Seinfeld

So David, I bought a DVD player for research for this episode. No way. By box that. Because there is some stuff like facts about the pilot that are only available in the DVD commentary and don't exist anywhere online. So I had to go on eBay, buy a copy of the Seinfeld DVDs and buy a brand new DVD player here in 2026 to view it.

Did they even sell those on Amazon anymore? They do. So do you make some, they're like, I don't know, a hundred bucks or something, but... So there you go. Appropriately, distributors of Seinfeld.

That's right. Alright, shall we do it? Let's do it. Welcome to the fall of the fall of the season of acquired the podcast about great companies. Well, usually companies anyway.

Usually. The podcast about great business assets and the stories and playbooks behind them. I'm Ben Gilbert. I'm David Rosenvall. And we are your hosts.

Today listeners, we are taking a giant left turn. David and I were staring at each other, pouring over our usual topic list and we decided that we only wanted one of the most important things we wanted to do. David and I were staring at each other, pouring over our usual topic list and we decided that we only wanted one criteria for selecting this one. What episode would we have the absolute most fun making and can we do something different and fresh for acquired? And we found something we are very pumped about.

The business of Seinfeld, the show Seinfeld. We both had just read this astonishing stat that Seinfeld in the first six months of this year in 2026 has been watched by 60 million Americans, which is about 20% of the entire US population. This show went off the air almost 30 years ago. I reached out to Nielsen to verify this. Not only is it true, they said that if you update it through the end of August, that number is up from 60 million to 72 million Americans.

Wow. That's almost the same audience size as the Seinfeld finale when it aired. This is a show that finished making new episodes nearly three decades ago and yet we are all still watching it. So why? Netflix's 2019 deal for Seinfeld, which was reported at well more than $500 million over five years, was the largest sum that a streamer has ever paid an outside studio to license a series that's no longer in production.

So it's $500 million plus per year, decades after they are done making new episodes and everything. The way the economics breakdown, the way that it is owned and structured is essentially a complete accident of history. Seinfeld managed to be one of the last shows of the old world where everyone watched the same thing at the same time. Well, at the same time, also having a foot in the new world just as the internet was taking off. And the story is really an entrepreneurial one of obsession, of craft, of a team that created the number one show in America by doing everything completely different than the way it had ever done before and defying all conventional wisdom.

It is one of the best examples we have ever studied on acquired where the creators, Jerry Seinfeld and Larry David, were such big believers that their product was excellent that they didn't care what anyone else thought or what the numbers looked like at first and how a small, passionate, early fan base with a slow burn went on to become their greatest asset. Today listeners, we do an experiment here on acquired, the business of Seinfeld. Let's do it. So listeners, as always, you can find the visuals, charts and illustrations of key concepts from this episode in our companion PDF at library.acquired.fm. You can join the email list at acquired.fm.

That's where we will send all the behind the scenes photos that we found in research, past episode corrections and vote on future episode topics acquired.fm. Come talk about this with us in the whole community in Slack after you listen at acquired.fm slash Slack. And before we dive in, we want to thank our brand new presenting partner, Sierra. Yes, Sierra helps the great companies of the world build better customer experiences and drive stronger business outcomes with AI. That's S-I-E-R-R-A, Sierra.

So with that, this show is not investment advice. I may have investments in the companies that we discuss and the show is for informational and entertainment purposes only. David, where we begin. Well, naturally, even though this is an episode about Seinfeld, the show, not Jerry Seinfeld, the person. We have to start with Jerry himself.

Yes. So Jerry is born in 1954 in Brooklyn to a Jewish family. And when he's young, the family moves out to a small town on Long Island named Massapequa. I actually spent a fair amount of time in my childhood in Massapequa. It's definitely suburban Long Island, not a lot of interesting culture going on there.

Great. But Jerry's father, Cal Steinfeld, was known in the family and amongst his friends for just always being a funny guy, always telling great jokes. Jerry would talk about it later. He had the funny gene, and Jerry definitely did too. Yeah, Jerry insists that comedy is a gene, right?

Yes. He thinks his kids have it. He knows his dad had it. And it can be taught. Obviously, you can work really hard and hone in and develop more material, but the instinct is actually genetic.

Yeah, he's always making his friends and family laugh. And right around the same time, when he's about 12 years old, he falls in love with an album with a record. Not a music album, not one of the great bands there at the time, the 60s, 70s. But with Bill Cosby's stand-up comedy album, why is there air? This is a big thing.

This was a big thing. Stand-up albums on vinyl. It's funny today we all tune into Netflix to watch the big stand-up special that just dropped albums. We're doing that same thing 50 plus years ago. Totally. So after high school, Jerry goes to Queens College in New York, actual New York City,

where he majors in communications and theater. And he sets up for himself. He's really in comedy. He sets up an independent study where he studies stand-up comedy like his heroes. So he goes out to the comedy clubs in New York. He writes papers for college, analyzing various comedians' sets.

And then ultimately, he himself goes on stage as part of his college studies to get experience try-out being a stand-up comic. And it's just like what he's born to do. And it seems like from every interview he's given, and Jerry has given a lot of interviews. Well, getting to why Jerry has given a lot of interviews later in the episode. Yes, he basically said I had one goal. I mean, it's since middle school, high school, become a successful stand-up comedian.

That's it. I didn't have specific goals around other things I wanted to do, some career progression, something I wanted to rise toward, family, hobbies. I had no goals around anything other than become a successful stand-up comedian. So at age 22, after Jerry graduates from Queens College, he goes into his career. He makes his stand-up comedy debut at the famous Catch a Rising Star comedy club on the Upper East Side in Manhattan in 1976.

And just like he did in college in his independent study, he does the same thing. He tapes himself, he analyzes his own performances, he's performing night after night after night. I mean, this is a level of obsession that is necessary for Jerry to become who he is, but it's also not that uncommon in the stand-up industry. Like this is what you do. If you're going to dedicate yourself to the craft, you are every night performing, analyzing, just meticulously refining every word, every syllable, every movement that comes out of your mouth and your body.

And stand-up is this thing that is unique among any sort of performance, be it entertainment, music, sports, where you get a real-time scorecard from the audience on something that is entirely within your control. And you might have just come up with it that morning. Let's say you're singing and you manage to write a song and perform it. This is sort of a long process, usually it involves other people arranging the music or other musicians playing with you. In stand-up, it's you and your material delivered through your instrument with a real-time brutally honest feedback from the audience whether they're laughing or not.

It is as raw as it comes. Yeah, it is a solo act. It compares it to being a solo athlete, but it's like the most extreme feedback and spotlight version of an athletic performance. So this is what Jerry does night after night after night. Pretty quickly, Jerry becomes a success as a stand-up, and that leads him to other opportunities and comedy and specifically in television.

So in 1979, three years after he begins his comedic career, he gets a call from Hollywood. They wanted to come out to LA and join a sitcom, shown named Benson, which I'm sure none of you listening remember. So he's going to get this recurring role on this sitcom, you know, great. He's going to make a lot more money than just playing in the clubs. It's going to be steady work, etc, etc.

Well, he's in three episodes and then his character gets dropped from the show. Doesn't work out exactly as he planned, which is the common experience in television. But this becomes very, very important to Jerry and to the eventual show, Seinfeld, because despite this disappointment with Benson, during that first brief stint that Jerry has in LA, he performs in local comedy clubs, performance stand-up on the nights and weekends around LA. Where one night he gets spotted by the legendary talent manager, George Shapiro, who, along with Shapiro's partner, Howard West, were the most legendary comedian talent manager slash agents in the business.

They had gotten Andy Kaufman, the recurring role on Taxi. That's a con that was a huge hit. They were placing their comics on the Tonight Show, which was filming out there in LA at the time with Johnny Carson getting them exposure nationally. It was all this flywheel between stand-up and TV that was happening. And what Jerry is watching here is, oh, that's how you become successful as a comic to bake money.

And it's kind of like the next rung in the ladder. But it's not like what he wants is to be in sitcoms. His calling is stand-up and sitcoms are the thing that the industry sort of has for you. Yeah. Well, it also becomes a self-reinforcing flywheel for your stand-up act, because once you're on TV, whether it's sitcoms or a regular spot on the Tonight Show, you get national exposure. Then you can tour with your stand-up routine.

And people in cities all across America will know you, they'll buy tickets to your shows. That's the way you hit a big in stand-up. So once Jerry is signed with Shapiro in West, they get him the big break, a spot on the Tonight Show with Johnny Carson. So Jerry talks about this. He trains, he's training for the Olympics to go on for, I think it was five minutes, a five minutes set.

And he always talks about how you're taking most of the best material out of your 40 minutes set to create that idealized six minutes to just put your absolute best foot forward. He goes around to clubs and he'll do the five minute set as he's practicing for months just to get it down to go on stage for five minutes. It doesn't like 200 times in clubs come off, get the next guy on. He starts jogging to get in shape. He's playing the Superman theme on his Walkman.

So in 1981, the appearance happens. And it's a hit. Johnny loves him. Famously, while Jerry is performing, Johnny flashes him an okay sign from the desk because everybody knows it's going well. And that leads to regular bookings on the Tonight Show. And then that leads to Letterman's book Jerry and other variety shows and all sorts of opportunities.

And this is where Jerry learns discipline because if you spend five years creating your 40 minute act and then you get six minutes on Carson, you do your six minutes, then you get invited back pretty quick. The next six minutes in your act, they're not your best six minutes. They're your second best. Then your third, then your fourth. And he said he remembers watching other comedians just kind of churn out. Once they got through their material, they stopped being invited back on the show.

And so he picked up this discipline of writing for hours a day, keeping steno pads with these yellow, legal pads where he would write everything all the time, everything he was observing in the world, so that he could avoid that horrible fate of irrelevancy, of stopping invited back. If you always are developing material and you kind of always do need to be on this treadmill of developing material, then you keep getting the opportunity. And you can see how this leads into signed up eventually. But yeah, this is the big difference between stand up comics and musical acts. We're all happy to go to a concert and hear a Taylor Swift shake it off again and again and again, every tour. That's like exactly what the fans want is to play the hits.

You don't want to go see stand up and see them till the same joke again. You kind of get it once and then it's over. So eventually this leads to Jerry getting another sitcom opportunity. He gets considered for the lead in a pilot show for ABC called Past Imperfect. And there's a new production company. It's Hot Ticket. Things are looking promising for this show. Ultimately, the production company decides to go with somebody else because Jerry doesn't have enough sitcom acting experience.

Just acting experience. Period. Being a stand up is not at all the same thing as being a great actor on a sitcom. These are two very different sales sets, even though the same people are doing it a lot at this point in time. But losing the show doesn't matter that much to Jerry because his stand up act is killing it thanks to all the exposures getting on the late night shows.

So he's touring basically every week and he was so popular that he was making on average about $25,000 a week from the clubs that he was playing across the country. So call it like a million dollars a year that Jerry's making just from his stand up touring here in the mid 80s. I didn't realize that before the show because the life of a stand up when you're playing in comedy clubs, you get paid in stage time. You should be grateful to get an audience to test your material. When you go on Carson, I don't think you get paid, at least not anything.

Yeah, not significant. And so it's this building a brand around yourself using the clubs and then using TV shows and then using the late night shows so that you can tour. That's the first time you're actually getting paid doing this one of art. And there's not that many people at a given time who are touring headline artists, comedians making a living. Jerry is in rare air here. And this is going to become super important because this is why he has leverage with NBC, which is going to come up here in just a sec.

So Shapiro and West is managers. I'm like, okay, Jerry's a big star. He's making tons of money. We're making tons of money as his agent. But he can do more. They start going to NBC.

In fact, George Shapiro starts writing letters, starts a letter writing campaign. The Brandon Tardikoff, who is the president of NBC Entertainment at the time, saying, you've got this guy, Jerry, this comic, he's regularly coming on the Tonight Show. He's doing great. Don't you think he needs a show of his own? Jerry actually has a great quote on this.

He says, imagine you have this kid who's been on the Tonight Show for like 30 times. And on Letterman, 30 times, he's on your network all the time. Presentable fellow seems to do well. Nobody ever thought, why don't we talk to this young man? Maybe we can do some business. Do a show.

So finally, in November of 1988, Shapiro succeeds in convincing Brandon Tardikoff and the powers that be at NBC that, okay, maybe we should consider this Jerry guy. The schedule meeting to discuss it. But it's not with NBC's comedy department. The comedy department at NBC means sitcoms. They control the sitcoms. They're not thinking of Jerry as sitcom material.

But what they're thinking of him is late night material where he's obviously already doing great. Can you do specials for us, which is the direction the sense of going? I think probably in the back of their minds, they're also thinking, hey, can this guy be a host? Johnny Carson's getting older, it would be a few years later that Johnny would retire. And then there's the whole, you know, J. Leno, David Letterman drama and the succession.

But like, this is a couple of years away. Maybe Jerry Seinfeld deserves to be in this mix. You mentioned specials. There were network comedy specials. Like Bob Hope would get these specials where he would go and do these routines.

So it wasn't like, hey, we're going to pitch you a whole new format called Jerry Seinfeld does stand up on TV. So on November 2nd, 1988 at 5.15 PM, local time in Los Angeles, NBC finally takes the meeting. Jerry shows up, George Shapiro manages their Brendan Tardikov, President of NBC Entertainment, Warren Littlefield, who's had a prime time for NBC, and then Rick Ludwin, who heads the Specials Department, the Variety and Specials Department that they're thinking about Jerry for. So Jerry says at the meeting we sat in there, we chatted about, oh, what do you think you want to do? Would you be interested in a talk show? And we kind of settled on doing a special in the Saturday Night Live time slot one week when Saturday Night Live wasn't airing.

So NBC says, come back with a script for what you want to do for the special, and we'll make it. I always like when they asked Jerry, so what do you want out of this meeting? And he has some comment like, oh, I actually hadn't really given that thought success as a comedian is getting this meeting. So I'm like in this room. I'm excited to be in this room with you right now.

I'm just happy to be here. So NBC at the time is in this pretty interesting place. They had just recently figured out who they were. In the late 70s and early 80s, they did not have a cohesive strategy. It was the classic, we're making anything and everything for everyone.

But they turned it around in the mid 80s. So Brandon Tartikoff, who you mentioned was the president of NBC Entertainment, had developed this philosophy to try to appeal to urban audiences aged 18 to 49 with smart content. And it worked. They're becoming the number one network. In 1986, GE comes in and buys the company and they had two big messages.

Keep in mind, this is GE. Like Jack Welch, general electric. One, you need discipline in your business. You have a pay attention to costs and ensure that everything that you do aligns with your chosen strategy. You can't just be a half hazard. And then you guys kind of know this at this point.

And two, things are changing. Viewers have way more choices with cable. They're not just going to watch whatever you put on by default. So you need to quickly develop great shows and if they're not great, get rid of them that are aligned with your business strategy and the audience you want to reach and the advertisers you're trying to reach and stop doing everything else. So, of course, NBC kind of looks at, Hey, this is already kind of working for us. Let's build a real business strategy around it.

Hey, this is a very valuable demographic. Urban audiences 18 to 49 who want to watch smart content. That's a great business to sell to advertisers. This is obvious now, but at the time that was pretty novel. Well, it was also novel, I think, for a broadcast network to just have a corporate strategy period to like the other networks and NBC before this point in time.

They're just like, where the broadcast networks America watches what we put on TV GE coming in and saying, no, we're general electric. I'm Jack Welsh, Mr. Black Belt six Sigma, great a CEO in American history. I'm told all of our, but you know, at this point in time, you need a corporate strategy. Yes. It's tied to revenue and profits. Yes. Everything that G does.

So the perfect thing to do is sign Jerry Seinfeld to a development deal. Yes. Now, there's just one problem though walking out of this meeting when Tardikov and Littlefield and what. And they're like, yeah, whatever you want to do, just come back with a script. We'll make it.

Jerry has never written a script in his life for anything, especially not a TV show, but Jerry knows one guy, one of his old New York standup buddies who does have some experience with script writing that might be useful for this special here for NBC. So three days later after this meeting in LA, Jay flies back to New York and he goes looking for that guy, Larry David, late at night after the sets at catch a rising star where Larry was a regular in the standup comic. And they got to know each other well during this period, where they're just both constantly going up, trying new material. You don't go on till 9, 10, 11 PM.

So you're like friends with other comics, just sitting in the bars, chopping it up. As Jerry was coming up as a kid out of Queens College, Larry David was one of the established comics that he looked up to, but their careers had gone in very different directions here by the end of the 80s. Who was Larry David here in November of 1988? The answer is he is nobody. And he's not even like a promising young nobody who has potential and talent.

He's 41 years old. He's single. He's broke. He lives in subsidized artist housing. His standup routine has, I think, the term that people use to describe him at the time was he was a comics comic, meaning that he was appreciated by other comics, but he was not exactly land with audiences.

And he had basically been chewed up and spat out of the industry. Jerry said they always just sort of had a comedic resonance, the two of them, and had known each other for a long time. But Larry has had this kind of George Costanza, eclectic string of failures that lead to this moment. So the stories about Larry before Seinfeld, you probably already know them. You just know them as George Costanza stories.

So Larry had actually moved to LA, not for a sitcom, but because he got a job on a show called Fridays. That's right. It was an SNL knockoff. Yes. I didn't know anything about this. ABC here in the late 70s, early 80s was jealous of Saturday Night Live on NBC.

So they decided that they're going to just do a wholesale knockoff of Saturday Night Live, and the only two things they're going to change is one, they're going to film in LA instead of New York, and two, they're going to do it on Fridays instead of Saturday. So they call the show Fridays. And they're going to fish in the exact same talent pool. Yeah. They also can't get the best talent out of New York.

Too is interested in this kind of stuff because they're going to SNL. So they get Larry David to come out for this. They get a eccentric young comic named Michael Richards. It made it hard to him. Friday's last, I think, three seasons and then gets canceled.

But fortunately, SNL says, you know, we could use some extra writing talent around here. Everybody who was a writer on Fridays will offer you a one-year trial. So Larry, he just needs a job. He needs a paycheck. He comes on for one season at SNL.

The entire season, he gets only one skit that he writes included on the show. And famously in Saturday Night Live history, one day Larry is so frustrated that what he's writing is not getting on the show. He flies into a rage, yells at all the producers, and screams that he's quitting. And he walks out of the set. And then he's freaking out.

He's like, oh shoot, I don't have a job. I'm not going to be able to pay my rent. What am I going to do? He's so worried. So where he goes home, he explains the situation to his next-door neighbor in his apartment in part to subsidizing their New York, who is named Kenny Kramer.

And Kramer, the real life Kramer, says Larry, why don't you just go back in tomorrow and pretend like nothing happened? So Larry does. Which he does. And I feel like I've heard this story before. George Costanza does this on a Seinfeld episode.

This is the first of many, many examples where what you see in Seinfeld is just things that happened in Larry and Jerry's and eventually other writers' lives. But this is the early stew of what would become Seinfeld is minding their own lives for stories. Yes, and most specifically Larry's because Jerry's life is exciting. There's Hollywood and stuff. But funny stuff is happening to Larry.

Yes. Also, this is going to become so important once Jerry brings Larry into this project with NBC. Larry did this and things like this during the one-year period where he was working at NBC. NBC hated this guy. To the extent he had any reputation, it was as a loser as somebody who could not function in any sort of corporate environment and NBC wanted nothing to do with.

