Shark Tank Takes A Selfie
The reality TV show started its 8th year with a celebration of its audience appeal, Emmy wins and impact on American culture. But ratings for the opener were down, which could mean its time get out of the water. Just don’t tell the Sharks. After $100 million in investments, they expect to swim through another successful season. INSIDER STUFF: Why Barbara Corcoran won’t invite Kevin O’Leary to dinner again and other tales about Sharks in and out of the tank
SHARKS AT BREAKFAST - bottom row l to r - Kevin O'Leary, producer Clay Newbill, ABC New's Rebecca Jarvis,, Lori Greiner; top row - Robert Herjavec, Mark Cuban, Barbara Corcoran,
SHARKS IN THE SWIM
That’s Mark Cuban and Barbara Corcoran photo bombing into Rebecca Jarvis’s selfie with Lori Greiner near the end of a Beverly Hills press breakfast to celebrate the launch of the 8th season of Shark Tank, the ABC show that won its time period last season and has been honored with three back to back Emmys, most recently as Outstanding Structured Reality Program for 2016.
Over croissants, spinach & feta frittata’s and fruit, ABC heralded Shark Tank as the highest rated show in its Friday night time period and made the case that it has played a seminal role in culture, business and society. The network calls it “a culturally defining series,” that, “gives people from all walks of life the opportunity to attain the ‘American Dream.’”
ABC credits the hit show with invigorating entrepreneurship in America.
On Friday, ABC announced that Shark Tank had attained “a major milestone,” with more than “$100 million in deals made in the tank.”
The press event to announce that milestone was timed for the morning before Shark Tank had its season premiere. There was a lot of positive news from the past but the next day brought bad news. Shark Tank’s season opening viewership slipped sharply from last year - down 45 percent in the key 18 to 49 group. It attracted almost five million viewers - but that was half of Hawaii Five-O on CBS, with over ten million watching. Shark Tank was no longer on top in its time period, at least for week one.
That could be a bad sign for a show that has become a steady performer even in rough seas. To paraphrase Jaws, “Is it time for everyone to get out of the water?” That would not just be a big problem for ABC, which has struggled to find and keep good programs on the air, but also for Sony Pictures Television, in the wake of a major management shakeup in recent months, and its producing partner, MGM Television.
That MGM unit is headed by Mark Burnett, creator of The Survivor, The Voice, Celebrity Apprentice and many other shows, who is now also CEO of United Artists Media Group. It is part of the private company MGM Holdings, successor to the legendary movie studios Metro Goldwyn Mayer and United Artists. Burnett is also a producer of the recent remake of Ben Hur, released through Paramount, but mostly funded by MGM, an expensive flop with is going to lose tens of millions.
Burnett is an Executive Producer of Shark Tank along with Yun Lingner, Phil Gurin and others, including Clay Newbill, who was at breakfast to explain what makes it so popular.
“Watching entrepreneurs makes great television because they have these amazing highs and lows,” explained Newbill, comparing it to a court room drama: “Shark Tank is a good conduit for dramatizing the experiences of people who come in a give testimony. The stakes are high and they are in front of a jury. But are they going to get it? – A deal or not?”
ABC, SONY BREAKFAST CELEBRATION
The “Sharks” sat in the middle of a long table in a L’Ermitage Hotel dining room, with top TV beat press seated around them, and nervous executives and publicists on chairs lining the walls.
Jarvis, an ABC News correspondent, was in the center asking questions, and the Sharks liked talking.
When it premiered in 2009, Shark Tank was very different from the usual network fare – scripted or reality - and few thought it would become a phenomenon. “We were just not the formula show,” Shark Robert Herjavec said at the breakfast. “We never thought it would be so successful. It just inspires people.”
What has always separated Shark Tank from other shows is that the investors are really rich and they are spending their own money, and could become your new best friend if one of them likes your idea, service or product.
“People need the message of Shark Tank more than ever,” preached Cuban at the breakfast. “Tell everyone the American dream is alive and well.”
