Reality Money

If you’re producing a reality TV show and shopping it to production companies/networks, there are two primary issues to start thinking about in terms of the compensation that you are going to get out of the deal.

First, there’s what is often called the “creator’s fee.”  This is usually described in your contract as a percentage of the production budget, usually hovering around 2% for new producers and/or those walking in with a piece of paper (treatment etc.), and goes up from there.  2% of a production budget may not sound significant, but if you get a show on a major network with a star attachment, that can equate to a ridiculously cool fee for a producer.  2% can also be not great, if the production budget is tiny. I often succeed in getting higher percentages for producer clients, but the calculation and negotiation ultimately depends on the stature of the producer, the content of the show, the stage of development of the idea, cast attachments etc. Whatever the percentage is, for your analysis of that revenue source to have any context at all, you have to think one step ahead about the production budget.

Source #2 of your producer compensation can be called a number of things in a contract — ancillary revenue, back-end, contingent compensation, net profits etc.  The bottom line is that it’s a percentage of the show revenue, usually hovering around 15-20%ish more or less, depending on your circumstances, and including revenue sources like DVDs, merchandise, funny hats etc. Buyer beware, like all entertainment contracts, the definition of net profits only means what the contract says it means.  The percentage may sound good, it may sound bad, but the reality is that you don’t know know squat about the ancillary revenue source unless and until you can take a look at the contingent compensation definition in the contract.

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