And he turned out to be a genius. A genius. And one of the best comedians and writers that the world's ever seen. Yeah. Yeah.

So during that ill-fated year for Larry at SNL, he also intersects with a young woman on the cast named Julia Louis Dreyfus. Who also had a very short stint at SNL and kind of turned out of it. Yeah. I think she lasted two or three years, but they bond over. You have not getting any airtime or their material on the show.

So back to this night here in early November, 1988 when Jerry goes looking for Larry at Catcher Rising Star, this is what's on his mind. Hey, my buddy Larry has experienced writing this kind of stuff, right? Is SNL? He's going on TV. He can help me flesh out what we can do with this opportunity.

So he finds Larry. They go out for a walk together. Jerry explains to Larry what's going on. And they stop at a Korean deli there in the Upper East Side, Lee's Market, which is right here, the comedy club. And when they're in the deli, they can't help themselves.

These are two comics together. They start making jokes about all the products here on the shelves. And this three and deli Larry makes a quip about Korean jellies and Jerry looks at some fig bars and says it looks like somebody made these in their basement. And the board's come out of Jerry's mouth and Larry turns it looks at him and says, this is it. This is what the show should be.

This is the kind of dialogue that we should do on the show. You know, two guys just talking like this. They're both excited, inspired by this. They said, okay, great. Let's meet up again tomorrow night after our sets.

So the next night, they meet up again. They go to the Westway diner on 9th Avenue. It's around midnight. And Jerry says to Larry, you know, I've been thinking about what we came up with last night. You know, the number one question I get asked, I'm sure you get asked to be in stand-ups is where do you get your material?

And Larry says, bingo. That's how we set up the show so we can do that kind of dialogue on the show. The premise will be how do stand-up comedians get their material. Jerry says, yes, yes, great. The comedians, they get their material.

They do this. He's just gesturing with his hands to themselves there at the table in the coffee shop, hanging out with his friends. And at that moment, Seinfeld is born. Which you'll notice, nowhere in there did David say the words a show about nothing. That has nothing to do with how the show Seinfeld is born.

Later on in the show, Seinfeld is so meta. They would do a season arc where Jerry and George are creating a show called Jerry, a pitching NBC about the show. That is a show about nothing. And then of course that gets co-opted to be like, oh, Seinfeld in real life is a show about nothing. But no, no, no, the premise is the show is about how stand-up comedians get their material.

Yes. And so this leads Jerry to believe, okay, whatever format this takes, I'm playing myself. And I'm not just playing someone named Jerry. I'm playing someone with my sensibilities, with my observational humor about the world. I'm not going to cast myself into a character that is super different.

I don't want to do that. I'm not acting. I mean, we all know Jerry can't act. So. Yeah, Roseanne Barr, the comic, did Roseanne.

Like she's not playing Roseanne Barr on Roseanne. She's playing a sitcom character. It's a slightly different Jerry Seinfeld. I mean, the version on the show is in a little shoebox apartment and this guy was making $1 million a year flying around. So there are differences, but still it's pretty true to personality.

And again, you can see how this all takes shape because nobody's thinking about a sitcom here. This is a one-off special that they're going to do. Right. So that brings us to the next month of December, 1988, when Jerry returns to NBC in Los Angeles to meet again, this time bringing both a pitch for the idea for the script and a partner, Larry. And NBC, as you might expect, doesn't exactly like either of them, or especially at least doesn't like Larry.

But nonetheless, the two of them, Jerry and Larry, walk out of that meeting with probably the most valuable TV deal that has ever been made in all of television history. But before we tell that story, now is a great time to thank our brand new presenting partner this year, Sierra. Yes. All of the leaders of the world's most important companies today are wrestling with the same question. In a world where everyone has access to the same intelligence, what is my competitive advantage and what is the right way to turn AI into revenue for our company?

That's where Sierra comes in. First, your customer relationships are your competitive advantage. When you deploy Sierra's AI agents, every interaction adds to your understanding of that customer, deepening the relationship and generating insights that compound over time. Second, you should pay for outcomes, not tokens, like an insurance claim paid or a sale closed or a customer retained. Sierra's pricing model is quite novel in that way.

Sierra is already the leading platform for customer service agents. Everything from account sign up to troubleshooting, subscription management, they work with over 40% of the Fortune 50, one in three of the world's leading banks and five out of the 10 largest healthcare companies. And their agents can also handle complex workflows that generate revenue too. So think about appointment booking and healthcare, or refinancing alone in financial services, things that can take weeks or months and span across voice, chat, email and WhatsApp conversations. And they just introduced a new product, personas.

Every AI agent sounding the same, polite but slightly robotic, you can give your agent a distinct voice and personality, tailoring its tone, humor, even the rhythm of how it speaks to your brand. And great brands should have a recognizable character to them. And your company's agents should match that same character that you have worked hard to create. How an agent speaks impacts customer trust. And Sierra told us that one of the largest telecommunication companies in the world just introduced a new voice and persona for their Sierra agent.

And the rate it's solved customers problems increased by nearly 50%. So to find out how you can build stand out customer experiences that grow your business with AI, visit Sierra.ai slash acquired and just tell them that Ben and David sent you. So David, Jerry and Larry, they've got a TV deal, right? There's a show? Well, right. So Jerry and Larry have this TV deal that would go into become arguably the most valuable television deal in history.

But NBC isn't sure about the idea and they definitely aren't sure about Larry. Why on earth do they go through with this? Well, one is we talked about this whole, you know, comedians crossing over into television is currently hot. So they're motivated to do it. It's part of their corporate strategy, which you...

In general, you're probably going to get eyeballs if you bring in a brand name, star, star, and a show. Get young male comic, you want your young male audience, you know, urban areas, et cetera, great. But two, more important. At the end of the day, this is just a one-off, 90-minute special that they're talking about here as a commitment. This is not a big deal. Like, if it doesn't work, it doesn't work. They decide in the meeting, great, okay, fine.

Let's call this thing Seinfeld's Stand Up Diary. Oh, I never called this. Yeah. Oh, it's a name before the name. That was the original working name for the show when it was still in this conception as a one-off special that was going to be about how Seinfeld got his material.

And then the premise was going to be at the end of the special. You would see him on stage doing his stand up material that he got throughout the episode. Okay. What's the name again? Seinfeld's Stand Up Diary. Okay. This is so fun to see how like all the rough edges get sanded off so it eventually becomes the thing we know.

Totally. Totally. Okay. So the deal. What's the deal? Why is it so valuable? How much is NBC going to pay these guys?

Well, actually, NBC isn't going to pay them anything directly because at the time, NBC could not legally own the show. Thanks to rules from the FCC at the time, broadcast networks were prohibited from actually owning the content that they broadcast on the networks, a set of rules called Financial Interest Incinication or FinCIN. Yes. So time for a little history lesson listeners. So today you know about these like media conglomerates. But before that, the TV networks were entirely separate companies than the production studios.

So NBC was its own thing, totally separate from Universal, CBS, just broadcast network, nothing to do with Paramount, ABC separate from Disney. So the networks, ABC, CBS, NBC, right when TV production started in the 50s, they need to hire the production studios to make stuff for them to broadcast on their networks. Some of these studios were very large, like Paramount or Universal or Warner Brothers or Disney. Some of them were really small, like MTM Entertainment, which is named after the Mary Taylor show. Yeah. Or Desi Liu of Desi Arnaz and Lucille Ball.

Yes. It's just the big guys, the big Hollywood studios getting into making TV. We talked about on our Disney series. It was Walt Disney that started doing that. Originally, the Hollywood studios kind of boycotted TV because they were worried about it as a threat to the film business.

Walt was the first one who was kind of the visionary and said, no, no, no, these broadcasters. There's so much money that's going to be made here as television sweeps the nation. And we're going to be the best arms dealer for them. And if we flash all the way forward, way more money was in TV. Way more, way more money in TV.

It was incredibly right. When you look at where the cash gushers are in the entertainment industry over the last 40, 50 years, it's come from TV, not from movies. It's kind of what are these jokes in Hollywood that we really learned about studying for this episode of All the Glamour goes to the movie stars and the movie directors and the movie executives. The richest people in town were always the TV guys. Yeah. Okay. So back to the call it 60s. The way that the deals worked between the networks and the studios were called deficit financing.

And this is crazy that this is how it works, but it is. The networks would not fund all the production costs of the show. So they would really like something, find the production company to make it and say, we'll pay you 60 to 80% of what it costs to make the show. Because we're in this case, this special list I felt in Larry David. Right. Because historically, the networks are cash conscious. And so they'd rather save 20 to 40% of the budget of the show.

And we'll give up some future upside, but that's okay. Right. Well, in return, the production company would own the show. Yes. So because NBC is not totally covering the costs, they're leaving this deficit. They just get a license to the show to err on their airwaves once, twice, very limited license.

But that meant that the studio was still in the hole for the rest of the funding to make the show. But it is sort of fair. The studio gets to own the rights to that show in the future to monetize it when there's things like international ways that they could license it or merch or later home video or the eventual huge cash cow of syndication or reruns of the episodes on other networks or on cable channels or something like that. But then the network started including one deal term that was very, very favorable to the networks. They overreached and they demanded a large cut of the future syndication revenue, even though they were not fully funding the costs to produce the shows.

I didn't realize that there was a period in the 60s where the networks could own syndication rights. Yes. So studios, of course, as you would expect, complain to the government and they say this is ridiculous. Like they're not finding the whole thing, but they're making it so we can't make money now and we can't make money in the future. So in 1970, the FCC issued the thing that you mentioned, David, the financial interest and syndication rules or FinCIN and these rules prevented the networks from owning a financial interest, which mostly meant from participating in the future syndication of shows that they were buying from the studios.

So this created a true separation between networks that aired the shows and the studios who make the shows. You've got a buyer, you've got a seller, it's very clean. Yeah. Yeah. But then by the late 1980s, last forward 20 years or so, the networks are now the ones complaining.

The cable shows up and a lot of the consumer attention is leaving the network and going to cable and the networks argue, well, we need more latitude and operating our businesses to effectively compete and make profits. You might remember this from our Disney episode where we talked all about what opened the door for Disney to eventually buy ABC. So by 1993, the networks won, FinCIN has repealed, the net of this is networks actually can produce their own shows from 1993, 4, 5 onward. Which means that they'll own those shows and perpetuity. Yes. But here where we are in the Seinfeld story, 1989, it is like the tail end of the FinCIN era.

And what works is NBC is not allowed to own the actual intellectual property of the show. They must say, hey, go find a production company, make the show, and then we will pay you 80% of what it costs to make it in order for the right to err it on our airwaves. Yep. And that dynamic back in the era had set up this incredible entrepreneurial ecosystem where you had these independent production companies and the creators they work with who got actual ownership of the shows and the syndication rates. Some of Silicon Valley startups, this like capitalistic entrepreneurial incentive to go make these amazing things.

And Seinfeld is one of the last ones out of this system. And it had power law dynamics where just like the venture capital industry, most shows fail, but for the shows that succeed, they succeed massively. And the cap tables are like a bunch of individuals or a small production company. It's not like all the profits just go into a big network the way that they do today. So you actually could have literally exactly like Silicon Valley power law outcomes to individuals on a cap table.

Yep. So back to Seinfeld and Derry and Larry in this meeting with NBC, when NBC says we will promise you, we are going to make what you are pitching us. That is an extremely valuable commodity that they are giving, Jerry and Larry, because they're saying, yeah, yeah, go get a production company and you work out your own deal with them, but we'll make it. Usually it's reversed. The production companies are making pilots and concepts for specials and scripts that they're pitching the networks and desperately trying to get the green light to air them.

NBC is now saying to the individual creators to Jerry and Larry, you go find your own production company, cut your own deal with them, we guarantee we'll make it. This is like free money to use a Silicon Valley analogy. It's like if you're investing in a series A and somebody has already guaranteed that they're going to mark it up 10x in a series C afterwards. Right. You write this check and there's another check waiting right here for you.

So Jerry and Larry and the agents at Shapiro in West, they're just giving the golden goose here. So this is where that very nice production company back when Jerry was being considered to be cast for that ABC pilot comes back into the picture. Castle Rock. And Jerry says to George Shapiro, all right, great. Well, why don't we just use those guys from last year?

They seem nice enough. And boom, Castle Rock becomes the production company. Now, Castle Rock, you might know of it, or you might just know of it from watching Seinfeld episodes and seeing their title card at the end of the screen. Then what's the awesome history of Castle Rock? All right. So we're going to go back slightly pre-Castle Rock in 1982.

Columbia Pictures, the major Hollywood film studio gets bought for $750 million by longtime listeners will know this. Coca-Cola. The Coca-Cola Company acquired episode crossover. Coke is trying to get into the movie business. They just had a new CEO, Roberto Goizweta, take the helm and is trying to diversify.

And I think part of the rationale here is like, oh, hey, Coke products in movie theaters, films and in product placements in movies. What if we just own a studio? There can be some efficiencies here, some diversification is easier. Sure. Whatever. Okay. So that's Columbia and Coca-Cola. A few years after Coke buys Columbia, Castle Rock Entertainment is formed in 1987 by five partners, including Rob Reiner.

The successful young actor and director. He'd been on the Hall and the Family and directed spinal tap, I think, in the Princess Brad. Great movies. And the idea is to be a studio by artists, four artists, really talent friendly, flexible and easy to work with. And funded by the big bucks from the Coca-Cola Company. This is the craziest thing.

So Castle Rock is just this little thing with five partners that needs to get off the ground. Independent production company in the Silicon Valley style we were just talking about. Right. It could end up being very, very valuable because they're going to own the forever rights to any downstream revenue after the first run on television of any shows that they make and any of the movies they make. But for now, it's just five guys. They find their way through Columbia Pictures to Coca-Cola and Coca-Cola invest $30 million at founding of Castle Rock.

So the studio that funded and created Seinfeld was itself Coca-Cola money. Amazing. Why do you think Jerry Drake's diet Coke inside? So at formation, Castle Rock is owned 60% by its founders, 40% by Coca-Cola. And part of this deal is that Columbia would get to be the distributor of any films and TV shows that Castle Rock made.

Which doesn't matter that much right now, but later on, you need a distributor in order to sell the syndication for reruns anywhere where you're going to put reruns. So it's kind of a nice thing to put in the contract right now. Hey, we get to be the distributor down the line of anything you make. In November 1989, right around the same time that Seinfeld is going to get started here, Sony buys Columbia from Coke, which means the distribution rights that Columbia had goes to Sony. In addition to a minority stake in Castle Rock itself.

Sony did get the minority stake of Castle Rock, but they don't control it. So that distribution right goes with Columbia to Sony, but the actual IP ownership stays with the independent Castle Rock. And this is all going to become very, very important to the financial incentives behind Seinfeld as we go here. Yes. So taking a step back here, you're probably like, why don't I need to know all of that and what's the bigger picture here?

Just think about the incentives. If you're Castle Rock and you own the rights, all of your returns are super back loaded. If you make a show, like great, I'm going to make a show for $500,000 an episode. You're only getting paid $400,000 an episode by a network to buy that show from you. You have the rights to lose money on every episode.

Right. Every episode you make, you're like, boy, I hope this does well, but you just keep losing more and more and more money every single episode. You don't make money until five plus years down the line. Again, much like the venture business when that show goes into syndication or the foreign rights gets sold or merch becomes big or home video becomes big and same for those distributors. The distributor doesn't do anything when a Castle Rock is selling a show to an NBC.

So that whole apparatus of Castle Rock and Sony is just sitting there on their hand saying, so when do we get to stop losing money? Meanwhile, the networks are sort of in this rental business where they are renting content to show it. I think the contracts usually say we get to show it once and show ads against it on a big night of television and prime time. We also get to show it one more time, maybe next summer or something when there's nothing on the schedule. But after that, all the rights revert to the IP owner, to the studio.

And so the whole business of network is just we're going to rent content that we are legally not allowed to own and we're going to bet that we can sell more ads than it costs us to rent. So they run a very short-term business while the studios and distributors run a very long-term business. I guess just like selling a value. They're betting on the equity value in the long run. Yes. So back to Seinfeld stand-up diary here.

Larry and Jerry, having to guarantee that NBC is going to make this thing, is so valuable to any production company they work with because the idea is this is going to 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 going to air right away on NBC, maybe it'll do a summer rerun on NBC, and then it's theirs. They get 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, et cetera, et cetera. Awesome.

But you don't know how big it's going to be. Is this thing going to be worth anything to sell to other networks and see it? Sure. Probably not. It's a one-time special.

Right. Nobody's thinking about this as a sitcom. It's a special. What this allows is Jerry and Larry via Shapiro and West, 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 nobody thinks it's going to be worth that much and there's no risk.

There's no risk. Jerry and Larry have all the leverage. They could take this to literally any production company in Hollywood. 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. They're 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 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 going to make billions and billions and billions of dollars. And Jerry and Larry are going to get 15% each of that.

And they have this very clever way of dealing with it. And interviews can someone will say something like, you've made X hundred million dollars and they never quite deny it. They say, that's preposterous. That's an insane number. 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 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 million and they go, oh, that's not the right number.

Right. Right. But you didn't say that it wasn't in the ballpark. It's just one of these funny, it's admirable the way that they handle it because it's so true to form. 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. So as best we can kind of figure out by what's been publicly reported. Ballparked at 65ish 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. 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% to Sony, 15% ish a little less because of the Sony delusion, each to Jerry 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.

It's a Larry and Jerry to go off. They start working on the script. But they have a tough time coming up with 90 minutes worth of stand-up material to do the expose, if you will, and how it gets into comedian sets for the special 90 minutes of stand-up material is a lot of stand-up material. It's an eternity. It's really hard to be funny for 90 minutes.

So as they're working on other bangin' their heads against the wall, they also realize that there does need to be some kind of semblance of a story, 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 30-minute sitcom pilot, which a standard 30-minute sitcom is only 22 minutes of actual content? You know, 22 minutes? Right.

That is a manageable amount of stand-up material that we can come up with for this thing. Doing it as a sitcom here that'll give us some story reasons, enough situation, situation comedies, sitcom characters into the scenes, we can say the dialogue, et cetera, et cetera. And the way that will make it all fit is, Jerry, what you want to 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, NBC, and 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 the 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 90-minute special into a pilot, essentially, for a sitcom. You're gonna change it from Seinfeld Stand Up Diary to the Seinfeld Chronicles. It's gonna be an ongoing chronicle of Jerry's stand-up material. Which, if anyone, like me, now has the DVD box set, you can watch the original version of the pilot that airs, not the edited version later, that is actually called onscreen the Seinfeld Chronicles.

Indeed, indeed. Once again, NBC somewhat surprisingly just says, okay. Jerry's a great quote about this. He says, every step of the way, we were waiting for somebody to come in and say, you can't do this on network TV. But nobody did.

Because it's just different than everything else that's on there. It's not a sitcom really. We just needed to borrow from the sitcom format to accomplish our goal of how a comedian gets its material. And it's not even happening in the comedy department. It's happening through these late night people.

They're the late night department, the special department. This is part of why they say yes to this change in plans, because it actually makes their life easier. Previously, they were gonna have to fit a 90-minute special into the calendar. Wait, you're telling me now, I only need to give you guys 30 minutes? Sure.