The Sharks - whom the network described as “tough, self-made, multi-millionaire and billionaire tycoons” – are Cuban, chairman of AXS (a TV network, live event and ticketing company), owner of the Dallas Mavericks NBA team and outspoken on almost everything; New Your City real estate mogul Barbara Corcoran; Lori Greiner, known as the Queen of QVC for her sales successes and savvy in picking retail products; technology and cyber security mogul Robert Herjavec; venture capitalist Kevin O’Leary; and fashion and branding expert Draymond John, the only Shark unable to be at the celebratory breakfast.
They have seats at the table (l to r) Barbara Corcoran, Mark Cuban, Robert Herjavec
THE NEW AMERICAN DREAM IS TO START UP A START UP
The show represents a new kind of American dream but it is actually based on a Japanese program called Dragons’ Den, from the Nippon Television Network, which sold format rights internationally. There are now other Shark-like shows around the world, including a popular one in Germany.
Shark Tank, which is shown in replay on CNBC, tapped into the zeitgeist created by corporate consolidation and digital democracy. Suddenly everyone on the internet could start a business. It was no longer about getting educated and prepared to work for a company for an entire career. It’s not even about working for a company. It’s about risking it all to be your own boss. That’s the new dream.
“It used to be new college graduates, young kids, were all about a career, right?” said Cuban. “When I graduated from college it was, ‘where are you going to work?’ and ‘how long are you going to stay there?’ Now everybody is a free agent and you have to consider yourself a brand, a product and a service. You have to understand how you fit into the world, the whole economic structure.”
Herjavec, whose day job is high level government and business cyber security, said the drive to start up a business is both, “good and bad.”
“The show captures a theme in America where entrepreneurship was starting to bubble up and people wanted to do it,” adds Herjavec. “And the good thing is things are re-shufflable. Anybody can do it; anybody can start a business. Anybody can make a lot of money.”
“The downside is sometimes that makes people think anybody can do it,” added Herjavec. “It’s still hard. It’s still incredible difficult and its challenging.”
Making her point (l to r) Clay Newbill, Rebecca Jarvis, Lori Greineer and journalists
THOUSANDS AND THOUSANDS WANT TO PITCH, FEWER THAN 200 MAKE IT
The show has attracted a huge response not only in ratings, but also in people who want to get in on the deals. Newbill said they receive over 40,000 potential pitches each year – which must include a video presentation - of which 180, “makes it through the long process” of screening by producers and even mock shows.
“The magic happens,” said Newbill, “when an offer is made.”
While the Sharks put up real money, most of them say they really don’t know much about those they are investing with. They hear about the product, sales, future plans, but there are still unknowns.
“They are never who you thought,” said O’Leary. “You can’t assess a person until you see them under stress. What defines great entrepreneurs is how they deal with adversity and there’s a lot of it. So you don’t see their real strengths and weaknesses until months later.”
“You find out people’s real character when they give you their word on something,” said Corcoran. “You watch to see if it comes true. Very few people come through. I often think (when making a choice) would I want to be on a lifeboat with them. Then I suddenly get the feeling, ‘No, I’ll be overboard.”
“You never know,” added Herjavec. “People are pretty good at not being themselves (on the air). We know nothing about them until they come out. We’ve had instances where we were hesitant and they turned out to be great partners and then we had the complete opposite. People are really nice and then they turn out to be waco’s.”
Some don’t understand the hard work is selling their product, said Cuban: “I tell my entrepreneurs there’s never been a successful company that didn’t have sales. Sometimes you cannot even beat it into them that you have to sell. Everybody’s got to sell to be successful.”
Greiner said the show has changed her way of doing business, even her career: “I was focused on my business. Now most of my focus is on my entrepreneurs. They all call each other family. It has become a very special thing that has changed my life. It changed who I am inside. They give back to me and it is inspiring.”
PARTING GIFT - Each journalist received a parting gift of a set of Shark Tank action figures.
