America's Got Talent's $1 Million Grand Prize Isn't So Grand After All

If you love America's Got Talent as much as me - and you probably don't because I tune in for every episode - you might have wondered about the show's grand prize.

As the show's host, Tyra Banks, loves to remind us, the TV talent show's winner walks away with $1 million and gets to headline a show in Las Vegas.

That's a lot of money, even for TV's most successful reality show. And if you thought it was too good to be true, you're right.

Sharp-eyed viewers might have noticed this important message that flashes at the end of every episode:

The prize, which totals $1,000,000, is payable in a financial annuity over forty years, or the contestant may choose to receive the present cash value of such annuity.

So how much do they really get?

While the contestants do win $1 million before taxes, they don't exactly get a huge check signed by Simon Cowell.

Winners are paid out once a year for 40 years, meaning they get $25,000 a year before taxes.

Experts who did the math say that after the four decades are up, a contestant will only earn $750,000 after taxes, and by then they might be too old to spend it!

Can you get paid in a lump sum?

As the show's little-seen disclaimer says, contestants can choose to take home their prize in one payment.

But they don't win $1 million in that case. They take home "the present cash value of such annuity."

Ask an accountant and they'll tell you, that "present cash value" is not $1 million.

Actual winners are hush-hush about their payments (it's in their contract) and it's unclear what the interest rate for the payment is.

Forbes guesses the lump sum would be worth $300,000 before taxes, while an economics professor at the University of Toronto says it's closer to $450,000.

Either way, once the tax man takes his cut, the winner is left with a "grand prize" somewhere between $150,000 and $300,000.

Winners and Losers

There are other downsides to competing on the hit talent show too.

Past contestants say that the TV show can be very manipulative and controlling of a contestant's public image.

And while celebrity contestants on shows like Dancing With the Stars get paid weekly, most people agree that the talent show competitors do not.

But of course being famous has its perks, and headlining a stage show in Vegas will make anyone famous.

Jackie Evancho, who finished in second place, has since become a hit singer.NBC

Past winners like Terry Fater, Matt Franco, Grace VanderWaal, and Darci Lynne Farmer have turned their time on the show into lucrative deals.

Second place winner Jackie Evancho even has a platinum record and two gold records.

But then again, when is the last time you heard about Bianca Ryan, Neal E. Boyd, Kevin Skinner, and Landau Eugene Murphy. They were all Talent winners too...

Do you think the show's grand prize is still worth it?

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[H/T: Forbes, Global News]