Tabloid queen grants free interview to King

The message to Paris Hilton was loud and clear: Don’t mess with Barbara Walters.

In the aftermath of Hilton’s publicity fiasco, in which her reps shopped her first post-prison interview as a profit-making venture, the media world was abuzz about the “get” Walters lost, and the embarrassment she subsequently caused Hilton, as ABC fought back by helping spread the word about NBC’s big-money offer.

At a time when celebrities have more media outlets than ever through which to rehabilitate, maintain and enhance their public images — including many that eagerly pay for the privilege — Walters’ move showed it’s a game not without risks.

Details of Hilton’s negotiations with ABC and NBC proved so embarrassing, and made her story so toxic, that she was forced to settle for a lower-profile option with no coin at all attached: CNN’s “Larry King Live,” where she’s skedded to appear Wednesday.

“It may change the ability of celebrities to profit from their mistakes,” said former “GMA” producer Lisa Sharkey, now senior VP and creative director at HarperCollins, of the Hilton imbroglio. “I don’t think it’s going to change the news media competing for ‘gets.’ “

After spending months laying the groundwork with the celebutante and her mother Kathy Hilton, including fielding a phone call from the jailed Paris Hilton, Walters, the former “20/20″ anchor and co-creator of “The View,” was astonished to learn she had competition for Hilton’s story.

She wasn’t aware that the Hiltons had initiated a parallel track, headed by crisis management expert and family spokesman Michael Sitrick, to do what is commonplace in the world of celebrity interviews: shop networks for the best deal.

Sitrick approached ABC, NBC and CBS, news biz insiders said. Father Rick Hilton and a family attorney were also involved in the talks.

CBS passed quickly; the net is still living down charges that it softened the “Evening News” when Katie Couric became anchor. Insiders said “60 Minutes” exec producer Jeff Fager wouldn’t consider it.

When the Hiltons came back to ABC with an offer of close to $1 million from NBC, Walters adopted a scorched earth policy — both to keep the interview out of the hands of arch-competitor NBC and to rap the Hiltons for attempting to squeeze cash out of the Alphabet’s news division.

In so doing, it was inevitable that ABC News’ financial discussions with the Hiltons also became public knowledge. ABC News offered the Hiltons “up to $100,000″ to license personal photos and video, the kind of media essential to producing a primetime “20/20″ special.

ABC sources likened the proposed deal to what the network offered the widow of “crocodile hunter” Steve Irwin, killed in a freak stingray attack last fall. ABC’s “20/20″ landed the interview with Terri Irwin and paid her a comparable amount to license material for the show.

That kind of payment isn’t handled by the news division but by a legal department that handles the acquisition of rights to footage. Often the payment goes to another media company that owns the rights, not the celebrity.

Increasingly, however, the entertainment divisions have become involved in such situations. NBC paid $2.4 million for the rights to a concert honoring what would have been the 46th birthday of Diana, princess of Wales. NBC also landed a sitdown with Princes William and Harry, which drew the highest ratings for “Dateline NBC” since its Amber Frey exclusive; snippets of the interview are still playing on MSNBC.

NBC’s talks with the Hiltons focused on a deal with the entertainment division, which had a business relationship with the family when it aired two episodes of reality show “I Want to Be a Hilton” in 2005.

“I think there is precious little difference between paying cash for stuff and buying rights to television concerts; I think the networks spend a lot of time pushing the envelope and trying not to cross the line,” Sharkey said.

But as celebrity journalism increasingly drives news coverage and commands ratings, fewer news orgs still pretend that line exists. The syndicated newsmagazines, produced by the same media congloms that own the broadcast network news divisions and cable news nets, routinely pay for access, as do photo agencies and mags like People and OK.

If ABC had been able to secure the rights to, say, video of Hilton’s homecoming after her incarceration, the $100,000 deal would have been a bargain given the value on the open market.

Sources in the publicity world were less chastened than infuriated that ABC and NBC would grandstand on the issue of journalist integrity in connection with celeb interviews they chase in the hopes of scoring big ratings.

“Why shouldn’t they pay her? –they’re about to make an enormous amount of money off her,” said one prominent Hollywood publicist. “To deny they pay for interviews — well, now we know they do.”

Follow @Variety on Twitter for breaking news, reviews and more