Acquired
03:02:01 · David Rosenthal, Ben Gilbert
[03:02:01] S1: No. No. I I did not, but I did watch the the Seinfeld reunion on Curb. [03:02:05] S0: Oh, yeah. Everyone should know that, on Curb, they did a arc of four or five episodes that were fictional Larry David planning the Seinfeld reunion. In the finale, again, spoiler alert, if you've never seen the Curb Your Enthusiasm finale, give you three seconds to pause. The finale is a trial, just like Seinfeld. Larry gets convicted. Larry goes to jail. He's sitting in the jail cell, and someone walks in, and he has a visitor. And it's Jerry Seinfeld, and he opens up the door and he says, hey, Turns out it's a mistrial, but, you don't wanna end up here. This isn't where it ends. You don't want this. Trust me. Nobody wants this. [03:02:52] S1: Yeah. Yeah. Yeah. [03:02:53] S0: And it's a twenty five year payoff from a joke that was set up in 1998. [03:03:00] S1: So good. So good. I I have seen that clip. So good. Alright. So I think let's put a bow on the economics of Seinfeld's first run on NBC. [03:03:10] S0: Ignoring all syndication. No syndication, just [03:03:12] S1: the first run business for NBC. NBC in total made about $2,000,000,000 in cumulative advertising profit from Seinfeld during its run. But again, that vastly undercounts the actual value to NBC because of the dynamics of, well, you can't buy Seinfeld. You gotta buy Yep. Primetime, etcetera etcetera. [03:03:33] S0: But no ownership because they rented it. [03:03:35] S1: Yep. Castle Rock takes a loss on the show by design. That's right. By design, they lose money on nine years of Seinfeld.
03:03:35 · David Rosenthal, Ben Gilbert
[03:03:35] S1: Yep. Castle Rock takes a loss on the show by design. That's right. By design, they lose money on nine years of Seinfeld. [03:03:45] S0: Kinda like the first nine years of an early stage venture portfolio. Yeah. Exactly. Although that's not fair because in years, what, six, they started participating in syndication. [03:03:55] S1: Right. Right. [03:03:55] S0: Right. You're scoping this just to [03:03:57] S1: No syndication. Just the just the first run. Columbia slash Sony, they're like a did not play. [03:04:03] S0: They make $0. They spent $0. [03:04:05] S1: Again, by design. Cumulatively, Jerry made 50 to $60,000,000 in salary from all of his seasons of Seinfeld as the star, creator, co writer, etcetera. You know, huge, huge, but peanuts compared to the back end. Larry's salary during the show, as we talked about, has never been reported, but it is safe to say much, much lower for Jerry's and only for seven seasons. The rest of the cast, talked about, they're just employees. In total, they each probably made 25,000,000 or so, kinda give or take. But, of course, from a syndication standpoint, the business is just getting started. [03:04:42] S0: Right. In some ways, the story here on our episode is over, but the business is barely started.
03:04:47 · David Rosenthal
[03:04:47] S1: So to date, Seinfeld has had a record six plus broadcast syndication cycles more than any other show in history for broadcast syndication. No other show ever got five. Right? Not on broadcast affiliates. The... Just on, you know, like Mhmm. Cable TV land. TV land, etcetera. Over the decade of the two thousands, the show continues to do great. By 2010, the show had done $2,700,000,000 in total syndication revenue for off network and cable. Three years after that, by 2013, that figure is up to $3,100,000,000. Along the way, they also start to drip out DVD home video releases. They get a great business model move. Only one or two seasons at a time over several years, followed by the complete box set at the end of it for true collectors. In total, DVD home video generates, we estimate, about another 500,000,000 in revenue. So call it up to 3,600,000,000 total post airing revenue. It's actually a fun coda to the cast economics with the DVD releases. They hold out again to get back end in the DVD releases in order to come back for the commentary. I think this is part of why it takes so long to get the DVDs out. Oh, interesting. And, you know, totally makes sense on their end. Right? Like, it's just the last point of leverage that they have. And gets reported that each of the cast members get kinda, like, low tens of millions each out of the DVD sales. Along the way here, throughout the two thousands and into the twenty tens, I think Jerry and Larry start to realize that, basically, their main economic job from now on is to be on a permanent book tour for Seinfeld, the show, like, to be permanent ambassadors to the continued cultural relevance of the show.
