Does Sesame Street Lose Money?

Answers to your questions about the news.
Jan. 3 2012 6:11 PM

Brought to You by the Letter “$”

With all its merchandising, does Sesame Street really lose money?

Oscar the Grouch.
Oscar the Grouch

Photograph courtesy 2011 Sesame Workshop.

PBS is hoping that popular shows like Downton Abbey and Sherlock will bring in donations that “help finance other programs like Sesame Street and Sid the Science Kid,” explained a story published in the New York Times on Sunday. Does Sesame Street, with all its branded products on store shelves, really operate near the red?

Yes. Sesame Street and its production company the Sesame Workshop do make a lot of money from product licensing, but not nearly enough to cover expenses. According to the company’s most recent financial report, the Workshop earned about $45 million in merchandising during 2010, which accounted for one-third of its total revenue. The rest came mainly from distribution fees and royalties, and from an assortment of private donors, corporate sponsors, and government grants. That may sound like more than enough to make a puppet-based television show, but according to the same report, the operating expenses for the Sesame Workshop totaled about $133 million, including $37 million for production and development of TV shows at home and abroad; $41 million for production and distribution of non-TV content including apps, home video, and live entertainment; and a hair under $7 million for “Muppet acquisition.” (The remainder goes towards education, outreach, fundraising expenses, and assorted smaller costs.) Only about $4 million comes from PBS annually, and in return PBS recoups some of the cost.

The production budget for Sesame Street domestically is about $16 or $17 million per year, which produces about 26 episodes. At less than a million dollars per episode that’s a relative bargain. A cable show like The Walking Dead can cost $3 million per episode.

Advertisement

The Sesame Workshop hasn’t always collected so much revenue from the merchandising of its characters. The show was created using Jim Henson’s Muppets, and through the 1990s money the sales of Sesame Street dolls, playsets, and other toys was split with the Jim Henson Company and a German media group called EM.TV. Then in December 2000 the Sesame Workshop acquired the rights to Oscar the Grouch, Cookie Monster, and the other Sesame Street Muppets for $180 million. International licensing has also grown in recent years, especially as the show has gone global with shows like Plaza Sésamo (in Latin America), Sesamstrasse (in Germany), and Takalani Sesame (in South Africa). When The Sesame Workshop’s revenue grew by 4 percent in 2005, the New York Times noted that this was “primarily because of new income from international licensing.”

Sesame Street hasn’t always seen sunny days, however. In 1974 Sesame Street’s federal aid was slashed in half, leading the production company to cut 13 jobs. In 1995, the company laid off 47 staffers, and operated at a deficit. The recession was particularly hard on Sesame Street’s investment portfolio. Its assets shrunk by $36 million between summer 2008 and summer 2009, and in March it cut 67 of its 355 staff positions. Mitt Romney has vowed to make times tough for Sesame Street again, if he’s elected to the White House. While campaigning in Iowa, Romney signaled that he would stop federal subsidies for PBS. “We’re not going to kill Big Bird,” he said, “But Big Bird is going to have advertisements. Alright?

Got a question about today’s news? Ask the Explainer.

Want more questions answered? You can now watch the Video Explainer from Slate's News Channel.

Forrest Wickman is a Slate staff writer. 

TODAY IN SLATE

Medical Examiner

The Most Terrifying Thing About Ebola 

The disease threatens humanity by preying on humanity.

I Bought the Huge iPhone. I’m Already Thinking of Returning It.

Scotland Is Just the Beginning. Expect More Political Earthquakes in Europe.

Students Aren’t Going to College Football Games as Much Anymore

And schools are getting worried.

160 Countries Host Marches to Demand Action on Climate Change

Politics

Blacks Don’t Have a Corporal Punishment Problem

Americans do. But when blacks exhibit the same behaviors as others, it becomes part of a greater black pathology. 

Why a Sketch of Chelsea Manning Is Stirring Up Controversy

How Worried Should Poland, the Baltic States, and Georgia Be About a Russian Invasion?

Trending News Channel
Sept. 19 2014 1:11 PM Watch Flashes of Lightning Created in a Lab  
  News & Politics
Weigel
Sept. 20 2014 11:13 AM -30-
  Business
Business Insider
Sept. 20 2014 6:30 AM The Man Making Bill Gates Richer
  Life
Quora
Sept. 20 2014 7:27 AM How Do Plants Grow Aboard the International Space Station?
  Double X
The XX Factor
Sept. 19 2014 4:58 PM Steubenville Gets the Lifetime Treatment (And a Cheerleader Erupts Into Flames)
  Slate Plus
Tv Club
Sept. 21 2014 1:15 PM The Slate Doctor Who Podcast: Episode 5  A spoiler-filled discussion of "Time Heist."
  Arts
Brow Beat
Sept. 21 2014 2:00 PM Colin Farrell Will Star in True Detective’s Second Season
  Technology
Future Tense
Sept. 19 2014 6:31 PM The One Big Problem With the Enormous New iPhone
  Health & Science
Bad Astronomy
Sept. 21 2014 8:00 AM An Astronaut’s Guided Video Tour of Earth
  Sports
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.