So, David, I bought a DVD player for research for this episode.
No way. Did you buy the box set?
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.
Do they even sell those on Amazon anymore?
They do. Sony makes them. They're like, I don't know, 100 bucks or something. But
Sony, there you go. Appropriately. Distributors of Seinfeld.
That's right. All right. Should we do it?
Who got the truth? Is it you? Is it you? Is it you? Who got the truth now? Is it you? Is it you? Is it you? Sit me down. Straight. Another story on the way. True.
Welcome to the fall 2026 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.
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 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 6 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.
So 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 5 years, was the largest sum that a streamer has ever paid an outside studio to license a series that's no longer in production. $100 million plus per year, decades after they are done making new episodes.
And everything. The way the economics break down, 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 while 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 been 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/e. 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/e. Come talk about this with us and the whole community in Slack after you listen at acquired.fm/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-a, sierra.
So with that, this show is not investment advice. David and I may have investments in the companies that we discuss. And this show is for informational and entertainment purposes only. David, where do 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. Actually spent a fair amount of time in my childhood in Massapequa. It is definitely suburban Long Island. Not a lot of interesting culture going on there.
But Jerry's father, Kall Seinfeld, was known in the family and amongst his friends for just always being a funny guy, always telling great jokes, as 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. Yeah. Yeah. He thinks his kids have it. He knows his dad had it
and that it can't be taught. Obviously, you can work really hard and hone it and develop more material, but the instinct is actually genetic.
Yep. Yep. 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, you know, great bands there at the time of the 60s, 70s, but with Bill Cosby's standup comedy album. Why Is There Air?
This is a big thing. These comedy
This was a big thing. Standup albums on vinyl.
It's funny. Today, we all tune in to Netflix to watch the big standup special that just dropped. Albums were doing that same thing 50 plus years ago.
Yep. 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 into comedy. He sets up an independent study where he studies standup 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.
We'll get into why Jerry has given a lot of interviews later in the episode.
Yes. He basically said I had one goal. I mean, since middle school, high school, become a successful stand-up comedian. That's it. I didn't have like specific goals around other things I wanted to do, some sort of like career progression, something I wanted to rise toward, family, hobbies, like I had no goals around anything other than become a successful stand-up comedian.
Yep. 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 standup industry. Like, this is what you do. If you are 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 standup 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 standup, 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. You know, he compares it to being a solo athlete, but it's like the most extreme feedback and spotlight version of an athletic performance.
Yep. 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 in comedy and specifically in television. So in 1979, 3 years after he begins his comedic career, he gets a call from Hollywood. They want him to come out to LA and join a sitcom show 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.
Yep. 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, performs standup 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 like the most legendary comedian talent managers/agents in the business. They had gotten Andy Kaufman the recurring role on Taxi, that sitcom 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 standup and TV that was happening. And what Jerry is watching here is, oh, that's how you become successful as a comic, to make 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 standup. And sitcoms are the thing that the industry sort of has for you.
Yep. Well, it also becomes a self-reinforcing flywheel for your standup act because once you're on TV, whether it's sitcoms or like a regular spot on the Tonight Show, you get national exposure. Then you can tour with your standup routine and people in cities all across America will know you. They'll buy tickets to your shows. Like, that's the way you hit it big in standup. So once Jerry is signed with Shapiro and West, they get him the Big Break, a spot on the Tonight Show with Johnny Carson. So Jerry talks about this. He trains like he's training for the Olympics to go on for I think it was five minutes, a 5 minute set.
And he always talks about how you're taking most of the best material out of your 40-minute set to create that idealized 6 minutes to just put your absolute best foot forward.
Yep. So he goes around to clubs and he'll do like the five minute set as he's practicing for months just to get it down. Go on stage for five minutes. He does it 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 so everybody knows it's going well. And that leads to regular bookings on the Tonight Show. And then that leads to Letterman wanting to book Jerry and other variety shows and all sorts of opportunities. And this is where Jerry learns discipline because if you spend 5 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 or 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 stop being 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, you know, leads into Seinfeld eventually. But yeah, this is the big difference between standup comics and like musical acts.