Whatever you want to do, no problem. So they sort of sail through NBC here. In a wholly unprecedented move, the net of this is that NBC's late night in specials department okay is a sitcom pilot. This has never happened before. The show just stays in late night.

And it's just a listener's understanding what we're talking about. The comedy department that has at this point what? The Cosby show, it has cheers, it has a bunch of hits. They've got a whole process for reviewing scripts and giving notes and working with the creators. And the late night department's just like, it's really easy to say yes, because it's even easier yes than the thing we already said yes to.

And they just get to skip all the comedy department checklists and committees. So NBC says okay, and Castle Rock, now the production company, and Jerry and Larry, like, well, all right, let's cast this thing. Let's go make a pilot. So Rob Reiner at Castle Rock suggests that they should look at a mostly Broadway actor at the time named Jason Alexander, the part of George. He felt, and Jerry and Larry certainly agreed that they needed a really polished, like really, Jason Alexander is an incredible actor.

They needed a really, really great actor to play opposite Jerry, because Jerry is not a great actor. He was about to win a Tony a month later. Yes. When Jason came in to read, they were like, this guy's unbelievable, he's perfect for it. Later on, Jason would sort of figure out, oh, this character is kind of Larry David.

He's not exactly Larry David, but he's loosely based on him. He actually thought it was a Woody Allen character at first. So he came in and sort of did a Woody Allen impression for George. Next, they need to cast Kramer because Larry has decided to write his eccentric neighbor into the script here for the pilot. But he's not calling him Kramer.

Just, yeah, Kessler is that right? I don't want to make it too on the nose. And also if we call him Kramer, then we're going to have to pay this guy or do some kind of right situation. So they call him Kessler. The funny thing is, eventually they realize, and this is so Larry David and Jerry Seinfeld.

They are looking at the page, they're saying the name out loud, and they just realize, no, of all the names we can think of, Kramer is actually the funniest name. It just sounds funny. Yes. There's something about it that sounds funny. And funny is the most important thing.

Everything else is secondary to that. We have to go with funny. And so they name him Kramer. And then of course, it's the best thing that ever happens to the actual Kramer because he has Kramer's New York tours in New York City. So they need to cast the character.

And Larry says, I know the perfect guy from my days back at Fridays. Michael Richards. And that's how Michael Richards joins the show. George Shapiro has this great quote. Michael Richards was standing on his head while he was doing his lines, a yoga pose.

And Brandon Tarnikoff goes, well, if you want funny, this is at the audition. This is how he's preparing to go in an audition for this role. I mean, again, this is so off the wall compared to anything that would go through the normal process at NBC. So then they need to cast the fourth character, a woman, the character of Claire, the guys, regular waitress at the diner played by Lee Carlington. There's no a lane in the pilot.

So cast Claire, they shoot the pilot and then they bring the NBC executives in the screen. And they're not sure. Interestingly, the comment that really sticks out from this session is that some of the executives thought it was to New York and to Jewish. Which is quite ironic because basically the entire origins of American comedy are New York and Jewish. But they didn't wear it quite on their sleeve the way that Jerry did.

I mean, this is they named the show Seinfeld. And it has this like, I don't know how to put it other than this very Jewish type of humor, the sensibility, the timing, the observational humor, the persnickittiness, the crankiness, the detail oriented, the obsession. It's a really good point. The Jewish tradition of comedy really was the main lineage of comedy in America. I mean, the Marx Brothers, George Burns, like, but basically everybody that came out of all of it was Jewish.

But they changed their names. They didn't wear it on their sleeves. It wasn't as obvious. I think the thing the NBC executives didn't realize is that here by the late 80s kind of didn't matter anymore. Everybody knew Woody Allen was Jewish.

He was the biggest name in comedy. The other point in this is nobody knows anything. Yeah. They would go on to become Seinfeld. And they're like, I don't know.

Yeah. So they tested it. They're like, we should proceed with our standard testing and feedback. We'll recruit a test audience to watch this thing. Right.

The practice at the time, I know this is super interesting. They would cold call. They had a research department. They would cold call a bunch of houses to recruit 400 households to watch a unused channel on their cable system at a certain time. And if you knew to tune in and you had the right hardware, you would tune in and then you would see the pilot pop on.

And then I think there's like nothing else afterwards. You're like just watching this one channel at this one time. The researchers then convene these people or call them and ask them a standard set of questions. It tested horribly. Horrible.

Like the network executives were just a foreshadow of how people in the world saw it. Some of the most infamous comments that came out of this is one, you can't get too excited about going to the laundromat. Which is where most of the pilot takes place with Jerry and George at the laundromat. And Jerry and George have this whole discussion about what it means that this girl who's coming into town wants to see Jerry when she's there and she's going to stay with them and how much should they read into it. And when he greets her at the airport, are they supposed to hug?

And she can hug him? Just over analyzing the crap out of the situation. But they're having the conversation while in a laundromat, which is where a lot of the feedback sort of focused. The other quotes include Jerry's loser friend George isn't a forceful character. Jerry needs a stronger supporting cast.

And why are they interrupting the stand up for these stupid stories? If the viewers liked anything about it, it was actually just Jerry's stand up. But even that didn't test that strong. The recommendation from the research department to NBC was if you're going to air this and then if you're going to green like this and you're going to do something with Jerry, it should be stand up and it should be better than this. My favorite quote from the pilot research report was no segment of the audience was eager to watch the show again and the overall pilot performance was where it is.

A week. And Jerry and Larry did not see this memo for several years, but once it was brought to their attention, they hung it on the wall of the bathroom on set. That's right in the bathroom in their production office on the set. So they do air it. They do air it in a time and day slot where the network notoriously burns off, not very promising pilots.

They air it on July 5th, 1989. Not a lot of people do them into television on July 5th in America. And with that, 99 times out of 100 in history, that would have been the end of the Seinfeld Chronicles would have gotten put out to pasture with many, many, many other failed pilots. NBC does not pick up the show for a season run that fall in 1989. Instead, NBC picks up two other sitcoms over Seinfeld and all the other pilots that they ran.

The Nuthouse and Sister Kate. You probably don't remember them. Yes, exactly. Just to prove your point, Ben, that nobody knows anything. That would have been the end, except that back in the late night and specials department at NBC, they keep thinking about this Seinfeld thing.

I mean, they love Jerry. They want to do something with Jerry. And they're like, yeah, I mean, everybody was worried. It was too Jewish. It was too New York.

But I'll be damned if it's not funny. Like, it was just funny. And even though most people didn't like it, there was a small group of people who completely got it. It's like any successful startup. You're not trying to be a seven for everyone.

You're trying to be a 9.9 for a very small group of people that you can then figure out how to get those super fans to tell their friends. There were people at NBC that were like, this is the future. This is what we need to do. We need to be in business with Jerry Seinfeld and this brand of comedy. And it was Warren Littlefield in prime time and Rick Leavwin in specials.

And so the two of them come together and they hatch a last ditch plan to give their little baby another chance. They decide, well, since we've been doing this out of specials, what if we just cancel one of the other one off specials that we were going to do and use that budget to place an order, a season quote unquote, order for this show that we love? So they cancel one two hour Bob Hope special that they were planning to do on NBC that fall. And instead they use that budget. They call up Jerry Larry and say, great news.

We are ordering a season of the Seinfeld Chronicles. Jay says, great. What's the order? Four episodes. Making it, I believe the smallest first season order in television history.

And didn't you talk to Warren Littlefield about this? Yes. Yes. So the quote from Warren about how this conversation went down. He said, I called Jerry to tell him the good news.

There was a long silence over the line. Jerry finally asked me, has any show in the history of television ever succeeded with just four episodes? And Warren says, I didn't know. And that's exactly what I told him. Probably not.

If anybody knows, it's probably the head of prime time at NBC. Yep. Jerry's telling Larry in the background is they're having this conversation. And Larry famously reacts to this with, that's fine. I think four episodes is all I got in me anyway.

It's the ultimate Larry David line. Larry David would go on to be the head writer of 135 Seinfeld episodes. Yep. Yep. So they got the order.

And I said, in other interviews, that he and Castle Rock were looking around for other buyers because they assumed that NBC was out, which is a fair assumption. Fox actually made an offer and guaranteed 24 episodes. But Jerry wanted that NBC imprimatur of a real network. Fox was also a startup network. Yes.

It was not Fox that you know it today as one of the major broadcasts that works in the US. Jerry has phrased it as it wasn't the major leagues. And I wanted to be in the majors. And so they went with NBC's four episode deal instead. Yep.

So I get the order. And NBC's like, we trust you, but there's some problems with this show. In particular, the worst scoring demographic in the pilot was women. Yep. Women don't relate to this show at all.

And usually what we do here at the network is we just add a character from that demographic group to the episode. So I know you guys have got clear of the waitress. She needs to be hanging out a member of the group. Yep. Which leads to the networks.

I think one, I think one good creative note in the history of Seinfeld, which makes the whole show work. You need a girl in this thing. But before we tell the story of Elaine, now is a great time to talk about our good friends at anthropic. Yes. And David, I want to start with that research memo about the pilot.

Yes. Viewers didn't really like the cast of supporting characters. They thought the scenes of Jerry and his friends just hanging around were boring. Not good. Yeah.

But in 1989, they weren't wrong. I mean, there wasn't really anything to come back for yet. The show that people couldn't stop watching that it would eventually become was really built out over those nine seasons of shared history. So all the things you know, Vandalay Industries, Festivists, every single time that Newman walks in and goes, Hello, Jerry, all of it gets so much funnier the more you see. Yep.

And anthropic just did the same thing with Claude. For most people, every conversation with an LLM has been like the sign belt pilot. You explain what you're working on, how you like things done. And the next time you sit down, it has no idea who you are again. Now their new memory functionality carries across chat and co-work.

So all of that accumulates no matter where you're working in Claude. And for teams in Slack, Claude Tag does this for your whole team. One Claude in the channel that's read every thread knows the standing instructions and can notice things nobody asked about. So the value basically just keeps building the more you use it. A conversation with Claude isn't disposable anymore.

It carries into the next one. And so if you want to learn more about how Claude can help transform your chats into tangible, memorable work, check out Claude.ai slash acquired. And if you are inquiring about enterprise usage, just tell them that Ben and David sent you. So adding Elaine. Yes.

Arguably makes the show. I mean, when you watch the pilot, you're like, Oh, yeah, there is a giant ingredient missing. And it's not just because the couches weird and Jerry's apartments weird. And like, there's an Elaine shaped hole in the show. Totally.

Elaine makes the show. And it's not just NBC's note of you need a girl. It's so much more than that. I mean, yes, adding a female character gives Seinfeld a lot more appeal to more demographics than the pilot did. The character of Elaine is also this incredible act of subversion to the network because by you need a girl in it, NBC meant give Jerry a love interest.

And that is not what Larry and Jerry are doing with Elaine. And I think it's really what establishes what Seinfeld the show is. Yes. Because if you look at every other sitcom, I bet NBC felt like they didn't even need to give the full note, give Jerry a female friend who will have an on again off again. Is there a flame here and then eventually end up together and give the viewers what they want?

Yes. It's Ross and Rachel. Yes. Yes. Eventually Jim and Pam, like this is the formula and the way that Jerry and Larry chose to interpret the note is literally, but we're not going to do any of that other stuff.

Yeah, we're just going to need a girl. So George Shapiro, the television has a great quote about this about what you need a girl means. He says, the network wanted Jerry and Julia to be married or dating. That was normal network thinking. Fortunately, we had two creators who didn't give a crap.

Jerry and Larry felt strongly that Jerry and Julia shouldn't have a relationship and they were ready to walk away from the show because of it. And the way that they pulled this off is, Elaine is a former love interest. Yes. And they kept it and it didn't work and they broke up. And so viewers, you don't even need to take your minds there because we already told you it's not going to work.

There is one episode where they explore. The deal. Yes. Incredible episode. But then after that, I think that's the end of the season.

They come back the next season. The whole thing is forgotten. They don't take it anywhere. These characters are not a love interest period. That episode, the deal where they re-explore the romantic relationship is even more subversive to the network because they do it.

Larry and Jerry do that episode and then they just never mention it again. There's no resolution. There's no, they continue. They didn't continue. There's no development.

There's no relationship. It's just that didn't happen. There's no one to be number one by throwing out the playbook entirely and going straight off of the thing that Jerry and Larry wanted to make with no reverence for the roles that you were supposed to do to get to number one. Exactly. So this is why, you know, when I said that the Elaine character makes Seinfeld what it is, what is Seinfeld?

It is emerging of stand up and the sitcom. Just like the whole development of the show. This is what it's leading to. Like a sitcom, Seinfeld, the show has continuity of characters, places, relationships across episodes, across seasons, across years of the show. You get to know these characters.

You know the apartment. You know the coffee shop. You can't help himself. Yeah. Yeah.

Every time you can count on them to do the wrong thing, to see the temptation and to give into the temptation and by creating these consistent characters, it helps have a framework for those jokes. What does stand up comedy not have continuity, consistency that doesn't exist in the stand up world. Okay. Now flip it on the other side. Like stand up, Seinfeld doesn't have any development of these characters and places and relationships.

Jerry is always Jerry. George is always George. Elaine is always lean. You can tune in any episode. There's no development of the relationship.

The characters they never learn anything. The places don't change. The apartment is the same. The coffee shop is the same. A situational comedy.

But the situation is static. Or I would say the characters are static. The characters are vessels for humorous situations. Whereas they call them sitcoms before that, but really what they were with these. They were dramas with jokes.

Yes. And Seinfeld drops that and just creates situations that are inherently funny with characters that are static versus needing to insert isolated jokes to lighten the mood of a dramatic situation that has a beginning, middle and end. And those dramatic situations, as we're pointing out with the network note, the unsaid subtext of You Need a Love Interest are almost always either romantic relationships or family relationships. And they develop over the course of the show and the characters grow and learn and change and come together. Seinfeld is so radical by saying, absolutely not, we're not doing any of that.

So one of the writers that I talked with for research is Jeff Schaeffer. And he wrote for the show in the later years. His comment to me was, the plot itself has to be funny when you retell it. That's how they know they're onto something is if literally describing the situation is the humorous part. And the best illustration of this is how Seinfeld episodes end.

They don't resolve the plot in a satisfying way. It's just like stand up when the joke ends. There's no consequences. It's just funny. Right.

So the characters find themselves in a tough situation, but there's sort of no funny arc remaining after that. That's okay. The show just ends freeze frame, bam, bam, bam, bam, bam, bam. You don't get to know how they get out of the jam. There's no continuity in the next episode.

They start fresh next episode. It's literally a stand up act. But the people are in the situations instead of the jokes being purely verbal. Yep. You led me right into the perfect Jerry quote about this.

He says, I personally believe that when Larry and I brought to the sitcom format, a 22 minute format was a stand up comedian structural sensibility. We didn't really have time to tell what the characters were all about because we had jokes to do. We weren't really storytellers. We became that, but only through that lens. The jokes.

It's so true. And the thing that makes it so universally appealing is that the characters they developed, we see ourselves in these characters. They represent a side of ourselves. We've all wanted to grab the eclair from the top of the trashcan, but we were straight. We're real people who move around the world.

We're complex. We have multi dimensions, but Seinfeld represents wish fulfillment. George has no restraint. George is an avatar of our worst qualities. You know, Elaine has a lot of them.

Kramer has our most insane qualities. The recognition of this very basic human element in these characters is surprisingly timeless and durable. All this comes together and crystallizes during this first season timeline in Larry's famous rule for the show. There's only one rule. Which I've heard this is not a stated rule.

This was more sort of like something that bubbled up later that they realized they all had a shared understanding around. But Jerry Larry, the writers, everyone had this ethos for sure. No hugging, no learning. Which again is the exact opposite of every other sitcom that had ever been made to this point. Right.

The characters never hug and make up. So in Full House, you know how the end of every episode would be Danny sitting down on the bed, explaining some law of life to his daughters. And you know, you did a bad thing, but you learned your lesson. Seinfeld is you did a bad thing. You got caught.

You lied about it. You dug yourself into a deeper hole. You learned nothing. We end the episode. You do it again.

Right. No one ever learns from their mistakes. And it provides this like perfect substrate for the jokes to happen. The same situations that they get themselves into. And I think I just want to reflect back on all this.

I think Jerry and Larry viewed it as respect for the audience. We don't need to spoon feed you what emotions you should be having. And you don't need to hug and make up and like put about everything. You get it. You're in on the joke with us.

The joke's over. You're a smart person who can figure it out. And at first, that leads to a very niche audience. That is not a recipe to have a break through season one or two or three. But that will earn the respect of some small group of people who are obsessed with it.

You're so right. I think that's exactly how they thought about it. And it's so ahead of its time. And it's why Seinfeld is still so watchable and relevant today. Because TV sitcoms, all that other stuff, the hugging, the learning, the emotional arcs.

It's all fake. It was all just fake. And eventually, thanks to cable and then the internet, audiences on mass eventually just kind of came to see that for what it is of it's fake. And Seinfeld was really great. We're not going to give you the fake stuff.

We're going to give you something that you actually see in your life too. That feels more like real life. Yeah, your friends and your family, they don't grow. They don't change. Right.

Right. The funny thing about all this is they got the green light for these four episodes. But Jerry and Larry did not think that NBC would actually put them on the air. Yes. The story I heard on this was they literally thought about these four episodes as we are making this for the dinner party that we're going to host with our friends.

And then after the dinner party, we're all going to gather around the TV and we'll pop in the tape at these episodes and we can say, look at what we made. It never made it on the air. But look at how good it is. And the fact that that's what they made and then that's what succeeded gave them this like terrifying amount of autonomy from the network because they did it 100% their way, 100% the thing that they wanted to make. And that's what people actually wanted, which if you're trying to exercise any measure of control as the network, that train is left stationed.

Yeah. Yes. The inmates were running the asylum from the get go. Yes. Especially with Larry running the shell.

So NBC amazingly does put it on the air and the scheduling team comes to Castle Rock and to Larry and Jerry and says, if you're willing to wait and have this run over the summer, you know, summer is usually the traditional downtime for networks where they don't have first run shows going mostly reruns. We could run it after cheers reruns in the summer. Now, you might say, why is NBC a broadcaster doing cheers reruns? The networks would get the right to rerun each episode once over the summer. And they would get the right to box out syndication for a certain period of time.

Yeah. So Castle Rock and Jerry and Larry are like, no brainer. We're going to roll this thing after cheers. Now, in the meantime, throughout the spring of 1990, ABC had launched another show called the Marshall Chronicles. Nothing like Seinfeld, but everybody started worrying.

Oh, no, if we now launched the Seinfeld Chronicles over the summer, we're going to look like a me too about the Marshall Chronicles over on ABC. And so this is how the Seinfeld Chronicles gets shortened to just Seinfeld. Drop the the it's cleaner. It's cleaner. Yes.

Yes. So Seinfeld goes on the air Thursday, May 31, 1990, premiering after the summer rerun of cheers and crickly that very same month, Brendan Tardikoff leaves NBC. He was the head of the entertainment portion of the network. So he didn't run like sports or news or anything like that. But everything within entertainment, dramas, comedy, like comedy, like comedy, like comedy, like late night specials all reported up to Tardikoff.

