The Bizarre Economics of Media

Not everyone is losing money.

CC0 Public Domain

That the business model that long sustained America’s newspapers and news magazines is no longer sustainable is, well, old news. The move online over the last quarter-century means most people expect to get their information for free, advertisers have long since found more efficient ways to reach their customers, and the customers have increasingly moved to social media or other outlets that feed their existing prejudices.

More Than 1 in 5 U.S. Papers Has Closed. This Is the Result.” (NYT, Dec. 21, 2019)

City Council and school board meetings. Small-town sports and politics. Local government corruption.

These are a handful of the news and issues that go unreported when small newspapers close or are gutted by layoffs. Over the past 15 years, more than one in five papers in the United States has shuttered, and the number of journalists working for newspapers has been cut in half, according to research by the University of North Carolina’s School of Media and Journalism. That has led to the rise of hollowed-out “ghost papers” and communities across the country without any local paper.

More than 85 local newsrooms closed during the coronavirus pandemic” (Poynter, Aug. 11, 2021)

In many places, it started with a cut in print days. Furloughs. Layoffs. Just to get through the crisis, newsroom leaders told readers.

In some places, none of it was enough.

Now, small newsrooms around the country, often more than 100 years old, often the only news source in those places, are closing under the weight of the coronavirus. Some report they’re merging with nearby publications. But that “merger” means the end of news dedicated to those communities, the evaporation of institutional knowledge and the loss of local jobs.

At least 14 of the newsrooms now gone are owned by CNHI. Several are owned by Forum Communications Company. And a few are — were — owned by local families.

Since 2004, about 1,800 newspapers have closed in the United States, Penny Abernathy reported in her research on news deserts. 1,700 are weeklies. The pace of closures, up till now, has been about 100 a year, said Abernathy, a professor at the University of North Carolina’s Hussman School of Journalism and Media.

“Between places switching to online only and those that are merging, this is a really sharp increase,” she said, “and not surprising either.”

The pace might be faster, but Abernathy’s research shows a trend that’s still playing out in the middle of a pandemic — the newsrooms that are closing are mostly weeklies in small communities.

“And when you lose a small daily or a weekly, you lose the journalist who was gonna show up at your school board meeting, your planning board meeting, your county commissioner meeting,” she said.

Again, not new news. It’s been a semi-regular topic of discussion at OTB since our earliest days. So, why rehash it this morning, while is not exactly a slow news day? Because two stories caught my eye.

Ben Smith‘s NYT feature “Inside Politico’s Billion-Dollar Drama” and a MarketWatch story from a few days ago that was linked somewhere I’ve now forgotten titled “How much? Times walkout Bari Weiss breaks the rules, makes a mint.” Feel free to read them yourselves but the upshot is that POLITICO has been sold to a German investor for one billlllllllion dollars and Weiss is pulling in $800,000 a year from her Substack. It boggles the mind that the New York Times just about went under a few years ago and yet seemingly improbable outlets and columnists are thriving.

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College. He's a former Army officer and Desert Storm veteran. Views expressed here are his own. Follow James on Twitter @DrJJoyner.


  1. Scott says:

    Then there is this phenomenon which came out just about a year ago.

    Dozens of Sites Claiming to Offer Local News Are Actually Linked to Conservative Operatives

    They have titles like Antelope Valley Today, Pomona Valley News, and North O.C. Times, and appear on the surface to be start-up local sites covering extremely local news, particularly in communities that have been underserved by the small number of legitimate local news outlets that remain in regular publication. However, the New York Times reports, these sites aren’t independent neighborhood operations. Instead, the Southern California “news sites” are among some 1,300 pages put up by a single company, Metric Media, linked to conservative political operatives who use the veneer of local news to advance a political agenda.

    Hundreds of hyperpartisan sites are masquerading as local news. This map shows if there’s one near you.

    The growth of partisan media masquerading as state and local reporting is a troubling trend we’ve seen emerge amid the financial declines of local news organizations. But what do these outlets mean for journalism in American communities?

    We found that while the (few) left-leaning sites prioritize statewide reporting, right-leaning sites are more focused on local reporting, suggesting different strategies for engaging with targeted audiences and indicating the potential for these sites to exacerbate polarization in local communities.

  2. Lounsbury says:

    It boggles the mind that the New York Times just about went under a few years ago and yet seemingly improbable outlets and columnists are thriving.