We're all happy to go to a concert and hear 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 standup and see them tell 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 a 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 skill 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 standup act is killing it thanks to all this exposure he's 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 is making just from his standup touring here in the mid-80s.
I didn't realize that before the show because the life of a standup when you're playing in comedy clubs, you get paid in stage time. They're like, 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 material
And so it's this like 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 like actually getting paid doing this form of art. And there's not that many people at any given time who are touring headlined artists, comedians, making a living.
No, 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, his managers, like, okay, Jerry's a big star. He's making tons of money. We're making tons of money as his agent, but like he can do more. They start going to NBC. In fact, George Shapiro starts writing letters, starts a letter-writing campaign to Brandon Tartikoff, 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 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 Tartikoff and the powers that be at NBC that, okay, maybe we should consider this Jerry guy. So, they schedule a meeting to discuss it, but it's not with NBC's comedy department. So the comedy department at NBC means sitcoms. They control the sitcoms. They're not thinking of Jerry as sitcom material. They're thinking of him as late night material where he's obviously already doing great. Can he do specials for us? Which is the direction this ends up going. And you know, I think probably in the back of their minds, they're also thinking like, hey, can this guy be a host? You know, Johnny Carson's getting older. It would be a few years later that Johnny would retire. And then there's the whole, you know, Jay Leno, David Letterman drama and the succession. But like
this is a couple years away. You know, 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. That was a thing.
Yep. So on November 2nd, 1988 at 5:15 p.m. local time in Los Angeles, NBC finally takes the meeting and Jerry shows up. George Shapiro, manager's there, Brandon Tartikoff, president of NBC Entertainment, Warren Littlefield who's head of 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 of 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 ask 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. So
GE, like Jack Welch GE, General Electric. Yeah.
One, you need discipline in your business. You got to pay attention to costs and ensure that everything that you do aligns with your chosen strategy. You can't just be haphazard. And the NBC 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. Like the other networks and NBC before this point in time, they were just like, "We're the broadcast networks. America watches what we put on TV." GE coming in and saying, "No, we're General Electric. I'm Jack Welch, Mr. Black Belt Six Sigma, greatest CEO in American history until it all fell apart." But, you know, at this point in time, you need a corporate strategy.
It's tied to revenue and profits and everything that GE 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 Tartikoff and Littlefield and Ludwin, they're like, "Yeah, yeah, what? Whatever you want to do, just come back. Come back with a script. We'll make it." Jerry has never written a script in his life for anything and 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, Jerry 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 as a stand-up 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, 11:00 p.m. 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 like Jerry. He's 41 years old. He's single. He's broke. He lives in subsidized artist housing. His stand-up routine has, I think the term that people used to describe him at the time was he was a comics comic, meaning that he was appreciated by other comics, but his humor did not exactly land with audiences.
And he had basically been chewed up and spat out of the industry.
Jerry said, you know, they always just sort of had like a comedic resonance, the two of them, and had known each other for a long time. But Larry has had this kind of like 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. Right.
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 decide that they're gonna 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.
Yep. Yep. They also can't get the best talent out of New York who 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 an eccentric young comic named Michael Richards. Might have heard of him. Fridays lasts I think three seasons and then gets cancelled. 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, you know, so worried. So worried. He goes home. He explains the situation to his next-door neighbor in his apartment in artist subsidized housing there in 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 you might be thinking, I feel like I've heard this story before. George Costanza does this on a Seinfeld episode. This is the first of many, 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 mining their own lives for stories.
Yes. And most specifically Larry's because Jerry's life is exciting. There's, you know, Hollywood and stuff, you know, the 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 SNL. NBC hated this guy to the extent he had any reputation. It was as a loser and somebody who like could not function in any sort of corporate environment and NBC wanted nothing to do with
and he turned out to be a genius and one of the best comedians and writers that the world has 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.
