Legal and Business Affairs

by Leonardo Feldman

                                           Changes in Television Contracts 

There are millions of contracts that have been, and will be negotiated in the United States in all kinds of different industries.  Before 1677, verbal contracts were allowed under Common Law. However, there was a change when the “Statute of frauds” came about. The “Statue of Frauds” is a “measure intended to prevent the frauds that may occur whenever there is no signed, written agreement” [1].  Therefore, to prevent fraud a verbal agreement is not a binding commitment. Nowadays, written agreements are necessary with signatures unless they “performed the agreement”. This means that if the parties involved started performing their tasks as required in the contract, then a signature is not necessary.  With the rapid changes in technology, contracts can also be enforced under the law if they are conducted in an e-mail or in another digital manner.

The television industry is very particular about the way its contracts are enforced. has a very interesting article written by Glenn Halbrooks that details the basics of a TV contract. In summary, the article says that the contract should contain a list of services, compensation, station rights, moral clauses, a covenant not to compete, and termination penalties [2].

Some TV actors have mastered contract negotiations. Currently, Ashton Kutcher is the highest paid actor in television [3]


Courtesy by Michael Prince

Courtesy by Michael Prince [4]

The Current Highest Paid Television Actors  are:

1. Ashton Kutcher- “Two and a Half Men”- $ 16.8 Million

2. Jon Cryer- “Two and a Half Men”- $ 14.4 Million

3. Mark Harmon- “NCIS”- $ 12 Million

4. Mariska Hargitay- “Law and Order: SVU”- $ 11.5 Million

5. Sandra Oh, Ellen Pompeo, and Patrick Dempsey-“Grey’s Anatomy”- $ 8.4 Million

6. Jim Parsons, Johnny Galecki, and Kaley Cuoco-“The Big Bang Theory” $ 7.2 Million

7. Simon Baker- “The Mentalist!”- $ 7.2 Million

8. Angus T. Jones- “Two and a Half Men”- $ 7.2 Million

9. David Boreanaz- “Bones”- $ 5.85 Million

10.  Patricia Heaton-“The Middle”-$ 5.64 Million

Dancing with the Stars

All of these highest paid television actors are likely to be happy with their contracts. However, there are some frustrated television personalities that are upset because of the length of their contract. On March 29th there was an article written on Fox News which reported that a source closely connected to the series “Dancing with the Stars” said that some of the dancers are unhappy with the exclusivity and length of their contracts. The source claims that when they signed the contract they weren’t well-known, so they couldn’t really do much except to sign what was offered to them. But, now that they gained prominence, the exclusive rights along with its length have become a real issue for them [5]. 

Photo by Reuters (November 17th,2007) [6]

For Example, Julianne Hough got into the show when she was only 19 years old. After four seasons, she decided to split her time to pursue her music and movie career.  Currently, Hough is not a dancer in the show, but ABC still has control of what movies or other projects she can do. If ABC does not want her to participate in a specific project, Hough has to abide by their rules. As of yet, Hough nor ABC have commented about the current situation [7].

Jay Leno and Jimmy Fallon

Photo courtesy of Getty Images [8]

Photo courtesy of Getty Images [8]

For 22 years Jay Leno has hosted the “Tonight Show” on NBC, however his luck has run out and his contract will not be renewed. Jimmy Fallon will become the sixth all time host of the 59 year old show, and is expected to begin in February of 2014. Leno’s contract is set to expire in September of 2014 and NBC has decided to give him $15 Million dollars to exit the show early. There is no word yet as to wether he will remain with the network, go elsewhere, or possibly retire [9].

Courtesy by

Courtesy by [10]

On the same day of the announcement. Jimmy Fallon tweeted, “Today was one of the most exciting days of my life.” He also addressed his viewers during his current show, ‘Late Night with Jimmy Fallon’ by saying, “I want to thank everyone here at ‘Late Night.’ The staff, the crew and, of course, The Roots…I have to say thanks to Jay Leno for being so gracious. It means so much to me to have his support” [11].

Fallon will become one of the youngest hosts ever to host the “Tonight Show” at the age of 38.

Television average salaries

Television salaries are definitely not all as glamorous as Jay Leno’s or Ashton Kutcher’s multi-million dollar contracts.  A website called PayScale had the following average salaries  a year for different positions in television [12]:

  • News Anchor- $54,895
  • News Producer- $39,316
  • Film/ Video Editor- $46,206
  • Film/ TV Producer- $50,498
  • News Reporter- $33,036
  • Promotions Producer- $44,191
  • Producer-Director, TV/Cable Broadcast- $54,180

The future of contracts is uncertain

There is a lot of speculation over the future of Television and other media contracts. A very radical article from believes contracts may go away completely. The article expresses the possibility of having robots be the Television anchors basing it on a new App.

