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02.09.11

CBS Wants Contract Extension for Katie Couric

The network, which is shaking up its management, has asked anchor Katie Couric to stay on through the 2012 elections—for significantly less money than her original $15 million deal, a source tells Howard Kurtz.

CBS has asked Katie Couric to stay on as anchor after her lucrative contract expires at the end of May, a source familiar with the situation tells The Daily Beast.

While negotiations have not yet started and a deal might fail to materialize, this is the first concrete indication that Les Moonves, the company’s chief executive, has made a decision on extending her deal.

That word comes amid a management shakeup in which Jeff Fager, the 60 Minutes executive producer, takes over CBS News from Sean McManus, the man who helped lure Couric from NBC’s Today show five years ago.

If Couric and the network reach agreement, it will be for an annual salary significantly lower than the $15 million in her original deal. And the source says the new contract would be for a shorter period, running through the 2012 elections, which would essentially buy time for both sides to pursue other options.

Couric plans to listen to other offers in the coming months and might decide to go elsewhere, or the talks with the network could fall apart. But working in her favor is CBS’ apparent lack of a Plan B—that is, no obvious successor waiting in the wings.

Moonves may also want to create a syndicated program for Couric down the road, which can generate millions of dollars in revenue and therefore has an additional incentive to keep her in the corporate family.

On the other hand, Fager, who was named chairman of CBS News on Tuesday, does not have as strong a relationship as Moonves does with Couric, who does occasional pieces for 60 Minutes. Network insiders say Fager would not have accepted the job unless he had been assured that he would have a major role in the upcoming decision. And unlike McManus, he would not be as invested in Couric’s continued tenure.

Network insiders say Fager would not have accepted the job unless he had been assured that he would have a major role in the upcoming decision on Couric.

The CBS Evening News remains in third place, as it was when Couric took over, and by that measure her stint has been a disappointment. The broadcast averaged 7.4 million viewers last week, when Couric reported from Egypt, and that was its best week since 2009. But with Brian Williams also in Egypt, she still trailed NBC Nightly News, which had 11.3 million viewers, and Diane Sawyer’s World News, which averaged 9.8 million.

Couric has often seemed constricted by the 22-minute format, in marked contrast to her freewheeling approach on NBC’s much longer morning show. But she has garnered more respect in the anchor role since her famous series of interviews with Sarah Palin during the 2008 campaign and has drawn favorable reviews for her online interviews with celebrities and newsmakers.

In assuming the title of news division chairman, Fager is keeping his job at 60 Minutes. The president’s title will go to David Rhodes, who has been Bloomberg’s head of U.S. television operations after a dozen years as a vice president at Fox News.

“If you look at what we’ve done at 60 Minutes,” Fager said in an interview, “I want to do more of that at CBS News. That’s the message here. In terms of this being a reporter’s world, that’s good news for the reporters of CBS News.”

The top-rated newsmagazine show, of course, has far more resources for its size than other broadcasts. “I’ve got to dig in and find out how we’re spending our money,” Fager said.

He described the chairman’s job as “more of a strategic role, a big-picture role,” rather than running the news division day to day. That, he said, would be impossible while keeping his current job. Moonves “didn’t want me to leave 60 Minutes, and I didn’t want to leave 60 Minutes,” Fager explained.

McManus has been juggling a pair of jobs since 2005, when he took over CBS News without giving up his portfolio as president of CBS Sports. He’ll now return to the sports division with the title of chairman.

“I’m proud of everything we did at CBS News,” McManus told me. “Both divisions right now, with all the challenges they’re facing, deserve to have people who are doing those jobs full time…

“My background and foundation is really in sports,” said McManus, the son of legendary sportscaster Jim McKay. “It was the most logical choice to be made.”

Network staffers were stunned by the announcement. “Sean McManus is the best boss I ever had, and I’m really going to miss him,” says Face the Nation host Bob Schieffer. “But if there had to be a replacement, I can’t think of a better person than Jeff Fager.”

Fager is a newsroom favorite who pulled off an extremely delicate task. As the longtime understudy to Don Hewitt at 60 Minutes, he took over the executive producer’s job in 2004 without making Hewitt feel he’d been pushed aside, then restored its competitiveness by jumping more quickly on breaking news stories—for example, the recent two-part profile of WikiLeaks founder Julian Assange.

Ira Rosen, a 60 Minutes producer, describes his boss’s no-drama style: “Jeff has a real clear judgment about ideas, even while he’s disagreeing with you, but he’s open-minded enough to hear you out. In screenings, he’s a great editor. He could take a piece you know something’s wrong with, and in five minutes—rip it apart, put it back together, and it’s much better.”

While he has a collegial approach, Fager can also make tough decisions. He helped ease Mike Wallace into retirement. And although he had served as Dan Rather’s CBS Evening News executive producer in the 1990s, Fager decided not to keep Rather as a 60 Minutes correspondent in 2006, concluding that he had trouble breaking into a crowded lineup that includes the likes of Steve Kroft, Lesley Stahl, Ed Bradley, Scott Pelley, and Bob Simon. Rather’s dismissal came after his botched story on George W. Bush’s National Guard service, which aired on 60 Minutes II—after Fager had left as that show’s founding producer—and cost Rather the anchor chair. Rather unsuccessfully sued CBS for breach of contract.

One problem Fager will inherit is CBS’ perennial also-ran status in the morning. McManus presided over several anchor changes at the Early Show, most recently replacing Harry Smith and Maggie Rodriguez with Erica Hill and Chris Wragge, but the program remains in third place.

Howard Kurtz is The Daily Beast's Washington bureau chief. He also hosts CNN's weekly media program Reliable Sources on Sundays at 11 a.m. ET. The longtime media reporter and columnist for The Washington Post, Kurtz is the author of five books.