America’s Got Talent Season 8 – Greatest Illusion of All – Winning $1 Million Dollars (August 2013)| August 25, 2013 at 3:48 PM EDT
America’s Got Talent Season 8 is about to enter into the semi-final rounds, moving ever closer to crowning the newest million dollar winner. Everyone knows that the first prize winner of America’s Got Talent will win $1 Million Dollars because Host Nick Cannon gleefully tells us so every week. The promise of winning that $1 Million Dollars could possibly be the greatest illusion of all on America’s Got Talent. I always imagine the winner being handed a giant check amid thunderous applause and a flurry of confetti, filled out for the life-changing sum of $1,000,000.00. Wow! Can you imagine? Well if you have been imagining it, don’t tax your brain any longer, because it’s just not worth it.
How about that, two puns for the… never mind.
Actually, the reality is that America’s Got Talent isn’t going to be handing out $1 Million in prize money to this season’s winner, not exactly. The teeny, tiny disclaimer at the end of the show tells the real story, “The prize, which totals $1,000,000.00 is payable in a financial annuity over 40 years, or the contestant may choose to receive the present cash value of such annuity.” 40 Years?
Can you imagine Nick Cannon substituting that mouthful every time he says $1 Million Dollars?
Back before Howard Stern became “America’s Judge” he actually threw a wobbly on his radio show when he found out that the reality of the $1 Million Dollar prize wasn’t quite as advertised. Howard had been a fan of the show long before he signed on as a judge. While talking about Season 5 winner Michael Grimm on his radio show he said “F You NBC. Nick Cannon’s on there going ‘This is the biggest contest prize of any on TV.’ Obviously, Howard has managed to come to terms with NBC misleading viewers. I’m sure his salary for being a judge on America’s Got Talent isn’t paid over a 40 year period.
So basically, the winner might eventually get that million dollars, but it’s in the form of approximately $25,000.00 per year, depending on the current interest rates, and that figure does not include the income taxes that have to be paid, federal and state, for the next 40 years. So right out of the gate, the $1 Million Dollar figure is drastically reduced. Who can predict where they’ll be in 40 years and I have no idea if there’s an option to designate a beneficiary.
So for instance, imagine comedian, John Wing as the winner, who is 53 yrs. old. Sure he could remain hale and hardy into his 90′s, but would he take that risk? This is one reason that many winners over the years have elected to take the lump sum payment. Others take it thinking they can invest it themselves and make out better in the long term or they think “Holy Cow just think what I could get with that money right now!” If the winner chooses to take the lump sum, they will pay a much heftier amount of taxes, also in a lump sum and will end up with approximately one-third of the advertised $1 Million Dollars.
John Wing’s performance on America’s Got Talent Season 8 earns him the judges’ votes and a place in the semifinals.
Reportedly, Michael Grimm, winner of America’s Got Talent Season 5 elected to take the lump sum payment and ended up with approximately $200,000.00 in prize money after the IRS took it’s share. AGT Season 6 winner Landau Eugene Murphy, Jr. told reporters right after his victory that he was going to use the prize money to buy a big house and send his kids to college. He reportedly ended up with approximately 300,000.00. Season 2 winner ventriloquist, Terry Fator made the most of the situation and signed a 5 year contract worth $100 Million Dollars with The Mirage in Las Vegas.
A couple of hundred thousand dollars is nothing to snub one’s nose at, but it’s a far cry from the highly publicized $1 Million Dollars. If the winning act contains multiple members, such as Catapult for example, that few hundred thousand will presumably be divided among them, and each share will be subject to income tax. I guess they could each end up with enough to start a college fund, or buy a nice new car or even make mortgage payments. Of course, income tax is an extremely variable thing and there are many factors that will affect the amount of taxes any particular contestant will end up paying and what they will ultimately end up with.
The point is, perhaps one of the most amazing illusions performed on America’s Got Talent is the hyped up promise of the winner walking away with a Million Dollars in prize money. The contestants are aware of how the awarding of the prize money is structured before they sign on for the competition, I hope. But for those who are serious about furthering their careers, they’re also aware that as the winner of America’s Got Talent, the most valuable thing they’ll come away with is the worldwide exposure and the credibility that winning the national competition provides. But One Million Dollars?
Not a chance.
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