SHOW US THE BOOKS
So after $100 million of deals how has it worked out for the Sharks? “It’s worked out really well,” said Herjavec. “I think we’ve averaged something like 11.8 percent on all the investments.”
Cuban has made 70 investments through the show and has over 150 that he is involved in overall. Each one sends in reports and updates every week or two, and most have been profitable. He said he tells his “portfolio companies” that they need to “hit me with the bad news first. When there’s bad news we need to cut it off or resolve it. That’s when I dive in and it goes to the top of my list.”
Corcoran is candid about how difficult it has been to pick winners. “I’ve made money on one in five investments,” said Corcoran. “I don’t know if others would be honest enough to say that. People say, ‘everything they touch turns to gold.’ But only one in five have made me money. Of the others two are still IN business but not going anywhere, and two have bit the dust.”
Corcoran said after the second season she completely changed how she invests. “I hyperfocused on the individual and you know what I learned?” said Corcoran. “I realized picking entrepreneurs is identical to doing what I had done my entire life which was trying to choose people that would make great real estate agents. You try to figure out can they make it on a commission basis? Will they make me money or cost me money? All my mistakes in seasons one and two were when I didn’t look closely at the entrepreneur. Can they sell? Can they take a hit and do they have high energy? The same stupid stuff I used to make a living my whole life. And that’s been a game changer for me.”
Herjavec said he, Cuban and some others have made an important change in the kind of deals they do recently. “The big challenge we are getting is liquidity,” explained Herjavec. “These are all small cap private companies so even if we double sales from a million to $3 million, how do I get my money back?”
“So that’s the struggle now,” he added, “and a lot of us are trying to restructure deals where there’s a payout or dividend and we all participate in that.”
WHEN THEY HAD TO DUMB DOWN THE TANK
Cuban said the first two season the fast paced conversation and business jargon were going over the head of many viewers and consumers, so they had to shift to an easier to follow vernacular. Or as Cuban put it, “We had to dumb it down after the first season.”
In addition to follow up stories on past investments, this season for the first time the audience will see, according to ABC, “the entrepreneur’s excitement and anticipation of what they go through back stage in the intense moments before they face the Sharks.”
TIPS FOR THOSE LOOKING TO PITCH THE SHARKS
What does it really take besides a great product, a polished pitch and a willingness to wheel and deal to get an investment from one or more Sharks?
“You’ve got to be entertaining,” said Herjavec. “I don’t mean dog and pony and a magic act, but you’ve got to be entertaining. We sit there twelve hours a day, days in a row. We’re cold. We’re hungry. We all have real jobs. So you’ve got to come in and grab out attention. You’ve got to entertain us.”
The Sharks are very different but their approach to investing and competitive nature meld on air. They are together in a studio for an intense day or two, with several episodes shot in a row. “Everybody’s got their ‘stuff’ and that can be annoying,” laughed Corcoran. “The days are enormously long. Were in the fox hole together. What you get out of that is an enormous bond.”
PRODUCTION DAYS AMONG THE SHARKS LIKE BEING IN HIGH SCHOOL
Corcoran compared the atmosphere on shooting days to being in high school: “You know that feeling you get from those friendships again when you get older? So that’s kind of how we feel about each other overall because we grew up together on the show,” said Corcoran. “And that for me is the happiest part of the show. Much more than the work with entrepreneurs, even the good ones. You have a family to belong to, but we still drive each other nuts. Trust me. And I am sure I drive them nuts but I don’t want to hear why. Actually I’m perfect. I forgot about that.”
Corcoran laughed and added: “We bug each other on the set sometimes. Remember were sitting on the set, and we will hear Robert Herjavec about how he came over on the boat as an immigrant. If I have to hear that once more, I say ‘Please, give me a drink. Stop the cameras. I need alcohol.’ Or Lori (Greiner) does very long outs (on camera comments to end a segment). She goes on and on. You might see her on your TV at home dong a short out, like a sound bite, but noooooooo, she goes on for about 25 minutes. ‘Just go out for god’s sake,’ Is what I want to say. And we all have our nuances. Mark Cuban, one of the most positive men in the world, sits there and grumbles half the show. ‘Rrrrrrrrrrr.’ ‘Just shut the fuck up Mark!’”
