Will Ferrell and Adam McKay's recently launched Gary Sanchez Prods. is expanding into television with "P.E.," a single-camera comedy for HBO.

After a bidding frenzy among a number of broadcast and cable networks, the project landed at HBO in what sources described as one of the pay cable network's richest development deals, with sizable penalties attached to it.

Jody Hill, Ben Best and Danny McBride will write "P.E.," which centers on a guy who, after flaming out as a major league baseball pitcher, returns to his small Southern hometown to teach physical education at the middle school he once attended and has to make amends with all the people he turned his back on.

Hill, Best and McBride wrote and starred in the indie kung fu comedy "The Foot Fist Way," which Hill directed. When the movie screened at the Sundance Film Festival in January, the trio was signed by CAA, the agency that also represents Ferrell.

After seeing a tape of the movie, Ferrell and McKay made it Gary Sanchez's first acquisition under the company's first-look deal with Paramount Vantage.

Ferrell and McKay then teamed with Hill, Best and McBride for "P.E.," which all three will executive produce. Gary Sanchez's head of production Chris Henchy, who most recently served as a writer on HBO's comedy "Entourage," will oversee the project for the company.

In addition to its busy slate on the film side, Gary Sanchez Prods. plans to be active in television. The company will take a selective approach, developing a couple of TV projects a year, sources said.

Ferrell and McKay are coming off the summer blockbuster "Talladega Nights: The Legend of Ricky Bobby," which the two wrote, McKay directed and Ferrell starred in.

McKay is repped by Endeavor. Ferrell is additionally repped by attorney Deborah Klein.

Ferrell and McKay are managed by Mosaic Media Group.

McBride is additionally repped by attorney Peter Nichols. Hill is additionally repped by attorney Dan Steinman.

Hill, Best and McBride are managed by the Gotham Group.