CBS announced Tuesday that David Letterman would continue hosting the “Late Show” until at least the end of 2014. The agreement will make him the longest-running host in late night, beating out Johnny Carson’s 30-years as host of “The Tonight Show.” The announcement also confirmed that Craig Ferguson, host of “The Late Late Show,” would stay on as host for at least two years.

Though financial details were not disclosed, Letterman will not have to accept a lower salary, according to “The New York Times” Media Decoder. Meanwhile, according to earlier media reports, Ferguson may have doubled his current estimated $12.7 million annual salary as a result. The move would make him one of the highest-paid hosts in late night – almost as rich as Letterman’s estimated $28 million annual package.

Based on figures from multiple media sources, 24/7 Wall St. reviewed the estimated salaries of television’s late night hosts to identify the highest-paid entertainer in the business.

Read: The Highest-Paid Hosts on Late Night TV

According to Nielsen, while salaries continue to increase, viewership is shrinking. In fact, with the exception of ABC’s “Jimmy Kimmel Live!,” the viewership of every late-night show has fallen from last year. David Letterman and Jay Leno, the most popular and highest-paid hosts in the late night circuit, have together lost nearly half a million viewers. Still, their shows remain the two most popular on nighttime television. And at the end of the day, while not the only indicator of pay, popularity is the biggest factor in determining how much these hosts are going to make.

At the same time, the highest-paid host does not necessarily spell success for a network. Some of the most lucrative contracts in the late-night scene are for shows that are clearly not pulling their weight, and are based on expectations, rather than performance. After picking up estranged long-time NBC host Conan O’Brien and paying him an estimated $12 million a year, TBS has failed to see a return on investment. Compared to the same nine-month period a year ago, “Conan” has lost an average of more than 600,000 nightly viewers.

The case of O’Brien and TBS illustrates another major factor networks consider when determining hosts’ pay. O’Brien was expected to be the late night beachhead of TBS, much the same way that Comedy Central’s Jon Stewart and E! Network’s Chelsea Handler are for their networks. In many ways, they are more valuable to their respective networks because they disproportionately contribute to the network’s total viewership. This is one of the reasons Handler is paid more than double Jimmy Kimmel, despite the fact that she draws less than half the audience.

Another major factor in a host’s pay is highlighted by the Ferguson’s current salary and contract negotiation: length of service. Regardless of the final outcome, Ferguson already makes well more than Jimmy Fallon, who shares the same time slot. Fallon has only been a host since 2009, when he took over for O’Brien as the host of “Late Night.” Ferguson has been a host since 2005. Fallon’s viewership is well more than Ferguson’s, and his audience has declined less than “The Late Late Show,” which lost more than 300,000 average viewers last year. Despite all of this, Fallon makes $5 million per year, much less than Ferguson.

24/7 Wall St. examined a variety of sources, including TV Guide’s annual salary review, Forbes, the New York Times and the Wall Street Journal, to identify the salaries of the biggest late-night hosts on television. Average nightly viewership also was considered, along with the primetime ratings of their networks, as provided by ratings agency, Nielsen. 24/7 Wall St. excluded programs that do not feature year-round programing, and only included programs that air between 11:00 PM and 1:30 AM.

9. Stephen Colbert
> Annual earnings: $4 million
> Show: “The Colbert Report”
> Network: Comedy Central
> Start time: 11:31 PM
> Years on air: seven
> Avg. viewers: 1.1 million (seventh highest)

In 2005, after spending several years as a “correspondent” on “The Daily Show,” Colbert began producing his own program. Unlike any of the other major talk shows, Colbert is in character the entire time, playing a hyperpatriotic right-wing commentator. While it remains second to “The Daily Show,” which it follows on the schedule, the “Report” has been, by most measures, an enormous success. In the nine months ending February 5, Colbert’s show averaged 1.1 million viewers, more than “Conan,” as well as the entire Comedy Central primetime lineup. Among 18 to 49 year olds, it is the fifth-most popular show on late-night television. While all of the major shows lost viewers in this demographic, “The Colbert Report” only lost an average of 19,000, by far the fewest. In 2010, Colbert signed a new contract with Comedy Central through the end of this year. Colbert’s salary is estimated to be $4 million, currently the lowest pay of any of the nine biggest hosts.

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8. Jimmy Fallon
> Annual earnings: $5 million
> Show: “Late Night with Jimmy Fallon”
> Network: NBC
> Start time: 12:37 AM
> Years on air: four
> Avg. viewers: 1.7 million (fourth highest)

“Late Night with Jimmy Fallon” has only been on air since March 2009, yet, it has already generated a significant following. Between September 2010 and February 2011, the show had the third-largest viewership among late-night talk shows, behind only Leno and Letterman. Of course, some of this popularity is because the show follows “The Tonight Show” with Jay Leno. “Late Night” also lost the second-smallest number of viewers over the past year, despite its network, NBC, losing the most viewers among all networks. Fallon’s contract is renewed on a year-by-year basis, and reportedly will be up for renewal soon.

7. Jimmy Kimmel
> Annual earnings: $6 million
> Show: “Jimmy Kimmel Live!”
> Network: ABC
> Start time: 12:06 AM
> Years on air: 10
> Avg. viewers: 1.8 million (third highest)

While all other shows on this list lost audience last year, “Jimmy Kimmel Live!” was the exception. The show, which began airing in 2002, averaged 1.75 million viewers over the past nine months. This bumped “Jimmy Kimmel Live!” into the third most popular late night show, beating out Craig Ferguson and Jimmy Fallon. In December, 2010, Kimmel signed a new contract, which has him earning an estimated $6 million. One condition of the contract was that Kimmel’s show would start at midnight, rather than 12:06 AM, trimming six minutes off ABC’s popular “Nightline” show.

