What David Letterman Did That Will Never Be Done Again

David Letterman Landmark Dead Broke Mold
Robin Platzer/Twin Images/Time Life Pictures/Getty Images

Landmark deal in 1993 broke the mold

David Letterman’s sign-off from CBS’ “Late Show” next year will not only mark the end of an era in latenight, it will bring the curtain down on one of the most unique and lucrative deals ever crafted for a television star.

From day one on CBS, Letterman has owned “Late Show” outright through his Worldwide Pants production banner. Even in 1993, that was basically unheard of for talent not named Oprah.

But Team Letterman took advantage of a moment in time that gave it the utmost leverage. NBC had been so ham-fisted in its handling of “The Tonight Show” transition in 1991 that it alienated Johnny Carson and Letterman, Carson’s hand-picked successor. That made Letterman a red-hot commodity for a rival network that was desperate to break into the latenight business. Surprisingly, for all its Tiffany successes, CBS had never fostered a latenight franchise to rival NBC — or even ABC’s perch with “Nightline.”

Letterman’s longtime attorney Jim Jackoway and CAA reps Lee Gabler and Steve Lafferty seized the opportunity to command more than just an eight-figure annual payday. Control was crucial to Letterman after the tough experience at NBC.

Worldwide Pants’ 100% ownership of “Late Show” meant that Team Letterman called virtually all of the shots and owned the negatives.

CBS paid Worldwide Pants a license fee just as it would to any other studio — a fee that encompassed the network
picking up Letterman’s considerable salary and production costs. Even Jerry Bruckheimer and Dick Wolf at their peaks never wielded such a club (Mark Burnett comes the closest with his roughly 50% stake in “Survivor”).

Letterman’s deal became even richer about a year into his run on CBS when the network was eager to negotiate a long-term extension. That’s when the two sides hammered out the deal that gave Worldwide Pants ownership and control of the 12:30 a.m. slot following “Late Show.” “The Late Late Show” bowed in January 1995 with Tom Snyder at the helm. Snyder was succeeded in 1999 by Craig Kilborn, who in turn was replaced in 2005 by Craig Ferguson.

Right around this time, Worldwide Pants also was developing a sitcom property with a promising comic, Ray Romano. “Everybody Loves Raymond,” of course, became one of the pillars of CBS’ primetime turnaround, and has made a tidy fortune in syndication.

ABC made a big run at snaring Letterman in 2002, which forced CBS to further plump up its license fee for “Late Show.”

Letterman’s ownership of both of CBS’ latenight offerings came into sharp focus in late 2007-early 2008, during the 100-day writers strike. While “The Tonight Show” and others were sidelined with their writers hoisting picket signs, Worldwide Pants was able to cut an interim agreement that allowed Letterman and Ferguson to go back on air in early January at full strength with all their scribes in tow.

Despite his muscle, Letterman has not been exempt from the changing tides in the TV biz. Declining audience and heightened competition forced a downscaling of the CBS-Worldwide Pants deal in recent years from the 2002 high. And in 2012, CBS quietly came onboard “The Late Late Show” as a co-producer (which translates to an equity interest) as part of a Letterman-Ferguson contract renegotiation. Sources said that move was also prompted in part by a chill in Ferguson’s relations with Worldwide Pants.

Letterman’s business-side reign in late-night will surely end after his retirement. Even if Ferguson’s show continues on CBS, sources close to the situation said it would be unlikely for Worldwide Pants to retain the infrastructure required to produce the show.

Ferguson is negotiating a new contract — with CBS, not Worldwide Pants. Those talks just got a lot more complex, thanks to the April 3 call Letterman made to CBS chief Leslie Moonves.

No matter whom CBS sets its sights on to fill the “Late Show,” there is zero chance the new guy or gal will see anything like Letterman-level largesse. It’s a matter of simple math, and the fact that CBS is no longer in startup mode in the daypart.

On a broader level, when Letterman goes, latenight TV loses the one host who remembered when a single wee-hours personality held the entire nation in thrall. Letterman is TV’s last link to the Johnny Carson era, and the only one who still made an effort once in a while to talk to the nation — not just that sliver of it that represented a particular demographic niche.

Now that’s a passing.

Brian Steinberg contributed to this report.

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  1. Sandra Crenshaw says:

    Letterman is leaving. I feel like someone close to me is dying. He’s a very unique person. I hope we get to see him again, maybe as a guest. Really gonna miss him. We’ve seen him twice. Never did get my jacket!

  2. MRM5412 says:

    Beautifully stated.
    It’s the end of an era. God help us all.

  3. Joe Starr says:

    I place him in with Johnny Carson as the two top hosts then comes Jay Leno !!

  4. Judy says:

    There never will be another Letterman – we will miss him greatly – multitalented is putting it mildly!

  5. BillUSA says:

    I don’t always agree with (and even like) David Letterman, but he is a good entertainer. My favorite highlights were when he wore a suit of magnets and spring-boarded himself to the side of a makeshift refrigerator. The other thing was when he annoyed Madonna and Richard Simmons. Disagreements or not, Letterman will be missed. Good Luck DL.

  6. LOL says:

    I love Letterman.

  7. Becky Garrett says:

    I can see why Craig might be fed up with Letterman’s Worldwide Pants. For all the money Letterman has made he makes Scrooge look like the most generous guy on the planet. They probably expect Craig to compete with Kimmel and Seth Myers but refuse to give him a band or money for skits, etc. I personally will be glad to see Letterman go, his politics are off-putting to half of the country and his stingy attitude toward the Late Late Show is unforgivable.

    • Judy says:

      I disagree! Saying, “his politics are off-putting to half of the country” means nothing unless you have done a scientific poll to back up that comment! If you haven’t, it’s just your opinion!

    • jsm1963 says:

      Even though he owns, or owned The Late Late Show CBS was probably putting up the money, much like with his show.

    • Smooth says:

      Dave’s politics are only off putting to wing nut republicans that make less than $100,000 a year, and carry water for billionaires while wishing and playing the lottery.

  8. Erin Morris says:

    Letterman is unique in his 100% ownership and having the ability to make every important decisions. In my opinion though, this is a very traditional way late night programming is taken. Letterman is classic comedy but definitely an emphasis on the classic. Now late night hosts and new bloods such as Fallon and Meyers look to how they can keep their programming alive by putting content management in the hands of viewers, through social media posts and comedy bits centered around Tweets and Reddit posts.

    See how Fallon and Meyers do it right in the link below:


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