Here is a video of a News Anchor Robot : Robot News Anchors [13]

The article talks about a new startup App called Guide that will be available through iTunes  and Android Play stores in May of this year.  The company transforms online news articles into video news pieces. This is done so viewers can pick what news they want to watch, and computerized characters (robots) can read them just like a human news anchor [14].

Courtesy by

Courtesy by [14]

The startup is trying to give viewers the “TV-Newscast-feel” by having online comments at the bottom of the screen in a ticker, and including commercials between segments.  The computerized characters include a non-human Avatar, a puppy. an anime character, and they are in the process of creating more variety. The founder says this could also be a source of revenue for the company by making viewers pay a small fee to buy the different computerized characters [14].

Although this article may be somewhat of a stretch, it is clear that television will keep changing as technology evolves. As of now contracts still exist, and are enforced under Common Law.


[1] Blumenthal, Howard J., and Oliver R. Goodenough. The Business of Television. New York: Billboard, 1998. Print.














Regulation of Distribution

by Baindu N. Saidu

Distribution refers to the means by which television programming is delivered to consumers. It is done through traditional means like Broadcast, Cable or Satellite television, or through newer means like Video on Demand (VOD), Digital Video Recording (DVR), and online Subscription Video On Demand (SVOD) services like HULU Plus and Netflix.

When it comes to overseeing and regulating of these different means of mass television distribution, the Federal Communication Commission (FCC) is the principle government agency in charge. Its jurisdiction covers the means of mass emerging television technologies at the intersection of telephone, internet, computing, and digital signals. [1].


via the FCC website (

Several events have been ongoing during this semester related to the regulatory and legal aspects of distribution include a satellite provider, Dish’s disputes with both cable and broadcast networks, and the FCC’s ongoing plans for an incentive auction to reclaim spectrum space for wireless operators.

Dish Network vs. AMC Networks

The Networks’ dispute started years earlier with Cablevision’s lawsuit against Dish over their Voom HD channel which Dish stopped carrying in 2008. AMC was spun off from Cablevision in 2011. In April 2012, Dish notified AMC that it would drop their channels and by July, when their contract expired, Dish removed AMC Network channels AMC, WEtv, IFC, and Sundance from its lineup [2].

The companies indicated different reasons for the dispute. AMC stated that DISH dropped its programming because it wanted to gain leverage in an unrelated lawsuit involving Cablevision and their Voom HD channel [3]. DISH, conversely stated that the dispute was over “bundling,” in which big networks like AMC try to sell several of their channels, both high- and low-rated, to providers in a bundle to get a better price [4].


Image via Deadline website (

By September, Dish’s 14 million subscribers had been without any AMC channels for more than two months and feared not be able to view the season premiere of the AMC hit show, The Walking Dead, set to premiere October 14. Speaking on the dispute, Dish’s senior vice president of programming, Adam Shull stated that “The problem is they’re asking me to pay for four channels for really what is the price of three shows,” thus Dish wouldn’t be paying for any AMC shows [5].

On their part, AMC turned to social media in a quest to get their channels back on Dish, launching a YouTube video contest for angry Dish subscribers called “Hey DISH, Where’s my AMC?” [6].

The conflict would not be resolved until October 21 when Cablevision and AMC Networks settled their lawsuit with Dish Network for $700 million. The deal brought to end a dispute over whether Dish breached an affiliate agreement by terminating AMC’s Voom HD Network in 2008. At a trial that began in late September, AMC sought some $2.4 billion in damages from what it believed was Dish’s improper termination. Dish had defended itself by saying that it had the authority to cancel the Voom deal based on a contractual clause requiring Cablevision/AMC to invest $100 million per year on the channel. As part of the deal Dish also reached a new carriage agreement with AMC, bringing the network back to their lineup along with IFC, Sundance, and WEtv [7].

Dish Network’s AutoHop vs. Broadcasters

Image via Dish Network Website (

Another battle Dish Network has been involved in pertains to the AutoHop feature for its DVR systems, Hopper and Joey. Introduced in March, Autohop, an International Consumer Electronics Show (CES) Innovations 2013 Design and Engineering Award Honoree, allows users who are watching Primetime Anytime recordings to completely skip commercials. When the user starts watching a recording, they are allowed to choose whether or not to skip commercials. Users who choose to skip the commercials move from segment to segment of TV shows without having to watch the ads [8]. This feature has undoubtedly caused uproar with broadcasters, who depend on ad sales for a majority of their revenue.