    Not sure why it boggles, this is really very typical (in the abstract) of an industry evolution where the market is radically changing the revenue generation stream – where established ‘legacy’ actors struggle to adapt as their sunk costs on now stranded assets (fixed or soft [as in no longer appropriate systems, HR, etc]) are difficult to rationalise. The entire retail sector is experiencing a version of this – although retail also shows that there is not not a pure answer….

    The changes besides for better or worse reflecting the radical effect of economies of scale that internet brings, also reveal that the local newspapers really were not in the news business as a viable market, they were in the small local market announces business with news as merely a marketing gloss.

  3. becca says:

    I gave up the nyt when FG came into office, so I never read Weiss. I did catch her on The View one day, but I didn’t get a good look at her because of the gigantic chip on her shoulder. Wah-wah-way was all she had. Pretty sure Mrs Domenech set the whole thing up.

    Another example of failing up?

  4. mattbernius says:

    Weiss is pulling in $800,000 a year from her Substack.

    I am really dubious of the Substack model–as I understand it. I am really curious to see if they can afford to keep offering these giant contracts to content creators (at least at the rate they’ve been doing).

  5. Mu Yixiao says:

    My little (online) newspaper serves an area of about 10,000 people. It costs me $15/mo in overhead (hosting and stats service).

    If I was young and gung-ho, I could be out reporting on everything going on and hustling up the advertising to support me as a full-time journalist (I ran the numbers once, just out of curiosity).

    The reason that so many of these small-town papers are going under is because it’s a “young man’s game”, and people don’t want to do that hustling. They also don’t understand online advertising–they’re stuck in the past. Our old-time local newspaper was bought out by a national chain, and does shit reporting now. Their advertisements consist of the print version turned into a .jpg and shown in the sidebar (every ad together in one image that’s too small to read). Low-res, no linking, no rotation, no special sponsorships.

    Small towns want local news. I get e-mails all the time asking me for info on local topics. I get people stopping me on the street asking me to look such-and-such local issue. I’ll be perfectly honest: I don’t get to a lot of them because I just don’t have the time and energy–but then I’m doing this as a hobby, essentially. The paper makes about $200 a year–just enough to keep the lights on–and that’s fine with me.

    I’m absolutely not surprised that media outlets and journalists who understand the new approach are making lots of money. The money is there–it’s just that too many news outlets are stuck in the past or heading down the rabbit hole with trying to be hip and edgy.

  6. And says:

    And then you have someone like John McWorter, who recently quit substack and now has an “exclusive” deal with the NYT. For him, I don’t think it was about the money.

  7. mattbernius says:

    @Mu Yixiao:

    I’m absolutely not surprised that media outlets and journalists who understand the new approach are making lots of money.

    Just to be clear, most of the break-out stars of substack are *not* journalists. They’re “outspoken” opinion writers.

    While important, doing opinion work is far easier than feeding the daily reporting beast.

  8. Modulo Myself says:

    The town where I grew up had a well-staffed paper, and there was like a page devoted to church suppers and bingo. There had to have been probably reports of school board meetings and zoning issues, but where is the audience for that? Sports had its own section and there was editorial and a weekly lifestyle-like section, but beyond the front page of local news and the local updates stuff–and they can not have been paying anybody for the church supper beat–it was mostly AP/UPI stories. To me the idea that people were dying for write-ups on school board meetings is hard to process.

    Also, podcasts make a ton of money. Whereas Substack is a bunch of one-note grifters (Taibbi, Greenwald, Weiss) the big journalistic podcasts do long-form deep dives into Iran-Contra or an unsolved murder in a town in Oklahoma. Basically, they look at the past, at what really happened, and in the most dramatic way possible.

    I think these models are way more sustainable, and the difference between the big earners of Substack complaining about the same thing every time and Blowback or Slow Burn reexamining the past is pretty stark. Bari Weiss is raking it in, but she and her audience are pretty dumb. No ambitious young writer is looking to Weiss and thinking I want to do that.

  9. wr says:

    Israel is perfect in every way. Anyone who says otherwise is an anti-Semite who wants to put me in a concentration camp. I fight every day to protect free speech, and anyone who criticizes anything I say or write is a vicious leftist trying to impose cancel culture on America. I love free speech so much that if anyone dares to disagree with me in print I will fight to have them fired from their job.

