What does it mean to sell a TV show with a penalty?

If you’re one of the lucky ones who sell a TV show to a network, often times they’ll pay for  your pilot script (or pay to have your pilot written if it hasn’t already been done so) and that’s the end of the road for you. They might even produce your pilot and never air it. I’ve watched dozens of pilots that have never seen the light of day. To avoid this, high profile producers/writers will demand a penalty in their purchase agreement. This is also referred to as a PUT PILOT. What this means is that if the pilot doesn’t get produced and aired on TV, the network must pay a huge fee to the producer/writer of the show. This can range for low six figures to low seven figures depending on the contract. I’ve even seen deals that include a series penalty which means if the network doesn’t order the show to series, they must pay a penalty. Networks can also use this as incentive to make sure the producer/writer sells their show the them and not one of their competitors.

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