In May, three of the major broadcasters (CBS, NBC, and Fox) filed suit against Dish Network in Los Angles, contending that the technology violated copyright law. Dish simultaneously filed a suit against ABC, CBS, and NBC in New York seeking a declaratory judgment affirming the legality of their technology [9].  In documents filed August 22, Fox’s lawyer argued that AutoHop was in “violation of the express terms and conditions of its contracts with Fox and federal copyright law. Both parties argued their respective points of view in front of U.S. District Court judge, Dolly Gee, on September 21 in Los Angeles. On November 6, Gee denied Fox’s request for a preliminary injunction that would shut AutoHop down. Gee, in denying Fox said, “Although Dish defines some of the parameters of copying for time-shifting purposes, it is ultimately the user who causes the copy to be made.” She also pointed out that Fox hadn’t proved there would be “irreparable damage” if no injunction was issued. Any harm to Fox, she said, could be relieved by monetary damages. The judge did agree with Fox though that Dish had likely committed copyright infringement and broken the contract between the two companies in making copies of Fox programming for alleged quality assurance [10].

On November 9, Fox filed an appeal against the denial of its request for an injunction, moving the matter from the U.S. District Court to the U.S. Court of Appeals for the Ninth District[11]. More legal action from broadcasters followed on November 24 when ABC sought a preliminary injunction from U.S. District Judge Laura Taylor Swain in Manhattan federal court to also block AutoHop [12].

The broadcasters’ reason for going after AutoHop is that it “will ultimately destroy the advertiser-supported ecosystem” they depend on for revenue [13]. The networks make more than $19 billion a year in advertising, money that pays for the high cost of programming. Without advertising, network executives say, media companies would have to charge distributors three times the current rate for their signals, added costs which would be passed on to consumers. Dish, on its part, said that it believes that the AutoHop feature does not violate the networks’ copyrights. Instead, the company said AutoHop is simply an enhancement of existing ad-zapping technologies, and ultimately a matter of consumer choice [14].

FCC Incentive Spectrum Auction

Image via Cio website (

The FCC is a quasi-autonomous commission that has elements of each of the legislative, judicial, and executive branches of government. It is part of the group of independent regulatory agencies (see also the FAA, FTC, and SEC) [15]. In its control of television, the FCC performs several distinct functions such as rulemaking, licensing, registration, adjudication, enforcement, and informal influence [16].

Last February, President Obama signed a law empowering the FCC to buy spectrum from broadcasters wishing to give it up and then turn around and auction it to wireless broadband carriers. The FCC is working on the implementing rules for the incentive auction — so-called because broadcasters have a cash incentive to give up their spectrum [17]. They have hopes that the auction could begin as early as 2014, but have until September 2022 to conduct the sale and license the airwaves to wireless companies [18].

For the most part, full-service broadcasters with major network affiliations and newsrooms have said they have no interest in the incentive auction, preferring to hang on to their entire spectrum so they can offer new services. However, other broadcasters that are struggling see the incentive auction as a way to recoup some or all of their investments. Speculators have also entered the market, buying up marginal stations with the intention of selling their spectrum at a profit in the FCC auction [19].

Fall FCC Spectrum Auction News

  •  September 07, 2012: FCC Chairman Julius Genachowski set to release the FCC’s framework for the spectrum auction with target of  having a report and order voted by mid-2013 and the auctions completed by the end of 2014 [20]. Full article.
  • October 04, 2012: Chairman Genachowski said that the FCC will exceed its 300 MHz target for freeing up spectrum, a target the commission set in  the National Broadban Plan [21]. Full article.
  • November 13, 2012: An anonymous group of broadcasters interested in selling their TV spectrum in the incentive auction created the Expanding Opportunities for Broadcasters Coalition and tapped former Fox and Disney lobbyist Preston Padden to lead their efforts before the FCC as the commission writes rules for the auction [22]. Full article.
  • December 03, 2012: FCC officials spelled out some financial options in a PricewaterhouseCoopers LLP webcast, urging listeners to file comments as the commission works to write rules for the auction. The deadline for comments on its Notice of Proposed Rulemaking was extended to Jan. 25, with reply comments due March 26 [23]. Full article.

With the auction yet to occur, there is more news to come. To stay updated, check out the FCC’s official website.



[1] Howard J. Blumenthal and Oliver R. Goodenough. “This Business of Television: The Stadard Guide to the Television Industry,” 3rd Ed., pg.28.












[13] [14]

[15] Howard J. Blumenthal and Oliver R. Goodenough. “This Business of Television: The Stadard Guide to the Television Industry,” 3rd Ed., pg.29.

[16] Howard J. Blumenthal and Oliver R. Goodenough. “This Business of Television: The Stadard Guide to the Television Industry,” 3rd Ed., pg.30




[20] FCC_Wants_Broadcast_Spectrum_Auctioned_by_2014.php