    Okay, I’m ready for my $800,000 now.

  10. Jay L Gischer says:

    @Mu Yixiao: This is such a valuable take. I grew up in a small town, and I would second the notion that small towns want local news.

    200 bucks a year, though, isn’t going to attract a lot of attention from investors or engineers from Silicon Valley. Which is why you see people with an agenda subsidizing it. I wonder if there isn’t a set of tools one (being a web-friendly programmer) could make to make it easier for the people who want to do reporting in their local town. Facebook is out, since they will crush your revenue. YouTube might work, though I don’t know that you can get the scale you need.

  11. Sleeping Dog says:

    Bari Weiss aside, I don’t get the substack model and why I should be interested. First every substack I’ve visited is commentary, opinion, with some analysis. Analysis, if it is good, can be of value but the rest?

    I suspect that what happens is that people sign up for a substack, read it for a few weeks and then forget to cancel the subscription. Lots of folks never look at their credit card statements so these $3-5 subscriptions simply become a leak in a bank account.

    This post reminded me it was time to send OTB a tithe.

  12. Mu Yixiao says:

    @Modulo Myself:

    To me the idea that people were dying for write-ups on school board meetings is hard to process.

    Trust me. They want it. The only reason I’m not reporting on them is that I can’t tolerate sitting through 3-4 hour meetings filled with political bullshit and pandering. On the other hand, the City Council meetings are scheduled for 1 hour, and often finish in 30-40 minutes, because they’ve worked out everything in committee meetings (each of which are usually about 30 minutes).

  13. Mu Yixiao says:

    @Jay L Gischer:

    I wonder if there isn’t a set of tools one (being a web-friendly programmer) could make to make it easier for the people who want to do reporting in their local town. Facebook is out, since they will crush your revenue. YouTube might work, though I don’t know that you can get the scale you need.


    It’s what I use. It’s what OtB uses. At its most basic, if you can type the story you can publish it. No web-knowledge needed. It’s entirely yours, it doesn’t require membership, it’s not behind a paywall, and with very little training, you can get high-ranked hits on Google (because nobody else is writing about what you are).

    I’ve added advertising widgets ($35 for the pro version), contact forms, stats, and a “weekly deliver” option–enter your e-mail address, and “The Sunday Edition” will e-mail all the stories of the week (image, excerpt, link to the full article) to your inbox.

    In addition, I do a (sporadic) weekly live-stream via YouTube. Even weeks are the mayor’s, odd weeks are mine to interview “local leaders and important individuals in the community”.

  14. Modulo Myself says:

    @Mu Yixiao:

    Put it this way–they don’t want it badly enough. They aren’t giving you money so you can hire somebody new to do the work of sitting at a meeting. And the ads you are running aren’t paying you enough to hire this person.

    Overall, this is what people miss about the media. If you’re into politics and news, you think that’s what drives the media. No. The Times emails me recipes. They have weddings and styles, and a magazine. I used to do the crossword; for about a year I completed every one, even Alex Eaton-Salners’ work, who is like a mastermind. Think his dad worked for the NSA?

    Anyway, newspapers serve as mirrors. The NYTimes is a mirror for somebody like me. In a small town the mirror is about the guy you went to high school with getting in a fistfight in a bar parking lot, and the mall that was finally coming in (if it’s 1988) or closing down (here are some memories of what it was like to go there the first time). Zoning or school board issues are niche reporting supported by the mirror, and not the other way around.

  15. Mu Yixiao says:

    @Modulo Myself:

    They aren’t giving you money so you can hire somebody new to do the work of sitting at a meeting. And the ads you are running aren’t paying you enough to hire this person.

    Perhaps I didn’t make myself clear: I’m not asking for money. And I’m not pursuing advertising. The money issue is entirely on my shoulders.

    If I wanted to put in the time and effort, I could be earning enough money to support myself and pay for a “city beat” writer part-time. I don’t want the hassle. I don’t want to deal with self-employment taxes and all the rest. I’ve done that, and I’m just too damn old and cranky to jump into the deep end again.

