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Deal Points &
Expectations When Selling A TV Show
How Much Can You Make, and
How Do TV Production Companies Make
new writers set out to pitch a TV show, they often ask us "How much do TV writers make?",
or "How much can I make from selling a TV
show idea as a new producer or writer?", the answer
is not one-size-fits-all. Also of importance is
understanding how TV production companies make
money. There are a myriad of factors that determine
how much one project delivers versus another, as
well as what one writer or production company makes compared to another. Budgets
determine fees, deals determine participation, and
the success of a show influences everything. This
article gives the new TV writer or creator an
overview of basic deal points, along with some
insight on what to expect when you sell a TV show.
a company commits to bringing your TV series pitch
to market, they'll propose an option agreement
for negotiation that gives them the exclusive right to sell your
TV series treatment or pilot script to a network for a limited period of time. More
people from outside the TV industry break into the
business from selling a concept for a show rather
than an actual longform property (script, book,
etc.), so it's important for us to share what one may
expect when selling a concept in order to strategize
and prioritize your negotiations.
Option deals for scripted projects are structurally
the same as for reality-based concepts, but fees and
purchase prices are considerably higher in scripted.
Budget and Network outlet play a large role in
determining related fees.
Financial participation as well as participation in
the development and production is negotiable to a
point, depending on your experience within the
industry and what you bring to the table in terms of
the marketing of your show.
As in any industry, there are a variety of forces
and factors that give shape to the legal structure
and content of any deal made. A television Writer or
Producer who has an established track record is
likely to receive a more lucrative deal than someone
with little or no experience, and most often will be
given more involvement in the actual production of
the show. However, there are industry standards
regardless of who you are.
First, it's important to understand how TV
production companies make money:
By traditional standards, production companies carry
high risk with the overhead of a development team,
in-house producers, administrative staff, and costs
involved in securing and packaging projects. They
must have a very specific path to deliver viable TV
series to their Network executives, and the talent
to develop and deliver compelling content that will
connect with a buyer and convince them to commit to
a budget and order for series. It's important for
new writers and producers to understand that a
production company typically doesn't make their
first dollar until production actually begins.
Production companies who get the green light are
given that privilege because the Network or Studio
knows they can deliver, and knows that their vision
is the right approach for the story or format at
hand. To try to explain how TV production companies
make money can be as complicated as defining "Net
Profits". So lets stick to the basics for the sake
of understanding the basics.
When a production company is ordered to produce and
deliver a TV series, or pilot for series, they're
given a budget from the Network or Studio. The fee
for physically producing the show may be 10% of
budget. So immediately you'll understand that the
bigger the show, the bigger the network, the bigger
the fee for producing. Add to that, negotiated fees
tied to specific talent producing the series per
episode, and licensing fees as profit participation
in the distribution of the series and any ancillary
income from such, you can start seeing how a
successful run of a TV series can pull in some
serious revenue. Of course nobody is getting rich
unless a series is a hit, and in that case a
producing entity may have a right to renegotiate
certain financial considerations depending on the
deal they've secured. Some production companies are
also tied into development deals with studios who
cover development costs and other front-end
expenditures in exchange for having first right of
refusal to anything that production company
The following is a conservative outline of
what should be in an industry standard deal from a
production company making a new writer/creator an offer
for a TV concept:
[Disclaimer: This is in no way provided as legal
advice or guarantee of what may or may not be
offered to you by any company or person you engage
in negotiations with. We strongly advise that you
have an entertainment attorney negotiate any offer
made to you, as there are many variables and
strategies for securing the best possible deal.]
Option Money or Free Option
This is an upfront
payment made to you by the company who wants to
produce your show. It's token money, and varies from
$500 up to appx. $10,000 depending on the project. The
company pays it to you
simply to retain the exclusive right to further
develop and sell your show to a Network or Studio. If the
project is a property with market value already tied
in it will pull a larger option fee. Option fees for
bestselling novel sub-rights can run into six
writers will agree to a free option simply to
benefit from the opportunity of a top production
company shopping their show to networks, and to
launch their career as a writer/creator of shows.
Most production companies will have no problem
offering a nominal amount of money upfront, but keep
in mind they're the one investing time, resources,
connections, and finances to prepare it for network
before getting paid a dime. At the
end of the option period, the company will sometimes
have an option to extend the deal if they have a
bona-fide offer in play with a qualified third party, which requires additional
payment for the extra time they are requesting to
retain your project.
If the production company doesn't sell your show to
a network then the show returns to you, the creator
and owner. That's called "Reversion". You can continue to shop your show to
other companies. Many writers have had shows never
make it to production, but have made significant
financial gain off of repetitive
options. If the company does sell your show to a
network, then you will be paid a "Purchase Price"
or "Set Up Bonus" that will have been pre-negotiated.
This is not always
included in a deal, but may be negotiated. It is a
fee paid to you, the creator of the show at the time
of the production company "exercising your option".
In other words; you are paid this money as a bonus
when the show is sold to a network. The amount
varies greatly depending upon your negotiations with
a buyer. At this point, the show no longer belongs
to you and is the property of the production company
who sold the show, and eventually the network or
distributor who puts it into production.
This is the main
source of revenue derived from a series. Typically a
production company will offer the creator/producer a
percentage of the locked per episode budget.
Whatever the Networks sets as the budget per
episode, you would receive a set percentage of that.
Anywhere between 2 and 5% is standard, and up for
negotiation. Budgets vary greatly depending on the
content of the series and the network producing the
show. Major Networks and Prime Time shows pay more.
However, when you're looking at long-term financial
gain, you hope for a successful series that runs
multiple episodes for multiple seasons on any
network or cable network at any budget.
Participation In Profits:
creator of a show it is customary to retain an
interest in profits derived from the production and
distribution of that show. This is paid to you by
the production company through your attorney and is
usually a nominal percentage of the fees paid to the
production company by the network or distributor as
the show is produced and televised. Again, the
amount of financial participation in this area
varies and can often be negotiated as leverage
against any purchase price you agree to.
Additionally, it is standard practice for your
attorney to retain the right to "audit" the
accounting of the company paying you to ensure that
the percentage of profits you agreed to is the true
percentage you are paid.
projects, companies and networks will acknowledge
the creator of a show produced, usually with a
"Created by" and "Associate Producer" or "Consulting
Producer" credit. For scripted projects it is more
often a "Written by" or "Story by" credit in
addition to a negotiated producer credit. As such,
you should be able to negotiate a standard fee
associated with your credit, paid per episode or
week of production. These are all negotiable.
Now that you understand how much you can make
selling a TV show idea, here's a quick
overview of the process when landing a TV series deal at the TV Writers Vault:
The Writer/Creator wrote and develops an original
concept, format, or story.
They connect with a Production Company after their
pitch was scouted in our marketplace.
They engage in conversations to determine its
potential and ideal direction for development.
The Writer/Creator received an "Option Agreement"
proposal that would allow the company exclusive
rights to develop and shop the project to networks.
Negotiations for all terms are settled.
The company develops and readies the project to
pitch to Networks. A sizzle reel is often produced
as a proof-of-concept.
The production company sells the pitch to a Network
and the Option is exercised.
The series is produced, and the Writer/Creator is
engaged and compensated as per the terms of the