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Did your favorite TV show get canceled? Here are 7 reasons it might have.

The economics of TV shows are making it more and more likely that low-rated shows can survive in unlikely ways.

Tim Allen on ABC’s sitcom Last Man Standing
The Tim Allen sitcom Last Man Standing has been canceled by ABC after six seasons.
ABC

Each May brings another TV season to a close, leaving behind plenty of shows that fell behind and just didn't make it.

But understanding why some shows are canceled and some are renewed can be tricky, even for the most intrepid of TV fans. The changing economics of television now mean that some shows that do pretty well get dumped, while some that barely skate by are picked up season after season.

It's hard to imagine a situation like the one that befell the classic sitcom Seinfeld, which overcame a shaky start, both creatively and in the ratings, to become an all-time favorite, simply because the network believed in it.

"It seems incredibly unlikely that it would have gotten through any of those hurdles today," veteran showrunner and ratings watcher Kyle Killen told me.

As with everything else, time is money in TV, and giving a show time to find itself is increasingly an expensive proposition if that show isn't an immediate hit.

But low-rated shows have one thing in their favor: The economics of the industry are complicated. As the TV audience fractures into smaller and smaller niches, ratings data becomes harder and harder to parse. And they’re not the only reason a show lives or dies.

So we're here to help. There are a bunch of reasons your show might have been canceled, but these seven are the most likely.

Reason No. 1: The show almost immediately flopped

TV guide stuff
Mulaney was canceled in 2014 almost immediately after it flopped.

Fox

Talk to anyone who works in network television and they'll tell you the same thing. There is still some invisible line below which a show can't drop if it wants to be renewed, especially if that show debuts with horrible ratings right out of the gate.

"As much as people try to say it's about this and it's about that, it's still about the ratings," Kevin Biegel, the co-creator of Cougar Town and creator of Enlisted, told me.

The problem is that the point at which the ratings have gotten so low that it merits instant cancellation differs from show to show. Every show comes to the air under a different set of circumstances, with a different budget, and with a different baseline for success.

The clear-cut flops are usually obvious — look at Fox's short-lived sitcom Mulaney, which debuted on a Sunday in 2014 to only 2.3 million viewers and lost half of the audience that watched Family Guy right before it. A show with such horrible numbers in such a high-profile time slot was never going to last, and, indeed, Mulaney was canceled quickly.

But not every case is so immediately obvious. For one thing, ratings have dropped so precipitously across the board that properly assessing them can be difficult.

"You will see these things like a 50 percent spike in the ratings of a show, but it's almost meaningless because the numbers that you're talking about are so small that them jumping 50 percent feels like noise in the data. It takes very few people to make that jump," Killen said. "A lot more people are competing for a lot less eyeballs."

So that means networks increasingly turn to other metrics to determine a show's fate.

Reason No. 2: The show struggled in the ratings, and the studio wouldn't reduce the licensing fee

Here's something many TV viewers don't understand: The TV shows you watch every night aren't technically owned by the networks that air them. They're leased.

Take a look at how this all breaks down:

tv_shows_graphic_static

Obviously there are as many variations on this graphic as there are television shows. But this is the baseline most everybody in network TV is operating from.

The chain of ownership goes something like this:

The production company or studio makes the TV show. The studio technically owns the show, and it collects almost all revenues generated by the show. This setup wasn't such a big deal when the only secondary revenue stream was the syndication market, but now that there are myriad ways (streaming, international distribution, DVD sales, etc.) to make money from a show, it behooves most studios to do their very best to produce as many episodes of the show as possible.

However, in the current economy, the studio still needs to find a way to amortize at least some portion of the show's production costs (even cheap TV shows are pretty expensive to produce). And that means finding a network to air the thing. (Occasionally the studio will also sign up a production partner, which makes things even more complicated.)

The network pays the studio what's called a licensing fee, which is essentially an agreement to pay a certain amount of money, per episode, to air the show a certain number of times. In exchange, the network gets the ad revenue generated by those airings. (The network and studio will sometimes split the ad revenue, but let's keep this simple for now.) Because the network isn't directly paying production costs, a huge hit can be a real moneymaker.

Now that you've read about it, here's that graphic again, this time in motion.

TV_shows_animation2

It's the licensing fee that is often misunderstood by TV fans. Theoretically, a studio that wanted to guarantee that a show reached a certain number of episodes could drop the licensing fee to zero to entice a network to keep airing it, but that would set a dangerous precedent. After all, the studios can't make every episode they produce a complete revenue black hole.

