From PEOPLE Magazine Click to enlarge
Katie Couric could not take the call. Her agent Alan Berger, on the phone on Dec. 18 with an urgent message, simply had to wait. And wait. And wait. Until at last at 7 p.m. the Today co-host finished taping an interview in New Jersey, hopped into a company car waiting to take her back to her Manhattan apartment and dialed Berger's number on her cell phone. When Berger heard Couric ask, "What's going on?" he could hardly contain his excitement. After weeks of what he calls "heated debate and back-and-forth" with NBC, he wasted no time: "Katie, we have a deal! We're done!"

And what did the winner of $65 million over the next 4½ years have to say about her newfound status as the world's highest-paid TV news personality? Not a thing. "All I heard was dead air," says Berger.

Had the small-town-kid-made-good passed out? Had she tossed the phone and headed straight for the nearest shopping mall? Nope. Her cell line had simply died. But when Couric, 45, called back to talk over the contract—which allows her to stay with Today but also gives her free rein to explore other possibilities within NBC—there was no mistaking her reaction. "She was thrilled and excited and overwhelmed," says Berger. For the record, though, the famously frugal star has still not gone on any shopping spree. "Katie will spend her money on the same thing she's been spending it on for the last 10 years," says a pal with a laugh. "Nothing. She puts it in the bank."

Most of it, anyway (she does, after all, live in a $3.2 million Park Avenue apartment). The fact is, while Couric has jazzed up her look in the 10-plus years she has been on Today—her prim suits and boyish hairstyles giving way to leather skirts, sleek high heels and longer, blonde-streaked hair—she is at heart the same sensible beat reporter who until August spent 13 years driving the same Honda (her mother, says a friend, found the 2001 red Ford Thunderbird convertible she replaced it with "a little flashy") and who listens with equal intensity to Secretary of Defense Donald Rumsfeld talk war strategy or to daughter Carrie, 6, kid sister of Ellie, 11, discuss an episode of Rugrats. This past year in particular has brought TV's most famous working mom both heartache and joy. In October, less than four years after her husband, Jay Monahan, died at age 42 of colon cancer, she once again lost a family member: her sister Emily, who died of pancreatic cancer at age 54. But this time she did not face grief alone; at her side through it all was high-powered multimillionaire TV producer Tom Werner, 51, her boyfriend of more than a year.

Now, despite the family loss, friends say Katie's spirits are high. When she gave the go-ahead on the deal with NBC, she achieved the goal she has said was most important to her when she first got into journalism as a desk assistant for ABC's Washington, D.C., bureau—where her bosses included Sam Donaldson—some 20 years ago: Not riches (she was already earning $7 million a year), but respect. "Time and again she has shown that she can handle any interview," says Tom Shales, TV critic for The Washington Post. "Osama bin Laden, if he came on the show, or Mariah Carey." Says Michael Gartner, the former NBC News president who hired Couric: "She has what my 99-year-old father calls an 'affidavit face.' You look at her and believe her. People see something in her they relate to and trust."

Which is exactly why every Tom, Dick and Steven—as in DreamWorks co-owner Steven Spielberg, who courted Couric for a daytime talk show with a $100,000 video featuring people waving signs saying "We Love You, Katie"—spent the better part of 2001 trying to woo her. "Certain people have an indefinable something," says 60 Minutes executive producer Don Hewitt, who early last year broached the subject of bringing her on board the CBS news show. "It's what made a Walter Cronkite a Walter Cronkite. It's not easily defined—it just is. It's a mystique."

It was math that brought General Electric chairman Jeffrey Immelt—who oversees the sprawling corporation that includes NBC—to urge Couric to stay. With revenues upward of $350 million a year, Today beats out even prime-time favorites such as Friends and Frasier as the network's biggest earner. And while Today co-host Matt Lauer, as well as weatherman Al Roker and news anchor Ann Curry, are part of the team's appeal, Couric, says pal and Extra senior executive producer Lisa Gregorisch-Dempsey, is "the jewel in the crown." A jewel the show needs to flash more than ever. In 2000 Today beat out ABC's Good Morning America and CBS's The Early Show by as many as 2 million viewers on some days; in 2001, for the first time in six years, its numbers declined. For a time in December Today's lead over No. 2-ranked GMA dropped to about 600,000, but soon afterward had climbed back to about 1.6 million. At a time when a slowing economy has meant cost-cutting by many companies—NBC has reduced its staff 5 percent nationwide—Couric's windfall has reportedly led to some grumbling in the studio, where Couric has long had a reputation as a hard-driving boss. "She can be very demanding," says one former staffer. "People get burned out."

Still, "if you have a star you pay them star money," says Gartner. Adds a former NBC exec: "She could be worth $65 million a year. You can pick a number. It really doesn't matter. They desperately wanted her."

So Couric found herself facing a happy dilemma. In between the regular cardio and weight workouts that have given her what Allure magazine editor-in-chief Linda Wells calls "the best legs on television," picking up her daughters from their Manhattan private school and faithfully attending PTA meetings, and occasionally fitting in a romantic dinner with L.A.-based Werner at the local Italian restaurant Vico's (her usual: zuppa di pesce, a $25.50 bowl of mixed seafood in broth), she had to figure out what she wanted. When Berger put out the word early in 2001 that Couric was open for offers, she was flooded with suitors: Sony, DreamWorks, FOX, Viacom and Disney, just to name a few. "Everyone and their mother had a meeting with Katie and Alan," says one studio executive.

