This is taken from The Guardian:

BBC warns stars including Jeremy Clarkson and Terry Wogan of severe pay cuts
by Maggie Brown
Wednesday 10 June 2009 13.07 BST

BBC stars including Jeremy Clarkson and Terry Wogan have been left reeling after being called to a meeting with top corporation executives and told to expect drastic pay cuts, MediaGuardian.co.uk can reveal.

About 100 of the BBC's best known TV and radio stars attended the Monday evening gathering on the sixth floor of BBC Television Centre in west London, where they were addressed by the director general, Mark Thompson, and other senior corporation executives. One attendee described it as a "very grim meeting".

It is understood that anyone on screen or behind a microphone earning more than £100,000 a year faces a pay cut of 25% when their contracts are renegotiated. For some highly paid stars, the salary reduction could be as much as 40%.

According to sources who attended Monday's meeting, those present included Clarkson, Wogan, Bruce Forsyth, Lenny Henry, Jo Brand, Mariella Frostrup, Dara O'Briain and John Inverdale.

However, three of the most highly paid BBC stars – Jonathan Ross, Graham Norton and Chris Moyles – were absent.

At the meeting, the stars were treated to a lengthy address by Thompson about the severe financial pressures and uncertainty facing the BBC in the coming years, in what was clearly an attempted wake-up call. Alan Yentob, the BBC creative director, and Jana Bennett, the director of BBC Vision, were also present.

Afterwards, one of the stars said: "I thought we were going in for a sociable glass of wine and canapés, but instead there was this very grim meeting. We were all buzzing about it afterwards. Some of us are in very difficult contract renegotiations right now. No one was left in any doubt what they were getting at."

A BBC spokesman said: "No organisation is immune from the economic climate and we have to find substantial savings. Talent fees are not excluded from the economic pressures faced across the organisation and these will be reflected in our ongoing negotiations.

"This was an internal event as part of our ongoing dialogue with the artists and presenters who work for us."

The BBC is reacting to public outrage at what is regarded as excessive talent pay, particularly Ross's three-year deal, thought to be worth £16.9m.

This debate over BBC talent costs was stoked last week by the highly critical Commons public accounts committee report attacking what it claimed was the inflated pay of leading BBC radio presenters and DJs.

But stars at Monday's meeting said these instances of BBC misjudgment were not their fault.

One presenter said the pay cuts were unfair because those affected were ultimately self-employed, while the managers at the BBC, whose pay has risen sharply, were only facing a salary freeze, and a continuation of their gold-plated pensions.

An agent said: "I find it disgusting. The BBC is taking it out on the talent, while its executives have made the mistakes. They messed up over Ross, they have bad property problems, and they have spread themselves too thinly over too many services. And now they are taking it out on the middle ranks – people at the top of their game earning £100,000-£250,000 who have commitments and mortgages like everyone else.

"They have the talent over a barrel. The person hiring can do what they want, and currently there is little demand for anyone's services anywhere else. An entertainment star might threaten to go to ITV, but not in the present climate."

One household name who attended the meeting said: "The problem is no one has got any sympathy for people like me, so it seems churlish to start moaning. Many people will take the line: 'Keep me on, I'll take a pay cut to keep up my public profile.' The thing is, no one is on the breadline."

TV executives across the board now recognise that star salaries have spiralled out of control during the past decade, and not just at the BBC.

They claim some of the top names in entertainment have been able to demand, and receive, between £50,000 to £100,000 an episode, and that applying the brakes is now essential, but will be a big shock to the stars.

In an interview with the House magazine last month, Thompson said: "We will reduce the total amount we spend on top talent, and have already agreed some new contracts for less than we have paid in the past."

In March the director general warned BBC staff that the corporation had to find £400m in budget cuts over the next three years or risk breaching its statutory borrowing limit.

Thompson said the cuts were needed to balance its books, including a freeze on executive pay and a reduction in the fees paid to top talent.

The BBC has cut 7,200 jobs over the past four and a half years, with another 1,200 to go, and is making efficiency savings totalling £1.9bn over the licence fee period up to 2013.