His successor is chosen Warren Littlefield, one of the two primary champions of Seinfeld just became president of entertainment at NBC, which means that when it comes to the next critical decision point in the young Seinfeld shows life cycle here of whether it's going to get an actual season in the fall, going to get picked up for real finally, it's now Warren Littlefield's decision to make. So the new episodes air throughout June and July and Littlefield of course, he loves the show. He wants to support it and Rick Ledwin, the specials department head is right there too. But they know they've got resistance in the network and yes, Littlefield can make the decision, but they got to build consensus here.

So Warren pulls over a guy from NBC research in Preston Beckman and says, you know the folks at Nielsen, the ratings company, I want you to go talk to Nielsen and see if you can get custom reports made for each airing of these new Seinfeld episodes. And I want you to get reports by city, by Metro area for each of these episodes so that we can have some data of whether this thing only plays in New York or whether it's universal. So Beckman does go to Nielsen and gets these custom reports and it comes back. There is no difference in audience retention from the cheers reruns to staying with Seinfeld in any major Metro area, the same percent retained in New York as they do in Chicago or Houston or Seattle or San Francisco.

And that percentage is pretty high. It's not 100%. Nobody retains 100% from cheers, but it's like, hi, most of the audience that is watching the cheers reruns sticks around and watches Seinfeld. So they're like, all right. I mean, the audience is not big.

Yeah, but it wouldn't be big for a while. But there's something happening here and there is something universal to this show. It's not just New York where this is playing. So end of the summer rolls around and now the decision has to be made at the network. What is the fall lineup going to be?

What are the new shows that NBC is going to pick up? And Warren has a quote that's in his memoir, which is great. He says, I walked up to the scheduling board and grabbed the magnetic card that said Seinfeld. I took it off the fringes of the board where we had our backup shows and I put it right smack at the center. This is our future.

Rick Ludwin smiled. No, that's the way it's in the memoir. Success has been fathers. The reality is I think probably because of all the internal politicking and horse trading for the schedule for the fall of the new season, they end up only picking up Seinfeld as a mid-season replacement. So half a season.

It's not a full season order of 22 plus episodes. We're not going to run into the fall, but we will slot you in when we inevitably cancel one of the other shows in the spring. It's a half-hearted pickup. So NBC comes to Jerry into Castle Rock and says, great, here's a 13 episode order. Larry goes to Jerry and goes, I don't accept this.

I'm out of material. What else can we possibly have already put? I've mined my entire life for all the best crazy situations that we could possibly put into these five episodes. I've basically scraped from the bottom of the barrel here. Yes.

true because there was way, way, way more material that Larry would go on to create, but it is illustrative of, okay, they, they got to bring in some fresh talent because these guys are not out experiencing the world anymore. Their heads down, writing a TV show, they need writers who are out observing the minutiae of the world to come and work with them. Yes, totally. It's also unbelievably unlikely that this happened. By the time Seinfeld gets picked up for this first half season order, it's over 18 months since they made the pilot, right?

And over a year since the pilot aired, but because of the way it came up in NBC and through the Specials Department and the belief that these guys had and had to keep metering out little chances to it, it broke through. So after they get the pickup, a little field in Ludwin already kind of have a sense from Larry and Jerry that they aren't going to take any more notes from NBC. So they make another NBC executive do it for them. They draft another guy to come be the hatch of man, essentially. To give notes that you know we're not going to be taken. It's a giant

waste of time. Yes, a guy named Perry Simon. Perry has a great quote in Warren's memoir about this. Larry and Jerry came into my office and Rick Ludwin was there too. I tried to wing typical network notes. Hey, you know, we need a little more story, a little more of this, a little

more of that. Larry and Jerry were incredibly gracious. Let us work on this. We'll come back to you. And then they walked out the door and I knew that they were just like F that. As if we're not

listening to a word that those guys are going to tell us ever again. Perry continues. And now I think thank God whatever they were doing, they were doing it right. It's a good thing they didn't listen. Incredible. All right. So what were these sort of early episodes? What did season two have in it?

There's some good stuff in there. They do the revenge where George quits his job and then comes back the next day. Like nothing happened. I guess Larry found some more stuff in his life to mind from material. Yes. They do the jacket, which is one of my personal favorites. Oh, where Jerry has to flip

the suede jacket inside out to go out in the rain and then with Elaine's terrifying father. Yeah, won't walk with him another episode that happened to Larry in real life because Larry was dating Richard Yates's daughter. Yes. And the character is based on Richard Yates. Yes, just like Elaine's dad in the TV show. I see. And then the big moment, the Chinese restaurant, that's in that first half

season. They never leave the lobby of the Chinese restaurant in this entire episode. That must have been so frustrating for the network executives to get the script and be like, are you kidding me? This is a single set sitcom. And not only is it single set, you're not even going to use the set that we built you on the soundstage. You know, this isn't free. Like we have to build a completely

new restaurant set for you to go shoot this episode. And it's totally absurd what you're doing. Basically, nothing's going to happen on episode because it's just people making phone calls from a payphone getting mad at the guy who won't let you get a seat. Is there really enough to move a story forward here in 22 minutes? And it turns out it was brilliant. Yeah, a defining moment for the show.

But this episode in production, NBC is freaking out about it. So they consider shutting down production that week of the show, which they would do from time to time with other shows. I mean, the relationship usually of the network with the show is the network can do whatever they want. And they don't like something they shut down production that week. So Rick Ledwin goes out for a walk with Larry around the lot and explains, Hey, we got some concerns about this one. What are you guys

doing? And the network has real time data coming in from their ad sales force, because they're talking about episode plots to advertisers trying to get them hooked on advertising. And imagine you have to arm your sales force with the whole episodes in the lobby of a Chinese restaurant. It's not good for NBC. Well, for shadow, imagine you have to arm your sales force with the whole episode is about being the master of your domain. We'll get to that one in a minute. But yes,

you know, Rick takes Larry out on this walk around the lot and Larry just blows up. He just lets him out. He's like, this is what the show is. This is this is my vision. If you don't like it, I quit.

Fine. You don't want to make it shows over. And nobody did this. No creator would usually the network says we don't like, Oh, okay, whatever you want. It's interesting because like, this is why Seinfeld succeeded, but the lesson here isn't be a blowhard and abrasive to everyone and insist that your vision is the correct vision and take no notes ever. Dot dot dot success.

That's not for most people in most situations, that is failure. But it just so happened that these two were comic geniuses and were right and then absolutely worked their tails off to refine these stories with a team of writers to produce just some of the absolute funniest material ever seen on television at the time. But like, what is the lesson? You hit the nail on the head. I was actually talking to wanted to little feel about this when we did research because nobody ever made a show like this again. Why not? It was so clearly successful. It was the right way to do it. And you know, there's

all sorts of reasons for your accuracy and people's careers and politics, etc. But he also made a really good point. Like, not every creator is Larry David and Jerry Seinfeld. Like, if you're gonna let a genius be a genius, you need to be sure you're working actually with a genius. And most people are not occasionally out there. There's a Nathan Fielder or a Tim Robinson, but like most

people with these totally ludicrous, absurdist ideas are wrong. It's another parallel with Silicon Valley, right? Most founders are wrong, but some founders are right. And when they're right, they're really right. Yep. So season two, the first full half season here, is great creatively.

I mean, the finale is the episode, the Busboy, where Larry introduces the interweaving story lines that all intersect and resolve at the end of the Grand finale. Yeah. So this becomes a hallmark of Seinfeld. Typically in sitcoms, there's an A story where it opens on the A story that's like 60, 70% of the story and there's a B story. And you kind of flip back and forth and like maybe they rely on each other, but it's pretty separate. What they figured out in Seinfeld, and in particular, I think the Busboy,

that season two finale is where they really catch their stride on it, they would give each character a storyline. So you have four concurrent storylines, which means you have to be really efficient in your storytelling. There could be no wasted words, no wasted minutes. And as the episodes progress, the storylines start to be interwoven in unexpected and surprising ways. And then they almost always converge at the end in like a violent, unexpected blow up that's unfortunate for everyone and ruins all of their lives concurrently and then cut to credits. And

that became this like real winning formula for them, which is hard. And David, you and I know this is hard as you're structuring story. It's really hard. You're kind of like squinting from it from all these different ways, especially as the story gets larger and larger, you're like, God, how do I introduce this here, but then pay it off later, but then not spoil it in the middle. And we're not even doing comedy. We're doing storytelling here.

We're doing nonfiction storytelling. Yes, yes. It is an incredibly specialized skill to be able to not spoil the interwoven place where the storylines converge, but make them all funny along the way and make all the payoff happen at all the right time. But it's a thing they figured out that no one else ever did before. I think I can tell you why. This is how every truly great stand-up routine.

Oh, yeah. This is where they're coming from. This is the DNA of the show. The callbacks to the other jokes. Yeah. At the end of a truly, truly great stand-up routine, there's a moment where you realize that

everything throughout the whole 20 minutes or 60 minutes always interwoven and building to this moment. Yes. And that's what they do with the TV show. No situation is there for filler. Nothing wasted.

Yeah. So that sort of takes us to what else makes this show different? We've talked about the fact that they are despicable characters, which is not like novel now. A lot of people figured out, you know, we can put Michael Scott on TV deeply flawed characters who aren't just like, oh, dad, that never learned from their mistakes. That's thanks to Seinfeld.

Right. Right. They do that now. You know, they're neurotic. Every situation that they're in is largely their own fault for getting into it. It's super relatable, but there's a lot of structural things about the show also,

like the interwoven plot lines that make it unique and that are difficult to pull off and that we're just novel. So a typical sitcom that has a two-act structure has seven scenes. That's it. In 22 minutes. Seinfeld, first of all, was two to three times as many. So you have

14 to 25 scenes per episode, but they just threw out the act structure. Right. Plots often don't have acts. Right. Yes.

Yes. On the set, they actually Larry originally wanted it to be single-cam instead of a multi-cam set up to basically resemble a movie. And for anyone who's unfamiliar, multi-cam is sort of a percenium style show where you have sets and you have four cameras and they're all catching the same action. You might be able to get away with only running the action once because you're catching it from every angle and you're just lighting it. It's going to be really bright, but you're lighting it from every angle so that any other four cameras and any kind of kind of works. Yeah, that's like theater. Single-cam is probably more expensive because you have to run

the action multiple times. You probably have to relight it every time you're shooting it from a different angle. So if you're shooting character A and then the next run through, you're going to shoot character B. There's a pause and relight step. It has kind of a more cinematic feel. NBC was able to push back

enough to say we're not doing single-cam for the show, but they brought in a lot of single-camera elements to it. So it did have more filmic lighting. It often used a pretty high number of location shoots for a sitcom where they would actually not shoot it on the stage that had the sets that were pre-built for Jerry's apartment for the coffee shop. Think about the number of Seinfeld scenes that are out on the street or in Central Park or in an airport or in some other location. Right. And that adds all this expense of packing up the whole cast and crew and getting them out

there, especially when you're shooting every week. They borrowed a lot from cinema that was uncommon on TV at the time. It's not overacted. I think a lot of sitcoms when I watch them today, anything pre-seinfeld, I'm like, oh my god, it's so overdone. Stop selling me on your fake emotion.

Seinfeld is not that. In fact, Jerry can barely act and he's laughing through the entire thing, but since it's the situation that's funny, it totally plays. And I think Jerry's chuckle is a cue for you to laugh along with him. Oh man, the scenes with Jerry Stiller, who plays Frank Gessanza, George's dad, they're so good. All the other actors are cracking up and you can tell.

God, he's so good. Jerry Stiller. There's no artificial laugh track. So this is like a purity for Larry and Jerry at Stand-Ups. If they didn't earn the laugh, they're not putting a fake laugh in.

Right from the live audience that was there. Every single laugh you hear on Seinfeld is the live audience laughing at that joke. Yes, even for the scenes that were recorded offset, they would play them on video screens to the live audience when they were there for the taping and then record the laughter from the screens. Yes, which has two jobs. One is record the laugh, but two is they need to know if those jokes are funny and they need to change the episode. If it's

not, it's like a real-time feedback mechanism because these guys come from stand-up. Yep, exactly. And then the last one that I didn't really realize until last night, I was watching a bunch of episodes and my wife and I were talking about this, it was kind of this light bulb moment for me. Seinfeld episodes are not live camera switched. They are edited in post. So normally what would

happen is at a sitcom, you'd be sitting in a proscenium, there'd be a live audience, the actors are on the stage, they're someone at a control board saying camera A, camera B, camera C, okay, now back to camera A, camera B going for the two shot, great, cut to camera B, like they're directing it. In Seinfeld, they do some live switching, but that's kind of to get a feel. All of the real work is done in post, which gives them the flexibility to do two things. One, to make all the cuts much tighter, the scenes can be shorter, you can get more scenes in and more situational jokes. And two is, it lets you tell jokes you couldn't otherwise do. So if you think about the episode, The Contest,

where David, you mentioned being master of your own domain, there's a joke where the way the joke is told is they're cutting to each of those characters and you're seeing them lay in bed and they're either restless and they can't sleep or they're sleeping like a baby. And that's the joke as it cuts around. That's impossible to do in a live switch show because there's no way to make those cuts in front of a live audience. You have to just go record all the material and then have a whole step after that of sitting there in a editing bay making the cuts be the jokes. And of course that adds production complexity and expense. It's kind of a way to get closer to the

single cam or film like ethos. That's exactly right. It's hard, but these guys are nut jobs, they're obsessive, they're purest and so they want all the flexibility and pacing of editing a movie, while also getting the benefit of what you would get with a live audience at a play that laughs and let you know if the joke is landing or not. And so they kind of threaded this needle and invented a novel production process to get the best of both worlds. Yep. Yep. So at the

end of that half season mid-season replacement, Seinfeld does get picked up for a real first full season, season three of the show. Still with kind of a cult following. Exactly. Starting to catch. Still on Wednesday nights, they're not on Thursday nights yet. But even at the end of season three,

that first full season Seinfeld was the 42nd ranked show on television. Seinfeld's got this cult following all this creative juice, but certainly not the centerpiece for the network. But season three would be the last time that that would be true and really that any of the actors in the show be they leads or guest stars could live a normal life ever again. But before we tell the story of how Seinfeld finally caught on and became the Seinfeld that you know it today, that was a great time to thank our good friends at Century. Yes. That is S-E-N-T-R-Y, like someone standing guard.

Which is exactly what Century does for developers. Century helps teams debug everything from errors to latency issues, basically any software problem, and fix them before users get mad. So David, I want to talk about the whale. My favorite episode, we're going to spoil it. The show gave us the single best root cause analysis story ever put on television.

Absolutely. Perfect illustration of why you need Century decades before Century was invented. I don't love it. In the episode where George pretends to be a marine biologist, he wades out to the beached whale that is in front of a crowd and comes back holding a golf ball that he pulled out of its blowhole. And he says the sea was angry that day, my friends. The actual root cause of the

golf ball being in the blowhole of the whale is Kramer from way earlier in the episode when he was hitting golf balls into the ocean. Nobody in the audience connected those two storylines until George pulled out the Kramer golf ball. And that is exactly what a real software outage postmortem feels like. There is the hero of the story who gets paged in the middle of the night and that they try to fix the issue, but then there's the golf ball. Some small change that shipped a long time ago that nobody mentally connected to the thing that is currently on fire.

The hard part is not noticing the whale on the beach is realizing that ah, it is actually the golf ball causing the issue. Yep. Yep. And that is what century does. It takes the thing your users are yelling about and traces it back to the exact change that started it, which release, who was impacted and the very commit or very golf ball with the developers name on it.

Then all that context goes straight into whatever writes the fix, whether it's Claude Coater or Cursor or Sentry's own agency, which finds the issue and opens the PR for human to review. This is why 200,000 organizations run on century, whether it's a solo side project, or the engineering teams at anthropic, Vercell, linear or GitHub, you can learn more about where software gets fixed at sentry.io slash acquired or click the link in the show notes and just tell them that Ben and David sent you. All right. So here we are now in the fall of 1992, heading into season four, the second full Seinfeld season. The show is this cult hit. It's maybe a little more

than that. Season three averaged 18 million viewers per episode. Yeah, but it still hasn't cracked in the Elson top 30, which is crazy though. I got to interrupt you that 18 million. That's not in the Nielsen top 30 today. You would never ever ever see 18 million people watching a single thing

no matter how good a show is other than like NFL and NBA games. I mean, there were four networks. That's what you watched. No internet. YouTube phones, podcast, short form video. I mean, cable had just started coming up, but most of

America's attention is still on one of those four broadcast networks in prime time. So 18 million viewers an episode not cracking the top 30 is nuts. I mean, I think we're still a year away from the mosaic web browser, right? 1992. Yeah. There's no competition. Yeah, it's a great time to be in

television. Meanwhile though, NBC, the network, that's a problem because cheers, the anchor of its whole comedy lineup is on its final season. And Warren and the whole crew, the executives there, don't know what they're going to do to replace it. So Time Magazine ran an article from this time. NBC, the one time kingpin of prime time has seen its fortunes turn sour almost overnight.

Its biggest hit of the 80s, the Cosby show, took an early retirement last spring. The network's last remaining top 10 hit cheers. We'll call it quits at the end of the season. Highly regarded younger shows like Seinfeld have not lived up to ratings expectations. The network is desperately in need of a miracle. And then on top of that, so Seinfeld is running on Wednesday nights

currently. You're going into season four. ABC competitor moves their big new comedy hit sitcom, home improvement to compete directly against Seinfeld in the Wednesday night slot. So for the first time Seinfeld not only has to prove that it can get a bigger audience, but it has to do so against a big challenge, a direct competition in the same time slot from another network. Yep.

And home improvement kicks butt. So by mid season, home improvement is pulling 28% share of audience in its time slot. And Seinfeld is down at 17. Not great. And doesn't feel to me like the future of the network. I mean, the 17% if you're thinking, Oh, 17% versus 28%, they're like a close

second or something like that. They got so much of it for free. It's like, if you're going to turn on your TV, there's four options, more or less that people are actually watching this time slot. So it should be very competitive. Larry and Jerry, though, and especially Larry, they don't care. They're not making

the show for the ratings. So this season, season four, they just go on like an all-timer. So they start with, I think the first season long meta arc ends up becoming a show long meta arc, where they have NBC, a fictional NBC, ask Jerry in to pitch a TV show called Jerry, called Jerry, with his other name, and he and George come up with the idea of a show about nothing to pitch at NBC. That's the first episode of season four that then continues off and on through the whole season. And he often on is important because each of these episodes still can stand on its own. You don't

have to be invested in the story, the multi episode season long arc in order to get it. Yeah. Episode seven of season four is the bubble boy, another classic. I'm not sure you could make that now. Like, if that was actually a news story right now, making fun of the bubble boy that everyone is writing articles about is completely off limits.

Well, speaking of completely off limits, that brings us to the critical midpoint of the season, where everything changes. Episode 11 isn't the outing also in season four? Yes, but later after episode. I see. Also, so good.