Yep. I think she lasted two or three years, but they bond over, you know, 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 Catch a Rising Star. This is what's on his mind. Hey, my buddy Larry has experience writing this kind of stuff. Fridays, SNL, he's been 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 was right near 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 in this Korean 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 words come out of Jerry's mouth and Larry turns and 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 decide, "Okay, 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, too, when we would be in standups 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." And 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 Larry say the words a show about nothing. That has nothing to do with how the show Seinfeld is born. Later on in the show, this is Seinfeld is so meta. They would do a season arc where Jerry and George are creating a show called Jerry and 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 who 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 shoe box apartment and this guy was making a million dollars 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, 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 signup 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 in healthcare or refinancing a loan 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. Instead of every AI agent sounding the same, you know, 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 solved customers' problems increased by nearly 50%. 50%. So to find out how you can build standout customer experiences that grow your business with AI, visit sierra.ai/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 on to become, you know, 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, as 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
in general, you're probably going to get eyeballs if you bring in a brand name star to star in a show.
Young male comic, you want your young male audience, you know, in urban areas, etc., etc. 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 thought this. There's a name before the 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.
Ah, 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 interests in syndication or fin-syn.
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 a 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 Tyler Moore Show.
Yep. Or Desilu of Desi Arnaz and Lucille Ball.
Yes. Interestingly, 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 cuz they were worried about it as a threat to the film business. Walt was the first one who was kind of the visionary. 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 than
way more, way more money in TV.
Walt was incredibly right. When you look at where the cash gushers are in the entertainment industry, you know, over the last 40, 50 years, it's come from TV, not from movies.
It's kind of, you know, one of these jokes in Hollywood that we really learned about studying for this episode of, you know, 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.
Yep. Yep. 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 green light 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."
Like in this case, this special with Seinfeld and Larry David,
right? Cuz historically, these 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 you know 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 air it 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, you know, 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 in the future. 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 cost to produce the shows.
Ah, 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 funding 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 fin-syn. 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.
But then by the late 1980s, flash forward, I don't know, 20 years or so, the networks are now the ones complaining. Cable shows up and a lot of the consumer attention is leaving the network and going to cable. And the networks argued, well, we need more latitude in 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. Fin-syn is repealed. The net of this is networks actually can produce their own shows from 1993-94 onward.
Yep. Which means that they'll own those shows in perpetuity.
Yes. But here where we are in the Seinfeld story, 1989, it is like the tail end of the fin-syn era. And the way it 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-ish% of what it costs to make it in order for the right to air it on our airwaves."
Yep. And that dynamic back in that 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 rights. It's almost like 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.
Yeah. So, back to Seinfeld and Jerry and Larry and 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, you know, 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, it's 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 then there's another check waiting right here for you.
Yep. So Jerry and Larry and the agents Shapiro and West, they're just given 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. Ben, 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, Yep, 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 Goizueta, 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 then product placements in movies. What if we just own a studio? There can be some efficiencies here, some diversification, as you say, but you know, sure, whatever. Maybe.
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 All in the Family and directed Spinal Tap, I think, and The Princess Bride.
And the idea is to be a studio by artists for artists. Really talent friendly, flexible, and easy to work with.
Yep. 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 invests $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 drinks Diet Coke in Seinfeld?
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.
Yep. 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 kind of getting started here, Sony buys Columbia from KO, 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 do 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 backloaded. If you make a show, like, great, I'm gonna 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, right? You have the rights to lose money on every episode that you, right? Every episode you make, you're like, 'Oh 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 there. 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 hands saying, 'So, uh, 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 in 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 like very short-term business while the studios and distributors run a very long-term business. It's just like Silicon Valley. They're betting on the equity value in the long run.
Yes. So back to Seinfeld's stand-up diary here. Larry and Jerry having the guarantee that NBC is 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 it to go sell it to HBO or Showtime or whoever. Sell it internationally, run the whole business model on the back end right away, guaranteed. No need to pitch the networks. No need to put capital into developing pilots that might not get picked up, etc., etc. Awesome.