What usually happens is that a network crunches the numbers to arrive at a licensing fee it can live with in a borderline ratings case, and the studio eats the added expenses in hopes of making that money back somewhere down the line.

For a likely example of this type of scenario, look to The Mindy Project, which was produced by NBCUniversal and aired on Fox. Its ratings performance was poor, but not so poor that it merited instant cancellation. However, since another company entirely owned the show, Fox wouldn't reap any benefits from Mindy's entry into the syndication or streaming markets, which almost certainly explains why the network canceled it in 2015. (It was later picked up for multiple seasons by Hulu, which has lower viewership thresholds to clear.)

But this approach also applies to shows that are bigger hits, like the recently canceled Last Man Standing. ABC aired the show, but 20th Century Fox owned it. Even though its ratings were solid, ABC canceled the series after its sixth season, likely because it wasn’t going to see substantially larger profits from subsequent episodes.

This is why networks airing shows from studios that aren't their corporate siblings is becoming increasingly uncommon.

Reason No. 3: The show struggled in the ratings and wasn't owned by the same corporation that owns its network

Marvel's Agents of S.H.I.E.L.D.
Agents of S.H.I.E.L.D. keeps dropping in the ratings but also keeps getting renewed.

ABC

Again, let's look at The Mindy Project. Though its ratings were lower than those of New Girl — another Fox comedy that was just renewed for a shortened final season — they weren't so much lower as to suggest that one show should be favored over the other. Except New Girl was renewed, while Mindy was shipped off to Hulu. Why? Because Fox Television, the corporate cousin of the Fox Broadcasting Company, owns New Girl, while NBC owns Mindy.

TV reporters will often talk about a network "owning" a show, and this is what they mean. New Girl is technically aired by Fox and owned by Fox Television, but because the two companies are part of the same corporation, the money all ends up in the same place. The distinction is minor enough that simply saying Fox "owns" New Girl is more or less accurate. Indeed, in the case of Fox, the same people, Dana Walden and Gary Newman, run both the studio and network.

Since the real money in television is in the syndication and streaming markets — more on this in a bit — many networks are in the game of asset management, or, rather, making sure enough episodes of certain programs are produced to make them financially worthwhile somewhere down the line.

For a good example, look no further than ABC's Agents of S.H.I.E.L.D. The show is far from a ratings powerhouse, but its continued existence helps out both ABC Studios and fellow corporate sibling Marvel. That money eventually comes back to Disney, the parent corporation of the network, the studio, and Marvel. It will be returning for a fifth season, despite terrible ratings. (That said, such an arrangement ultimately didn't help ABC's other Marvel series, Agent Carter.)

Before the Financial Interest and Syndication Rules were abolished in total by the Clinton administration in 1993, the number of shows that could be produced by a corporate cousin of a TV network was limited. Now, however, there's no limit to the number of shows a network can "own." And the number rises a little more each year.

So why would a network ever purchase a show from (or sell a show to) a non-corporate partner? Well, certain shows work better on certain networks. For example, Fox Television produces Modern Family, but it licensed the show to ABC, which has a stronger record with family comedy. There are also third-party companies, like Warner Bros., which have no real ownership interest in any of the big four networks and sell equally to all partners.

Reason No. 4: The show had poor ratings and no syndication or streaming potential

Last Man on Earth
The Last Man on Earth made it to three seasons in part thanks to its performance on streaming platforms.

Fox

If you look at the annals of TV history, a show that's already made it to season three is much more likely to make it to season five than a show that's only made it to season two. Why? Syndication.

Syndication is the lucrative after-air market for TV shows, the long afterlife the most successful shows enjoy once they've finished their initial runs on standard broadcast television. Before the rise of cable, most production companies and studios lost revenue on TV shows until they entered syndication.

Syndication is when a show's reruns air in non-primetime hours on local stations, or at any time of the day on cable. Consider a show like Seinfeld, which continues to air in reruns to this day. The studio that owns that show (in this case, Sony) gets a per-episode fee when selling the reruns.

The standard number of episodes required for syndication viability used to fall between 88 and 100 episodes, depending on the era in which the show was produced. But there are numerous shows that've bucked the trend by going into syndication with far fewer episodes (particularly shows for kids), and the number has decreased even more in this content-hungry era.

And since the rise of cable, the possibilities for a show to make money after its first airing have opened up even more. In addition to syndication and cable reruns, studios can now sell their shows to international markets, they can sell shows on iTunes or Amazon, and they can sell shows to streaming services like Netflix or Hulu. (And those are just three of the more obvious examples.)

