Never swim alone, that goes for reality television production too.

Several weeks had passed since Robert and I first discussed the possibility of producing a reality television show in HD. We had never discussed exactly what we would produce, nor had we discussed what a deal between us might look like. It was time to cut the deal. Robert and I met at Starbucks and hammered out the deal. Robert and I would create a limited partnership that would own the show. Each of us would own 50% of the partnership. I would fund the first $25,000 of production costs (i.e. third party cost without markup) and any production cost over $25,000 would be split equally between each party. The first revenues would go to pay off the first $25,000 plus a 12% return. Second revenues would go to pay 25% profit margin (i.e. on the production costs) to Robert’s company. The final revenues would be split equally. I am not certain this was the best deal I could have negotiated, but it was the easiest deal.

If you accept the fact that the potential upside to producing a television show is fairly limited, but the downside is relatively unlimited, it will immediately make sense to include as many people in your project as possible. My business partner in several other deals is Scott Ryan and I offered to cut him in on the deal offering him 50% if he would cover 50% of the costs. I explained that I might be a bit distracted by the project and that by including him in the upside he the distraction wouldn’t cost him anything on any of our other projects. He jumped on the offer and became my partner in the show as an executive producer.

At this point I was still convinced there was significant money to be made and I wasn’t really interested in cutting anyone else in on the deal. This was a mistake. Ironically, I could have raised the entire amount from friends interested in ‘producing’ a television show. Another thing I learned that you might not realize, production credits cost you nothing, but you can trade them for services or even sell them. For example, offer your lawyer a production credit in exchange for free legal services or at a minimum discounted legal services. My advice? Cut as many other people into your deal as possible. Again, if you are hoping to make money you are sorely deluding yourself. Accept the dilution and get busy making your show a success. Mark Burnett only got paid $455,000 for the first season of Survivor, today he makes $1,000,000 per episode.