Shark Tank is a reality show where people with ideas, inventions and business’ can pitch five successful venture capitalists, (Sharks). They pitch what they’re doing and then ask for money and or partnership to help take the next steps. In return they offer a percentage of their business to the Sharks. Billionaire owner of the NBA’s Dallas Mavericks, Mark Cuban, is one of the five potential investors.
I’m usually not a big fan of reality TV shows, but I did get sucked in and enjoyed watching this one. In part because I like shows that give talented people an opportunity they might not get otherwise. Further, truth be told, I’m always coming up with ideas myself so I wanted to get to know the show, the Sharks, and apply when the time was right.
In researching Shark Tank, I discovered something I find deplorable. Just for appearing on the show whether one of the show’s Sharks like or make an offer or not, the show’s production company, has the option to either receive a 2 percent royalty on the operating profits of the contestant’s business or take a 5 percent equity stake. Are you kidding me??? If I were to ever apply to be on the show I would certainly consult with an attorney to find out if this is legally enforceable.
I find this exploitative with a capital E… I’m sure the rationale is just by being on the show, a person’s product or idea is getting good exposure/ publicity. But what if the Sharks all slam the business idea and make the person / idea look foolish? And then the person builds the business in spite of being on the show?
But forget that for a moment. Let’s say, the PR is great but for whatever reason a deal isn’t offered or made. (Or a deal is verbally agreed to but later falls through, which is also in the fine print.) It’s still wrong for the show’s production company to do this. Need some comparable examples?
Does American Idol, The Voice, The Last Comic Standing, The Apprentice or any other competition/reality show, take a percentage of future earnings that losing talent may not have earned unless they got the exposure on the show? A singer’s voice is no more his or her business than an entrepreneur’s business or idea. Why take from one and not the other? Or better yet, you don’t take from one and shouldn’t take from the other.
While we’re at it, why not charge actors a percentage of their future revenue when they appear for the first time on a scripted TV show? After all it might benefit their career going forward. I thought college basketball and football players were exploited for not being paid to play. They’re getting off easy. If the Shark Tank producers were running the NCAA the players might have to give away a percentage of their future earnings as professionals.
The Producers, Mark Burnett, (executive producer of Shark Tank and The Voice) Sony, ABC and the Sharks, benefit and are making big money by having these budding entrepreneurs on their show. In fact they need them, and there wouldn’t be a show without them. That should be enough. Just because the supply exceeds the demand (meaning lots of people would like to appear on Shark Tank), doesn’t lesson the value that the participants contribute. Nor does it justify the exploitation. They’re auditioning and getting on, based on the strength of their idea, to the same degree that singers get on The Voice, or newbie actors get a few lines on Mad Men based on their talent. And believe me I know plenty of actors who would pay money to get their first role on a major, or for that matter, minor show. Doesn’t make it right. And it reminds me why unions exist.
Overall, I like all of the Sharks and think they do a great job, even Mr. Wonderful. I appreciate the opportunities the show offers but I will no longer watch until this wrong is corrected. If you agree, do the same and spread the word.