Acquired
02:28:17 · Ben Gilbert, David Rosenthal
[02:28:17] S0: Right. Sony gets there, cut off the top of that, but then there's probably 400 plus, maybe 425 ish million dollars that then flow through to everyone else who owns the Seinfeld IP just for this first cycle of syndication to the off network affiliates to watch around The US. [02:28:36] S1: And, then the next year, in 1996, Larry leaves the show. [02:28:43] S0: Honestly, it's hard to blame anyone after walking through the intense pace that they'd been working at for six years now. [02:28:50] S1: Well, yes. And, yes, I think that is the reason Larry left the show. He was totally burned out. He'd gotten married at this point. He was ready to move on with his life. But putting that aside, now that you know the economic history of the show, Larry leaving in 1996, of course, makes sense. Right. Why stay? Everybody just got the payday in 1995 from syndication. He's in the money, and he's not just in the money with a onetime payout now. He's in [02:29:19] S0: the money forever. And it's not like he was making a lot. I don't think. Again, we have no access to these private contracts. But in general, a nonacting creator lead writer is not drawing a giant paycheck Right. On a per episode basis in making a show that, you know, you own the show. So you're expected to make your money on the back end, which is gonna happen whether or not he makes any new episodes. [02:29:45] S1: Again, to use a startup analogy here, this is like the company went public and the lockup ended.
02:29:45 · David Rosenthal, Ben Gilbert
[02:29:45] S1: Again, to use a startup analogy here, this is like the company went public and the lockup ended. [02:29:51] S0: Yeah. That is the right way to Yep. Yep. There's a lot more value you could build, but other people can build it too. [02:29:56] S1: You're gonna have a life changing event. [02:29:58] S0: Yes. But for the show, this is brutal because everyone else was kinda just a input to Larry in the writers room. And Larry was like, we heard him referred to as the CPU. You know, he would be the one that ultimately would come in on weekends, do the rewrites. You could get a script most of the way there, and you could always be confident that Larry would make it great. Without Larry, they need an entirely new process. Right. [02:30:23] S1: And, like, Jerry was there as the, you know, coprocessor, but he's also starring in the show. [02:30:28] S0: Oh, Jerry was not available to play Larry's role because No. You can't have a lead writer who is also running the whole show as producer and the lead actor and, you know, doing all those rehearsals that we talked about. So what this leads to is more people are involved in the writing process, and they just need more hours. So now all the writers are coming in on weekends, not just Larry like the old days. And when we were talking to Alec Berg about this, who was a writer on the show, he told us that he looked at his calendar at one point and realized that he had come into the office every day for some amount of time for fifty six days. Yeah.
02:30:28 · Ben Gilbert, David Rosenthal
[02:30:28] S0: Oh, Jerry was not available to play Larry's role because No. You can't have a lead writer who is also running the whole show as producer and the lead actor and, you know, doing all those rehearsals that we talked about. So what this leads to is more people are involved in the writing process, and they just need more hours. So now all the writers are coming in on weekends, not just Larry like the old days. And when we were talking to Alec Berg about this, who was a writer on the show, he told us that he looked at his calendar at one point and realized that he had come into the office every day for some amount of time for fifty six days. Yeah. [02:31:03] S1: Yeah. What was the story like they would go watch the Super Bowl, and then they'd all go all go back to the office after? [02:31:08] S0: Yeah. Jerry would run a suite for everyone at the Beverly Hills Hotel and then back to the office. [02:31:12] S1: So it's a Herculean task after Larry leaves. Castle Rock and and by extension NBC keep upping Jerry's salary, like the amount that he was being paid per episode for all of his duties. First to $500,000 an episode, and then by the ninth and what would end up being the final season of the show to an unprecedented million dollars per episode. [02:31:38] S0: Per episode. Per episode. For one person who also owns the show. [02:31:44] S1: Who also, yes, gets all that back end that we were talking about.