  16. KM says:

    @Mu Yixiao:
    But isn’t that @Modulo Myself’ point? They don’t want it enough to make it worth it for someone like you to wade back in. Every drudge job needs either (a) someone really, REALLY enthusiastic about it to suffer through the crap, (b) good enough pay / incentives to make up for it or (c) someone desperate enough to take the job. Sitting through endless committees or insane screamfests isn’t gonna attract (c) since McDonald’s will pay more. (b) might be doable if the funding is there but really these beats require (a) and there aren’t enough of those in every local area to matter. Some places might get lucky but overall the pool’s too small to meet demand.

  17. Mu Yixiao says:


    They don’t want it enough to make it worth it for someone like you to wade back in.

    No amount of money would make it worthwhile for me to wade back in. It has zero to do with the money.

    However… If I wanted to do it, the money is there. If I were 23 instead of 53, I’d probably jump at the idea–and I’d have the energy to do it. As a stagehand, I used to work the hours that being a small-town reporter. I had all the same issues (bazillions of W-2s, partially self-employed). Now? I’m in bed by 20:00. 🙂

  18. Monala says:

    I’ve read a number of comments here and elsewhere wishing for a “by the article” model of being able to purchase newspaper content. Currently online news is either free or behind a paywall where you have to purchase a subscription to the entire magazine or paper to access it.

    Many people don’t want to pay for host of subscriptions, but would be fine with paying a few bucks for a particular article of interest. But that option is not available.

    Along those lines, I have long subscribed to the (currently free) newsletters of NYT writers Paul Krugmann and Jamelle Bouie. Recently it was announced that readers cannot continue to subscribe to Times writer newsletters without a NYT subscription, starting September 1st. I’d be happy to pay a fee for the newsletters themselves, but I balk at a NYT subscription. (It’s a principle thing). So I’m going to choose to lose the interesting content of these two writers going forward.

  19. wr says:

    @Monala: “I’d be happy to pay a fee for the newsletters themselves, but I balk at a NYT subscription. (It’s a principle thing). So I’m going to choose to lose the interesting content of these two writers going forward.”

    I have no idea what your principal thing is, but how much would you be willing to pay for the newsletters? I’ve got to imagine it would have to be at least five bucks a month for each, no?

    Right now you can get a digital subscription to the Times for one dollar a week for a year. That’s four dollars for the whole paper AND the newsletters, and you’re still saving enough for a Venti Latte.

    After a year they’re going to jerk you up to their full digital rate — $4.25 a week, $17/year.

    Again, I don’t know what your principle is, but unless the New York Times ran over your dog or something, you’re depriving yourself of writing you want to read for no reason.

  20. Monala says:

    @wr: I got tired of the Times writing articles normalizing Trump and his supporters. “The Nazi next door” from a few years back —a fluff piece that talked about the guy visiting and helping his mom on the weekends—was the final straw for me to cancel my NYT subscription.

    I know it doesn’t make financial sense. That’s why it’s a principle thing.

  21. Just nutha ignint cracker says:

    @Modulo Myself:

    or closing down

    Indeed. The only reason the main building in the mall in my town still exists is because it houses the public library and the townfolk don’t want to pay to build a new building for it. With the exception of Planet Fitness I don’t think any tenant would do anything other than close up shop if the mall were razed. (The Planet Fitness is, according to some sources, one of the five largest membership clubs on the West Coast–which I certainly find surprising.)

  22. Just nutha ignint cracker says:

    @KM: “(b) good enough pay / incentives to make up for it”
    Just yesterday, a friend from Alaska stopped in on his way somewhere else and we talked about this exact issue over coffee. In his case, he’s chosen to do relief work for Alaska Marine Highways in return for first choice of every available berth on every ship and not being subject to lay off. (He works every week he doesn’t go on vacation–even during the Covid-19 cutbacks.)

    And I was reminded of the days when my boss would say “I’ve got a job that just in your area of expertise”–that being one that no one else wanted to do.” And I’d reply “at what you’re paying me, there’s no job down here to menial.” And the reason was because I was being paid the highest prevailing wage in the warehouse, chose my own start time (most people started at 5 am; I started at either 7 or 9 depending on the day) and I was the only guy in the building other than the manager who got an hour for lunch. And adequate trade off.

  23. KM says:

    @Mu Yixiao:
    That’s why I said “pay / incentives” – there’s no incentive for you to take the task that you deem enough. You could pay me a million dollars an hour to go clean up radioactive messes like in Fukushima or Chernobyl and it would be a hard pass. The only reason I’d do it would be the incentive to save a ton of innocent lives or if I was already terminally ill and had nothing else to lose. There’s plenty of jobs out there you can get money for but ultimately its not worth it personally as you note due to the paperwork, hassle and stress. Fix those issues (the incentive) and you might take it back up as it’s a far more attractive prospect.

