#334 Oprah

**David Senra** (0:00)
I'm going to jump right into this episode. Make sure you stick around to the end. There's two very important updates, including the very first in-person Founders-only conference that's taking place in Austin, Texas. Less than 60 days from now, I'll tell you more details. Stick around to the end. I'll see you on the other side.
In 1984, Oprah was riding high.
She was already Chicago's most popular TV talk show personality, and the local ABC affiliate that produced her show was paying her $230, a year.
Her agent had negotiated a four-year contract with annual salary increases of $30, a year.
She was pleased at first, but then began having second thoughts. Three separate ABC people stopped me to tell me what a great guy my agent was, Oprah said. And that didn't make sense to me.
Oprah's natural skepticism was aroused, and she fired her agent.
She replaced them with a Chicago lawyer named Jeffrey Jacobs.
I had heard Jeff is a piranha, Oprah said. I like that. Piranha is good.
That key decision turned Oprah from employee to capitalist and vaulted her out of the ranks of the merely well-paid Into the Forbes 400 Her show now airs on more than 200 stations in the United States and in 117 foreign countries.
Oprah earns more than $70 million a year.
It is ownership that has made her rich.
Oprah owns not only her show, but also the studio in which it is produced.
And she owns a big stake in King World Productions, the company that distributes her show.
Oprah's previous agent had given the local ABC station the rights to syndicate the Oprah show. No wonder they loved him. But Oprah and Jacobs sensed that they could do better and started looking for ways to retrieve her syndication rights.
They then brought in King World Productions as a distributor.
Shortly after, Oprah got a break. She was picked to star in the film The Color Purple. When her talk show went back on the air in the fall of 1986, she was a bonafide Hollywood celebrity. Ratings for her talk show climbed rapidly. With King World Productions selling it hard, Oprah's show earned $115 million in revenue during its first two seasons.
Last year, the Oprah Winfrey show took in $196 million in revenue against production costs of $30 million.
This part is fascinating. It talks about why this happens. Local stations are willing to pay top dollar for the Oprah show because it assembles an audience that tends to stay tuned to the same channel for the evening news. In a market the size of Houston or Atlanta, one rating point means about $1 million a year for that news station, right? The news programs that follow Oprah are the highest rated in most markets.
And in a market the size of like Houston or Atlanta or Washington, DC, these stations were paying Oprah $100, a week to carry her show. Oprah sold her show to 210 stations last year, which agreed to carry the program for the next five years and pay a 3% to 5% increase every year of the deal. This is so wild, what they did in addition to that. The stations will also give up an additional minute of advertising time. King World, the distributor, and Oprah will share the ad revenues that that minute generates. So think about it, they're getting a minute of ad revenue.
That's 200, because they sold the show for 210 different stations. That's 210 minutes of advertising five days a week for five years. And this is the end result. A conservative estimate of this five-year cash flow from that deal is $400 million. Remembering her close call with becoming just another high-paid celebrity, Oprah said, on my own, I will just create.
And if it works, it works. And if it doesn't, I'll create something else. I don't have any limitations on what I think I could do or be.
That was an excerpt from a Forbes 400 article written all the way back in 1995 when Oprah was just 41 years old. So I've wanted to make a podcast about Oprah for a long time. It's incredibly hard, I would say almost impossible to find a good, like a high-quality biography on her. And so let me tell you what I did instead and how this episode came to be. There is a performance coach and a writer named Dr. Julie Gerner.
She writes this fantastic newsletter called Ultra Successful that has a great tagline where it says, start your week with the most successful people on earth. And I was sending her messages on Twitter asking if she knew of any great biographies or autobiographies of Oprah Winfrey. She actually gave me great advice. She's like, there's a bunch of like long form interviews of Oprah in her own words and I can't think of a better source than Oprah herself. And so I found two long form interviews with Oprah. I start watching them, start taking notes on them. I was like, this doesn't feel right. This isn't what I do. And so what I did instead is I downloaded the audio from these interviews. I transcribed them, printed them out, and essentially made my own book on Oprah Winfrey. And it's essentially her speaking in her own words. And so the first interview, and I did this on purpose too.