Knowing Value

I just read this story, and I’m having a hard time corroborating it. I’m also having a hard time refuting it, so, because it sounds plausible, I’m posting it. But just know, it may be an urban legend.

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In 1972, M*A*S*H debuted. It wasn’t expected to be much of anything but a chance to make a series, relatively cheaply, using leftover sets from the Altman film. It turned out to be the only hit for FOX (although it aired on CBS, it was a FOX production) at that time.

Three years later, FOX was in financial trouble again and two of the stars of M*A*S*H left, so, panicking, it decided to try to make some fast money. It offered local stations a deal: for a flat $13K an episode (non-refundable) the stations would have the rights to run the shows, years later, when they were syndicatable. Stations jumped at the chance and FOX made $25 million.

When the show could run locally, in 1979, M*A*S*H was still hugely popular and each of those local stations grossed over $1 million for each episode. That’s 168 episodes… so $168 million, per episode, made by the stations, for an investment of $13K (per).

FOX made nothing more.

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The point? FOX sold something without respecting its potential future value.

I’m afraid too many photographers are doing this today. Think about future values. Consider negotiating deals where future value is a factor by accepting a low fee now but with more down the line. For example, structure a system for a small company with potential for growth, that wants you to shoot for their website. They’re growing, with the hopes of having an IPO in the future–build in a tiered pricing system where, if they hit X revenue or have their IPO, you get a bonus. That makes you a stakeholder in their success–part of the team–and gives them confidence that you are really interested in their best interests as well as your own.

Basically, be creative in your pricing, and don’t give it away. You never know when you’re sitting on a Nike swoosh or a M*A*S*H episode.