02:31:44 · David Rosenthal, Ben Gilbert
[02:31:44] S1: Who also, yes, gets all that back end that we were talking about. [02:31:47] S0: The tenor of my voice should not be anything around, like, surprise or didn't earn it. But it's just like to underscore, these are separate things getting paid as the person making the show slash acting in it and the ownership. [02:31:59] S1: Yep. The show, though... I mean, look. You can argue whether seasons eight and nine are as good as the Larry seasons. [02:32:07] S0: They're certainly different, but they're more ambitious. [02:32:09] S1: They are more ambitious. Yeah. The only way that they could find to sort of move past Larry was to try and do bigger stuff. [02:32:16] S0: And there's some classics. I mean, true true all timers in there. The Bizarro Jerry. Yep. The chicken roaster, the Kenny Rogers episode. Yes. The Andrea Doria. Muffin tops, is that in there? The pothole. [02:32:29] S1: Van Buren boys? [02:32:30] S0: Yep. Yada yada yada. Yep. You're right. Muffin tops, the Summer of George. I mean, this is season eight. Get Like firing on all cylinders. Season nine, the butter shave, the voice hell. Oh. Serenity now is season nine. [02:32:45] S1: That's right. Yeah. Terry's still [02:32:47] S0: in got a bigger role. The slicer, the dealership, the reverse peephole, the wizard. These are all season nine. [02:32:54] S1: Yeah. Yeah. So creatively, definitely different, but still excellent. Ratings and ad sales wise, though, for NBC. [02:33:03] S0: That's changed quite a bit.
02:33:03 · Ben Gilbert, David Rosenthal
[02:33:03] S0: That's changed quite a bit. [02:33:04] S1: The show definitely does not miss a beat with Larry leaving. So in 1996, Seinfeld makes a $150,000,000 of profits for NBC after paying ad agency commissions and all the production fees that they're paying to Castle Rock for, you know, whatever it is, 80% of the actors' salaries and sets and the production and all that. In 1997, the show makes $200,000,000 in profits for NBC. So that's the revenue they got from advertising minus the cost of paying Castle Rock for the show. [02:33:37] S0: It's $200,000,000 that [02:33:38] S1: And I think also the cost of commissions to ad agencies for the advertising. I think it was actual profits. [02:33:45] S0: Because to put that in context, NBC's entire profit during that era was about $1,000,000,000 a year. So 20% of the network's profits were coming from Seinfeld directly. [02:33:56] S1: And probably more than that because those directly attributable numbers actually understate the value of Seinfeld because the way NBC would sell their ads... Let's say you were General Motors. You wanted to place a $30,000,000 ad buy for Seinfeld that season. You can't do that. The only way you can get $30,000,000 worth of media on Seinfeld is to buy $200,000,000 of media on prime time at NBC that season. [02:34:28] S0: Bundling, baby. [02:34:28] S1: Bundling. Yeah. Exactly. Exactly. Then there's all the value that Seinfeld delivers in terms of launching other shows or propping up other shows, you know, just like Cheers did for Seinfeld.
02:34:28 · David Rosenthal, Ben Gilbert
[02:34:28] S1: Bundling. Yeah. Exactly. Exactly. Then there's all the value that Seinfeld delivers in terms of launching other shows or propping up other shows, you know, just like Cheers did for Seinfeld. [02:34:37] S0: Right. So it's how much revenue did it catalyze and then also that it served as a launch pad for other shows. Yep. [02:34:45] S1: That sets up the 1997 cast renegotiation of their salaries. [02:34:52] S0: Because they haven't been making anything near where Jerry was, and they have no back end. It's not like the cast of the show owns the show like the creators do. They're paid actors. They're employees. [02:35:03] S1: They just get their union guild standard residuals in the show, which is peanuts. I think Jason Alexander has been quoted as saying that each of them, probably lifetime in standard guild residuals from Seinfeld, got $250,000 or so. [02:35:18] S0: But they were making good salaries at this point. [02:35:20] S1: Yes. Early [02:35:21] S0: on, it was nothing. But then by this point, I think it was a $160,000 per episode that they were making now that they were big stars in the number one show. [02:35:30] S1: But they start getting pretty nervous because they're like, no. This show's days might be numbered. Like, we don't know how long Jerry can keep this going, how long Jerry will want to keep this going. Larry's already left. They're both rich beyond anyone's dreams here. They realize that after the eighth season, they kinda have a now or never moment where they need