6. Conan O’Brien
> Annual earnings: $12 million
> Show: “Conan”
> Network: TBS
> Start time: 11:00 PM
> Years on air: Two
> Avg. viewers: 837,000 (eighth highest)

From 1993 to 2009, Conan O’Brien hosted “Late Night with Conan O’Brien.” In 2009, O’Brien took over hosting duties from Jay Leno for the “Tonight Show.” In January 2010, O’Brien left the show after NBC pushed its time slot back to 12:05 AM. In November of that year, he began hosting “Conan” on TBS. However, the show has not done particularly well, and it had the second-smallest average viewership over the past nine months after “Chelsea Lately.” The show also has lost more than 600,000 viewers since last year, the most among late-night shows. According to industry analysts, “Conan” is doing poorly. However, TBS recently committed to the show, signing a contract to ensure it will be produced through April 2014.

5. Chelsea Handler
> Annual earnings: $12.5 million
> Show: “Chelsea Lately”
> Network: E! Network
> Start time: 11:00 PM
> Years on air: five
> Avg. viewers: 673,000 (ninth highest)

In July, 2007, author and comedian Chelsea Handler began hosting her show “Chelsea Lately” on E!, from 11:00 PM to 11:30 PM. The show’s viewership is small compared to the other eight on this list. However, looking at the network’s audience size makes it clear how valuable “Lately” is to the network. Over the past nine months, E!’s primetime lineup audience averaged 150,000 people, while Handler’s show audience was 673,000 people. This helps explain why Handler was able to negotiate a two-year, $25 million deal last November.

4. Craig Ferguson
> Annual earnings: $12.7 million
> Show: “The Late Late Show with Craig Ferguson”
> Network: CBS
> Start time: 12:37 AM
> Years on air: seven
> Avg. viewers: 1.5 million (sixth highest)

Craig Ferguson has been hosting “The Late Late Show with Craig Ferguson” since 2005. It currently competes with “Late Night with Jimmy Fallon,” which shares its 12:35 AM slot. Though once neck and neck, average viewership for the past nine months has propelled Fallon’s show ahead by more than 200,000 viewers after Ferguson lost nearly a quarter million average viewers. On Tuesday, Ferguson signed on to host his show through the end of 2014. According to a company press release, “Craig Ferguson continues to evolve the genre in exciting and innovative ways,” according Nina Tassler, President of CBS Entertainment.  As part of the agreement, Ferguson will move to a larger stage at CBS Studios, something the host has complained about for some time.

3. Jon Stewart
> Annual earnings: $14 million
> Show: Comedy Central
> Network: “The Daily Show”
> Start time: 11:00 PM
> Years on air: 13
> Avg. viewers: 1.5 million (fifth highest)

In 1999, Jon Stewart took over for Craig Kilborn as host of Comedy Central’s “The Daily Show.” Since then, the success of the show has skyrocketed, earning 16 Emmy Awards and spawning independent careers of several other comedians and a spin-off. The program is currently the fifth-most popular late-night show on television, but the third most popular among 18 to 49 year olds. The show’s average audience over the past nine months of 1.5 million viewers is more than one-and-a-half times the size of Comedy Central’s primetime lineup. Last year, the network extended Stewart’s contract through the end of 2012 for a reported $14 million a year.

2. Jay Leno
> Annual earnings: $25 million
> Show: “The Tonight Show with Jay Leno”
> Network: NBC
> Start time: 11:35 PM
> Years on air: 20
> Avg. viewers: 3.7 million (the highest)

Jay Leno is one of television’s biggest stars. Leno has hosted “The Tonight Show” since 1992, with a brief break in 2009, during which he hosted the failed “The Jay Leno Show.” This makes Leno the longest-working late-night host aside from David Letterman. “The Tonight Show” is the most popular nighttime talk show, averaging nearly 3.7 million nightly viewers in the past nine months. The second-most popular is “Late Show with David Letterman,” which averages about 3.2 million viewers. Leno signed a new contract in 2010, when he returned to “The Tonight Show” after Conan O’Brien’s seven-month stint as host.

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1. David Letterman
> Annual earnings: $28 million
> Show: “Late Show with David Letterman”
> Network: CBS
> Start time: 11:35 PM
> Years on air: 19
> Avg. viewers: 3.2 million (second highest)

David Letterman has been performing on late-night television since 1983, when he began hosting NBC’s “Late Night.” In 1993, after losing a bid for “The Tonight Show” to Jay Leno, Letterman left the network (Conan O’Brien then took over “Late Night”) to begin hosting “Late Show” on CBS. The new show has been successful, but recently has taken a major dive in ratings. While CBS lost substantial viewership from last year, it did not lose nearly as much as NBC and ABC — the other two major networks. Letterman’s show, however, lost more than 300,000 viewers last year, which is more than twice the losses of Leno’s show. However, “Late Show” remains the second-most watched show on television. This fact, along with Letterman’s 30 years in the business, are the reasons he earns an estimated $28 million.

–Charles B. Stockdale and Michael B. Sauter

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