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Seinfeld is legendary not only for the quality of the show but also for its ability to mint millionaires. One of the more perplexing people to have made a fortune from NBC’s 1989-1998 smash is Stephen Bannon, CEO of Donald Trump’s campaign for president. How, exactly, did this happen?
The tale begins in 1988 when Jerry Seinfeld is featured in People Magazine and would be performing his biggest concert ever at Town Hall in New York City. His manager, George Shapiro, takes the opportunity to write NBC’s then top three executives — Brandon Tartikoff, Warren Littlefield and Perry Simon. The letter opens, “Call me a crazy guy, but I feel that Jerry Seinfeld will soon be doing a series on NBC.”
This led to a meeting, where contrary to popular belief, Seinfeld didn’t pitch a show about nothing, but rather one where comedians hang out and talk about where they get their material (a format similar to Seinfeld’s later Comedians in Cars Getting Coffee). The important thing is that Seinfeld had the executives in stitches, and Shapiro pressed Tartikoff for a pilot commitment. He got it.
But Seinfeld and Larry David realized they needed a production studio to put up financing for the pilot and considered Paramount, Universal and Sony before deciding they felt more comfortable with younger non-suits. They went with Rob Reiner and Alan Horn, then running Castle Rock Entertainment.
Castle Rock had made a slew of successful movies, including In the Line of Fire, A Few Good Men and City Slickers. But its fledgling TV business largely was churning out duds. In 1993, Ted Turner decided to acquire Castle Rock and New Line Cinema in a $700 million deal that would help feed movie content to his cable operations. At the time, Castle Rock was partially owned by Westinghouse Electric.
That’s where Bannon popped up. He had left Goldman Sachs to start Bannon & Co., a boutique banking firm specializing in media companies. His firm was representing Westinghouse, and when Turner didn’t have the cash to close both deals, he offered as partial payment the right to participate in some of Castle Rock’s TV shows. Most were unremarkable titles that even insiders can’t quite recall (though some say The Ed Begley Jr. Show and Julie Brown: The Show were included). There also was Seinfeld, which was struggling to find an audience even in its third season. Bannon advised Westinghouse to accept Turner’s terms. Westinghouse executives countered that if Bannon was so confident, he should also accept participation rights instead of a portion of his bank’s $3 million fee. Bannon took the chance. Neither Seinfeld, Horn, Reiner nor anyone at Castle Rock were even aware of the arrangement.
By the end of its ninth season, Seinfeld was generating $200 million a year in profits and Seinfeld was making $1 million per episode (Julia Louis-Dreyfus, Michael Richards and Jason Alexander were pulling in $600,000 an episode). Jack Welch, CEO of NBC’s then parent GE, was so eager for a 10th season that in a meeting at NBC chief Bob Wright’s apartment at Trump Tower (a few floors below where Trump himself lives now), he offered the comedian $5 million per episode.
Seinfeld had to think about it. He walked to nearby Central Park and stopped at the bench where decades earlier, he had told his father he wanted to be a comedian. Seinfeld just couldn’t do a 10th season. Shapiro told Seinfeld that Michael Jordan and John Elway had gone out on top — and now he would. Shapiro’s partner Howard West couldn’t believe it, asking the comedian, “You realize that $5 million was just the opening offer?”
Seinfeld opted to go out on top. But it didn’t matter because Seinfeld was about to truly rake in money for all its profit participants (from Bannon to CAA). Seinfeld has reaped more than $3 billion in its post-network afterlife through syndication deals with TBS, Hulu and others.
Bannon, now 62, became an influential figure at the conservative news site Breitbart.com before joining the Trump campaign. He’s still cashing checks from Seinfeld, and observers say he has made nearly 25 times more off the Castle Rock deal than he had anticipated.
This story first appeared in the Oct. 14 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
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