    Sometimes there isn’t a shiny enough pot of gold to get someone to wade through a river of sh^t….

  24. Michael Reynolds says:

    I have a somewhat off, somewhat on topic question I hope @wr or @EddieinCA can answer: what is the logic of paying tens or even hundreds of millions to, let’s say Benioff and Weiss from GOT, to develop new shows, given that there is no reasonable expectation that a person or team with one hit, will necessarily be able to duplicate that hit? Why not wait til someone has an idea for a show and then look at it and decide to buy it or not? Even someone like Shonda Rhimes has a mixed record, let alone Benioff and Weiss.

  25. Just nutha ignint cracker says:

    @Mu Yixiao: You’re 53 and go to bed at 8pm? Wa!! What time to you get up? I go to bed at midnight if I want to wake up at ~6 am-ish. Next week, substitute teacher calls start (actually I got my first today–preschool, no thanks 🙁 ) so I’ll need to start going to bed at 11 so I wake up at 5, half an hour before the phone starts ringing. If I went to bed at 8pm, I’d be waking up at about 2am.

  26. CSK says:

    @Michael Reynolds:
    Because it’s a crap shoot, or like buying a lottery ticket, just as publishing has become. Simon and Shuster (or whoever) pays a huge advance to a celebrity to put his or her name on a ghosted book in the hope of having a huge bestseller. Sometimes it works, sometimes it doesn’t.

  27. Mu Yixiao says:

    @Just nutha ignint cracker:

    It used to be that I’d go to bed around 22:00 and wake up at 04:00–no alarm. The past 2 years have changed that. Part of the issue is that I don’t sleep through the night. I’m fairly sure it’s because I’ve become sedate during COVID–which has become a feedback loop of laziness–and the fact that my bladder hates me. It’s not uncommon to be up 5 or 6 times during the night to piss.

    And… “go to bed”, not “fall asleep”. I can be nodding off in my chair, climb into bed, and not be able to fall asleep for a couple hours some times.

    What I really need is to start exercising again–which should (I hope!) get me back to a better sleep schedule. However… the only exercise I can really do (‘cuz arthritis) is swimming. And I’m dealing with a fucked-up shoulder that can’t handle simple daily tasks, much less swimming strokes.


  28. Modulo Myself says:

    @Michael Reynolds:

    Because the money is in buying up previously-established content rather than developing new shows? According to wikipedia, they’re doing The Three-Body Problem series. Book has a proven track record, built-in base and that’s merely with English-speaking audiences. This show will be through the roof in China.

  29. wr says:

    @Michael Reynolds: Well, let’s start with the cynical reason: If you buy a show from a showrunner with a hit and it tanks, you have a ready-made excuse and you’re not going to take the fall — of course anyone would want a show from the person who brought us that huge hit.

    And part of it is probably superstition — these guys hit once, why wouldn’t they do it again?

    But part of it may well be admiration for the work they did. I know it’s fashionable to dump on Game of Thrones now, but it was the biggest hit in the world all over the world for much of its run and at its best it was really great. They have proven they understand how to make a big show that will attract a huge audience.

    Also, particularly in the case of Benioff and Weiss, they ran a show that was logistically incredibly complex, shooting in multiple locations across the world. There aren’t a lot of people who have this kind of experience, and this is actually experience that means something.

    (Although somehow I doubt this factored much into Netflix’s picking up The Chair…)

    And these days several big EPs have essentially become studios — Dick Wolf, Shonda Rhimes, Greg Berlanti, Ryan Murphy, now presumably Benioff and Weiss run large companies that produce TV shows. They know how to do it well, they can deliver on time and on budget (or at least within expectations) and they also serve as a kind of brand. If Netflix likes an idea one of these brings them, they can push the button and be pretty sure they’re going to get the show they expect without a lot of effort on their part.

    Finally, as I know you know, an idea for a show is pretty close in value as idea for a car or a building. Everyone has ideas. I can draw a pretty picture of a new 100-story apartment tower — well, actually I can’t, but other people can — but if someone gives me money to start building based on that picture, it will fall down even before it goes up, because I have no idea how buildings work.

