#26: How much ownership can I offer talent or partners on a reality show pitch?
Ownership is a very simple discussion in reality production. You can’t offer any because you usually won’t have any (sad but true!). And even if you managed to get any on paper, you would not see anything in the bank.
Ownership vs. Income: “Front-End”
Very quickly, a lot of people confuse “ownership” in a non-fiction TV project with front end payments. Wrong! Front end payments are just that, fees for service. And typically, all front end money from a network goes to whatever physical production company is going to make the show. In reality TV, even creating a show, you personally would be lucky to see any of that. That money’s for production, and if anything is left over, the production company keeps a portion. That’s why you have to produce a lot of shows to make any money on our side of town. And that’s why production companies are reluctant to share any front end payments with people who aren’t doing any of the production work or taking any of the production risk.
If you already work in reality TV, know this - the production companies you’ve worked for over the past few years? No way they own any of the shows they’ve made (okay, unless it’s Burnett or Bankable!). The network owns everything. They have all rights, worldwide, universally and in perpetuity to distribute the completed show and retain all the money from that because, well, they paid for it and, well, you signed a contract agreeing to just that.
Ownership vs. Participation: “Back-End”
What most people confuse for ownership in TV actually is “back end” payments. Again, you don’t usually OWN anything, but you get to “participate” in sharing any profits from the show. That comes from things like overseas sales, format spin-offs, ad income against re-runs, etc. (all of which still are rare in reality TV - don’t think that The Apprentice is the norm). Back end is a joke in Hollywood because no one usually sees any of that. Movies that break records with $200 million takes…often break hearts at the studio when marketing and production costs still leave them in the red! Since networks and studios usually recoup their money in the back-end, they are less than inclined to share that action with you.
Sadly, the complicated formula for back-end leaves the network infinitely free to charge expenses against any income your show ever makes then give you .01% of the balance (or whatever number you negotiate), which will pretty much always be negative. Trust me. In reality TV, sometimes nets don’t fight about giving you back end. That’s because they know they never will show a profit that warrants paying it.
Keep in mind that in non-fiction, back-end also is a production company perk, not a show creator perk. That’s something the production company can choose to share with you. Not unheard of…because everyone knows it’s often a meaningless number.
Talent Participation
If you want to offer talent 10% of your back-end, should you actually get any of it, that’s generous relationship-wise but fairly meaningless financially. The big question for your talent really is: what does s/he want to get out of this show if it sells? Is it fame and exposure? That comes from working with the network to be available for publicity 24/7. Is it revenue stream? If that’s the case, tell your talent to start creating his/her own branded back-end that s/he CONTROLS THE RIGHTS TO. That means books, speaking presentations, product lines, whatever the talent’s specialty warrants. Tell them to bring as much into the game as possible and have an instant way to distribute it if the show becomes a hit. Trust that Cesar Milan is not making most of his dough because he has a piece of the back-end of a half-hour show on “National Geographic.” He is leveraging that show into a 24-hour infomercial for his books, ranch, CDs, personal speaking engagements, etc. He’s getting a weekly salary to promote his empire!
Creative Partner Participation
For a partner, the same “big picture” applies. The money to be made on a first show is in working on that show. So if they have production credits, what they want to fight for is a staff to management position that gets them a weekly salary. If they have no credits, this is a good chance to get one - in a position that they are qualified to hold. While you and your partner are building your show-selling foundation, these gigs will pay you well until you are in a position to finally be the company producing the show - and earning that production fee. But know this, too, those first few shows your company produces…you will earn less than you were making before as a management-level staffer!
Your Big Picture
As for you, as the show creator, I recommend against getting too invested in back-end yourself. Until it’s your production company, the amount will be fairly meaningless even on a hit. Go ahead and ask for it, but your efforts right now will best be served in getting the highest title on the show you can get so you can move closer to being a show runner on the NEXT show you sell. That’s when you negotiate for your own production company either to do the show or to PARTNER with the company the network approves. Because that’s how you’ll start getting a piece of the front end, which is the only guaranteed money in reality TV.