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Third Cycle Spins ‘Seinfeld’ Toward $3 Bil

Feb 16, 2004  •  Post A Comment

Who said “Seinfeld” was about nothing? The series that some consider the greatest show in the history of television is going to be worth about $3 billion by the beginning of the next decade.
Distributor Sony Pictures Television has made a quick sale of the third cycle of the series to its incumbent Fox stations, and license fees nearly match the record-setting numbers set in 1998, when the second cycle was sold. The first two off-network cycles of “Seinfeld” reportedly drew about $2 billion in license fees and advertising revenue. The new deal includes a minute of barter advertising and will keep the series on the stations for another five years, through March 2011.
All 19 of the Fox owned-and-operated stations that currently air the strip have renewed, and license fees are estimated to be about 90 percent of what the distributor received for its second cycle-and higher than analysts projected a few years ago. In television history, only Twentieth’s “M*A*S*H” has been able to keep that kind of momentum, according to experts.
The off-network syndication run of “Seinfeld” is expected to generate between $6.5 million and $7 million per episode in broadcast syndication for its third cycle. Sources said that in Los Angeles, where “Seinfeld” runs on KCOP-TV as part of a Fox duopoly and currently receives a license fee of about $480,000 per episode, the third cycle will generate about $425,000. With 180 episodes available and an advertising market that is picking up, that supplies an impressive cash flow to the studio.
The series began its first syndication run in September 1995, earning about $220,000 an episode from Los Angeles outlet KTLA-TV. Pos itive momentum nearly doubled that fee for the beginning of the second cycle, in 2001.
`Unique Program’
“`Seinfeld’ in its second cycle was a unique program. It was unique in the same way that `M*A*S*H’ was unique: a program that because of its success was able to increase license fees, thus in the third cycle it’s not unexpected fees would be maintained,” said Bill Carroll, VP of Katz Media.
“I think there are several sitcoms that are currently on the air that fall into the blue-chip category: `Friends,’ `Seinfeld,’ `Everybody Loves Raymond’ and `The Simpsons.’ If you own one of those shows, it would not be surprising that you would seek to maintain that as part of your overall lineup.” He said. “I’m not surprised the folks at Sony were able to reach an amicable deal to continue their relationship, because the show continues to perform.”
For several seasons now, stations that count on off-network sitcoms to fuel blocks of repeats during the lucrative access time period have lamented the apparent dearth of “Seinfeld”-caliber comedies in the pipeline. The laws of supply and demand have therefore made successes like the show about nothing that much more valuable.
Last year, Sony renewed “Seinfeld” on TBS through 2011, earning an additional $200 million-plus in a five-year extension of its deal with the cable outlet. In 1998 TBS initially paid close to a million per episode for rights to the strip and added an additional $800,000 when it renewed. This year Sony went all out to maintain interest in the series, bringing Jerry Seinfeld to Las Vegas to perform for selected buyers attending January’s National Association of Television Program Executives convention. The distributor later showed a unique presentation tape that featured Mr. Seinfeld discussing the origins of the series with co-creator Larry David. The syndicator nabbed Bob Costas to put the series in a historical perspective through a voice-over for the tape.
In syndication, “Seinfeld,” which was produced by Castle Rock TV, has averaged a 6.1 national household rating this season between its broadcast and cable runs, putting it in fourth place among all strips and tops among all off-net sitcoms, according to Nielsen.