Is Sheen the Model for Future Stars Looking to Get Paid?

Charlie Sheen is unquestionably considered to be on the wrong side of crazy, but the man knows business.

It makes complete sense for you to dislike him for his internet tirades, trouble with the law, kidnapping of a prostitute and drug-inspired interviews, but there is at least one thing you can respect Sheen for, and it ain’t his acting.

While the man has not earned much in the way of awards for his on-screen acting ability, he has earned a hell of a lot of money. In a career that has produced just five award wins (one of which is a wrestling “Slammy Award”), Sheen has managed to garner some of the biggest payouts in television acting history. Namely, his stint at “Two and a Half Men” earned him up to $30 million per year.

But if all goes right for Sheen (and when doesn’t it?), that $30 million per year will be nothing more than an emergency fund for this Estevez brother.

On his new show, “Anger Management,” Sheen could earn up to $200 million on the backend alone. In signing up to do the show for $100K/episode—you know, chump change—Sheen got almost half of the backend revenue on the show. Now that the show has had all 100 episodes bought, foreign distribution sold and has sponsorship deals in place, Sheen seems all but assured to get nearly, if not more, than the estimated $200 million lump sum payment he would be entitled to.

This to me is great news. Even as a guy who wants to be a media and entertainment CEO, I love when the talent wins. Sure, some day I’ll probably be doing my best to negotiate the deals of actors and crew in my favor, but in my heart of hearts, I want the “laborer” to come out on top over the big, bad corporation every time. And when actors get as powerful as Sheen, they do tend to usurp much of the value that arises from the productions they star in.

Which is why I don’t care too much when media companies do their best to get value from actors when they are not as big as Sheen. A guy like Sheen, single-handedly caused the #1 sitcom to take a step back, and for that, he was rewarded with a potential $200 million payout. So when media companies pay Sheen less than market price for roles in Ferris Bueller’s Day Off, Wall Street and everyone’s favorite TV movie, War of the Stars, who can blame them? After all, the company is only going to get taken to the cleaners when that young-and-up-coming Sheen becomes a sitcom phenom.

It’s how the business works. Media companies extract a lot of value on projects and productions that over-perform, and they try to stay above water on high-potential, big-production shows and movies with big TV personalities and box office movie stars.

But Sheen’s payment is a tribute to something else besides him sucking out most of the value in his latest piece of work. This is about a highly-compensated actor taking some of the risk off the media company’s hands. It think it suffices to say, that on high-budget television shows, most media CEOs would love to pass off the risk. In fact, that’s all they do—it’s exactly what the LA Screenings are for: to sell the foreign distribution rights of new shows before they even hit the air. Will Sheen’s latest financial coup encourage other big name actors to do the same? Or is Sheen’s situation specific to him, because he was begging for work and had to take the risk to get a job?

I don’t know the answer, but I do know one thing. Fox was very happy to produce a show with a big draw talent and relatively minimal risk, and Sheen certainly will be happy when he gets his big pay day. In the interest of mutual satisfaction, perhaps this risk sharing thing can become a way of original content’s future–pending actors’ low level of risk aversion.

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