Not that there's anything wrong with that. Not as good as episode 11. Not that there's anything wrong with the outing, but it's not as good as episode 11, the contest. So, oh, man, we've alluded to this, but for anybody listening who hasn't seen or heard of this episode, this is a master of your domain episode with the four characters making a bet to see who can go the longest. The episode opens. George walks into a diner and the opening line that he gives Jerry,

Elaine and Kramer in the booth is my mother caught me. I can't even keep it together. Just talking about the episode. They don't need to do much from there. They go the entire episode without saying what they are having a contest to try not to do. There's just this giant, unstated elephant.

You know exactly what the elephant is the entire episode. And yet, it's perfect. It doesn't break any rules, but they break all this new comedic ground. So, apparently, like all are almost all great Seinfeld episodes. This actually also happened to Larry. Of course it did.

And Larry, even Larry was scared of this episode. He would have been thinking, it's too much. But finally here, by season four, they've got enough confidence and enough, you know, just no fear attitude. Larry's talking to Jerry and says the idea. And Jerry says, that's funny. Let's do it. So, they write the episode to them in secret. Usually what they

would do in their office on the set, Larry and Jerry's office that they shared together, they had a whiteboard. So, if you watch the Seinfeld reunion on Curb, you're in enthusiasm, that's in the office, you can see the whiteboard. And on the whiteboard, they have all the plot points for all the characters and the candidates, etc. So, anybody could come in their office, the other writers, the M.C. executives, they'd see what's on the whiteboard. They didn't put this one on,

they just wrote it in secret. I don't know if they put decoys, that would be even better. Word did get out though. Well, so, the story continues. So, they have it in secret all throughout the writing process. And then it gets to the table read. So, the way that we could work

was the cast would do a table read of the script first, and then do some rehearsals, and then they would shoot the episode. This is pretty close to filming. You're well into production week at this point. They bring out the script. And M.B.C. is just like, oh my god.

We're going to talk about the full schedule, the weekly schedule of making a sign for the episode in a few minutes. But know this, when you're at the table read, you are six days from shooting the episode 4 reel in front of a live audience in studio. You're pretty close to the point of no return. Or as close as Larry and Jerry could engineer getting before revealing what they were doing. So, the broadcast standards department at M.B.C., which is the in-house sensor that is responsible for keeping all of M.B.C.'s programming up to broadcast standards rules. They, of course, hear about this

right away. They're just losing their minds. And the woman who runs this department, their name is Dr. Rosweinman in New York. She calls up Warren, and is just apoplectic. And Warren's like, well,

it is Seinfeld. It's the guys. They don't say the word. It's funny. And somehow, I don't know if she was a fan of the show, and she got it. She said, well, all right. We're going to keep a close eye on this.

Like, we could pull the plug at any time. But in this case with this show, it might be enough that this show has packed with its audience that we can get away with this. This is unbelievable. Because broadcast standards really has two jobs. One is, are we literally going to fall a foul of any FCC regulations where we will get in trouble as a network? Two is, is there going to

be any blowback on our network where it hurts our brand? People don't like us anymore, advertisers run, things like that. And if you're not running a foul of one, because no words are coming out of your mouth, then it's really just about it. The question is only number two. Yeah.

Right. Do we think the audience will love or hate this? I think it's a big risk, but a very perceptive one to be like, Seinfeld actually has cultivated an audience where this is entirely okay, especially done this artfully. Yep. So broadcast standards lets it through.

And then sales calls up. They're like, are you out of your mind? We have to tell the advertisers what their spots are going to run against. And Warren says, all right, well, let's let them keep going. We'll get a rough cut of the edit before we have to put it on air. So the rough cut comes in,

they give it to sales, sales shares it with the advertisers, they come back and they say, we've got a bunch of advertisers that are going to pull out. They're not okay with this. We're going to have to cut the rates for this episode to backfill to get enough people in last minute enough new sponsors to fill the episode. Warren says, okay, how about this? There are these cable networks out there, MTV's out there. They've got this same kind of audience. They're killing it with a bunch of

alcohol companies, the sponsors and Nike sponsoring them. What if you guys go to all the advertisers on MTV and say, hey, we've got an opportunity to get you into Seinfeld this week? Which they do, and they fill the episode. That's how sales allows it to go through. For all the advertisers that didn't pull out the regular sponsors that stuck with the episode, they end up having leatherbound copies of the script, printed, autographed by the cast and sent out as a thank you for sticking with us. And then the episode airs, there's no protest. It's great. It becomes the first

catchphrase moment for the show. Master of my domain, are you master of your domain? Yep. It completely changed the rules for Seinfeld. And it cemented Seinfeld as a water cooler conversation show.

Yes. This was something you were going to share with your friends. You sure as hell, we're going to talk about this the next day. Yeah. So many years later, in 2009, TV Guide did a ranking of the greatest television episodes of all time. This episode was ranked number one. Yeah, of course. So have they moved to Thursdays yet?

At this point? No, no, they're struggling. They're getting the pants beaten off of them by home improvement here on Wednesday nights. This is like the crucible moment for the show. So right after this is when NBC makes the decision, they say, all right, this is magic. We were right about this show

that it's just special. We're going to have to bet on this. We're going to make this our future. We're going to move it to Thursday right now. We're going to air it after Cheers.

And then when Cheers goes off the air after this season, Seinfeld is taking our top slot. If it performs, this is a production. Which of course, Larry David, he's furious about this. Yes. Yes. His quote is, if they didn't watch us on Wednesdays, I don't want them watching us on Thursdays.

We've earned this weird niche audience. That is our people. And you're just about to blast us out to the mass public. Just going to go right from Cheers into Seinfeld to get hit by a mental bus. Yes. Famously, that was Larry's reaction. And equally famously, this is why they were such a

great partnership. Jerry's response to NBC about the move to Thursday night was, thank you very much. We will take the new time slot. Yeah. Good business decision. Yes. It is interesting thinking about

Larry's reaction here. So part of it is like just as purist, because he's a purist in so many ways. And he's got the element of George Costanza. He's not as pathetic as George's. No, I think that's a fairer. They've amped up a pathetic dial to 11. But he does have the sort of duality in him that

George has, which is thinking he's the greatest thing to ever watch planet Earth. And George is not, but Larry is, but coupled with extreme self-consciousness, self-loathing, and self-doubt. Yes. And so to tell Larry David, we're going to promote you to this giant spot, it's like, no, no. If people truly loved us, they would have sought us out and found us. I don't

need these people who aren't going to do work to watch my excellent, perfect television show. And I think it is true. We think about this for a lot. I think there's a business strategy angle to growing slowly through word of mouth. It makes you more durable when you grow slowly through word of mouth and have a core of extreme fandom versus quick mass exposure. It's like the quicker you go

up, the quicker you go down. Whereas I think Seinfeld, taking four seasons across five years to break through is part of the durability. There was a real core to explode out from. Absolutely. That is all true. And once you make the contest, you can't go back. You've got to go

to Thursday night. You've got to be in the big leagues. There's a landmark moment. Okay. So I never understood why Thursday nights were such a great business before, or why this was such a big deal for TV. People always talk about the Thursday lineup and I grew

up watching friends. When I watched Seinfeld, it was more in reruns because I was born literally the month that the pilot came out. So to me, the whole arc was basically before I was of Seinfeld watching age. I've now seen every episode, but mostly in reruns. So for me, friends was the anchor NBC show on Thursday night and I kind of knew Thursday was the biggest night. But why? Why? Why is it different

than Tuesday? I get why it's different than Friday, Friday, Friday, and Saturday and Sunday are kind of about sports or going out or living your life. But why are we discriminating between days of the week? It was your last chance to reach audience before the weekend. So if you're launching a movie that's going to come out on Friday, you need to be advertising. If you're launching a product where you want to

drive people's stores over the weekend, if you're trying to hit consumer messaging before some set of weekend activities, Thursday night was your last shot at it. And it was the most important for recency bias to land a message. If you're NBC itself and you want to advertise that week's NFL match up, yes, it is the most important night. And the Thursday night lineup on NBC was more profitable than all of the other nights combined. What? Yes. It's that outsized?

Yes, it was that outside part of that too was just because NBC was such a powerhouse on Thursday night. That's where their marquee shows lived. But wow, because you have the same amount of ad inventory you are selling each weekday night and Thursday's rates were high enough that it dwarfed the sales for all those other nights. Wow. Yes. Combined. Yes. So Seinfeld moving into this

hallowed time slot is huge, huge. And boy, does it work. So the first week that Seinfeld moves to Thursday is in February of 1993. NBC, by the way, had had the Super Bowl in January 1993. They used promos during the Super Bowl to announce the Seinfeld move to Thursday night.

So they went big and had they coined it must see TV yet? No, so they rolled out that must see TV slogan for Seinfeld as the anchor moving into Thursday night. It was what Seinfeld cheers had ended. So I guess Frazier was the spin office just starting, I think, wings. Right. Mad about you. There's a whole

sub drama of wings was the golden child from the comedy department at NBC. So the actual sitcom department, they were always trying to push wings over Seinfeld. But NBC does something really smart here branding the night as must see TV and creating like a network identity around NBC rather than just marketing the shows themselves. You actually ended up with this affinity for the network. I mean, for me growing up, NBC meant something because of this, like none of the other networks meant anything.

They just had stuff that I watched on them. And that continued. I mean, if I think about what came after Seinfeld friends, the office in between the two you had Will and Grace around the time of the office and later you had 30 Rock Parks and Rec. Yep. Yep. There was like this whole NBC comedy powerhouse.

Yes. Yep. And a lot of it using SNL talent. Yes, which is also NBC, which is also technically true Seinfeld. Yes. So back to the actual move here in February of 1993 when Seinfeld moves from Wednesday

to Thursday, the shows ratings rise 57% and it goes from the 45th most popular TV show on air to the 5th in one week. Now, obviously, huge part of that is the power of the time slot, but it's also after the contest, it changes everything. You can't go back. And the thing that was shocking, even to everyone at the network was if you put something after Cheers, it's going to get good ratings, but it's going to be a drop off from Cheers to that show. It's just a matter of how much drop off.

Seinfeld actually gained audience over Cheers that they retained the Cheers audience and then new people tuned in just to see the next Seinfeld episode. This is the puns. I mean, now here at the Big Leagues first run, Thursday nights, it retains all the audience and then by the end of the season, it's bigger. It's crazy. It's the New Anchor Show. It's the New King. Larry has asked about this in 1993.

The LA Times does an interview because I think viewership hit an average of 30 million viewers per episode by this point. And Larry's quote is, this probably means that a catastrophe is imminent. Something terrible will emerge from this. I really know how to account for it. Oh, man. Oh, man. Well, a catastrophe was not imminent because the season continues. They just keep

crushing it, doubting. Episode 17, not that there's anything wrong with that. Episode 20 is the Junior Mint. Of course, which really starts to foreshadow the absurdity that would come into Seinfeld in later years. This is the great example of the concept of the episode is a joke in itself, like the absurdity of Jerry and- Great. Jerry and Kramer.

Get invited to observe a surgery from like a balcony above the OR and they're eating juniors and one of the juniors gets fumbled and actually ends up falling into the patient. Which, fun fact, using the cameras at the time, the cameras would not have picked up a junior mint. So they actually used a York Peppermint Patty for this low-motion tumble. Great trivia. Great trivia.

And the cultural relevance, the catchphrases beginning with Master of Mind, Domain, Master of Your Domain. After that, we get yada yada yada, double dipping, shrinkage, Festivus, I mean, all of that. These are all words and phrases that Seinfeld invented. And all this is hitting here as we head into 1994, 1995, right as the internet is coming online. That's right. According to the book Seinfeldia, which is a great read, there were a bunch of

early online communities about Seinfeld. Analyzing each episode, the week it comes out, it was crazy. Steve Case would talk about, head of AOL, that AOL's main competition was Seinfeld. They would never see AOL connection numbers dip, except when Seinfeld was airing. And then they would go right back up as everybody came on AOL to talk about Seinfeld.

And you know who's talking about stuff on the internet? Urban, well-educated, affluent, young males. I mean, it was the most perfect timing ever that you could imagine for this type of show to have that moment of cultural relevance with the contest, move to the Marquis lot on Thursday nights on NBC, and then have the internet hit, all in quick succession. It's amazing. So this is all going really well. But what's going on inside is basically killing

the people who are making it. The obsession that is going into this. The like every word and the writing and the rewriting and this obsession with the joke, nothing else matters. It is these like real auteurs that attracted other people as psychotic as them to obsess with them. And they needed to, because at this point, Jerry and Larry, after five years of existing in writing a television show, they're not experiencing the real world anymore. So they need to keep bringing in young writers

because they need to mind those people's brains for stories that happen to them. They need to find like many Larry and Jerry's who still live in New York, hopefully. So they get some element of that. But what ends up being an amazing bed to recruit from is the Harvard Lampoon, where it's these young comics, super smart, except that they actually are experiencing the world. So every year for a while, they were bringing in a completely fresh crop of writers because they would basically steal all the best material from everyone's life. And then move on to the next one. I mean, Festivus was

a thing from someone's life. George's whole thing about, is he going to put a tip in the jar when they're not looking because he doesn't get credit for the tip. That's a thing from someone's like, you kind of need all this fresh blood to come in and get material. Okay. So how did it work to actually produce the weekly Seinfeld episode? Thank you to Alec Berg and David Mandel for

talking us through this. They were writers on the show, and then there's some great interviews with Jason Alexander that share a lot of the detail too. So the typical sitcom schedule would start its life on a Monday with rehearsals leading up to a Friday shoot. And on Seinfeld, they realized, well, actually we could start the week on Wednesday and shoot the following Tuesday. And when the actors go home for the weekend, that means we can get some extra time coming in and rewriting the episode to make it better, which is fine since then they weren't married enough kids, like they had no personal life to speak of. They were obsessed with this. So that's just what they did. So day one,

it starts with a table read. Everyone is there. There's producers, writers, NBC executives, Castle Rock representatives. And as Jason Alexander put it, they would then have a big pow wow after table read, they would give their notes, then Larry would quit, then the notes would be thrown away, then Larry would agree to stay and then he would come back tomorrow. So that's a very let's day one. And the actors start trying to do some rehearsing, but it's all going to change

so materially. And they kind of know it. So they're not taking that rehearsal that seriously. It's just like familiarizing themselves with the material. So Larry and Terry would then go to a bunch of rewrites overnight. The scripts don't really have stage direction. It's just dialogue,

because they're comedians. That's what they write. And so then the actors had to figure it out. So Seinfeld had this really unique collaborative way where the actors would stay on set, even when it wasn't their scene, so they could work through it together and they could trade. So actually, I think it would be more funny if Kramer is at the fridge right now with the door open going through, or then maybe George is and trying to figure out the blocking together. So then day three,

more full rewrite overnight, more rehearsing, still just internal to the team. The network's not there yet. The actors are there. The writers Larry, Jerry. This becomes more or less the shape of the final script. Then at the end of the day, NBC and Castle Rock come in, they watch a full run through.

They give their notes. As Jason Alexander says, Larry would quit. Their notes would be diminished. And Larry would come back. Day four is camera block day. So this is when the cameramen come in

and start learning their shots. Who's taking what? The episode is sort of finalized enough to figure out what shots do we need and which cameras are we assigning? It's a very difficult thing, because it's not like the four cameras just sit there and don't change. Let's say you're camera one. You're

responsible for a wide shot. It comes off you and goes to camera three. You have five seconds to scramble, shift, zoom, get a two shot on two characters, because then when it flips back to you, that's where you're supposed to be. So it's this like real ballet and art. So they all rehearse as a unit, the cameramen actors, because the next day they're in front of a live audience. Yeah. On day four, also, especially

as the show got bigger and they were doing more on location filming where they'd shoot outside the permanent sets that the coffee shop and Jerry's apartment, they do things like go to the fake New York street on a different lot to do the sort of outdoor street shots or actual filming locations like the cemetery where George visits Susan. Oh boy. Yeah. Then day five is rehearsal in the morning. Then you bring in the live audience to film in the afternoon. They'd run the entire show in

chronological order. And if there's any scenes that were not on those permanent sets, because the audience is just sitting there in front of the coffee shop and Jerry's apartment in big bleachers, they would bring down a screen so the audience could watch a rough cut of what was shot outside. And that way they could record those laughs just like we talked about earlier. If they didn't get a laugh, do you know about what they would do David? If it wasn't going as expected, even with the live audience there, they would pause production. They would huddle all the writers and the actors and the

director on stage. They would bring out a live band who was just like waiting on set to entertain the audience. And they also had like comics and stuff warm up the audience. And they would huddle and try and figure out like a better joke. Yeah. What happens when you write it live.

The best example of this is in the marine biologist. So the episode is supposed to end with George walking into the ocean. And if you've seen this episode, that is not the end. This is the best story. It's so good. They bring down the screen to show the on location shot.

George walks into the ocean. Audience is kind of confused. There's been like a lot of build up, but there's no joke here. So they all huddle. They come with this idea for George to have the additional scene in the booth where he does a monologue. And then he finally produces the golf ball out

of his pocket, which is of course tying in a plot from earlier in the episode where Kramer sitting golf balls into the ocean and that golf ball turns out to be lodged in a whale's blowhole in Georgia storyline, which is why the whale needed a marine biologist in the first place that George was pretending to be. So it's so good. Larry goes off after their huddle and he writes a full page monologue on the spot, which Jason Alexander tells Larry, yeah, I can do that. I'm a Tony award winning actor. I'm a theater actor. This is put me in, coach. This is what I do. Give me a moment. It's already late at

night here at this point. Yeah. He memorizes it, performs it on the spot. It's incredible. It's the first time it's ever been read. There was no rehearsal when George goes, the sea was angry that day, my friends.

Oh, so good. It gets this giant laugh. And then of course, when the laugh finally dies down after he produces the golf ball, Kramer looks at him and goes, that title is to you. Hole in one, huh? So this happens. And then the next day, they come in for a table read.

Yep. Not seen. Not stop. In parallel to this entire process is the pre production where all the writers are, you know, some paired up in groups of two, but often just alone in their own offices, writing the next week's episode, the week after that, the week after that. And then, and Larry and Jerry are working with them and getting ready for a table read. But like, how are they working with

them? Because they're also full time in a seven day work block to produce the current episode. It's crazy that no wonder they're just kind of looking over outlines of the next week and the week after the white requires so much rewriting week of is because it really hasn't gotten, especially Jerry's attention yet. Yeah, the Seinfeld star is burning brighter and brighter and consuming everybody within it in the fusion reactor at its core. Yes. Which is a good time to flip back over

to the business side of Seinfeld. Because also right at this time, after the move to Thursday night, after the huge success, after the internet starts to come online, Seinfeld, it's syndication. So Jerry's quote to the LA Times here is, we'll be in syndication next year. And that will probably help us further the same way it helped cheers. Most people are still just now discovering our show. Most of the audience watching the show

on Thursdays have not seen us before. They're new to us. There's 60 some odd episodes they haven't seen. Yep. Ooh boy, I'm aware those 60 episodes going to be worth a lot of money to the ownership group that we discussed earlier in the episode. Because Seinfeld is basically the most perfect

syndication show ever created. Because of the no hugging, no learning element, no character development, no relationship development, you can tune in anytime to any episode in any order. It doesn't matter. You're going to get a full editing experience. And because these characters are just kind of vessels that you don't really need to invest in their storyline, they're just like mirrors of the worst part of ourselves, the situations provide the comedy. And so it's a very internationally relatable show too in a way that not all comedy

has. Yep, totally. So why now? And what exactly is this business of syndication? There's sort of a magic unofficial number for TV shows back in this time of 100 episodes.

