November 28, 1997
Every man a king.
Huey Long
The entertainment business has spawned a gaggle of multi-millionaires that would have been unheard of half a century ago. By entertainment, I refer to music, movies, sports and just about anything connected with radio and television.
Movie stars have always done well, as have stars of the stage, opera and music. Nowadays, Oprah Winfrey, who is the Master of Ceremonies(MC) of a TV talk show, is paid $150,000,000 per year. This is as much, or more, than many heads of large corporations make. Of course, she isn't even in the same league with Microsoft's head Bill Gates. Opra is very good at what she does, and so is Bill Gates, but there have been people in the past who have been at least that good who were paid only a small fraction of what they now get paid; even considering the value of the dollar. Of course, entertainers and entrepreneurs have always been well paid, but the scale of what "well paid" means has changed radically.
For a single fight, Mike Tyson got $30 million --and that was for one that he lost. To be fined three million bucks is a pittance. His biting the ear of his opponent guarantees a bigger crowd at his next fight. And it is big crowds who are willing to pay big bucks to get in to see the fight, as well as the money paid by the networks to broadcast it, that make those large purses possible. The big money paid by TV networks comes from the big bucks that advertisers pay to get their message to a public that will buy just about anything that is advertised.
I recently watched a 60 Minutes segment on Tina Turner. She is a pop singer who screams into a microphone in competition with a cacophony of electronic instruments. She also constantly bounces and wiggles everything that she has. In exchange for periodically doing this, she has more money than she could ever spend. She has a villa in southern France that would have been the envy of royalty --who are also, in their own peculiar way, entertainers. What else does the royal family of England do, besides entertain?
If Tina paid cash for her villa, she will be okay. Audiences are very fickle and today's star will be tomorrow's has-been. However, old people go to concerts put on by the entertainers of their youth. A single musician who used to play for the Grateful Dead can still pack in a crowd of old Deadheads. Tony Bennett can still fill a big hall.
And what does the public get for its money? They get exactly what they want. And people are willing to pay just about anything to get what they want.
I ask myself whether these superstars deserve what they get. In a world where a small piece of crystallized carbon can demand a handsome price, who am I to question the price of a Tina Turner, Michael Jordan, Luciano Pavarotti, Opra Winfrey, Mike Tyson etc.
We all know that price has nothing whatever to do with value. Price is solely a function of what someone is willing to pay for something, while value refers to what the product can do for the purchaser. Caviar commands a very high price, while the fish that it comes from has real value --it can keep the buyer alive, if eaten. A house and land have some real value to the owner; but a fancy villa on the Riviera serves the owner no better than my modest house serves me.