Yep. But you don't know how big it's going to be. Like, is this thing going to be worth anything to sell to other networks and syndication? Probably not. It's a one-time special, right? Nobody's thinking about this as a sitcom. It's a special. But what this allows is Jerry and Larry via Shapiro and West, the managers, the agents to negotiate a huge percentage of the backend, essentially the equity in this piece of content with the production company cuz 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. You know, sort of the cap table essentially of Seinfeld the show because the only people who really know are Jerry and Larry and Castle Rock and then Shapiro and West. But um 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 in interviews cuz someone will say something like, 'You've made x00 million' and they never quite deny it. They say, 'That's preposterous. That's an insane number, right? 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.' But you didn't say that it wasn't in the ballpark. So it's just one of these funny uh 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 standup 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, ballpark it at 65ish% left for Castle Rock. The interesting thing to know is usually the way a distribution deal works cuz 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%ish, a little less because of the Sony dilution, each to Jerry and Larry, 5%ish to West Shapiro, and then 50%ish to Castle Rock and its successors, shall we say, as we go along here. So, once all these various parties are in place, they need to go, you know, write the script for this thing. So Larry and Jerry, they go off, they start working on the script, but they have a tough time coming up with 90 minutes worth of standup material to, you know, do the expose, if you will, on how it gets into comedian sets for the special. 90 minutes of standup material is a lot of standup material.
It's an eternity. It's really hard to be funny for 90 minutes.
So, as they're working on it, they're banging their heads against the wall. They also realize that there does need to be some kind of semblance of a story. I put story in quotes or you know some situations to get the characters into the scenes where the conversations would happen that would lead to the standup 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. Great. Like, that is a manageable amount of standup material that we can come up with for this thing. And doing it as a sitcom here, that'll give us some story reasons, enough situation, situation comedy, sitcom to get the characters into the scenes so we can say the dialogue, etc., etc. And the way that we'll 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 standup. So, the script for this first pilot that they come up with, the first initial script that they're going to pitch back to NBC is that Jerry is supposed to go on the Tonight Show, you know, NBC tie-in Tonight Show, but he doesn't have any new material, so he needs to pull his act together and he's hanging out with his friends, particularly his Larry-like friend George, to get the material. And then at the end of the episode, Jerry's going to 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. They're going to change it from Seinfeld Stand-up Diary to The Seinfeld Chronicles. It's going to 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 on screen The Seinfeld Chronicles.
Indeed. Indeed. Once again, NBC somewhat surprisingly just says, 'Okay.' Jerry has 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 cuz it's just different than everything else that's on network. It's like a sitcom that's not a sitcom really. We just needed to kind of like borrow from the sitcom format to accomplish our goal of how a comedian gets his material.' And it's like not even happening in the comedy department. It's happening through these late night people.
Through the late night department, the specials department. This is part of why they say yes to this change in plans because it actually makes their life easier. Previously, they were going to 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 and specials departments greenlight a sitcom pilot. This has never happened before. The show just stays in late night.
And just so listeners understand what we're talking about, the comedy department that has at this point The Cosby Show, it has Cheers, it has like 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, uh, it's really easy to say yes because it's an 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 are 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 for the part of George. He felt, and Jerry and Larry certainly agreed, that they needed a really polished, like really, I mean Jason Alexander is an incredible actor. They needed a really, really great actor to play opposite Jerry cuz 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 yet.
Kessler. Yes. He's like, 'Oh, I don't want to make it too on the nose.' And also, if we call him Kramer, then like we're going to have to pay this guy or do some kind of rights 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.
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 cuz he sets up, you know, Kramer's New York tours in New York City, right? 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 Tartikoff goes, 'Well, if you want funny...' This is at the audition. This is how he's preparing to go in and audition for this role.
Yeah. 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 guy's regular waitress at the diner, played by Lee Garlington. There's no Elaine in the pilot. So they cast Claire, they shoot the pilot, and then they bring the NBC executives in to screen it, and they're not sure. Interestingly, the comment that really sticks out from this session is that some of the executives thought it was too New York and too Jewish.
Yeah. 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 pithiness, 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 basically everybody that came out of vaudeville 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, it 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. It's Seinfeld, right? It would go on to become Seinfeld. And they're like, 'Eh, I don't know.' So they test 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, and I didn't know this, is super interesting. They would cold call, they had a research department would cold call a bunch of houses to recruit 400 households to watch an 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, horribly. 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 a 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 is she going to stay with him and like how much should they read into it and like when he greets her at the airport are they supposed to hug? Is she going to hug him? Like just overanalyzing the crap out of this 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 standup for these stupid stories?' If the viewers liked anything about it, it was actually just Jerry's standup. 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 greenlight this and you're going to do something with Jerry, it should be standup and it should be better than this.
