According to the Hollywood Reporter, Katie’s initial budget was $50 million, or nearly twice the cost of similar talk shows. (The budget was later lowered to $35 million). But the show never pulled in the Oprah-size ratings that ABC hoped for. And more tellingly, despite hosting a talk show aimed at the 25-to-54-year-old female demographic, only 10 percent of women view Couric favorably, according to the Q Scores Company, compared with almost 30 percent for Ellen DeGeneres. There have even been rumors that Katie wouldn’t get renewed for another season, although given the fact that Yahoo Chief Executive Marissa Mayer made a point of saying Couric would be able to keep hosting the show, it now seems likely that the show will keep going.
Still, it’s impressive that the tech company has been able to draw such a major broadcast news persona at all. In her year-and-a-half tenure as Yahoo CEO, Mayer has taken great pains to breathe new life into the struggling Internet giant. Its stock is up, thanks mostly to Yahoo’s stake in the Chinese Internet company Alibaba. But the company is still in desperate need of an advertising boost—and to do that, it needs to attract a bigger audience. Yahoo has gone on a buying spree in recent months, snapping up top talent and platforms in an effort to revitalize its brand. In March it purchased Tumblr for $1.1 billion. In the past two months it has also hired the New York Times’s Megan Liberman, Matt Bai, and David Pogue to head Yahoo News, write political columns, and cover tech, respectively. Couric’s deal is said to include a “newsmaker interview program” that would be featured on the website’s homepage, which gets about 43 million unique views a day, according to comScore (SCOR).
By adding Couric, Yahoo is clearly trying to give people a reason to visit (and revisit) its site. But adding a 56-year-old news veteran with a lukewarm following probably isn’t the groundbreaking move the company needs to turn itself around. Yahoo hasn’t said what it’s offering to pay Couric, but her $40 million package at ABC is a pretty hefty baseline. Last year, Mayer made $36.6 million in her first six months on the job, mostly in stock options, and her minimum estimated pay when she joined Yahoo was $117 million over five years. So even though Couric won’t be the highest-paid person at the company, she’s still a pretty weighty purchase.