Simon Cowell On ‘The X Factor’s’ $5 Million ‘Life-Changing’ Prize & Choosing ‘Competitive’ Judges

The first winner of the U.S. version of Simon Cowell’s “The X Factor” is going to have plenty of reasons to smile – in fact, 5 million reasons.

The winner of the reality competition – which will premiere in Fall 2011 on FOX – will walk away with a $5 million record deal, the network announced on Monday.

The prize marks the largest guaranteed prize in TV history and when asked on a conference call with reporters on Monday afternoon if he was nervous about giving away such a hefty sum, Simon said it did, in fact, make him quiver.

“Yes. And I think we should be nervous. The reason we decided to do this was to show the people who are auditioning [for] the show, sometimes you have to put your money where your mouth is. Putting up that kind of prize money is a massive, massive risk, but also it’s an incredible incentive,” he said.

“I also did it because I believe [we] can find a star,” Simon continued. “So, I’m nervous, but I’m also confident that it was the right thing to do. I think it should be a life-changing prize. This is not a dressed-up 5 million.”

The British media mogul, who will also be serving as executive producer and a judge on the show, noted that the money will be paid out over five years, one million for each year, and record company costs – like marketing, etc., would not be deducted from the sum. Additionally, he revealed they would give the winner support in looking after their money, “because it’s a lot of cash,” he said.

Big money isn’t the only way “The X Factor” is planning on changing the reality show singing game – they have also expanded the age pool to younger and older contestants — something Simon is looking forward to seeing.

“You can’t put an age cap on talent,” Simon said.

“With Susan Boyle, who would have thought this little lady living on her own in Scotland would go on to sell 20 million records,” he said, referring to the winner of another one of his shows – “Britain’s Got Talent.” “Susan Boyle taught me a huge lesson: That I have to be open minded. I think the American audience knows what talent is.”

Simon, who confirmed for the first time officially he would be a judge on his Fall-due reality competition, said he is also looking forward to seeing the groups that come forward to try out for the show.

“I’m most excited in a way about the groups. I’d love finding a great group at the moment,” he said, recalling outfits like The Jackson Five, *NSYNC, Destiny’s Child and The Black Eyed Peas. “That’s what I want to find on the show… I would even say to schools across the country how choirs have become really interesting … I’d love to find something like that, something different.”

Already a hit in the UK – the show has consistently been a huge ratings draw abroad since its debut in 2004, peaking with 21 million viewers tuning in for the 2010 season finale, which saw singer Matt Cardle crowned the winner. “The X Factor” has turned unknowns into superstars, most notably with Season 3 winner Leona Lewis in 2006. It’s a trend Simon expects to continue stateside.

“It has to be controversial, interesting,” Simon said when asked how he thinks the show will settle in stateside. “If the U.S. show has some of the same qualities as we’ve done in the UK it could do really, really well. But I’ve learned never to take anything for granted.”

The names of the U.S. version’s host and judges’ panel, however, have yet to be revealed, but Simon confirmed on Monday’s call that offers are out there, not clarifying whether that included UK “X Factor” judge Cheryl Cole, who is said to be a frontrunner to judge stateside as well.

“I think it comes down to — A — who I think is interesting — but the most important criteria for this show is the commitment and the expertise,” he said.

“I also think it’s important on a show like this that you’ve got people who are competitive with each other,” he added, noting that when the judges start mentoring contestants, they too are competing with each other. “The British/American [judge] thing — it’s not the most important thing, it’s who I’m hoping the American audience will find interesting and also know what they’re talking about… It also helps if they’re cute.”

Among the names who have been rumored include Cheryl, Elton John, Rolling Stones rock icon Mick Jagger, Mariah Carey, Katy Perry, Jessica Simpson (who recently Tweeted she is “not” doing it), Pussycat Doll-turned-“Dancing With the Stars” champ Nicole Scherzinger and former Oasis guitarist Noel Gallagher.

Simon also didn’t rule out the possibility of reuniting with Paula Abdul.

“I’m a massive fan of Paula,” he said. “We honestly haven’t made our mind up yet… We’re talking to a number of people. We hope to make an announcement in 3-4 weeks.”

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Auditions for the first US season of “The X Factor” will kick off in Los Angeles on March 27. Additional cities hosting auditions include Chicago, New York, Dallas, Miami and Seattle – specific dates have yet to be announced.