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"Did Erin Win The Biggest Payout On Reality TV?"
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Lumster 179 desperate attention whore postings
DAW Level: "Blistex Spokesperson"

09-12-03, 09:21 PM (EST)
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"Did Erin Win The Biggest Payout On Reality TV?"
Does anyone know if Erin won the biggest payout on a reality TV show at $2 million?
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  Subject     Author     Message Date     ID  
 RE: Did Erin Win The Biggest Payout... gotmyjd2003 11-25-03 1
   And ... AyaK 11-25-03 2

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gotmyjd2003 3 desperate attention whore postings
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11-25-03, 02:58 PM (EST)
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1. "RE: Did Erin Win The Biggest Payout On Reality TV?"
this is such a late reply that i doubt anyone will even read it, but the answer to your question is a hedge: yes and no. On the one hand, the sum of $2 million is the most ever paid out to a reality show contestant. On the other hand, whereas most reality shows actually pay out the winning amount (less taxes, which are considerable) right away after the show, FLOM had a very unusal arrangement in which the award money was paid out in an annuity over 40 years. This is very similar to a lottery arrangement, except that even lotteries usually pay out within 26 years. So the bottom line is that Erin only stood to get paid $25k/year after the first FLOM. One could argue that that's why she chose to do the second one. Now, even after winning $2 million, she still only gets paid $50k/year for the next 40 years. Of course, if she doesn't last the full 40 years, the remaining amount need not get paid out.
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AyaK 10083 desperate attention whore postings
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11-25-03, 09:17 PM (EST)
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2. "And ..."
...if you look at the news threads for FLOM, taking into account the time value of money, you'll see that we calculated the present value of the $1 million annuity at around $450,000. Thus, the present value of the $2 million annuity is around $900,000 -- which means that Erin won less than each of the seven Survivor winners, because the present value of $1 million paid today is $1 million.

Don't be fooled by NBC's "$2 million" hype.

--AyaK, JD, CPA

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