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I've been reading about the process of selling a TV show to a network, and have been confused by the entire process, the payments to the production company, talent, and anyone else involved, and the difference between someone "pitching an idea" for a TV show and one actually producing/filming/physically developing it.

I think most people with ideas for TV shows are interested in selling an idea to a network, but not necessarily show running it themselves/are not owners of a production company producing it themselves. If that's the case, most of the people involved would be solely into having someone else produce/physically develop their idea, and have no interest in doing it themselves. Their pay would be different than someone owning a production company, coming up with an idea, pitching it to a network with a treatment, sizzle real, animatic, and storyboard, and wanting it to be produced by their own network if bought.

If one started/owned a production company, came up with an idea for a TV show, wrangled together all materials needed to properly pitch the show to a network, and it were purchased, what would the production company/owner of the production company be looking to earn as their payout for the show? Per episode? For one entire season? What would the executive producer of said show be paid? Do networks pay a budget to produce the show, and a fee to the owner of the production company/fee for the person in said scenario to keep separately from each other? Profits/In pocket payout only is what i'm referring to. I live in New York City.

Answer
Hi, John.

I got a little confused following you here, but let me see what I can do to draw you a picture.

Networks don't technically "own" the programs - they pay a license fee to a production company for the right to air episodes a set number of times over a set period.  The production company is responsible for all of the costs (including overruns), which is why there is such a strong market in secondary distribution (foreign, syndication, format rights, DVD/streaming, etc.).

This is where it gets obtuse - there is no set number anyone should expect to make on a television episode -- except the writers and directors of scripted programming (they get paid the minimum under their guild agreement for the actual episode, but usually get additional fees for additional producing services as well).  The range of payments is huge - depends on the type of programming, where it's airing, what time of day it's airing, the number of episodes per season, how long it's been on the air, and more.  Compensation can range from hundreds of dollars up to over a million per episode.... there's simply no way for me to actually give you a specific answer as to how much to expect (however, you should know that production companies usually LOSE money on the first few years of scripted episodes).

Networks don't want to be in business with new people.  There's too much money on the line.  They want to work with people who are tried and tested, and when they do (rarely) buy something from someone new, they insist on attaching a showrunner and/or production company with a strong track record.

This week, the National Association of Television Program Executives (NATPE) is conducting their annual convention.  If you check out their website (www.natpe.org), you might find out a lot more about the development, production and distribution processes.  

If there's something else you'd like to know, feel free to write me back.  

Best,
Marrissa  

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Marrissa O`Leary

Expertise

Happy to help with your questions about the business of television. I've been a TV Business Affairs, Talent and Comedy executive for over 10 years after starting out as a child actress. I've been a VP at two studios, and consulted for others. Because we get so many questions about reality shows, please take a look at the "Previously Answered Questions" first (you'll probably find what you need there!). Also - please bear in mind that budgets & license fees are considered to be proprietary information and I can't share them here. Thanks!

Experience

20+ years in entertainment, ranging from child actress to studio vice president.

Education/Credentials
MBA, Pepperdine University / BA, Theatre Arts, Occidental College / AA Mass-Telecommunications Technology, Unites States International University

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