With so many different platforms, and thus so many ways to bring in cash, it's no wonder that corporations like to own both the networks airing the shows and the studios producing the shows. That way, they can collect both ad revenue and after-air revenue.

But, again, this only works if a given show survives long enough to air a manageable number of episodes. Sure, Netflix and Hulu have lots of one-season shows in their ranks, but because of the licensing fee — a per-episode thing — studios usually make less money on shorter-run shows than they do on shows that made it to 100 episodes. (There are exceptions, of course, particularly for beloved cult series.)

And though they're only a small part of the network decision-making process, the number of plays on a streaming service like Hulu can make a difference in a show's fate.

"A couple years ago, networks discounted those numbers. Now they're looking at them going, 'Oh, okay,'" Biegel said.

And streaming services also appeal to advertisers, who like their young audiences — and inability to skip ads.

"The thing that still matters is if you can prove that people are watching your show and they're the kind of people the network sees as valuable to them, as far as advertisers wanting to reach them, that's what's going to make or break them," Biegel said.

Reason No. 5: The show got poor ratings and was expensive

This is much more likely for a show not "owned" by the network. Think back to Fox's Almost Human, which was canceled in 2014. A solid-enough ratings performer, the robot cop show was, nevertheless, bedeviled by high visual effects costs. Since it was owned by Warner Brothers, there was no real reason for Fox to keep it around, and the show lasted only one 13-episode season. (This also bedeviled Last Man Standing, which boasted a hefty salary for star Tim Allen.)

Production expenses tend to be more of an issue with older shows, but it's a constant concern. Even a show that's "owned" by its network will be under harsher scrutiny come renewal season if it's wildly expensive to make on a per-episode basis.

Reason No. 6: The show got poor ratings, and nobody liked it (at the network)

Though fans and critics alike would love to believe they can extend a show's life just by being passionate enough, there's very little evidence to support this theory.

"To be really honest, most network shows are very, very expensive. ... It's hard to justify spending $40 to $50 million on a show that people write nice things about but nobody watches," Biegel told me.

However, it does help if a show is well-liked by network brass and has no notable naysayers among the executive suite.

But this doesn't happen as much as TV fans might like to believe.

"It's rare that you find a show that everybody is totally behind," Biegel told me. But sometimes, he said, there's a show that the network takes on as its baby or special pet project.

For a good example, see NBC's recent Broadway-set Smash. Reportedly a favorite of network president Robert Greenblatt, it earned a second season, even though its first-season ratings slumped a little more with every week. But even the favor of the people deciding its fate is unlikely to buy a show more than one extra season. Smash failed to catch on after two seasons and was summarily canceled in 2013.

Reason No. 7: The show just got too old

CSI
CSI died of old age.

CBS

This is the toughest cancellation reason to get a handle on, because so much of it is dictated by numbers that aren't publicly available. As you'd expect, the salaries for everyone involved in a show's production go up as that show ages — just like you might get a raise if you stay with a company and perform at a certain level year after year.

For every show, there is a point where, even if it's successful, any other benefits are cast aside because of how expensive it gets. That's why renewals for shows like Bones (which concluded its 12th and final season this spring) or CSI (which was finally canceled in 2015, after 15 seasons) come down to the wire every year. Even though they reliably draw good numbers for their respective networks, the financials must be balanced so that the studio can continue making money on production. Eventually everything gets too expensive, and the show goes away.

The same happened to ABC's Castle in 2016. Even ABC Studios' plan to cut two cast members (including female lead Stana Katic) couldn't reduce the budget enough to make the network pick up the show (a case of a studio and network being owned by the same company but ultimately disagreeing on a show's fate). After eight seasons on the air, it was just too pricey.

"It's just the nature of the beast that everybody gets canceled eventually, and some of us very quickly," Killen told me. "It is what it is."

On the plus side, any show that airs for several seasons is (or was) likely a hit in some regard, and that means it'll likely have enough advance warning to plan a series finale — or its creators might even make the call to end the show themselves. This is the happiest end-of-show scenario. Nobody involved can quite afford to keep making it, but everybody wants to give it a victory lap to celebrate.

Still, that might not assuage the sadness of fans who wanted a show to continue forever. But have hope: All long-running shows are practically guaranteed to live on in cable reruns, the catalog of a streaming platform, or some other corner of our great entertainment ecosystem. In other words, they will be with you always.

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