    What’s going to make a TV show work is the execution of the idea. And networks and streamers know that if they like an idea, they can trust these people to execute it. When they order a ten-episode show at Netflix, they’re basically handing over a check for $50 million and saying “come back with a series.”

    I may be missing some reasons. Eddie?

  30. EddieInCA says:


    Nailed it.

    As wr notes above, there is SOOOOO much content being created right now, there just aren’t enough people, good people, who know how to execute efficient production. There are a ton of shows being produced right now that are “shitshows”. That doesn’t mean the show is shit. It means the production is a freaking mess. Long, long hours, re-shoots, crew leaving left and right, unhappy crews, etc, are creating toxic work places. Why? Because TV/Film production is freaking hard. And these tech companies, who have been successful in tech, think they can just rejigger a few things and turn themselves into entertainment companies. Not so fast. It took Netflix a decade to be trusted by the creatives. Amazon almost as long. Apple still isn’t there, despite the success of Ted Lasso.

    So if you can sign someone who has a proven track record, you are giving yourself the best chance at success. Creators such as Dick Wolf, Tyler Perry, Greg Berlanti, Ryan Murphy, Shonda Rhimes, Jerry Bruckheimer, have had such success that it makes sense to go after them. None of this is really new, though. Back in the 70’s, it was Norman Lear and Aaron Spelling. It the 80’s, it was Witt-Thomas, Stephen Cannell, Glen Larson. In the 90’s, Chuck Lorre started his empire. In the 00’s, it was Bill Lawrence, Chuck Lorre, Seth McFarlane…. TV and Film has always given those who have achieved success much more leeway to fail. Chuck Lorre alone is responsible for two separate billion dollar shows with “Big Bang Theory” and “Two and a Half Men”. The failures are miniscule compared to that sort of success. It’s worth the losses if someone can create billion dollar successes.

  31. Teve says:

    @Just nutha ignint cracker:

    (The Planet Fitness is, according to some sources, one of the five largest membership clubs on the West Coast–which I certainly find surprising.)

    I don’t. My Planet Fitness membership is $11/mo and I go 5-6 days a week now. My body has visibly changed in the last 2 mos.

  32. Just nutha ignint cracker says:

    @Teve: The only reason I find it surprising is that our target market is composed of about ~50-60,000 people. For a comparison, the gym in Vancouver, WA is smaller yet in a market that is roughly 4 times the size of ours. (And no, it’s not the only gym in the area, there are about 8 or 10 others.) But, yeah, the price is right (as is the location for me).

  33. Just nutha ignint cracker says:

    @Mu Yixiao: Not wishing to sound like an evangelist or anything, but when I had the condition you describe, one of my doctors finally suggested that I be tested for sleep disorders. You may want to talk to your doctor about it. Or not, your choice.

  34. Mu Yixiao says:

    @Just nutha ignint cracker:

    Not wishing to sound like an evangelist or anything, but when I had the condition you describe, one of my doctors finally suggested that I be tested for sleep disorders.

    I’m pretty sure I know what’s happening with me. 3 basic things:

    1) Temperature. I can’t sleep when it’s over 70º. I’ll be so happy when it’s winter and my bedroom drops down to 65 (the lowest the portable heater will go). We had a run of about a week earlier in the summer when night-time temps dropped into the 50s. I turned on my window fan and slept like a baby.

    2) Joint pain. Partly arthritis, partly being very out of shape. I gained 20 kilos over the last year, after dropping down to a really good weight for me.

    3) Bladder. Seriously. I had my bladder. 😛

  35. Michael Reynolds says:

    @wr: @EddieInCA:

    Okay, I absolutely get that it’s generally smart, and generally safe, to go to a guy who has delivered in the past. I mean, I get hired because I’m a genius, of course, ahem, but at least as much because I have a long record of on-time, on-spec delivery.

    What I don’t get is that – correct me if I’m wrong – the hundred million development deal for producer X, is not then used to actually make the show. Rather the costs of developing a show are over and above these nine figure deals. Or do I have that wrong?

    So, if I have this right, Streamer A pays Producer X a shit ton of cash in what amounts to a hope, a bet on that producer as opposed to a bet on a given product. What happens when Producer X comes up with a couple flops in a row? No one goes back to Producer X and says, Dude, we gave you a gazillion dollars and you gave us a reboot of F-Troop which was watched by nine people, all of them critics who hated it.