03:06:56 · Ben Gilbert, David Rosenthal
[03:06:56] S0: Without being too on the nose, like, I'd say they both pursue their artistic passions, and a secondary benefit to the work that they make is that it reinforces the relevance of Seinfeld. And, like, you know, Curb reinforces Seinfeld, especially when you put the reunion of Seinfeld on Curb. And Jerry doing his stand up, He would be doing stand up no matter what, but it definitely reminds people that the show Seinfeld exists. [03:07:24] S1: Well, I think all of these things are true. I think Larry and Jerry made the decisions to do what they did after the show, the activities and projects they pursued out of personal and artistic reasons. And kind of you look at this, like, through the lens of our Disney flywheel from our Disney episodes, the way you maximize the value of IP in a flywheel is you generate lots of other IP around it, but you don't disrupt the core thing. And that's exactly what Jerry and Larry do. They never disrupt the sanctity of what Seinfeld is. But Jerry's stand up, comedians in cars getting coffee, the stand up specials, again, even curb, these things never compete with Seinfeld. They only focus attention back on it. Yep. And look like they're probably making at least as much money from the increased attention on Seinfeld as they are directly from any of those things. Even Curb. I mean, Curb was great, but it was on HBO, so it didn't make a lot of money. Like, Larry David made a fraction out of twenty five years of doing Curb as he did from seven years doing Seinfeld.
03:07:24 · David Rosenthal, Ben Gilbert
[03:07:24] S1: Well, I think all of these things are true. I think Larry and Jerry made the decisions to do what they did after the show, the activities and projects they pursued out of personal and artistic reasons. And kind of you look at this, like, through the lens of our Disney flywheel from our Disney episodes, the way you maximize the value of IP in a flywheel is you generate lots of other IP around it, but you don't disrupt the core thing. And that's exactly what Jerry and Larry do. They never disrupt the sanctity of what Seinfeld is. But Jerry's stand up, comedians in cars getting coffee, the stand up specials, again, even curb, these things never compete with Seinfeld. They only focus attention back on it. Yep. And look like they're probably making at least as much money from the increased attention on Seinfeld as they are directly from any of those things. Even Curb. I mean, Curb was great, but it was on HBO, so it didn't make a lot of money. Like, Larry David made a fraction out of twenty five years of doing Curb as he did from seven years doing Seinfeld. [03:08:35] S0: Yeah. You know, we can't do this whole episode without bringing up the raging racist remarks that Michael Richards Yep. Had in his stand up. [03:08:44] S1: In 2006. Let's just scope [03:08:46] S0: this to the business because that's what this podcast is about. Aside from just how absolutely awful the the comments were, it's a problem for the business. Totally. [03:08:57] S1: It puts the business model at risk.
03:08:57 · David Rosenthal, Ben Gilbert
[03:08:57] S1: It puts the business model at risk. [03:08:58] S0: Right. If you are a Seinfeld cap table member like Castle Rock and these folks, the goal is to keep this asset going, to keep people loving it. And if that could have spiraled into a boycott the show Seinfeld thing, and I think everyone had to toe a very tight tightrope between, one, their feelings about the issue, two, their feelings about Michael as a friend of theirs, three, making sure to appropriately condemn condemnable words, but four, make sure that Seinfeld is able to, like, be preserved as an asset as they go through that PR crisis. [03:09:37] S1: Even if it just creates some subconscious Ick. Negative associations and for viewers, it's really, really sensitive, the value to perception here. [03:09:48] S0: So it was interesting kinda going back and watching a lot of the commentary on that. Jerry offers up things like, well, you know, a comedian on stage is not actually that person. It's sort of a person playing a a role. But, like, if you look at it from a pure comms and and, like, business incentives perspective, you need to condemn the act enough to make people go, okay. Good. Jerry doesn't have his hand in the sand here. He realizes how awful that was, but not condemn it so much to make people go, well, then I don't like Kramer either. And I don't wanna watch Seinfeld because of that. So it's kind of interesting, the art of stewarding a business asset. It involves a lot of that, like, tightrope walking.