CBS held out the possibility of working for 60 Minutes (one of Couric's dreams, says a former colleague). AOL Time Warner (the parent company of PEOPLE) was especially interested in Couric to host a syndicated talk show. To that end, says an exec from a rival company, AOL Time Warner proposed "a Web site, a show on CNN, a column in TIME magazine and the kitchen sink too." DreamWorks offered the entire kitchen. In an effort spearheaded by chiefs Spielberg and Jeffrey Katzenberg, the studio designed and built a set for a syndicated talk show and handed Couric's reps a multimillion-dollar check she could cash if she agreed to sign.

At times the woman whose parents wouldn't let their children buy candy at the movies was uncomfortable with the over-the-top come-ons, say friends. Still, as Couric told The New York Times, "some of the offers did intrigue me. I felt I owed it to myself to see what else was out there, and there were some exciting-sounding things." According to friends, Couric often turned to her savvy beau, who coproduced such megahits as The Cosby Show, Roseanne and 3rd Rock from the Sun, to help guide her through her many offers. "He's a brainiac," a Couric colleague says of Werner, who had separated from his wife of 30 years, Jill, 52, shortly before Berger introduced him to Couric in May 2000. "You have to be a brainiac to be around Katie." There was much to mull over. Was the comfort of her Today family and a familiar routine really worth getting up every day before 5 a.m.—and knowing that's the easy part? "It's a grueling schedule," says executive producer Jonathan Wald. "The pressure to worry about tomorrow and the next day never ends." On the other hand there is no less pressure to succeed on a new daytime talk show, where the failure rate is 90 percent and the subject matter often turns tawdry. Location was a factor too: Any number of Los Angeles-based jobs would have eased the logistics of her romance with Werner, but was that worth displacing her children? In the end Couric chose to stay put, says a friend, "because NBC is her home, because she grew up here, because anything else would be out of the realm she's comfortable in." In other words, she went with her gut. "The prospect of leaving NBC," explained Couric, "made me a little sick to my stomach."

So what now? Lauer, for one, might want to have a word with his agent about his reported $4 million-a-year salary. "It's going to be a feeding frenzy," says Ed Joyce, a former president of CBS News. "Every anchor whose contract is up will be sharpening his or her knife."

While others wrestle with what Couric's contract means, she continues with life as usual. She still shops for bargains at Loehmann's, gets $11 manicures at the Pink Rose nail salon near her apartment and tries to win a free cup of Java at a neighborhood coffee shop by answering a daily trivia question. "Sometimes she gets it," says a clerk, "sometimes not." At the Slammin' Salmon gourmet food shop near her vacation home in upstate Millbrook, N.Y., she never even thinks about ordering anything but the chef salad—at $6.95 the lowest-priced item on the menu. "It's not that she's cheap," says a clerk. "She says she is afraid she is going to lose her job."

A foolish fear, perhaps, but the deaths of both her husband and sister have taught her hot to take anything for granted. Most nights she eschews Manhattan nightlife in favor of family dinners at home, often takeout from Vico's. In her sunny four-bedroom apartment, says Gregorisch-Dempsey, she has put up photos of Monahan and sister Emily to "keep the memory alive for the kids and for herself." An additional tribute to her late husband: Her fund-raising efforts for the National Colorectal Cancer Research Alliance, which she cofounded in 2000, have helped bring in more than $10 million.

As Couric turned to her own parents, Elinor, 78, and John, 81, for comfort in her grief, her children turn to her. "She is so smart and sensitive in the way she has handled them," says Gregorisch-Dempsey. "The other night I was sitting next to Carrie while Katie was running room to room finding little colored pencils for Ellie to finish her homework. And Carrie was talking about how one of the Rugrats lost a parent. They talk very matter-of-factly about death because they understand it."

Indeed, the only issue in any talk, she says, is getting a word in edgewise: "You can't have a phone conversation with Katie without being interrupted 14 times. She'll be saying, 'Okay, Carrie, I'll be right there. Okay, Ellie, here I come.' It's like Ping-Pong. I never know if she's responding to me."

Fortunately, Werner, who has three children of his own—Edward, 25, Carolyn, 22, and Amanda, 13—is used to a frenetic pace. Between coaching Amanda's sports teams at home in Los Angeles, taking part (and having a financial stake) in the winning bid to buy the Boston Red Sox and hanging with Couric and her girls, he spends a lot of time in transit. "They steal moments together," says Gregorisch-Dempsey. "They are like two little kids. He is a prince—genteel, incredibly smart and romantic." Still, Couric isn't likely to enter into any more major life negotiations just yet. Werner's divorce is not yet finalized and when it comes to marriage talks, says a close Werner friend, "they're moving very carefully."

The fact is, after a year of love, loss and intense wheeling and dealing, Couric might just want to get back to the decisions of daily life. "One thing Katie has learned," says Gregorisch-Dempsey, "is just to focus on today."

Karen S. Schneider
K.C. Baker, Rachel Felder, Rebecca Paley, Diane Herbst and Elizabeth McNeil in New York City, Jenny Hontz, Frank Swertlow and Robyn Flans in Los Angeles and J. Todd Foster in Washington, D.C.

  • Contributors:
  • K.C. Baker,
  • Rachel Felder,
  • Rebecca Paley,
  • Diane Herbst,
  • Elizabeth McNeil,
  • Jenny Hontz,
  • Frank Swertlow,
  • Robyn Flans,
  • J. Todd Foster.