Yeah. 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 rated as weak. 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.
Yes, 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 tuning into television on July 5th in America.
And with that, 99 times out of a hundred 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 Nutt House 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 superfans 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 Ludwin 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 and Larry and say, 'Great news. We are ordering a season of The Seinfeld Chronicles.' Jerry says, 'Uh, uh, 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 says, '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, 'Uh, 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 as they're having this conversation, and Larry famously reacts to this with, 'Ah, it'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've got the order. And Jerry has later 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.
Well, Fox was also a startup network at this point in time. It was not the Fox that you know it today as one of the major broadcast networks 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 order instead.
Yep. So they 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 Claire the Waitress. She needs to be hanging out as a member of the group.
Yep. Which leads to the network's 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, the makers of Claude. 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, Vandelay Industries, Festivus, every single time that Newman walks in and goes, 'Hello, Jerry,' all of it gets so much funnier the more you see it.
Yep. And Anthropic just did the same thing with Claude. For most people, every conversation with an LLM has been like the Seinfeld 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 in Slack 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 it 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/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 couch is weird and Jerry's apartment's 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, but 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. Cuz 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.
It's Sam and Diane in Cheers. It's Ross and Rachel. Blah blah blah. 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 talent manager, has a great quote about this, about what 'you need a girl' means. He says, 'The network wanted Jerry and Elaine 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 Elaine 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. Like they've already had a relationship and it didn't work and they broke up. And so viewers, you don't even need to take your minds there cuz we already told you it's not going to work. There is one episode where they explore it.
The Deal. Yes. Incredible episode. But then after that, I think that's the end of a season, and 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 the two of them 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 continued, they didn't continue.' There's no development. There's no relationship. It's just that didn't happen. This show would go on 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 a merging of standup 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 know George just can't help himself. 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 standup comedy not have? Continuity. Consistency. That doesn't exist in the standup world. Okay. Now, flip it on the other side. Like standup, Seinfeld doesn't have any development of these characters and places and relationships. Jerry's always Jerry. George is always George. Elaine is always Elaine. You could tune in 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.
It's 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 called them sitcoms before that, but really what they were 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 sort of lighten the mood of a dramatic situation that has a beginning, middle, and end. And those dramatic situations, as we were pointing out with the network note, sort of 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 are 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.' Like, that's how they know they're on to 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 standup when the jokes end.
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. You don't get to know how they get out of the jam. There's no continuity into 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 what 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.'
Yeah. 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 trash can, but we have restraint. 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 and the recognition of this very basic human element in these characters is surprisingly timeless and durable. So all of this comes together and crystallizes during this kind of 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.
Yep. 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. There's no uh 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 the next time.
Yep. Right. No one ever learns from their mistakes. And it provides this like perfect substrate for the jokes to happen, these insane situations that they get themselves into. And I think I was trying to reflect back on all this. I think Jerry and Larry viewed it as respect for the audience that 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 a bow on 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 breakthrough 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, you know, the hugging, the learning, the emotional arcs, it was all fake. It was all just fake and eventually thanks to cable and then the internet, audiences en masse eventually just kind of came to see that for what it is, that it's fake. And Seinfeld was being like, 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 a TV and we'll pop in the tape of 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 has left the station.
Yeah. Yes. The inmates were running the asylum from the get-go.
Yes. Especially with, you know, Larry running the show.
Ah, 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, when summer is usually the traditional downtime for networks where they don't have first-run shows going, mostly reruns.'
Yep. 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.
Yep. 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 launch 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 31st, 1990, premiering after the summer rerun of Cheers. And critically, that very same month, Brandon Tartikoff 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, sitcom, late night, specials, all reported up to Tartikoff. 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 show's 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 Ludwin, 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 named 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. He goes to Nielsen, he 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 retain 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 high. 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 yet for this. 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. 'Now that's the way...' It's in the memoir.