Corcoran may be headed for a few drinks as Herjavec is greatly energized to tell that story of how his family came to America again and again. He believes it has new importance. He told me about his American dream, escaping from Communist Yugoslavia, only to be denied entry by the U.S. because he was from a Communist country. So his family went to Canada, prospered and immigrated south.
“I’m very sensitive about the whole immigrant experience, with what’s going on with our election right now,” explained Herjavec. “I understand for our need for security as a nation. But I’m very nervous about closing our borders.”
“I created an immense amount of wealth and value in Canada and then came to America,” said Herjavec. “So I think we can never forget the opportunity that this country gives us. And everybody here is an immigrant. We all came here from somewhere.”
All of the Sharks have political views but most have avoided going public with their views. The exception as all of America knows is Cuban, who has been a very vocal supporter, and recently has been attacked and mocked in a Twitter war with Donald Trump.
On Sept. 26, Cuban is expected to be in the front row at the first presidential debate, as a guest of Hillary Clinton. Trump threatened to put alleged Bill Clinton mistress Jennifer Flowers next to him, but his campaign later backed off and did not invite a very willing Flowers to parade in front of the cameras.
ACROSS THE TABLE (l to r) Kevin O'Leary, Clay Newbill, Rebecca Jarvis
O’LEARY: WOMEN MAKE THE BEST ENTREPENEURS
Kevin O’Leary said his experience on the show has him believing women really will take over a lot more of the business world. He said he has invested in 30 companies and every one that showed a profit was run by women. “I think there’s an advantage,” said O’Leary. “If you want something done, give it to a busy mother.”
“When you have a small company time is the most precious commodity,” added O’Leary. “Women do it better than mean at the beginning of a company’s life, and in its manifesting itself over years. Did you see this season? Most of my deals are women.”
The two women on the show cite some other benefits of their appearances. “I never knew I wanted this kind of notoriety but now that I have it I’m addicted,” said Corcoran. “You’re the same person, talking about the same shit every day but your whole life has changed.”
“That’s my favorite part,” piped in Greiner. “You can get in any restaurant.”
NOT A LOT OF SHARK SOCIALIZING AWAY FROM THE TANK
They all lead very busy lives and only occasionally get together outside of production days, several of the Sharks explained. Schedules may not mesh or even lifestyles.
Mark comes into the city and sees his best buddy Daymond (John) and they always invite me out - but if I’m not home by 8:30 I don’t want to go - and they usually start at 9. So once a year I’ll give them a treat and go out with them to a cool club and everything.”
Corcoran is in no rush to have dinner again with O’Leary. “When Mr. Wonderful comes and says ‘are you available,’ I say ‘no’ because when we did get together he complained about my food and asked me if I could arrange a massage before he left my apartment? I thought, what do I look like your concierge service? But I did it. And I went to bed with him still in the middle of my living room on a massage table.”
Corcoran laughed heartily: “So there’s a comfort level and it makes it a lot of fun. A lot of fun.”
“We hate each other,” said Herjavec, bursting into laughter. “We hate each other but the underlying tone is respect and love. We all get along. We will all have a coffee. We all respect each other. But you know, we’re highly competitive and we like to pick on each other and make fun of each other – a lot.
FINAL ADVICE FROM THE SHARKS
“Never trust advice from someone who doesn’t have to live with the consequences.” – Mark Cuban.
“What we’ve learned is the (entrepreneur) needs to have a great support system. So now I look for individuals who have that kind of foundation.” – Robert Herjavec
“If you think it’s hard being in the shark tank wait until you get into the real world.” – Kevin O’Leary