    It’s a bit like an advance in book world, except that I have to first reach break-even on the advance to see more money. And if it turns out I’m overpaid for Trilogy A, (Front Lines) I then lower my price on a different trilogy (Monster) in hopes of regaining my profitability.

  36. wr says:

    @Michael Reynolds: I don’t know what the hundred million dollars has to cover — shockingly, my nine-figure deal still has yet to reach this stage of negotiation.

    I’m pretty sure, though, that’s it’s one hundred million dollars over X number of years, so I suppose there’s a chance at renegotiation if it doesn’t pan out.

    And such deals do go bad, and not only in TV. Warners paid R.E.M $80 million for five albums — after the release of New Adventures in Hi-Fi. In TV, Glen Larson was a hit-making machine (some would say a hit-borrowing machine but let us not speak ill of the dead) for a decade, and then he ran cold after Knight Rider and churned out failure after failure.

    But in these cases, I’d think of it less than paying a writer/producer a bunch of money and more like the streamer or broadcaster buying a successful production company and thus assuring themselves of a constant stream of product.

    So it’s not exactly like paying you an advance for a book. It’s more like giving Stephen King a huge amount of money to create his own imprint, which will publish not only his next dozen books but books by other writers that he will supervise or edit or just discover and will all bear his name. (As in “Stephen King presents,” not “by Stephen King…)

    And if you think these are large checks in the entertainment industry, consider that the geniuses at AT&T paid $85 billion for Time-Warner, tried to run it for a couple of years, and then sold it all off to Discovery for roughly half that.

  37. wr says:

    @wr: And PS — I’m not saying I approve of this. I could happily live in a world where 75% of network TV wasn’t split between Dick Wolf and Greg Berlanti. I’m explaining, not justifying…

  38. EddieInCA says:

    @Michael Reynolds:

    I think there are two scenarios which often get conflated.

    Scenario 1: Streamer/Studio pays Creator A (who has never worked for them before) $XX Millions for a show/series/deal, they’re HOPING for hits to justify the expense. See Ryan Murphy/Netflix deal or Greg Berlanti/Netflix feature deal, as examples.

    Scenario 2: Studio/Streamer pays Creator A (who has created multiple massive hits for them already) $XXX millions for a show/series/deal, they’re basically buying out future profits from the series. It’s why CBS gave Anhony Zuiker $500 million. Although it was touted as an “overall deal for future development”, it was actually a payoff for creating a multi-billion dollar franchise. Same with Berlanti’s $400 million dollar deal with WB Televison.

    In scenario 1, it’s very much as you describe; a crapshoot. They’re hoping the magic repeats itself. But many times, as you state elsewhere, past performance is not indicative of future results.

    In scenario 2, they’re playing with house money, so there is really no downside. The studio is paying them from profits they’ve already made. That’s why you see the deals for Dick Wolf, Jerry Bruckheimer, Chuck Lorre, Jerry Seinfeld, Tyler Perry have such ridiculous numbers. They’ve already made probably 10X that much money for the studio.

  39. EddieInCA says:


    @wr: And PS — I’m not saying I approve of this. I could happily live in a world where 75% of network TV wasn’t split between Dick Wolf and Greg Berlanti. I’m explaining, not justifying…

    This!!! 100%

    I’d add Shondaland, Bad Robot, Ryan Murphy, Chuck Lorre, and Tyler Perry to that list.

  40. Michael Reynolds says:

    @wr: @EddieInCA:
    Thank you both for the seminar. Very interesting. We’ve got various little pots stewing – or not, because no one ever declares anything definitively over – and like to understand the economic ground we’re looking at. K wants nothing to do with anything Hollywood so I’ve been given the job of understanding things related to same. Tells you what a crack outfit we have here.

    So far Hollywood has meant one very nice payday and some little rights deals, which is all swell because they don’t mean any extra work. At least in theory. But I’m starting to think that when you add up all the meetings and meeting preps and meeting post mortems and then more post mortems with the agent, and divide that into the cash thus far earned, we may be sitting right around minimum wage.

    That’s not even counting the nightly tipsy recap where we bemoan the fact that we’re kinda old now and thinking we don’t have an endless number of days to piss away on unproductive meetings with annoying people. Are we here to do something? No? Then why the fuck are we here? What kind of water do I want?