That was when you entered into syndication. And the 100 episode thing kind of stems from, you have a large enough number of episodes to demonstrate that people liked the show, and there was familiarity with it or you wouldn't have continued, and that there's a big body you can license to someone to show because they want to buy your 10 episodes. That's not interesting. They want to buy a big block of them. And so syndication for those not familiar is basically any time a show gets licensed to another distribution option besides the primary first run TV network. And essentially those options are international off network, which this is the

biggest one for the longest time. I did not understand how this worked. When NBC buys a show, they're buying it directly from Castle Rock. But once that enters syndication and the reruns are going constantly, that has nothing to do with NBC. Yes. That is just the local affiliates.

And the local affiliates, you know, it starts with a K or a W, it's a four letter station that's broadcast over the air in your city. Yeah. And it might be a NBC or an ABC or CBS or Fox station. Right. But they only take the networks programming during prime time or sporting events, etc.

The rest of the time they have to go find their own programming. So either they need to make it or they need to go buy it directly. And there's like a thousand of them. And so this is where Sony actually does something. This is where the distributor matters. They earn their keep now.

For off-networks indication, what you're really trying to figure out is how many of these individually owned local TV stations are willing to buy my 100 episodes and at what rate. And so that is how off-networks. Then there's off-network cable, same thing, but cable stations. Fortunately, there's many fewer cable stations than there are local TV affiliates. And then in the far future, but it didn't happen yet, is a subscription video on demand or streaming, which would become a very, very valuable part of syndication. But the interesting thing about the TV business is just how large

off-networks indication and streaming syndication could be relative to the original first-run business. Because if you think about what does it actually cost to make a Seinfeld episode in season one, probably less than half a million dollars, probably less than $400,000. You're not paying the stars that much yet. Production costs aren't actually that high. And so then what's NBC going to pay for it? $300,000? 80% ish of whatever that number is, not a lot of money.

So let's look at season two, for example, 12 episodes. That probably costs somewhere in the five to six million dollars to produce, which means that somewhere in the fourish million dollars for NBC to buy. It's actually like a small thing. But those 12 episodes, when they're sold later in syndication, can fetch huge sums of money, especially if it runs for a long time, because the rights can be sold over and over and over again. And the most important thing is that group, David, that you were pointing out that sort of cap table of who owns the show, it's a totally different split from who makes the money the first time around. The first

time around, there's all these people you're paying on salary, especially the actors. The second time around, the people who are participating in all this syndication, it's that whole waterfall of who actually owns the show. And this is back to why Larry and Jerry got the most valuable deal in television history, because they got huge amounts for creators in that backend waterfall. And then that backend waterfall would be billions and billions of dollars. And this is where it all starts.

At least reportedly. Again, this is like a funny thing about doing this versus covering public companies. It's like we're relying on some reporting done by a few new outlets over the years. But I think we have to take out a face value. Yes, but surely billions of dollars have gone through this waterfall. So yeah, we sort of joked about Sony slash Columbia earning their keep in this

first syndication cycle, which is just for local broadcast affiliates. They can't take it to cable yet. Sony sells the show to a record at 224 local TV stations across America out of the thousand TV stations total. So basically one station in every market of the country taking the exclusive local rights. And that generated an aggregate sum of $500 million in revenue, actually over $500 million in revenue in a single event here in 1995. And that was just for the first five years syndication

window and only on local TV affiliates, not even on cable yet. Yeah. And it turned out that those local affiliate stations that were paying all that money for Seinfeld, actually we're getting a pretty good deal, because all of a sudden reports start popping up as Seinfeld entries in syndication, where stations that would run Seinfeld reruns would end up waiting the time slot in their local they would be live programming on other stations at the same time. So let's say your local affiliate TV station in Buffalo, New York, you decide that you're going to run Seinfeld reruns during a particular time slot when the other stations in town are running local news. Seinfeld beats the local news. It's the audience of people who never got to watch it on network, because it only ever

aired twice. Like you missed a big episode, let's say you missed the contest, you were working the first night and then you weren't around because you were doing summer travel or whatever. The only chance to catch it is in syndication. And that's a thing that everyone talked about. That could be a marketing event if you were a local TV station trying to drive a bunch of attention. We're going to air

that episode. Right, you could mark it that you were going to be running the contest on Tuesday night at 11 or something like that. Sounds way more compelling than local news to me. Or whatever other local programming, I think we'll have Fortune. There were a lot of like game shows that would be I think the phrase is first run syndication that would skip the network altogether and be produced directly to sell to the local affiliates. Actually, Oprah was this. Yes, we talked about this on our

episode. And just to make it even more fitting, that same year in 1995 when Seinfeld hits syndication is when FinCin gets repealed. So the door is now slammed that no other shows are going to have these dynamics because the networks now are going to own their own shows. And this is going to play out over broadcast television a little bit. And it's going to play out big time in the streaming era, which if you're Castle Rock, it's a good time to cash in your chips because you have this super valuable library which you own, you actually own it and it's guaranteed to make all this money in the future. And the regulation that was in place that let you make future shows, you have no idea if you're

going to be able to sell the next hit show to NZ, they probably should make it in house themselves. So this is a very good time to sell the company. So Castle Rock sells itself to Ted Turner and TBS here as this is all going down. It's a little earlier to summer 93. But it was when it was announced that the FinCin rules were going to get repealed even though it went into effect in 1995. Castle Rock

sells to Turner. It was $100 million in cash for Castle Rock owners plus another 300 million or so in paying off the outstanding debt. So the total out of pocket that Turner paid for Castle Rock, which owns that huge share of Seinfeld's profits and a bunch of other great stuff was about 400 million. What an unbelievable steal to get the Castle Rock library for that. And of course that happened before the actual sales of the first syndication cycle for Seinfeld. Right. Right. Also, isn't there a wild story that Steve Bannon

was an investment banker on that deal and took some of his commission in equity on the Seinfeld waterfall? The details are a little bit murky on this but I have seen it reported that Steve Bannon still gets royalties from Seinfeld's syndication. Yeah, because of this deal. Wow. Wow. So Turner and TBS buys Castle Rock and then they turn around and sell to Time Warner.

In all this consolidation that's happening, the net of which is that Castle Rock and the largest ownership slug of the Seinfeld waterfall ends up in the Warner Brothers library. All right. So then you said now is a great time to sell. In the moment, yes for Castle Rock. But actually, even if they had no viable future business from Finston ending from Finston ending, they should have waited because the value of the Seinfeld waterfall once syndication hit was about to become way more than the $400 million that they paid for it. I'll spoil the ending for everyone.

We're pretty sure that Castle Rock, if you work through the whole waterfall, made somewhere between two and two and a half billion dollars on Seinfeld's syndication over the years, but they captured almost none of that because they sold the entire entity and so was actually Turner and then Warner Brothers, the IP's ultimate resting place that would have received the lion. That's the lion, sure, of those proceeds. So I will revise my previous statement. Castle Rock absolutely should not have sold, but no one could have known that Seinfeld would go six syndication cycles and be as relevant as ever three decades later. Yep.

But importantly, Sony keeps the distribution rights. We'll come back to that when we get to streaming in a little bit. So that was the business story of Seinfeld from 1993 to 1995, culminating in that first syndication sales cycle where Sony generates an astounding $500 million in revenue that hits the, so to speak, cap table. Right. So he gets there, cut off the top of that, but then there's probably 400 plus maybe $425 ish million 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. And then the next year, in 1996, Larry leaves the show.

Honestly, it's hard to blame anyone after walking through the intense pace that they've been working at for six years now. Well, yes. And yes, I think that is the reason Larry left the show. He was totally burned out. He got 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 one-time payout now. He's in 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 non-acting creator lead writer is not drawing a giant paycheck on a per-episode basis in making a show that you own the show. So you're expected to make your money on the back end, which is going to happen whether or not he makes any new episodes. Again, to use a startup analogy here, this is like the company went public and the lockup ended.

Yeah, that is the right way to. Yeah. There's a lot more value you could build, but you're going to have a life-changing event. Yes. But for the show, this is brutal, because everyone else was kind of just an input to Larry in the writer's room. And Larry was like,

we heard him referred to as the CPU. 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.

And like Jerry was there as the co-processor, but he's also starring in the show. Oh, Jerry was not available to play Larry's role, because you can't have a lead writer who is also running the whole show as producer and the lead actor, and 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, he 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 56 days. Yeah. It was a story like they would go watch the Super Bowl,

and then they'd all go back to the office after. Yeah. Jerry would run a suite for everyone at the Beverly Hills Hotel and then back to the office. Yeah. So it's a Herculean task after Larry leaves, Castle Rock 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 in episode. And then by the ninth and what we end

up being the final season of the show to an unprecedented million dollars per episode per episode for one person who also owns the show who also yes gets all that back and that we were talking about the tenorify 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 it and the ownership. Yeah, the show though, I mean, look, you can argue whether season's eight and nine are as good as the Larry seasons. They're certainly different, but they're more ambitious. 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. And there's some classics. I mean, true all-timers in there, the Bizarro Jerry, the chicken roaster, the Kenny Rogers episode, the Andrea Doria, muffin tops, is that in there? The pot hole. Vambiran boys. Yep. Yada yada yada yada. You're right muffin tops,

the summer of George. I mean, this is season eight. Okay. Every firing on all cylinders. Season nine, the butter shave, the voice of the butter shave. So Rending Now is season nine. That's right.

Yeah. The slicer, the dealership, the reverse people, the wizard. These are all season nine. Yeah. Yeah. So creatively, definitely different, but still like some ratings and ad sales wise though,

for NBC. That's changed quite a bit. The show definitely does not miss a beat with Larry leaving. So in 1996, Seinfeld makes $150 million of profits for NBC after paying ad agency commissions and all the production fees that they're paying to Castle Rock for whatever it is, 80% of the actor salaries and sets and production, all that. In 1997, the show makes $200 million in profits for NBC. So that's

revenue they got from advertising minus the cost of paying Castle Rock for the show is $200 million. And I think also the cost of commissions to ad agencies for the ad. I think it was actual profits. Because to put that in context, NBC's entire profit during that era was about a billion dollars a year. So 20% of the network's profits were coming from Seinfeld directly.

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 your general motors, you wanted to place a $30 million ad buy for Seinfeld that season. You can't do that. The only way you can get $30 million worth of media on Seinfeld is to buy $200 million of media on prime time at NBC that season. Lundling, maybe. Lundling, yeah, exactly. Then there's all the value

that Seinfeld delivers in terms of launching other shows or popping up other shows. You're just like Cheers did for Seinfeld. Right. So it's how much revenue did it catalyze? And then also that it served as a launch pad for other shows? That sets up the 1997 cast renegotiation of their salaries.

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. 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 quarter million dollars or so. But they were making good salaries at this point. Yes.

Only on it was nothing. But then by this point, I think it was $160,000 per episode that they were making, not that they were big stars in the number one show. But they start getting pretty nervous because they're like, no, this shows days might be numbered. 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 kind of have an hour never moment where they need to hold out and negotiate for much higher salaries, which is incredibly awkward. Because the relationships between the actors and Larry and Jerry was always fantastic on set. It is notoriously a very professionally run show. There's no drama between people whenever issues came up. They would

resolve them and move on and try to get to the root of it. And they would actually help each other with their acting, which other TV shows, like there was an unwritten rule that actors didn't give notes to other actors. Right. So it creates this big awkwardness of we're all going to hold out. Right. I mean, at the end of the day, Jerry holds all the cards because he's the one who decides

whether the show continues and how. Right. Nonetheless, they get it all done at the deadline for the ninth season. And Jerry supports the cast by telling NBC and Castle Rock that he will agree to come back for a ninth season in 1997 and to 1998. But only if the whole rest of the cast also signs on.

Like he's not going to come back if they aren't able to sign all three of the other cast members too. Yeah. So they reach a deal $600,000 per episode for each cast member for one season plus an option to extend that same deal for a second next season, hypothetical tenth season, if the show comes back, which is all dependent on Jerry. Yes. So on season nine, the cast effectively did secure what they had set out to do. It wasn't like the highest number that they originally asked for, but it did get

them the amount of money where they don't need to work again. Because all of them are extremely typecast now. It's like the worst thing as an actor to be on a number one show in an extreme role, like any of these roles and not have back end and not have made your entire rest of your life's income from that show. Because it's just hard to get other parts. So at 600k an episode, that's $14,400,000 for each of Julia, Michael and Jason in that season. Good. Like, yeah,

not what it would be if you had back end, but like you could live the rest of your life on that when you may have cut off your ability to make big money from acting ever again in the future. So with Jerry now in a million dollars in episode, each of them at 600,000, that means that the cost per episode of talent is 2.8 million, which now means that the cost of each episode is, I don't know, three and a half million dollars, but NBC is absolutely happy to pay this because of the giant advertising profits. Yeah. So 70, 80 million in production costs for the season. Okay, we're going to make 200 million directly from ad sales, let alone all the other secondary benefits that come from it.

Yep. And we should know here too that Jerry's $1 million per episode salary made him the highest paid TV actor in history at that point here in season nine. Yeah. Without back end, just from the per episode fees. Just from the per episode fees. So all of this leads here at the end of 1997 to Jack Welch

inviting Jerry Seinfeld to brunch to discuss a hypothetical tenth season. Jack Welch, the CEO of the conglomerate General Electric, which is at the time thought to be the best run company in America in the world. And I think the most valuable company by market cap in the world at this point time, yes, it is worth Jack Welch's time to take this extremely seriously and invite Jerry Seinfeld to brunch and talk about a potential season 10. Yes. But listeners, before we tell that story, now is a great time to tell you about one of our favorite companies, WorkOS. You have heard us talk

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just hand out shared API keys to an agent or borrow human login credentials with full permissions, but obviously with very little accountability. It's really not that different from Kramer managing to get an employee badge. Yes. So WorkOS built the right infrastructure for this. A sign up form for agents. It's called auth.md and it's an open protocol. You publish one plain

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You can learn more at workOS.com slash auth.md and just tell them that Ben and David sent you. All right. So Jack Welch invites Jerry to brunch at the end of 1997. They set it up in the then CEO of NBC Bob Wright's apartment in New York City on the 38th floor of the Trump Tower in attendance from the NBC GE side are Jack Welch and Bob Wright, the NBC CEO helping prepare for the meeting where Warren Littlefield, president of entertainment and Don Olamire, who is NBC's head of LA operations, which is the location of the operations of the show of Seinfeld since it's filming in LA, which I still can never get over that Seinfeld was filmed in LA. But even some of the exterior shots of the apartment are recreations of New York buildings in LA. I know, I know. I don't

think about it because it feels wrong. Right. So that's the GEMBC side. And then Jerry is obviously there and George Pero and Howard West, the talent managers agents are there to they settle down to brunch and the NBC GE team brings out slides like presentation slides. Jack Welch starts giving the presentation to Jerry Seinfeld over brunch, making a presentation arguing that the show has not yet reached its peak. It can go higher. It can get bigger. You can do more. Jerry, we have the data,

the audience wants you back. It's not over. You haven't reached the top. Wow. Jack concludes his pitch to Jerry with this line. You know, Jerry, I go all over the world.

Everybody who talks to me, they only want to know one thing is Jerry Seinfeld coming back for another season. And that's lying about it hasn't peaked. That is one of the things that is going through Jerry's mind in addition to like exhaustion and having really not started his life because he's just been doing this for 10 years. Yeah, he's 43 years old at this point in time. Right. There is the concern that the show will keep going past its peak and he doesn't want to

see it. So the only way to go out on top is to go out before you reach your peak because you're not going to sign it perfectly. Yep. Yep. All that's going through his mind. So Jerry starts

demuring after Jack's pitch sales job here. He's not outright declining, but he's making noises. He's like, Oh, gosh, I appreciate it, Jack. I don't know that I really can keep it going. He said, all right, well, don't make a decision now. Don't make a decision now. The meal ends.

Everybody stands up. Jack says, Jerry, come over here for a minute. I want to talk to you one on one. He takes Jerry Seinfeld to the corner of the room. Jack takes out a piece of paper and he starts writing some numbers down on the paper. He writes down $5 million, 22, 22 episodes, $110 million.

He hands it to Jerry, says, this is a firm offer for your salary for next season, $5 million in episode. If you come back and do a 10th season, Jerry is already the highest paid TV actor in history at $1 million. And Jack Welch is handing him a piece of paper, not just like GE executive Jack Welch, Mr. Operational Efficiency, Six Sigma Blackbell. Yes.

People are replaceable. Go listen to our Home Depot episode about how cost focused Jack Welch and GE is is making Jerry an offer, a firm offer to 5x his already record salary. That 110 million is 11% of NBC's total profit for the year as being offered to him as salary to Jerry. Yes. Not as like budget for the show. Who already has the backend in the show.

This is how valuable Seinfeld is to NBC to GE. So Jerry says, well, all right, thank you. I'll get back to you. Keep in mind listeners that Seinfeld is the only show in history from this last season to ever command over a million dollars a minute for advertising rates, a fee only previously accomplished by the Super Bowl. Yep. Yep. So the group, this person,

and Jerry says to Howard and George, let's go for a walk. They go for a walk in Central Park. They stop and they sit down on a bench at 81st Street at Central Park West and Jerry looks at George, looks at Howard and says, guys, when I was 21 years old, I sat on this same bench with my dad when I told him that after college, I was going to go in to stand up comedy as my career. And he thought it was a great decision. He backed me all the way. He said he wished he could have

done it. So what do you think we should do? Howard looks at Jerry and he says, gosh, if it's me, I'd love to do one more season. George looks at Jerry and he says, if it's me, I think it'd be great to go out while we're on top. Howard says, you're the guy making the show, it's your call. Couple days later, December 26, 1997, day after Christmas, The New York Times runs

an article. Oh, they run this article on A1 in the top left corner of the paper. Yep. Front page news. Seinfeld says it's all over and it's no joke for NBC.

The article reads Seinfeld, the most popular television comedy of the 1990s and the centerpiece of the most profitable night in television history will stop production at the end of this season. Jerry Seinfeld, the show's creator and star said yesterday, yesterday being Christmas day 1997. Mr. Seinfeld said his decision did not hinge on money. Instead, he wanted to follow the tradition of stand up comedians and leave the stage with the audience wanting more. Jerry would later say

about the decision. I thought about the audience. How are they feeling? Where are they? I was trying to perceive it like a comedian on the stage when you've been on the stage for a pretty long time.

Nine years is a healthy run and they're still screaming. If you can get off, they'll scream even louder. They'll never forget you. That was the best business decision that Jerry Seinfeld ever made because on the surface and at the time and for a long time after the narrative around this is like, oh man, Jerry, gosh, he was so burned out and it was comedic timing. It was artistic. It was

personal. But man, it was a terrible business decision to walk away from $5 million. An episode. And you're about to make the argument that it's because they went out on top that syndication went nuts. Is that what I'm hearing? That's the argument I want to make is that actually it was

the best of business decision that Jerry Seinfeld ever made. Okay, so let's explore that. So in the hypothetical world where they do season 10, season 11, Jerry's making hundreds of millions of dollars out of each one, they're good, but like it's getting tired, kind of jumps the shark. You believe that there would not be the staying power to go through six syndication runs at very high dollar amounts, including recently here in 2026 with Netflix. Maybe I could see that.