'Success has many 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. We'll give you 13 episodes, not a full season order of 22-plus episodes. We're not going to run it in 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 and to 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.' Like what else could we possibly do? I've already mined my entire life for all the best crazy situations that we could possibly put into these five episodes. I'm basically scraping the bottom of the barrel here.
Yes. Yes, obviously that wasn't true because there was way, way, way more material that Larry would go on to create, but it is illustrative of okay, they got to bring in some fresh talent because these guys are not out experiencing the world anymore. They're 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 in it to keep metering out little chances to it, it broke through.
Yeah. So after they get the pickup, Littlefield and 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 hatchet man essentially to give notes that you know are not going to be taken. It's a giant waste of time.
Yes. A guy named Perry Simon and 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 in, 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 mine for 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 cuz 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 sound stage. You know, this isn't free. Like, we have to build a completely new restaurant set for you to go shoot this episode in.'
And it's totally absurd what you're doing.
Basically, nothing's going to happen all episode cuz it's just people making phone calls from a pay phone, 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 Ludwin 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 episode's in the lobby of a Chinese restaurant. It's not good for NBC.
Well, foreshadow. 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 yeah, so that, you know, Rick takes Larry out on this walk around the lot and Larry just blows up. He just lets him have it. He's like, "This is what the show is. This is my vision. If you don't like it, I quit. Fine. You don't want to make it, show's over." And nobody did this. No creator would say that. Usually the network says, "We don't like it." 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 Warren Littlefield about this in research because I sort of asked, 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, bureaucracy and people's careers and politics, etc., etc. But he also made the really good point like not every creator is Larry David and Jerry Seinfeld. Like if you're going to 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 yet another parallel with Silicon Valley, right? Like most founders are wrong, but some founders are right.
Yeah, 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 Bus Boy where Larry introduces the interweaving story lines that all intersect and resolve at the end in a grand finale. 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 Bus Boy, that season two finale, is where they really catch their stride on it. They would give each character a story line. So you have four concurrent story lines 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 story lines start to be interwoven in unexpected and surprising ways. And then they almost always converge at the end in like a violent unexpected blowup 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.
You're kind of like squinting from it from all these different ways especially as the story gets larger and larger. They'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 non-fiction storytelling.
Yes. Yes. It is an incredibly specialized skill to be able to not spoil the interwoven place where the story lines 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 standup routine.
This is where they're coming from. This is the DNA of the show.
The callbacks to the other jokes.
Yeah. 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 was interwoven and building to this moment. And that's what they do with the TV show.
No situation is there for filler. Nothing wasted.
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 a dad that never learn from their mistakes. That's thanks to Seinfeld that people can 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 were 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'd have 14 to 25 scenes per episode, but they just threw out the act structure.
Plots often don't resolve.
Yes. On the set, they actually, Larry originally wanted it to be single cam instead of a multicam setup to basically resemble a movie. And for anyone who's unfamiliar, multicam is sort of a proscenium 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 of the four cameras at any given time kind of works.
Yep. It'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 this 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 or 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 in a lot of sitcoms when I watch them today, anything pre-Seinfeld, I'm like, "Oh my god, it's so overdone." Like, "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 kind of like is a cue for you to laugh along with him. Oh man, the scenes with Jerry Stiller, who plays Frank Costanza, George's dad, are just, they're so good. All the other actors are just, they're 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 thing for Larry and Jerry as 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 off set, 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 standup.
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. There's someone at a control board saying, "Camera A, camera B, camera C. Okay, now back to camera A. Camera B. Go in 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 and 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 is 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 an 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, more filmic ethos.
That's exactly right. It's hard, but these guys are nut jobs. They're obsessives. They're purists. 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 laugh to 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, but it's 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, now is a great time to thank our good friends at Sentry.
Yes, that is S-N-T-R-Y like someone standing guard, which is exactly what Sentry does for developers. Sentry 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 Sentry decades before Sentry was invented.
I 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 story lines until George pulled out the Kramer golf ball.
And that is exactly what a real software outage postmortem feels like.
Yes, there is the hero of the story who gets paged in the middle of the night and 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, it's realizing that ah, it is actually the golf ball causing the issue.
