Acquired
00:48:49 · David Rosenthal, Ben Gilbert
[00:48:49] S1: Guess it's just like Silicon Valley. They're betting on the equity value in the long run. Yes. So back to Seinfeld's stand up diary here. Larry and Jerry having the guarantee that NBC is gonna make this thing is so valuable to any production company they work with because the idea is this is gonna be a one time special, and it's guaranteed to be made by the networks. So any production company that comes and works with them to make this thing, it's gonna air right away on NBC. Maybe it'll do a summer rerun on NBC, and then it's theirs. They get it to go sell it to HBO or Showtime or whoever, sell it internationally, run the whole business model on the back end right away, guaranteed. No need to pitch the networks. No need to put capital into developing pilots that might not get picked up, etcetera, etcetera. Awesome. [00:49:38] S0: Yep. But you don't know how big it's gonna be. Like, is this thing gonna be worth anything to sell to other networks and syndication? Probably not. It's a one time special. [00:49:46] S1: Right. Nobody's thinking about this as a sitcom. It's a it's a special. But what this allows is Jerry and Larry via Shapiro and Wes, the the managers, the agents, to negotiate huge percentage of the back end, essentially, the equity in this piece of content with the production company. Because [00:50:05] S0: nobody thinks it's gonna be worth that much, and there's no risk.
00:50:05 · Ben Gilbert, David Rosenthal
[00:50:05] S0: nobody thinks it's gonna be worth that much, and there's no risk. [00:50:09] S1: There's no risk. Jerry and Larry have all the leverage. They could take this to literally any production production company company in in Hollywood. Hollywood. Right. Right. And so choosing Castle Rock, they can essentially write the deal terms. So it's never come out exactly what the deal terms are, you know, sort of the cap table essentially of Seinfeld the show, because the only people who really know are Jerry and Larry and Castle Rock and and then Shapiro and West. But, it's reported that Jerry and Larry each own 15% of the show, which is huge. And spoiler alert, Seinfeld is gonna make billions and billions and billions of dollars, and Jerry and Larry are gonna get 15% each of that.
00:50:09 · David Rosenthal, Ben Gilbert
[00:50:09] S1: There's no risk. Jerry and Larry have all the leverage. They could take this to literally any production production company company in in Hollywood. Hollywood. Right. Right. And so choosing Castle Rock, they can essentially write the deal terms. So it's never come out exactly what the deal terms are, you know, sort of the cap table essentially of Seinfeld the show, because the only people who really know are Jerry and Larry and Castle Rock and and then Shapiro and West. But, it's reported that Jerry and Larry each own 15% of the show, which is huge. And spoiler alert, Seinfeld is gonna make billions and billions and billions of dollars, and Jerry and Larry are gonna get 15% each of that. [00:50:53] S0: And they have this very clever way of dealing with it in interviews because someone will say something like, you've made x $100,000,000, and they never quite deny it. They say, that's preposterous. That's an insane number. Right. That... That's a ridiculous number. And it's true. It is a ridiculous number, the hundreds of millions of dollars that end up coming out of this. But it's it's not... They're not saying it's wrong, or even when they do say it's wrong, they're not saying by how much. So someone throws out, it seems like you might have made over $600,000,000, and they go, oh, that's not the right number. Right. Right. Right. But you didn't say that it wasn't in the ballpark. So it's just one of these funny, it's admirable the way that they handle it because it's so true to form.
00:50:53 · Ben Gilbert, David Rosenthal
[00:50:53] S0: And they have this very clever way of dealing with it in interviews because someone will say something like, you've made x $100,000,000, and they never quite deny it. They say, that's preposterous. That's an insane number. Right. That... That's a ridiculous number. And it's true. It is a ridiculous number, the hundreds of millions of dollars that end up coming out of this. But it's it's not... They're not saying it's wrong, or even when they do say it's wrong, they're not saying by how much. So someone throws out, it seems like you might have made over $600,000,000, and they go, oh, that's not the right number. Right. Right. Right. But you didn't say that it wasn't in the ballpark. So it's just one of these funny, it's admirable the way that they handle it because it's so true to form. [00:51:34] S1: Yes. Yes. But this is why this crazy unlikely stand up special ends up becoming the most valuable deal probably in the history of television for these guys. [00:51:43] S0: So as best we can kinda figure out by what's been publicly reported, ballpark it at 65 ish percent left for Castle Rock. The interesting thing to know is usually the way a distribution deal works, because remember, Sony owns the distribution right eventually, that usually looks like 15% off the top. So that's like everyone gets diluted down 15% because whoever Sony manages to sell it to, they get the first percent off the top. And we've seen different numbers. We've seen 15. We've seen 30. There's lots of reason to believe it's 15.
00:51:43 · Ben Gilbert, David Rosenthal
[00:51:43] S0: So as best we can kinda figure out by what's been publicly reported, ballpark it at 65 ish percent left for Castle Rock. The interesting thing to know is usually the way a distribution deal works, because remember, Sony owns the distribution right eventually, that usually looks like 15% off the top. So that's like everyone gets diluted down 15% because whoever Sony manages to sell it to, they get the first percent off the top. And we've seen different numbers. We've seen 15. We've seen 30. There's lots of reason to believe it's 15. [00:52:18] S1: So simplifying this a little bit, you can essentially think of the water flow of Seinfeld's billions of dollars of syndication profits as 15% to Sony, 15% ish, a little less because of the Sony dilution each to Jerry and Larry, 5% ish to West Shapiro, and then 50% ish to Castle Rock and its successors, shall we say, as we go along here. So once all these various parties are in place, they need to go, you know, write the script for this thing. So Larry and Jerry, they go off. They start working on the script. But they have a tough time coming up with ninety minutes worth of stand up material to either do the expose, if you will, on how it gets into comedian sets for the special. Ninety minutes of stand up material is a lot of stand up material. [00:53:10] S0: It's an eternity. It's really hard to be funny for ninety minutes.
00:53:14 · David Rosenthal
[00:53:14] S1: So as they're working on it, they're banging their heads against the wall. They also realize that there does need to be some kind of semblance of a story. I put story in quotes or, you know, some situations to get the characters into the scenes where the conversations would happen that would lead to the stand up material. So Larry floats an idea. What if we just do this as a standard thirty minute sitcom pilot, which a standard thirty minute sitcom is only twenty two minutes of actual content? You know, twenty two minutes? Great. Like, that is a manageable amount of stand up material that we can come up with for this thing. And doing it as a sitcom here that'll give us some story reasons, enough situation, situation comedy, sitcom to get characters into the scenes so we can say the dialogue, etcetera, etcetera. And the way that we'll make it all fit is, Jerry, what you wanna do anyway, like you said, Ben, you just play yourself in the sitcom to end in the stand up. So the script for this first pilot that they come up with, the first initial script that they're gonna pitch back to NBC, is that Jerry is supposed to go on The Tonight Show, you know, NBC tie in Tonight Show. But he doesn't have any new material, so he needs to pull his act together, and he's hanging out with his friends, particularly his Larry like friend, George, to get material. And then at the end of the episode, Jerry's gonna perform it on The Tonight Show. They go back to NBC. They pitch the new version, and they have a new title for what this is to reflect the shift from a ninety minute special into a pilot, essentially, for a sitcom. I'm gonna change it from Seinfeld's stand up diary to the Seinfeld Chronicles. It's gonna be an ongoing chronicle of Jerry's stand up material.