The Town with Matthew Belloni 'Severance’: When a Hit Show Goes Over Budget, Who Pays?
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Feb 20, 2025 Chris Rice, cofounder and co-CEO of Fifth Season and producer of Apple+’s ‘Severance,’ dives into the financial labyrinth of television production. He explains what happens when a show exceeds its budget and who bears the costs, revealing the impact of industry strikes and ambitious creative choices. Chris also contrasts independent studios with larger networks, discussing financing models and the dynamics of global distribution rights. He further highlights the unique 'cost plus' model used in ‘Severance,’ illustrating the delicate balance between creativity and budget management.
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Types of TV Studios
- There are three types of TV studios: in-house, scaled independents, and smaller independents.
- Scaled independents like Fifth Season handle production, financing, and global distribution.
Challenges for Small Production Companies
- Streamers sometimes partner with talent directly but prefer to own content for full economic upside.
- This can limit opportunities for smaller production companies without substantial financial backing.
TV Financing Models
- Two main TV financing models exist: cost-plus, where streamers pay production costs plus a premium, and deficit financing, where networks pay a portion, leaving a deficit for the studio.
- The premium in cost-plus and the deficit in deficit financing vary depending on factors like the show and the studio.