Jeopardy Wasn’t Designed for a Contestant Like James Holzhauer

“James’s performance, I’m sure, is causing grief for an accountant somewhere.”

Alex Trebek

Ken Jennings rose to fame after an unprecedented run on Jeopardy 15 years ago: Over the course of 74 episodes, he won a total of roughly $2.5 million.

Recently, a contestant named James Holzhauer has been working toward Jennings’s record at an astonishing pace. After the Friday-evening broadcast of the quiz program, Holzhauer had won about $850,000 over just 12 episodes. If he keeps up that rate, he’ll reach $2.5 million in less than half the time it took Jennings to do so.

Before Holzhauer went on the show, the most money earned in a single episode of Jeopardy was $77,000. During his 12-episode streak, he’s beaten that total not once, but five times, and has set a new record of $131,127. Holzhauer’s success has been attributed not just to his deep trivia knowledge, but also to his aggressive style of play—he homes in on high-value tiles that might contain Daily Doubles, and then often bets enormous sums when he finds them—and his unmatched buzzer-pressing reflexes.

Whatever his method, Holzhauer is far exceeding the show’s average single-day winnings, which a Jeopardy fan website calculated to be $19,980. With his sometimes six-figure daily prizes, how much damage is Holzhauer doing to the show’s finances?

“Every game show has a prize budget,” says Bob Boden, a former head of programming at Game Show Network who has worked on dozens of shows there and elsewhere, including Family Feud. “Typically, for a long-running show the prize budget is determined by way of averages of what has been won in the past.” Large deviations from such averages can strain these prize budgets. “James’s performance, I’m sure, is causing grief for an accountant somewhere,” says Boden, who’s now an executive at the production company Entertainment Studios.

Estimating payouts is easier for some types of shows than others. “You know that the winner of Survivor is going to get $1 million, and you know what the second- and third-place players will get, so the prize budget on that is locked,” Boden says. Budgets for shows such as Jeopardy with variable winnings are harder to project.

Some production companies protect against that unpredictability by taking out insurance policies that cover abnormally large jackpots. This is common, Boden says, for shows such as Who Wants to Be a Millionaire?, in which giving out the top prize is rare but really costly. But he says he’d be surprised if Jeopardy, which has a prize structure less prone to extremes, has such a policy. (Representatives for Jeopardy and Sony Pictures Television, which produces it, did not respond to requests for details about the show’s financial workings.)

Jeopardy, though, should fare just fine during Holzhauer’s reign, for two reasons. First, prize budgets are generally not game shows’ biggest expenses. Boden says that the bills for paying production crews and on-air talent tend to be higher. (The salary of Alex Trebek, Jeopardy’s host, has been reported to be $10 million a year.)

Second, Holzhauer’s stellar performances are drawing in more viewers. Normally, Boden says, it’s not compelling TV for a single player to run up the score, “but in a situation like this, where records are being set and broken every night, the excitement, I believe, outweighs the lopsided results.”

That excitement will almost definitely help the show’s bottom line. Increased viewership often translates to more lucrative ad sales (though, Boden notes, this uptick in ad value isn’t immediate and would take some time to kick in). Spikes in popularity are also good for whatever additional revenue streams a show may have, such as merchandising or interactive gaming. More symbolically, Boden says, a thrilling contestant like Holzhauer can further burnish the reputation of a long-running game show like Jeopardy, solidifying its place in the canon of American TV.

Jennings was extremely valuable to Jeopardy in this regard, but with average winnings of about $34,000 an episode, he was a bargain compared with Holzhauer, who’s averaging roughly $71,000. In fact, if reports of Trebek’s salary are indeed correct, Holzhauer is currently outearning even the show’s host on a per-episode basis—though, of course, he has a bit less job security.