Why NBC decided to put the sit-com cast in the money

When the wacky neighbor starts getting $13 million a year, you know TV salaries have entered a new dimension. As every hipster doofus knows by now, the Seinfeld sidekicks — Michael Richards, Julia Louis-Dreyfus, and Jason Alexander — finally reached a pact with NBC that, combined with star Jerry Seinfeld’s $1 million-an-episode contract, makes the group the best-paid cast in TV history. Coming back next fall for its ninth season, the supporting trio, which had been asking for an eye-popping $1 million each per show, gets a 300 percent raise, from $150,000 to $600,000. Think about it: With 22 shows a year, Richards will end up drawing an annual salary near Jay Leno’s, and Louis-Dreyfus will be pulling down about what Sandra Bullock gets to star in a movie. ”We were able to come up with a package that became attractive,” said NBC Entertainment president Warren Littlefield at the May 12 fall lineup announcement.

Understandably, Littlefield barely alluded to the four months of bare-knuckle bargaining that threatened Seinfeld‘s future. Earlier this year, the network had drawn the line at $250,000 a show. Then, the week before the lineup was announced, NBC reportedly upped its offer to $400,000. Still, the cast mates held firm. According to a network insider, the most obstinate holdout was Louis-Dreyfus, followed closely by Alexander. Tensions ran so high that right until an agreement was made, there were indications that the actors wouldn’t be back. Says a source close to the negotiations, ”We were close to burying this show.”

From a financial standpoint, NBC had good reason to sign the cast. Do the math: Before the increases, the network made around $200 million a year in gross revenue from Seinfeld (its commercials cost $550,000 for a 30-second spot). The show, meanwhile, costs the network about $2 million an episode, paid to producer Castle Rock in license fees. That comes to nearly $50 million a season. The difference is an astounding $150 million profit.

With the salary raises, producing Seinfeld will now cost $1.35 million more a week, or roughly $30 million more a season. Even at the old ad rates, that still leaves NBC a glittering $120 million. (Castle Rock declined to comment on whether it will contribute to the pay hike. But if so, NBC’s losses would be even less.) Nor does that take into account the effect Seinfeld has as a lead-in show: Whatever series airs at 9:30 p.m. on Thursdays (this year, Brooke Shields’ Suddenly Susan shared the time slot with Sharon Lawrence’s Fired Up) can command $200,000 to $300,000 for 30-second ads. Says Littlefield: ”Our peers said, ‘We’d pay them a million.”’

If NBC has any worries, they may be about setting a costly precedent. Sure, the network faced an uproar over the Friends‘ salary renegotiations last summer, but that resulted in a paltry jump from $40,000 to a reported $75,000 an episode. By contrast, the Seinfeld deal could have TV producers desperately trying to hold the line on budgets, especially when the leads of most other popular shows are making less (see sidebar). ”I was just telling someone, ‘I wonder at what point people start to think about doing stuff like this,”’ muses Shields.

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