I think so. I think this is the taste left in people's mouth. It's the taste left in people's mouth. And the reason that three decades later Netflix has paid a billion dollars to the cap table of Seinfeld this decade over a decade is because of the cultural relevance of Seinfeld. And it's Jerry's quote. It's Jerry's quote. If you can get off that stage when they are still screaming,

they'll never forget you. And by our estimates, Jerry so far has earned somewhere around three quarters of a billion dollars from ongoing syndication sales, DVD sales, all backend deals of Seinfeld over the past 30 years. And yeah, my argument is that a huge part of that value was set up and protected by Jerry's decision here at Christmas 1997 to end the show go out on top. Because if you look at the data over the 28 years since Seinfeld ended and the 31 years since it first entered syndication, not only has Seinfeld never gone off the air, interest, viewership, basically has remained constant as in like very, very, very high.

There are many times the number of people I've seen estimates of three extra five X who have watched Seinfeld since it went off the air compared to when it was on the air. Right. Right. So if you take that, the majority of Seinfeld's audience have come after that Christmas decision. It's an interesting hypothesis. A different hypothesis was put forward by the Harvard

Business Review. This is listeners David and I read this quote. I want to say like a decade ago and have referenced it a dozen times since because we think it's like one of the all-time greatest business quotes. No doubt it is. And it is delightful that we get to do an episode on Seinfeld and bring it up. So I've got the whole thing here. Somehow Jerry ended up getting interviewed by Harvard Business

Review in 2017 when he was doing one of the promotional cycles for Comedians and Cards Getting Coffee. The HBR interviewer says, so you cut off the show when it was so successful, really as a result of the fact that you were burned out. Why didn't you try to come up with a more efficient, more sustainable way to make the show? What would McKinsey have said if they'd come in and said, there's a better way to do this? And Jerry says, who's McKinsey? The interviewer says,

well, McKinsey's a big consulting firm. Jerry says, are they funny? The interviewer says, no. Jerry says, then I don't need them. The interviewer says, no interest in efficiency or and Jerry says, no, no. If you're efficient, you're doing it the wrong way. The right way is the hard

way. Well, for him, it's extrapolation of the thing that he learned going on Carson when he was in his 20s, that if you don't just grind and find new material the hard way and write and think and rewrite and go through all the pain, then you're going to run on a material and you're going to become irrelevant. Like you must go through the fire. And look, I think there's two things embedded in this McKinsey, back and forth here that we love so much. One, for our purposes of the episode today, is the point that even in 2017, the consensus view is that this was a bad decision that Jerry made. Two,

more universally, Jerry is so absolutely right in what he says in response to the interview right here, at least in any creative field. And I think any entrepreneurial pursuit is by definition a creative field. The efficient way is the wrong way. Like if you're going to do the accepted, efficient, what McKinsey will tell you to do, you are going to get accepted, normal, efficient results. If you want outlier results, you need to take the hard way.

It's the basis, isn't it? He likes to invent and wander without wandering. You cannot invent. They are intrinsically linked. So we're in the last season of the show. What happens next?

Well, first off, the second syndication cycle kicks off. Sony goes to work again. And this time, they can add cable syndication, in addition to local broadcast affiliates. Which is the thing that has been true my whole life, which I said at the end of our last episode, which is you can't turn on the TV without finding sign-filled on some channel, be it broadcast or cable. So here's the amazing thing that happens. Remember we told you in the last syndication cycle,

the Castle Rock got acquired by Turner, by TBS. When Sony goes out to bid the cable rights, TBS Turner makes an over the top bid of a million dollars per episode for four years of cable rights, which is almost $200 million. Wait, so TBS is buying the rights from themselves, but they have to go through Sony to do it because Sony owns the distribution rights? Yes. This is why the distribution rights remaining with Sony was so important to the business of the show because it means that bona fide real bids always have to happen for sign-filled rights.

I see. Because if TBS couldn't just say, no, it's not going to market, we got it. Fascinating. And then Turner, of course, gets acquired by Warner Brothers. So fast forward to today with the streaming rights, which we're going to talk about in one second, Warner Brothers can't say, ah, no, we're just going to keep sign-filled on HBO Max. The thing we own. The thing we own.

No, no, it's got to go out to bid because Sony has the right to distribute it. So Warner Brothers doesn't actually own the decision-making for does it get to go on our service? They have to make a bona fide bid in addition to others like Netflix and the free market for it. Free market capitalism driving maximum shareholder value to the sign-film cap table. All right. So what is the 1998 syndication fetch? So in total, across the renewed broadcast affiliate

sales cable now with TBS and international, it brings in a reported $1.1 billion of total revenue here in 1998. So for those keeping track at home, the show's not even over yet and syndication has already fetched $1.6 billion. Sure. Making that a decision at Christmas time for Jerry go down a lot easier here when the second syndication cycle happens, which brings us to the finale of the show. I think the thing that people don't realize about the Seinfeld finale and that I didn't realize until doing this research was that it's a thank you. It's a thank you to all the guest

stars that made Seinfeld what it was over the years. Yeah. So what is the finale for those who haven't seen it or those who don't remember? On May 14th, 1998, they aired a special extended episode. They brought back Larry David to write it. He had been doing other projects for the last

two years. And the gang is put on trial for some sort of new law violating the Good Samaritan laws where they watch someone get held up in a carjacking and they do not intervene to help. And they are bringing in dozens of past guest stars as character witnesses to attest to if these people are good people or not, which is just so perfect for the theme of the show. But when you're watching it, you kind of do think this might be a little excessive. Yeah. This might be a little much. And the way it

ends, spoiler alert. So like stop this episode right now. If you care about not knowing how Seinfeld ends, they are convicted and go to jail for violating this good spirit in law because the parade of Seinfeld guest stars over the years paint this very clear cut case that these are not good people. Yeah. It's perfect and poetic. And also at the same time, I completely get the public outrage

at how much they didn't like it and how much they hate that these characters just all end up going to jail as the end of the episode. Yeah. Yeah. The fact that nobody likes it doesn't really matter. If anything, it maybe kind of adds to the lore of the show because it's the ultimate.

No, there's no point. Nobody learns anything. There's no development. Yes. So much so that we're not even going to give you a satisfying finale. And yet it is watched by 76.3 million viewers,

which is 58% of all viewers that night. The finale ad rates eclipse the Super Bowl. So NBC sold 30 seconds for as much as $2 million this back in 1998. That is about 54% more than the $1.3 million you would pay for the same 30 second advertisement during the 1998 Super Bowl. Yeah.

One of the advertisers during the finale is Apple, which is in the middle of their think different campaign and they run a special commercial where they add Jerry to the think different campaign. He is the final black and white person that flashes up on the screen. And it's the only time they ever ran the think different with Jerry in there. Yeah. So good.

Interestingly, this was not the highest or really even like close to the highest watched finale ever. Mash, Cheers and the fugitive were much higher numbers in their finale. But to me, the interesting thing is I've never watched a single episode of any of those shows. And no one's paying anything to get the streaming rights to them. Now they're not relevant. They

didn't transcend generations. And there's something very, very interesting and intrinsic about Seinfeld that made it last, even though on the highest day of heat and light and attention on them, they actually weren't the biggest finale ever. Yep. And audience reception wise, the finale was not loved at least. But again, it doesn't matter. And to put a perfect

comedic button on it, the joke that Jerry makes in the jail cell is the joke that opened the pilot where they are talking about the second button on the shirt, even while they're sitting there in jail. And then the last perfect little piece of comedy is David, did you watch the Kirby or enthusiasm finale two years ago, maybe 24? No, I did not, but I did watch the Seinfeld reunion on curb. Yeah, everyone should know that the on curve, they did a arc of four or five episodes that were fictional Larry David, playing the Seinfeld reunion in the finale. Again, spoiler alert, if you've never seen the Kirby or 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 want to end up here. This isn't where it ends. You don't want this. Trust me. Nobody wants this. Yeah. Yeah. And it's a 25 year payoff for the joke that

was set up in 1998. So good. So good. I have seen that clip. So good. All right. So I think let's put

a bow on the economics of Seinfeld's first run on NBC ignoring all syndication. No syndication, just the first run business for NBC. NBC in total made about $2 billion in cumulative advertising profit from Seinfeld during its run. But again, that vastly undercounts the actual value to NBC because of the dynamics of what you can't buy Seinfeld. You got to buy. Yeah. But no ownership because they rented it.

Yeah. Castle Rock takes a loss on the show by design. That's right. By design. They lose money on nine years of Seinfeld. Kind of like the first nine years of an early stage venture portfolio.

Yeah, exactly. Exactly. Although that's not fair enough because in years, what? Six, they started participating in syndication. Right. Right. You're scoping this just to no syndication,

just the first run. Columbia slash Sony. They're like a did not play. They make zero dollars. They spent zero dollars again by design. Cumulatively, Jerry made 50 to 60 million dollars in salary from

all of his seasons of Seinfeld as the star creator, co-writer, etc. Huge, huge. But peanuts compared to the backend. Larry's salary during the show, as we talked about has never been reported, but it's safe to say much, much lower for Jerry's than only for seven seasons. The rest of the cast we talked about their just employees in total. They each probably made

25 million or so kind of give or take. But of course, from a syndication standpoint, the business is just getting started. Right. In some ways, the story here on our episode is over, but the business is barely started. So to date, Seinfeld has had a record six plus broadcast syndication cycles, more than any other show in history for a broadcast. No other show ever got five, right? Not on broadcast affiliates.

Just on, you know, like people on the land, etc. Over the decade of the 2000s, the show continues to do great. By 2010, the show had done $2.7 billion in total syndication revenue for off-network and cable. Three years after that, by 2013, that figures up to $3.1 billion. Along the way, they also start to drip out DVD home video releases in 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. True collectors. In total DVD home video generates, we estimate about another 500 million in revenue. So call it up to $3.6 billion total post airing revenue. It's actually fun coda to the cast economics with the DVD releases. They hold out again to get back and

in the DVD releases in order to come back from the commentary. I think this is part of why it takes so long to get the DVDs out. Interesting. And you know, it 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 kind of like low tens of millions each out of the DVD sales team. Along the way here,

throughout the 2000s and into the 2010s, 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. 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. 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 and 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 stand up, comedians and cars getting coffee, the stand up specials, again, even curb. These things never compete with Seinfeld. They only focus attention back on it. 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 25 years of doing curb as he did from seven years doing Seinfeld. Yeah.

You know, we can't do this whole episode without bringing up the raging racist remarks that Michael Richards had in his stand up in 2006. Let's just scope this to the business because that's what this podcast is about. Aside from just how absolutely awful the comments were, it's a problem for the business. Totally. It puts a business model at risk. 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 a very tight rope 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 be preserved as an asset as they go through that PR crisis. Even if it just creates some subconscious negative associations and ick for viewers, it's really, really sensitive to value to perception here.

So it was interesting kind of going back and watching a lot of the commentary on that. Jerry offers up things like, well, a comedian on stage is not actually that person. It's sort of a person playing a role. But if you look at it from a pure comms and business incentives perspective, you need to condemn the act enough to make people go, okay, good, Jerry doesn't have a saying to this, and 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 want to watch Seinfeld because of that.

So it's kind of interesting. The art of stewarding a business asset, it involves a lot of that tight rope walking. Yeah, a business asset that is where the value is so tied to the present day cultural relevance. Yes. So yeah, then there's the internet that's associated with all this too.

I mean, it's kind of amazing again, back to Seinfeld hitting its stride right as the internet was going mainstream. The meme ability, the catchphrase is the gifs on the internet. Oh, gifts, gifts, gifts, sorry. That's a memorable moment right there. Like an untuned piano. I'm sorry, I apologize. The gifts on the internet,

you know, like the modern Seinfeld Twitter account becoming one of the early big mainstream Twitter accounts with all premises, you know, Seinfeld episodes in the modern day. That's all part of it too. Which brings us to streaming. Yes. So syndication is still a thing on broadcast networks and cable stations, but that's not where the big money is anymore. It's these streaming deals that really

get started in 2015 with the Hulu deal. So that was a $150 million five year deal. Yep. It would go up from there. So two years later in 2017, Jerry signs a personal deal with Netflix to bring comedians and cars getting coffee onto Netflix. It was on crackle, right? It was

like a web series. It was on crackle. Do you know what crackle was? I have no idea what crackle was. Crackle was Sony's early in house web streaming network. Got it. That's why it was on crackle.

And then that went away. So that sets the stage for this Jerry Netflix deal to bring comedians and cars over and to do two new stand up specials for Netflix. Because when the first renewal cycle comes around for Seinfeld streaming rights in 2019, Netflix does a landmark deal with Sony worth reported well over $500 million for five years of worldwide exclusive streaming rights to Seinfeld. That is a huge amount of money. And this is a result of Netflix had friends and the office, which I think became their top viewed shows and they were losing them because friends, it's so funny. All three of these shows were on NBC. Friends was produced just like Seinfeld in the

FinCynera. And it was produced by Warner Brothers, which is exactly where the rights are held for Seinfeld. So you might say friends, Seinfeld is the same. But in the case of friends, Warner Brothers also controls the distribution rights. Those were not ever owned by Sony. So HBO Max is about to

become a thing. Warner Brothers is like, no Netflix will take friends back. We're going to use that on our streaming service because we control the distribution rights and the office was produced after all the FinCyns stuff. So NBC actually owned it directly and they go, Nope, Netflix, we'll take that back. We're going to put that on what's about to come out and be called Peacock. So Netflix loses their

top rerun sitcom shows. They need Seinfeld real bad and Sony owns the distribution rights and is not coming out with a streaming service. So they're kind of the only ones to go to and say, gimme 180 episodes of people loving their 90s and 2000 sitcoms. So it all goes down that same year in 2019. Friends with HBO Max and the office with Peacock, they have to announce like a dollar value for the deals that they do because they have to calculate all the guild residuals to come out of it.

And I think the creators did have some back end. Yes. Yes. Kind of sucked to have back end in a deal where the distribution wasn't independently owned. Right. Because it means that like you just kind

of have to trust that the invisible wall between the sides of the company exists and the value is the real fair market value. Yep. So they announced that the Friends deal is $425 million for five years and the office deal is $500 million for five years. But yeah, this is not real money. So all three of these are in the same ballpark, but Seinfeld is the only one where there's actually a company paying other company. And then that brings us to this year with the 2026 Netflix renewal reported as

slightly lower than the original greater than $500 million deal. But this time it's exclusive for Netflix only in the US and Canada, not worldwide. So Sony is basically taking the bet here of, oh, we can start selling international streaming rights for Seinfeld separately and monetize those better, which they will begin selling shortly. Yep. In addition to that, they're still doing the other forms of syndication. So basic cable to paramount for $45 million ish. They had a full

cycle four and a full cycle five and a full cycle six. So all told here, all of this syndication ever, all the off network and international and cable, the streaming plus all the DVDs, this is around $5 billion to the cap table of Seinfeld from all of these deals. And it's real liquid cash changing hands every five years when they do a renewal cycle because Sony has no streaming service of their own. Yep. And all of that is just so far, I think at current course and speed, you can reasonably expect another billion plus in streaming rights to get stacked on top of that every decade from Netflix or whoever takes it next. Assuming it stays this relevant, but you would

think if it fell off in relevance, it would have happened by now. Yep. And it definitely hasn't. And then you know, total total revenue, you stack the two billion profits for MBC from first run, you're at easily seven plus billion dollars for this little TV show that should have gotten made. And by my calculations, David, this thing probably in total, including everyone's salaries, even that crazy high last season, cost about $250 million to make. And those costs stopped in 1998.

This is an asset that's now well above $7 billion in returns that keeps stacking another billion dollars every decade. And all the costs were paid for 30 years ago. It really is like a Silicon Valley startup type story. Yes. As a TV show, I mean, it's not Google or Facebook. We're not talking about trillions of dollars or in video here,

but that that level of investment would continue returning cash flows for that period of time of that magnitude. And it's a 30 X on its costs. Yeah. That's the other thing is if you just divide 7.7 billion by 250 million, that's a 30 X return. All right.

Should we transition to analysis? Yes. So one big thing I wanted to talk about is, why is Netflix buying this? Why is this particular asset and this category of assets Seinfeld, the office friends so valuable to a streaming service? Well, streamers need content to do two jobs. One is acquisition and the other is retention. Yeah. These are awesome

retention vehicles. Yes. So acquisition is a totally different thing. That's what the new content is for. That's the super high polish thing you can market to get people to sign up for your service.

And I think I'd be curious to get feedback from people in the entertainment industry. I think the reason why every show is like eight episodes now instead of 22 to 24 is because in broadcast, it was an ad based business model. So you needed something on the air always, and then you needed to sell ads for eight minutes of every half hour. And so you take 22, you take 24, you take 30 episodes if someone could make you 30 if it was a good show because it suits your business model on streaming. The point of a new show is to get people to sign up for your service.

And I'd be willing to bet that there's not a big difference between a great show with eight episodes and a great show with 20 episodes, how likely it is to get someone to sign up. And these things are expensive now. It's, you know, eight, $10 million per episode for some of these high polish ones. There's no way that the $10 million you spend on the 14th episode of a season is justified versus sinking it into the sixth episode of another show that you could do instead. Once you kind of like wrap your mind around, oh, shows are now acquisition vehicles rather than add inventory carriers. You sort of understand why shows are so different now that they used to be.

Yep. And the other thing in addition to the fact that these seasons are really short, they're mostly not commies. Yes. It's really weird. Like everything is a drama or spectacle or a sci-fi and I was really grappling like, why don't we see more Seinfelds now? Why are there so

few things that look like this? Part of it is I think that comedy doesn't travel internationally. And these businesses now, these streaming businesses are all scale economies businesses. So whatever you make, you want to expose it to the broadest number of people to justify its cost. And so it's really hard to green light something where like, you know, British humor doesn't translate.

When they brought BBC's The Office over to the US it bombed and they had to completely remake the show. In order to make an appeal to an American audience. So that's part of why you get white lotuses, but you don't get Seinfelds anymore. It might also be kind of as you see in the Seinfeld story, when you're just doing comedy, it takes a while to get the audience hooked. You can't just like hook somebody right away with an incredible drama or a flashy sci-fi or something like that.

Like it's a slow burn and that just doesn't make sense in the acquisition side of the business. Model for streamers. Right. It's not even obvious that I would sign up for a streaming service to get access to a new comedy. Like I watched Tires because I was already a Netflix subscriber and it was awesome. But what I have gone to sign up for Netflix on my own just to watch Tires, I would have

needed a pretty strong endorsement and people endorse comedy differently than they endorse dramas because you're like less, it's your point sucked into the story. Now flipping over the other side retention, that is Seinfeld's job these days is like the single perfect retention vehicle. I'm happy to subscribe to a service where worst case if I'm surfing around and I can't find something, there's always Seinfeld. That's sweet, warm Seinfeld. It's comfort food. Yes, exactly.

