×
You will be redirected back to your article in seconds

What David Letterman Did That Will Never Be Done Again

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.

Popular on Variety

More Biz

  • Harvey Weinstein

    Weinstein Can Get a Fair Trial in Manhattan, Says D.A.

    The Manhattan District Attorney’s office argued on Friday that Harvey Weinstein can get a fair trial in Manhattan, and blamed the producer’s defense team for much of the pre-trial publicity in the case. Weinstein’s attorneys have asked an appellate court to transfer the case — which is set to begin on Sept. 9 — to [...]

  • Leonardo DiCaprio Madonna

    Leonardo DiCaprio, Madonna Call for Action on Amazon Wildfires

    As wildfires rage at an alarming rate in Brazil’s Amazon rain forest, celebrities are using their platforms to bring awareness to the deforestation’s impact and to call for action. In the past week, stars like Leonardo DiCaprio, Madonna, Cara Delevingne and Ariana Grande have taken to Instagram to express their frustration with the lack of [...]

  • 'The Durrells' TV Show

    Greece Sweetens Production Incentives as Struggling Country's Economy Rebounds

    It’s taken the better part of a decade for Greece to show signs of recovery from the crippling crisis that almost pushed it out of the Eurozone. Now, with the economy slowly on the mend, the government is doubling down on efforts to jump-start the local film industry, giving a dramatic overhaul to the incentive [...]

  • Warner Music Group Partners With Audiomack

    Warner Music Group Partners With Audiomack

    Warner Music Group announced it has entered a partnership with the music streaming and discovery service Audiomack, marking the platform’s first licensing deal with a major label. According to the announcement, the two companies will work together on content concepts and explore ways to break emerging artists, connecting music fans with rising talent before they [...]

  • Scooter Braun Congratulates Taylor Swift on

    Scooter Braun Congratulates Taylor Swift on ‘Brilliant’ Album and Campaign

    Two days after Taylor Swift fired off the latest salvo in her battle with Scooter Braun, the manager congratulated the singer on the campaign around her “brilliant” new album, “Lover,” which arrived last night. The message came after Swift said she will be re-recording songs from her first six albums, which are now owned by [...]

  • David Koch Obit

    David Koch, Libertarian Activist and Billionaire Philanthropist, Dies at 79

    David Koch, brother of Charles Koch and one of the owners of Koch Industries, the second-largest private company in the U.S., has died at 79. According to the New York Times, Charles Koch announced the news of his brother’s death in a statement. Though he did not attribute to David’s death to a particular cause, [...]

  • Beverly Hills Realtor Accused of Stealing

    Beverly Hills Realtor Accused of Stealing From Usher, Adam Lambert

    A Beverly Hills real estate agent has been arrested on charges of stealing from the homes of celebrities, including Usher, Adam Lambert and “Real Housewives” star Dorit Kemsley. Jason Emil Yaselli, 32, is accused of encouraging an accomplice, Benjamin Ackerman, to enter homes during open houses in order to steal from them. Ackerman allegedly sold [...]

More From Our Brands

Access exclusive content