'Taking a pay cut won't demotivate me'

Paul O'Grady talks about the cost of BBC talent, his hopes for an amicable renewal of the contract, and why working on Radio 2 is not the fun it was. Interview by Maggie Brown
Paul O'Grady
From wig to wag … O'Grady has become one of Channel 4’s most bankable stars, regularly attracting more than two million viewers. Photograph: Sarah Lee/Guardian

A few hours after our interview Paul O'Grady calls from his Kent farmhouse, where he has been building a Fort Knox chicken run for 26 rescued battery hens. "These pay cuts of 25-40% that the BBC is telling its talent to take - does that include [director general] Mark Thompson?" asks the Channel 4 chatshow host. When told that BBC executives are imposing a pay freeze on themselves, O'Grady growls: "That is grossly unfair. Why expect the people who bring in the viewers to your networks to take a big cut and not you. Insane. Wrong. If I worked for the BBC I would not be amused by that. Especially when we know the licence fee has not gone down."

The comments and the scenario are vintage O'Grady, who has positioned himself as a funny, animal-loving ex-social worker daytime TV presenter since ditching Lily Savage, the alter ego that made him famous, five years ago. Yet the highly-paid 55-year-old is also conscious that these constrained times demand change. Unlike many of his TV peers, who all appeared to go to ground when news of the BBC's plans to cut salaries emerged last week, O'Grady told the Guardian he supported a pay cut. "I am quite happy to take a cut. You've got to, if you want to work and continue working."

O'Grady has got the message that advertising-funded British television, such as C4 and ITV, is being painfully squeezed, so showbusiness cannot continue in the way it has for the past two decades.

One leading entertainment executive spoke for many when he said: "In a credit crunch they are as equally responsible for the future of broadcasting as the people off screen. The top talent are paid too much, it's as simple as that."

Silly money

Few of O'Grady's viewers and fans are in the mood for sympathy with stars who moan about pay cuts. C4, in the middle of negotiations over its survival, has made it clear that it can only continue with savings of between 25-30% on the cost of his programme.

O'Grady is phlegmatic. "I can afford it. We can't be ridiculous and hold out for silly money," he says. "I was talking about it with Cilla Black the other day. We can't be greedy in these times."

He has risen to become one of TV's most bankable stars over the last five years. He is among the top 100 earners who take a lion's share of the £750m paid annually to all television and radio presenters.

Crucially, he created his own company, Olga TV, when he walked out of ITV in 2006 in a coup staged by C4. Olga has made his chatshow ever since and therefore takes a production fee on top of standard performance fees, and a share of any profit left after production costs are taken out.

In this, he is similar to many of the big-name stars such as Jonathan Ross, Graham Norton, and Richard and Judy, who led the way in owning (or part-owning) their own companies. So successful has the model been for these owner/presenters that television executives call it double and treble creaming.

Olga TV is renegotiating its two-year contract for the Paul O'Grady Show with C4 (it is off air for the summer but returning in September). The show expires at the end of December, and in some ways the negotiation is an indicator of how decisively the power balance has shifted away from the talent.

Following the channel's loss of Richard and Judy and Carol Vorderman and its slashing of budgets for daytime programmes, it could of course be a relief that C4 has decided to keep O'Grady's show - but then it regularly attracts more than two million viewers, an audience share in excess of 15%, and advertisers keen to reach housewives.

"I want an amicable agreement without fights," says O'Grady, who fell out with ITV partly over his desire to create Olga TV. "I'm not a businessman. I could pack it in, but I like work. I don't want to sound like Catherine Cookson but I've worked since I was eight, with a paper round and in a fruit and veg shop. Taking a pay cut won't demotivate me, not at all. It's not about money in the first place. It's about the job.

"I have a responsibility to my staff. A lot of people are working for me. Also, the wage we get, for most people, it's a fortune. An absolute fortune!"

He makes it clear that he loves his job, which he took on in 2004 after ditching the Lily Savage drag act after 20 years.

"I went from being a big harridan in a wig to a talkshow host with my dog, Buster. I like this job, I've found a format which suits me. I have trotted around the country, doing stand up, I've been there, done it. I want to go on doing this," he says.

The bottom line is that he and his business partner, the Labour peer Lord (Waheed) Alli, know, as do other presenters and their agents, that they cannot play off C4 with threats of moving back, say to ITV, or to Channel Five - the market for big entertainment talent has collapsed. "There's no competition," O'Grady admits. Quite how big a pay cut he will take is up for negotiation, but a star's fees can be a very large portion of the overall cost of a programme. O'Grady says he accepts that reducing his pay is the only way to make sufficiently meaningful economies to satisfy C4, without damaging the show or failing to protect his 15 permanent staff or any of the people hired to help for the show's 26-week run.

"Times are hard. I'm providing a lot of regular, reliable work and wages. I have friends on the staff."

The Paul O'Grady Show, which runs five times a week, costs C4 £111,000 per hour, a total of £14.43m a year. Informed sources say that O'Grady makes far more than the estimated £20,000 per show performance fee he was paid at ITV. He has made millions as a mainstream star but all he will say on the pay front is: "It varies. In the weeks I am not on television I turn everything else down. It wasn't about money, though. I moved [to C4] because it was about control of the show. I was the only star without my own production company."

But the channel's executives point out his popularity has flowed over into other deals. The first part of his hilarious and moving autobiography At My Mother's Knee, about growing up in a damp little house in Birkenhead, has sold 800,000 copies in hardback, topped the bestseller lists, and last week went into paperback. He is writing, with relish, a second instalment, about the Lily Savage years, for a rumoured £2m advance.

The two-year deal, which runs out at the end of this year, was done when there was plenty of advertising money in the system: now the market is down 15%, and C4, which has overpaid for the rights to a floundering Big Brother, has slashed its programme budget accordingly.

It fears that 2010 (the final year it is contracted to buy Big Brother) will be extremely tough. At current costs O'Grady's programme is said to be not making a profit for the company, especially since the ending of premium-rate phone revenue from now-abandoned quizzes. The show stopped the general knowledge phone-ins during the controversy of two years ago.

Public outrage

O'Grady, who is about to go on holiday - a luxury train across Siberia to Vladivostok - hopes to return home to his chickens and to sign another a long-term deal that stretches to 2011. And to resume his one other outside commitment, a slot on Radio 2.

As a parting shot, I ask what he thinks of Ross's controversial three-year deal with the BBC, which has stoked public outrage about BBC largesse and strengthened its determination to act on inflated contracts.

"Ridiculous wages. But I always thought, good for him. He's not to blame, it was the BBC. If you can get such a deal, do it. Film stars do."

But he adds that working for Radio 2 is no longer the fun it once was, with editorial compliance executives breathing down the necks of producers. In what sounds like a slap at those busybody producers but could also be a slap at his rival, he says archly, "As if I would swear live on TV or radio!"

Money, money, money

£750m what Britain's TV and radio talent earns a year from fees, royalties and residuals

£204m the amount the BBC pays talent - excludes news and current affairs

18% of all programme spending goes to talent. The top spenders include drama, comedy and music

Top ten stars, such as Simon Cowell and Jonathan Ross, earn well in excess of £2m a year

Vanishing species: the £1m-a-year newsreader. Natasha Kaplinsky's 2007 deal with Channel Five is unlikely to recur