It's really weird because it started as this like jarring, crazy, daring show and now it's comfort food. It's the chicken pot by Netflix. And it's like a churn reducer in two ways. One, maybe I signed up for K-pop demon hunters. And then I realized Seinfeld's on there. Okay. Well, actually I got hooked on

Seinfeld and I'm going to watch every episode of that while I fall asleep at night. So that's like one thing. But two, now that I know it's there, I'm just not going to cancel. I don't want to lose access to something that I think I theoretically at any given time might want and decide to watch. Yep. So yeah, that is why it's so valuable to streaming services. Incredible retention tool

for streamers. So while we are on the topic of the weird incentives that fall out of subscription based streaming versus advertising based TV networks, this is a bit of a brain buster. Tell me if you agree with it or not. Okay. NBC's 90s advertising business model incentivized attracting a more educated audience than streaming. Yep. I buy that because advertisers are willing to pay for

audience demographics, whereas in the streaming world, everybody pays the same 1299 or whatever it is a month. It doesn't matter who you are. Right. In the streaming world, you're just a vehicle for your 1299. There are lots of counter arguments to this that I'm open to, but it is sort of an interesting brain puzzle that streaming doesn't incentivize you to get the most valuable viewers.

Well, you're happy to take the highest quality viewers. You just need viewers. You want to have a differentiate. Yeah. And you know, look, streaming is historically subscription based, but they're adding ad tiers now, Netflix is adding an ad tier. Right. And those

advertisers will care who the subscribers are. Yep. Okay. So my big question for you in analysis, before we get to powers and quintessence, we opened the episode by saying this couldn't happen again today, but this was so anomalous it needed to happen at the exact time that happened with the exact people who made it. I have a list of things that I think couldn't happen today. I'm curious your thoughts on them. Great. I've got a list too. You want to trade

back and forth? Yeah, let's do it. So my first one, arguably the whole show, it was so creator led with essentially no design by committee. I bet that's pretty hard to find today. Well, it's easy to find on YouTube or I guess, completely outside the system. Completely outside the system.

And it is almost impossible to find inside the system because the stakes are too high now. Somebody executives at some organization are involved, whether it's the streamer or the production company or the studio, really the budgets are so big. That was my point about the stakes are too high. Right. Like you want to make a TV show these days. You need a lot of freaking money. There's no way

that something could start like Seinfeld back in the day with that budget that set episodes. Right. I think always Sunny did, but that's now 23 years old or something. Tires, I think did. Tires was pretty low budget when it started. And it was like creator led independent. So yeah, I guess it

can happen out there. But by and large, you want to make a TV show, you need a lot of money, which means you're going to have suits weighing in on what's going on, which is just going to make everything worse. Yeah. All right. Next for you. No doubt. The independent

cap table and incentives associated with Seinfeld made it what it is today. The fact that Jerry and Larry, as creators, got this incredible deal and set up circumstances that let them get huge back in from the production company. And then they made the show artistically what they wanted, but they were incentivized for the long run always made all the difference in the world. It is probably impossible today to make a TV show that you in any way make $500 million from. You can make it in secondary ways. You can get famous from the TV show and then pick up sponsorships

and get to invest in companies and stuff like that. But to truly own enough of a show's long-term economics to make hundreds of millions of dollars, I think that's over. That would only exist in the creator world like podcasts and YouTube and it doesn't happen on TV. So the question is why? Because both business models are totally viable. The old media networks one where you're like,

I don't want to own the long-term upside. I just want to have profitable business today or the one that the Netflix and the world are doing where they do want to own all the long-term upside. And follow me on this. I think it's because the distribution that happens today is on tech companies at their core, not on media networks, which I think were capital constrained. Tech companies are very, very used to making big investments upfront the way that you would make in software with very high margins when you get to scale. But obviously you're like way in the hole for a while

until you get to scale. Microsoft's a terrible business with 100 customers but an unbelievable business with a billion customers. The modern media company wants to own all of that risk, like a tech company, and pay for it upfront so they can own all the rewards later in the success case, which is the exact opposite of the traditional media business or the traditional networks business. You know what's interesting? I sort of expected going into this research to hear over and over that NBC realized their great mistake in not owning any of the back end of Seinfeld and they let so much value walk and it was this bitter lesson that especially once FinCin was repealed, they never allowed something like that to happen again. That's the fact pattern. But actually back

in the day, the executives were fine with it. They were happy with the arrangement of, yeah, totally, you production companies, you're essentially the VCs, you take the risk, you make money on the back end, we get this great stuff that we can put on our network and one year payback period on a multiple of our invested capital. Sell add units, we're super happy. That works great. Yeah, I think it comes down to tech companies are trained to seek operating leverage and attract investors that want operating leverage. And that was not a thing when media was distributed by

networks. But now that's the ultimate end state of the media distributors being tech companies. And back in the day, they were going to give it down, right? You were going to turn into NBC, ABC or CBS and then eventually Fox two. That was it? Yeah. One other little piece of

analysis before we get to seven powers. There's a very real argument here that FinCin being repealed is one of the worst things to happen to the industry in the last several decades. Yeah. The networks start saying, we're going to pick from the in-house things that we've sort of come up with to hit their ways. It just means that you get bad stuff out there. Whereas if you

have this like thriving free market of a whole bunch of independently funded small studios coming up with things and you can buy from any of those, that's a much better world for content. Totally great. And we heard that universally in the research like, yep, those were the good days, FinCin being repealed ended that. Yep. And consolidated where content can come from.

Yep. Fortunately, the internet changed that and we have, you know, the YouTube and the explosion of creator dials right now. Yep. Powers. This is actually going to be really fun.

So let's see. Normally, the way we do this exercise is seven powers are the seven things that could give a company persistent differential returns or the ability to be more profitable than their nearest competitor on a sustainable basis. Who's the entity here? The Seinfeld cap table? Yeah. I think we should talk about it from the cap tables perspective.

And it's what lets Seinfeld be asset of the show, even when it was being produced and today be more valuable than other things that compete with it. Other shows. Yep. Yep. Okay. I think counter positioning today might be the biggest one because it's

the last of these huge retention tools left that is not capatively owned by streamer. So it can come to market in a way that friends in the office can. And you think that's counter positioning? Well, if you were to say friends in the office are its competitors, they are structurally hamstrung by their ownership situations now. If they did compete with Seinfeld to go to the free market and be able to go anywhere, it would hamstring their parent company. Their parent companies would be making value

destructive decisions to do that. Yep. At least based on their chosen current strategy of needing to have owned and operated streaming services. Yep. Scale economies all over the place. I mean,

the fact that the world has an install base of 100 million plus Seinfeld fans. I would say this is network economies, not scale economies. Oh, that we're all like that. You know all the memes from Seinfeld is extremely valuable to me. You're right. I don't think there's scale economies because the definition of scale economy is when

I can do something that is more profitable to me for the same input than one of my competitors can do because I have more scale. But this asset doesn't actually make any decisions or do anything. Yeah. I mean, like the only way to scale economies when Netflix decides to pay 500 million dollars, it can make better use of the Seinfeld content and be more profitable on that acquisition than smaller streaming services. Yep. Yeah. Branding? Maybe?

It depends what you consider branding. Right. Is the whole tenor of the show branding? Is it just the logo? Is the... Like I'd much rather watch Seinfeld than Big Bang Theory,

but that's not because it's called Seinfeld and I trust Seinfeld more. It's because I think the entrance equality of the show is higher. Yep. Yep. I don't think there's any switching costs here.

No. Can you even think about that would be in this case? Cornered resource, obviously, they have the rights to Seinfeld. And maybe that is the power. That might just all be cornered resource.

We have a thing that we can sell that other people can't sell and make a lot of money on it. Yep. And then the last one, process power. Not today, but there was... If you change this exercise to what did Seinfeld have when it was being produced that other shows didn't have, it's absolutely process power in the way they were making it.

It's absolutely cornered resource in Jerry and Larry and some of the other writers that they had to. I think there was process power clearly just to the act of making the show. I don't think Jerry or Larry individually or if they were to come together again now could repeat it. It was a magic moment. In fact, the evidence is right there in Kerb. Larry had to run Kerb differently than Seinfeld.

He couldn't do again what he did at Seinfeld. The Kerb was improv. Larry couldn't create the scripts and all of the intense effort and alchemy and magic that went into every week of Seinfeld in the same way. You just couldn't do it. All right. Should we bring this baby home and do quintessence?

Let's do it. I know where you're headed. So listeners, the way that we decided that we want to do our quintessence this time is to answer the question, what made Seinfeld such a ludicrously good TV asset to own? Yep. What made it durable? What made it continue to get renewed for these really

high rates three decades later? Yes, there are comps in the office, which actually is my preferred thing to watch all night lately. I grew up when it was on. It feels more for me. It feels more modern and blah, blah, blah. Friends is arguably more valuable but is held captive. Seinfeld is the

one free agent in the top tier that actually can go and trade on the free market. Yep. Look, of course, there's a whole list of these, most of which we talked about earlier in analysis. But I think if you were to ask Jerry, at least, it went out on top? I think the driver is viewership begets viewership. Seinfeld has been everywhere for the last three

decades on a bunch of channels in streaming service. And because it has been omnipresent, there's so much demand today to watch it because we're so familiar. It is today's comfort food, even though when it launched, it was very uncomfortable. During my childhood, teenage years, college, adulthood, it was everywhere. And I have all the jokes memorized. Always on every

channel, every night. Yep. It's passed from generation to generation that way. I talked to my dad about it. In fact, we were prepping for this episode and my three-year-old son is sitting on the couch with me because we had the DVD on. He goes, putting the DVDs on the DVD flare and he

points to the screen. He goes, is that Jerry Seinfeld? Oh, my God. That's awesome. Cast it to another generation. And then we're watching the DVD interviews afterwards and he points to the

screen and goes, there, there's Larry David. And I was like, I'm so proud of you. Wow. Good for him. I know, right? But it's this thing. My parents liked it. I liked it. I like it. It's so in the water

in our society. There's a crazy stat from Nielsen in 2021. 41% of Seinfeld's then current audience had either been toddlers or not born yet when the series ended in 1998. Amazing. So you kind of have to just keep tracing it back. Like, I think you might be right that it's

because it went out on top. But the reason, in my opinion, is because the 1995 and the 1998 syndication cycles were so successful and exploded out of the gate that it created this in the waterness to Seinfeld. Yep. I mean, look, at the end of the day, it's a stew of all of these things. But I don't know. I just think if they'd milked it for a few more years in quality at Gone Down

Hill, this thing is so hypersensitive to the aggregate cultural assessment and impression of it that if at the end it didn't have that like greatest show of all time vibe in the culture, yeah, the engine wouldn't have continued like this. Yeah. Totally agree. We're saying very similar things here. It's ultimately that coupled with quality, like the situational jokes that they set up just don't feel dated, even though a lot of these things could be solved with a cell phone. But the intrinsic quality of the situations they are in still feels relevant today.

Well, more than 20% of America agrees with you. 22%. Here you go. All right. Well, on this one, we've got some fun trivia that we should include here that didn't make the episode. Number one, the theme music. Yes, that was mine. The baseline.

that I have, you can hear the original pilot with the original theme music, which is not what you are familiar with. The bass riff composed by Jonathan Wolfe is something completely different and it interferes horribly with Jerry's standup at the beginning. It's just like, it's tonally overlapping each other and you almost can't make out his words. So when Jonathan Wolfe got the call about it, he said, oh, I know exactly what I'm gonna do. I'm gonna treat Jerry's voice like the lyrics of a song.

And I'm gonna compose around that. Like he's kind of carrying the melody and he even felt like there was a tempo that Jerry did standup to and it came in around 110 beats per minute. That's how his jokes were told in that rhythm. So he didn't create a theme song. He created a theme song system where he could uniquely compose, on a synthesizer in front of him, that had the bass guitar riff mapped to a bunch of different keys and also all the little sounds, like all the mouth sounds that he makes.

And he uniquely composes a theme for every episode that is slightly different that fits in around Jerry's jokes in the intro. And so he has this great quote on this. Every monologue was going to be a variation of the theme. So whenever I did, I needed to architect it modularly so that it could be shiftable, changeable, like Lego music. It needed to not conflict with his voice.

So great. So great. And so distinctive. I mean, it's part of what makes the show. Yes. It's so different at the time too.

Of course, like everything else, the networking's excited because it wasn't like anything else in the market. Of course. That's a single equality when the number is second and same. All right, that's number one. Number two, this has come up on a choir before.

Julia Louis Dreyfus is, yes, from that Louis Dreyfus family, the very large French commodities trading family. Yeah, big multi-generational business. Has made an appearance before unacquired in the Ferrari episode because Julia's grandfather was one of Enzo Ferrari's first clients and raised his privately owned Ferrari 166, like the first cars that Enzo made in Le Mans, the beginning of Ferrari. Amazing. All right. That's number two.

Number three, NBC had a corporate relationship with Nike. And so any of the stars of any NBC sitcoms could just go to the Nike warehouse in LA and get all the swag they wanted. So how do you think Drey Seinfeld started wearing Nike's? No. On Seinfeld episodes, freebies.

But yeah, we talked about this on the Nike episode that they had their athlete strategy and then they got into entertainment. And this was part of the Drey Seinfeld was one of the first big parts of Nike's entertainment strategy. All right. All right. That's what I got for trivia.

Carvouts? Carvouts. So I decided for this one appropriately enough, I got it just to. Seinfeld episode recommendations. Perfect.

So the Marine biologist, number one, by far, it's just the most like masterful piece of 22 minute episode crafting I've ever seen. It's great. Couple deep cuts that I'm partial to. One, the jacket, which I already mentioned. And two, the first Seinfeld episode I ever watched, I vividly remember this like it was yesterday.

I was nine years old when this episode came out. I saw it live on TV. I had a babysitter for the night. My parents were out. I got to stay up late.

And I had the TV on. It was the dinner party, airing live, which is the episode with the black and white cookie. I will always, always remember Jerry eats the black and white cookies talking about lanes like Elaine. The world needs to look to the cookie. Racial harmony here in the cookie.

What we can learn from the black and white cookie. And then in the end of the episode, he throws up due to food poisoning from the cookie. Oh, Jerry. Oh, Jerry. All right. What you got?

For me, I have another Seinfeld related one. Everyone, if you have a browser open right now, go to Seinfeld.visualizingdata.com. There is the most insane web project I've ever seen called the Seinfeld Chronicles, Unnecessary Data Exploration by Andy Kirk. This is a book that, it's a coffee table book that the author then put online that is a full data visualization of a zillion different ways you could slice in Deiss Seinfeld. What laughs happen when in each episode, what do the patterns look like?

How do they accrue to each character? It goes episode by episode. The things 121 pages showing when various characters got screen time. It walks through why he thinks the show worked, what makes it unique. But the most wild thing to notice, it's all hand-labeled.

So it was him watching episodes on his couch with a spreadsheet open. Gradually every five seconds, pausing and labeling who's on screen, who's getting laughs. I mean, the whole thing is astonishing that human did this manually before AI. Wow. So I have the marine biologist up right now.

There are 23 scenes in the marine biologist. Yeah, it's crazy. There you go. Seinfeld in the internet. Made for each other.

My second carve out is Bucks in Woodside. Oh, yeah. Incredible restaurant. David and I just went there for a meeting this week. And I was reminded of just how special that place is, especially if you like Silicon Valley, lore and ephemera.

And I mean, they've got an Apple one up on the wall. They've got a signed Jensen jacket. The first one you ever wore on stage. It's like you just two around the place and get a history of the tech industry, which is very fun. It's like a Silicon Valley version of Monks Cafe, you might say.

Yes. And my last carve out is a company called Tin Can. My son is obsessed with it. He's three, but it's more for like five to 12 year olds. It is a phone.

It's a landline with no screen that uses Wi-Fi that is built for kids. So they can call pre-programmed numbers. And if they need to call 911 or emergency contact or something, it stays plugged in your house. It's like exactly the type of phones that we had when we were kids and just got to call other kids without all the smartphone stuff. The weird code out to this one is somehow I ended up being the first investor in this company.

It was a completely different company first. It's like my last check when I was a professional. You like NBC network executive. Like it accidentally pivoted turned into this company. Became this massive viral hit there on Good Morning America.

It's the face of this movement around great ways for kids to communicate without screens. And my son is loving it. So forever I was just sort of sitting on like at some point, I should carve out Tin Can. But I don't want to be like too self-promotional and promote a company I invested in. But this thing is just really fun watching all these kids use it.

So good. All right. Well, listeners, if you want to listen to any other acquired episodes, you can do so on Spotify or Apple podcasts. And we've got some thank yous. Yes, we do.

Thank you so much to our partners this season. Sierra. Sierra helps the great companies of the world build better, more human customer experiences. Sierra.ai slash acquired work OS starts selling to enterprise customers with just a few lines of code and build authentication in minutes instead of months work OS calm to anthropic. Claude thought with me a lot while I was recently doing this episode.

And it can think a lot with you to Claude.ai slash acquired to century application monitoring software considered not bad by millions of developers, century.io slash acquired. You can click the link in the show notes to learn more about any of the sources, the several dozen that David and I have between us, the books that we read, especially signed Feltia by Jennifer Keaschen. Yep. Great, great book. All of that is linked in the show notes and a few people to thank in particular.

Yes. David, what you got? Yes. Research. Thank you as well.

Speaking of books for the show first and foremost to Warren Littlefield, NBC executive responsible for the decision to officially pick up Seinfeld. Warren spent a great amount of time with us, which was wonderful. He also wrote a fantastic oral history memoir of his time at NBC called Top of the Rock, which is well worth reading about Seinfeld friends. Not about you, cheers, all the great stuff from NBC from this era. Famously, right after Seinfeld ended, Warren got fired at NBC and went on to have an amazing second career as a producer.

So he executive produced Fargo, the Hammates Tale, Dope Sick, and now the Testaments, which is doing incredibly well. So great to talk to him. Alec Berg, Dave Mandel and Jeff Schafer, three of the writers behind some of the most legendary episodes on Seinfeld, especially the second half of the show to Jeremy Zimmer, former head of the UTA talent agency to Michael Lin, former chairman and CEO of Sony Pictures Entertainment to our friend, Robby Nanden at A24 and Brian McCandrew's longtime television executive first at ABC, Capital Cities, and then at Disney and to our friend Jeremy Jafon for helping inspire this episode, which is original recommendation that I made a card out on our last episode of Jerry Seinfeld's movie, Comedian.

Thank you, Jeremy. I've got a couple of one to Arvind Navarutnam at Worldly Partners for his great mini study, this episode on Seinfeld, which is linked in the show notes and then also to good friend of the show, Danny Passman, an entertainment lawyer who has spent his whole career around deals in this industry. If you like this episode, go check out other episodes on TV and entertainment, Taylor Swift, Oprah way back in the day, more recently, much higher quality episode because we got better over time, Disney part one and part two, and for a tie in on Coca-Cola. That's right. You can visit library.acquire.fm to get access to all the visuals associated with this episode, charts, tables, illustrations, you can join the email list at acquire.fm slash email.

That's where we will send out behind the scenes photos from research, episode corrections and vote on future episode topics and come talk about this episode with us and the whole community in Slack after you listen, acquired.fm slash Slack with that listeners. We'll see you next time. We'll see you next time.