In the past month, Sony Pictures Television has sold The King of Queens into its third cycle in syndication and Seinfeld into its fifth. Such syndication deals are usually received as a matter of course, but the truth is these later-cycle deals are some of television’s most profitable.
“For many years, syndicators used this standard formula when it came to figuring out how much money you would make on a sitcom: you would get 100% of your license fees for the first cycle, 60% for the second cycle, and 40% for the third cycle,” says Chuck Larsen, president of October Moon Television.
Translated into dollars, that means if a show sold for $1 million an episode in its first cycle, it would sell for $600,000 an episode in cycle two and $400,000 an episode for cycle three.
Today, however, “that’s out the window,” says Larsen, who represents producers when studios take their TV shows out for sale in syndication. “With cable, subscription video-on-demand and digital networks, every deal is different.”
What remains true, however, is that the more cycles a studio can get out of a show, the more profitable it is. And the bigger the sitcom hit, the longer the show can typically run in syndication.
Seinfeld went into its first cycle in syndication in 1995. According to reports, the show upped its revenue in its second cycle—something that’s only been done by a few sitcoms in off-network history, with M*A*S*H and Two and a Half Men counted among them, according to Larsen.
In 2010, Time Warner, whose Castle Rock Entertainment produced the show while Sony distributes, reported at an investors’ conference that Seinfeld made $598 million in its first broadcast cycle, $984 million in its second cycle and $703 million in the third. On top of that, cable paid $180 million for the show in its first cycle, $113 million in the second and $86 million in the third. That totaled nearly $2.7 billion. Since then, the show has been renewed for two more cycles, bringing its total take to well over $3 billion.
Even though an off-net sitcom usually makes the majority of its money in its first cycle, if it comes back for more cycles, those license fees and barter sales become pure profit.
“By the second cycle, you’ve covered all of your deficits and you’ve paid off a lot of your residual costs. Besides a few expenses and distribution fees, everything else is gravy,” says Larsen.
Shows such as Seinfeld and The King of Queens, along with other aging sitcoms including Warner Bros.’ Friends and CBS Television Distribution’s Everybody Loves Raymond, are no longer the ratings powerhouses they once were, but they can still be strong utility players for stations.
Tribune paid cash-plus-barter to renew Seinfeld in many of its markets, including WPIX New York, where it follows CTD’s The Arsenio Hall Show at midnight.
“Seinfeld in New York is still very valuable,” says Sean Compton, president of programming and entertainment at Tribune Broadcasting. “It’s not been overexposed on cable, and broadcast stations have only had 12 runs per week. The fact that Sony is getting cash for the fifth cycle of a sitcom is sort of unheard of.”
Even off-net sitcoms that aren’t as strong as Seinfeld are faring well in this robust market, many distribution executives say. With digi-nets and SVOD players all hungry for fare, there are many places to sell off-net sitcoms, even comedies from the ’90s such as The Fresh Prince of Bel-Air and Full House.
“We have found more demand for off-net sitcoms than there has been in a long time,” says a syndication executive. “Many of these shows have value, just in different places. There are lots and lots of sitcoms that are doing very well for cable and digi-nets that essentially stations don’t want. Distribution is not the impediment to anything.”
And the most important thing about sitcoms is that, in terms of repetition, they don’t seem to get old. “The value of sitcoms over drama is that they are eminently repeatable,” says Larsen.
“Both Seinfeld and King of Queens have proven for a very long time that they are very valuable programs,” adds one station programming executive. “They are always funny.”