TV and Money – How does it all work?

Have you ever wondered how TV shows make money? Have you ever wondered how much TV stars really get paid, and where that money comes from? Me too and that’s the inspiration for this week’s blog. As it turns out, it’s a fascinating industry.

Where does it come from?

The first thing to note is that once a network has a TV show, there are 4 primary ways it makes money, and all those ways start with the word “brand”.

1. Commercials

There’s no doubt that ad spots make the networks money. Consider that NBC Sunday night football in the USA charge over $500,000 per 30 second spot for the program. The Big bang Theory 30 second spots come in at $275,000 and American Idol at just under $300,000. It all comes down to ratings, audience size, genre and demand but an average sit-com will fetch around $400,000 per 30 second commercial.

2. Brand placement

“Who’s gonna turn down a Junior Mint? It’s chocolate, it’s peppermint, it’s delicious!”

We know they do it in the movies but have you considered all the brands you see throughout a TV show?  Yep they pay for it, and it’s much less obvious than when you’re watching a movie. It’s all about increasing brand awareness, and there are so many examples of brand placement victories like for instance, the Junior Mint episode of Seinfeld. Reality TV shows are doing this very well with location brand placements paying as much as $26 million!

3. Merchandising

The networks themselves own the rights to the characters and the catch phrases.  If you’ve purchased something, in fact anything that references that show, then the chances are, the network has taken a commission.

4. Syndication

It makes sense for TV networks to continue to broadcast shows post season finishes, and even post series finishes. Ad placement costs are still high, demand is still there and it’s still a cash cow.  Shows will sell in packages containing a run of episodes. The Good Wife syndicated for $2 million an episode. Seinfeld now over 10 years post the finale has generated over $3.1 billion in syndication fees ($17 million per 30 minute episode and up). Larry David and Jerry Seinfeld are still making hundreds of millions from these deals which have now been renewed 5 times. Why? Because the shows are still selling ad space and merchandising, and hence it’s a profitable product for the network.

Show me the money

So that’s where the money comes from. With that in mind, here’s a list I’ve compiled of just some of the highest paid TV stars on the box in 2013

Reality TV

  • The Kardashian family are pocketing $10 million per season for their reality TV show but with endorsements and sponsorships, Kim alone earns $18 million per year. The per episode pay check is just a fraction of her total earnings
  • Judge Judy rakes in a cool $45 million per year purely from syndication
  • Mariah Carey took $17 million for 1 season of American Idol with Howard Stern and Ryan Seacrest pocketing $15 million each also

Talk Shows

  • Dave Letterman: $28 million
  • Jay Leno: $25 million
  • Conan O’brien: $12 million
  • Matt Lauer from NBC’s today earns $21.5 million per year

Drama & Crime

  • Kevin Bacon (The Following): $175,000 per episode
  • John Hamm (Mad Men): $250,000 per episode
  • Mark Harmon (NCIS): $500,000 per episode – NCIS is still commanding 20 million viewers per episode
  • Patrick Dempsey (Grey’s Anatomy): $350,000 per episode
  • Lucy Liu (Elementary): $125,000 per episode
  • Simon Baker (The Mentalist): $300,000 per episode

Sitcoms

  • Tina Fey (30 rock): $350,000 and Alec Baldwin $300,000 per episode
  • Jim Parsons (Big Bang Theory): $300,00 per episode
  • Ashton Kutcher (Two and a half men): $700,000 per episode
  • Modern family adult cast: $175,000 per episode

2 comments

  • home inspection company Viera  

    Nice blog.. Thank you for sharing with us.

  • Karen  

    Interesting! Thanks for this

Comments are closed.