Yep. Yep. And that is what Sentry 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 developer's name on it. Then all that context goes straight into whatever writes the fix, whether it's Claude Code or Cursor or Sentry's own agent Seer, which finds the issue and opens the PR for a human to review. This is why 200,000 organizations run on Sentry. Whether it's a solo side project or the engineering teams at Anthropic, Vercel, Linear, or GitHub. You can learn more about where software gets fixed at sentry.io/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.
Yep. But it still hasn't cracked the Nielsen 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. YouTube, phones, podcasts, 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.
It's a great time to be in television.
Yep. Meanwhile though, NBC, the network, has a problem because Cheers, the anchor of its whole comedy lineup, is on its final season. And Warren and the whole crew of 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, will call it quits at the end of this 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 here going into season four, ABC, the 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, you know, 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 its butt. Yep. 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 in this time slot. So, it should be very competitive.
Yep. Larry and Jerry though, and especially Larry, they don't care. Like, 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.
With his other name, Seinfeld.
And he and George come up with the idea of a show about nothing to pitch it to NBC. That's the first episode of season four that then continues off and on throughout the whole season.
And the off and 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.
Yep. 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 11.
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 the 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 or almost all great Seinfeld episodes, this actually also happened to Larry in real life.
Of course it did. And Larry, even Larry was scared of this episode. He would have been thinking, "Nah, we can't do it. 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, the two of them, in secret. Usually what they would do in their office on the set, the Larry and Jerry's office that they shared together, they had a whiteboard. So if you watch the Seinfeld reunion on Curb Your 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., etc. So anybody could come in their office, the other writers, the NBC 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.
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 the week would 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. So this is pretty close to filming. Like you're well into production week at this point. They bring out the script and NBC is just like, "Oh my god."
We're going to talk about the full schedule, the weekly schedule of making a Seinfeld episode in a few minutes, but know this. When you're at the table read, you are six days from shooting the episode for real in front of a live audience in studio.
Yeah. You're pretty close to the point of no return or as close as Larry and Jerry could engineer getting.
Yes, before revealing what they were doing. So, the broadcast standards department at NBC, which is the in-house censor that is responsible for keeping all of NBC'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, her name is Dr. Raz Weinman in New York, she calls up Warren and is just apoplectic. And Warren's like, "Well, you know, it's 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 a pact 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 afoul 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 afoul of one because no words are coming out of your mouth, then it's really just about...
The question is only number two. Right? Do we think the audience will love or hate this? And 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. Yep. So, broadcast standards lets it through and then sales calls up and they're like, "Are you out of your mind? You know, 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, "Hey, 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 as sponsors and, you know, 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 and 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 leather-bound 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?
It completely changed the rules for Seinfeld.
And it cemented Seinfeld as a water cooler conversation show.
This was something you were going to share with your friends.
You sure as hell were 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, had 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 an audition."
Which of course, Larry David, he's furious about this.
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 like blast us out to the mass public.
Just going to go right from Cheers into Seinfeld. They're going 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. Yes. It is interesting thinking about Larry's reaction here. So, part of it is like just this 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 is.
No, I think that's a fairer... George, they've amped up the 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 walk planet Earth. And George is not, but Larry kind of is, but coupled with extreme self-consciousness, self-loathing, and self-doubt.
And so to tell Larry David like we're going to promote you to this giant spot is 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, right?
And I think it is true, you know, we think about this for Acquired 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 like a real core to explode out from.
Absolutely. That is all true. And once you make The Contest, you can't go back. That's true. You got to go to Thursday night. You got to be in the big leagues. It is 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 would always talk about the Thursday Night 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, right? Why is it different than Tuesday? I get why it's different than Friday. Friday is a weekend. Saturday and Sunday are kind of about sports or going out or living your life, but like 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 to 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 matchup, yes, it is the most important night. And the Thursday night lineup on NBC was more profitable than all of the other nights combined.
Yes, it was that outsized. Now, 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 Thursdays 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 nights.
And it was what, Seinfeld, Cheers had ended. So I guess Frasier, the spin-off, was just starting. I think Wings, right?
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 did 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. So 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.
There was like this whole NBC comedy powerhouse.
And a lot of it using SNL talent.
