How to Account for Prize Money in Your Unscripted Gameshow

Every job in the entertainment industry comes with its own rules and quirks. Many of them are easy to learn with a quick Google search, but some jobs – like producing an unscripted game show – are so unique that information is scarce.

That’s where Wrapbook comes in! 

In our ongoing effort to be a high quality source of information for producers of all stripes, we’re filling the internet’s knowledge gap on game show production. More specifically, how to account for all that prize money.

To get clarity on what the job entails, Wrapbook went right to the source.

Meet Shannon Perry

We spoke to Shannon Perry, the EVP of Reality Development and Production Services at Village Roadshow Entertainment Group.

With over 20 years of experience in the entertainment industry, Perry has risen from production management roles to her current position developing and overseeing production of unscripted  shows for a major studio. Her extensive résumé includes work on Capital One College Bowl, The Fix, and Cutthroat Kitchen.

Perry answered our questions on everything from the relationship between ad revenue and prize money to what happens to prize money when no one wins it. Let’s dive in! 

Where does game show prize money come from?

The first thing to understand about managing prize money on a game show is who is responsible for providing it in the first place. 

The two places prize money most commonly comes from is either directly from the network’s budget or from an advertising sponsor. Perry has seen it done both ways. 

She notes, 

“When we were producing a show called College Bowl for NBC [...] we had a million dollars in prize money put up by our sponsor, Capital One. With a prize that large, they took title sponsorship of the series."

Sometimes, this money comes in through a network’s ad sales or marketing department, but other times, Shannon has gone out and found the sponsorships with her network partners.

“In the case of College Bowl we – Village Roadshow – actually went out and found that sponsor, and in collaboration with NBC, worked out that sponsorship deal. This was exceptional and incredibly exciting because all of that prize money went to college students for their education.”

One of the advantages to this sponsored content is that it allows producers to offer more prizes or richer prizes than might be paid for by a network alone.

In other cases, such as the Game Show Network series Perry is currently producing, the network is directly paying the prize money. No matter from where the money’s coming, Perry advises trying to raise the bar for prizes as high as you can. 

“You want to pump up the prize anyway you can [as a producer] and make it better for your viewers and make it better for your contestants. Because, honestly, it's just more fun. The more I'm able to give away, the better my show is, I have a blast doing it and so does everybody that's participating.”

How is prize money budgeted?

As an unscripted game show producer prize money is budgeted in multiple different ways. Some networks prefer to see it as a line item in the budget, others like it tracked in a separate budget. Transparent communication from the outset with your network is imperative to ensure all incoming and outgoing prize money is paid correctly. Perry states, 

“Depending on the TYPE of prizing payout; is it episodic, is it an arced grand prize, is it a valuated product, the network is typically budgeting for an average amount of prize money that they are going to pay out. It is incredibly important to report consistently to the network about every dime that is being awarded in show. It is also incredibly important to ensure that every dime paid out on the show matches the money the finance team is tracking as a pay out. One would be amazed at how easy it is for this to get mixed up."

Episodic prizing numbers are developed during pre-production by taking the grand prize payout and averaging it “on a scale across the number of episodes for the different levels of what the prizing could potentially be.”

This means that for each episode of your game show, the prize money could be a  line item in your budget that may have a variance. 

Perry also tells us that some productions take out what’s called “jackpot insurance.” This is an important tool for producers working on a game show such as The Wall where most contestants are winning small amounts or nothing at all, but the promise of a large jackpot is always looming.

On a show such as this, the smaller prize payouts you are budgeting for episode to episode won’t accurately reflect the expense of the jackpot payout. Jackpot insurance covers your production so you don’t go wildly over budget should someone win the grand prize.

How is prize money accounted for when awarded?

Just like every element of a production, prize money has to be accounted for in your budget. The Federal Communications Commission (FCC) has stringent rules governing game shows and you want to make sure you do everything correctly to avoid penalties.

“Producers are regulated by very specific game show rules set via FCC regulations. We have highly trained lawyers on staff and on site to make sure that we follow these strict rules so there's no concern for cheating or skewing the game in any way.”

And since contestants receive payouts without being employees, this results in very specific paperwork for contestants to sign. 

“Contestants sign a contestant agreement and a rules document that will state everything from how the game is played, to how difficult issues will be resolved, to how and when prizing is paid out.[...] Typically prizing is not paid out until after the show airs, so you will be receiving your payment, your prize money, a specified number of days from the date of air of your episode.”

Even though that money won’t go out to winners right away, Perry likes to make sure checks are cut to the prize-winners at the end of each season.

“After every series, cut those checks and put them away. You do not mail them, you lock them up someplace secure, but you have those checks cut with all of that secure information [that contestants filled out] [...] and then you're ready to mail those payments as soon as they're approved to go out. Because your staff is gone in six months! There's nobody left to chase down those individuals, so you need to make sure you have a plan for making those payments after production is wrapped, and it has to be locked down.”

Perry also finds this system is helpful for cost reporting. 

“If I cut those checks, then we're showing those payments going out and those payments are ready to mail. I know I have all the correct paperwork and the contestant is on the hook to notify me if there's a change in address.”

But managing the money being distributed to prize-winners is just part of the job. The money that isn’t won has to be budgeted and tracked as well. 

What happens to prize money if not awarded?

According to Perry, unawarded prize money leftover at the end of the season is typically governed by the network or whomever is paying the money.  

A good producer will make sure there is an agreement in place with the network in advance so there aren’t any questions about where the money should move.

What are some common mistakes line producers make when factoring in prize money?

Some potential mistakes that producers can make when budgeting for prize money is NOT understanding the deal in place with the network. Business Affairs and the production team should have clear communication about how the prize money is received from the network and how it is managed.

“Not having an agreement with the network that the prize money number [is] going to fluctuate and the network is going to have to cover the cost. You have to agree that ‘here is the number we think prize money is going to be, but if it goes over this the network is on the hook.’”

To make sure that she’s always on the same page with the network, Perry places a premium on sharing her budgets in as much detail as possible. 

“Typically production budgets are fully auditable so the network should receive regular cost reporting on where the show stands with regards to the prizing line items and actual prizing won in the episodes. The network will see that your contestant won $10,000 in episode two and it is the responsibility of the producer to ensure that all of our reports match what aired in the show.”

It’s this kind of transparency and communication that separates good line producers from great line producers in the world of prize money management. 

What are some general protocol tips for line producers working on game shows with prize money awards?

Of course, no one walks into their first job on a game show knowing the details of how this unique pocket of the entertainment industry works. If you find yourself in the position of line producing a game show with prize money awards, and you aren’t sure of best practices, Perry says the best thing you can do is be up front with your partners. 

“I recommend an open dialogue with your network executive to say okay how do you typically handle this? How do you like to see this budgeted, tracked, and reported? For instance, if your show has three jackpots in one week, that’s something that you might want to flag for the network, since it could put the show over budget for that week.”

Wrapping up

The ins and outs of managing prize money in the game show world are sometimes overlooked, so thanks again to Shannon Perry for taking the time to speak with us and sharing her hard earned knowledge!

For more information on working in unscripted television, make sure to check out our latest free eBook, “Collaboration at the Speed of Unscripted.” Also be sure to book a demo with us to learn more about Wrapbook’s production accounting services.