  41. Michael Reynolds says:

    @Modulo Myself:
    Sorry, thanks to you as well.

  42. wr says:

    @Michael Reynolds: If I may be so bold as to give you some completely unsolicited advice, I’d suggest that next time the phone rings, just say no. There’s nothing in this biz — and so much of the rest of life — that is as exciting as the unobtainable. Say no to meetings, to offers, to whatever.

    Of course this is always a gamble — sometimes people take no for no. But if you guys are really this uninterested in Hollywood, you’ve got nothing to lose. If they take you on your word, you’re not wasting any more time with them. But if you get the one who can’t take no for an answer, your complete indifference will drive them crazy.

    These producers and execs are used to having people fling themselves at their doors. Someone who simply doesn’t care becomes an existential challenge, and nothing opens the checkbooks like an existential challenge.

    Now granted this technique only works if the phone does ring… but either way, you get to move out of Southern California and back to civilization!

  43. EddieInCA says:

    @Michael Reynolds:

    wr gave you brilliant advice. If you really want to drive them crazy, just keep saying no. Especially if more than one company is interested. And especially if you don’t give a shit. I turn down work left and right from certain companies – mostly because I don’t like how they do business – and those companies are the ones that are pestering my agent for my availability more than the companies for whom I do the most work.

  44. dazedandconfused says:

    Outrage sells so newsrooms are ever more populated with people who are either naturals or good at feigning it. What happens when something serious crops up and intelligent, sober, and very broadly educated people are needed? Everybody focuses on how this might affect somebodies political career, that’s what. Ya go with whatcha know…

  45. Kathy says:

    @Michael Reynolds:

    I’m reminded of Asimov’s First law of Hollywood: Whatever happens, nothing happens.

  46. wr says:

    @Kathy: “I’m reminded of Asimov’s First law of Hollywood: Whatever happens, nothing happens.”

    Well that hardly seems fair. Foundation is already coming out as a TV series, and it’s only been seventy years since it was published.

  47. Kathy says:


    And not even thirty years since Asimov passed away.

  48. Teve says:


    And if you think these are large checks in the entertainment industry, consider that the geniuses at AT&T paid $85 billion for Time-Warner, tried to run it for a couple of years, and then sold it all off to Discovery for roughly half that.

    I worked for a certain corporation around that time. My job went from awesome to absolute shit. Prior to that I had been selling iPhones on commission and iPhones fucking sell themselves.

    Then the bosses all stopped giving a shit about phones and started leaning on us hard to sell 2 shitty tv products that nobody wanted. My really cool boss was replaced by an absolute witch who started chewing everyone out every single day if you didn’t start giving every single customer the hard sell. I mean, a 90 yro blind woman could come in to pay her landline with a check and you were supposed to ignore her payment for 10 minutes while you tried to sell her tv. And if you didn’t, you got an ass-chewing every time. After about 2 months of this, one day i woke up, started to get out of bed and get ready to work, and looked at my phone for a few mins, turned it off, and went back to bed. She was fired a few months later, but I’d moved on.

    I’m sure the executives who cooked up that deal made many, many millions in the process.

  49. Michael Reynolds says:

    @EddieInCA: @wr:
    I’ve been trying to be nice since I/we may have blown up the Animorphs movie. But absolutely. It’s how K got a merch deal from Disney*, just basically repeating I really don’t even want to do this.

    *Cash value: $0.00, but hey, a win is a win, no matter how hollow.

  50. Michael Reynolds says:

    It’s possible that I’m not the first book author to bitch about Hollywood.

    It’s the time suck that annoys us both. The lack of productivity. OTOH we’ve seen the end product. It’s just that it’s meeting, meeting, meeting (repeat 42 more times) and then, occasionally, there’s this huge explosion and suddenly there are hundreds of terrifyingly competent people working harder on your stuff than you ever did yourself. Aaaaand then it goes to streaming.

  51. EddieInCA says:

    @Michael Reynolds:

    The single biggest mistake in the history of Hollywood was Fox agreeing to let George Lucas keep all the merchandising rights to Star Wars (and it’s sequels) in return for Lucas giving up an additional $500K he was to get as a directing fee.

    So perhaps this is a start of an empire for K. (no pun intended)

  52. Kathy says:

    @Michael Reynolds:

    It may be making a movie is a bit more expensive, and takes more people, than writing a book.