On the street outside the Emmys on Monday, I caught up with a veteran TV studio executive who was amused by the final line in Jason Sudeikis’s acceptance speech for Ted Lasso. “We’ll see you for Season 3, at some point,” Sudeikis said, likely prompting some nervous laughter among executives at Apple TV+ and Warner Bros. Television. Yes, the next and supposedly final season of the two-time best comedy series will eventually be finished—it’s the “at some point” that has caused concern and frustration among those on and around the show. When, exactly? And at what cost to the studio and the creatives? “You never want to hear ‘at some point,’” this executive joked.
So far, it’s taken about a year to make 12 episodes of a sitcom—albeit a very labor-intensive sitcom—and there’s no finish line in sight. Lasso Season 3, the first with Sudeikis firmly in charge alongside co-creators Brendan Hunt and Joe Kelly, opened a writers room last September, and the cast arrived in London in early January. But Sudeikis personally decided the scripts needed a significant rewrite, according to multiple sources. OK, fine, that happens; it’s called Ted Lasso, the guy who plays Ted and runs the show should be happy with the writing, especially since it’s now Emmy-Winning Ted Lasso and he’s said the third season will be its last. What’s the old Steve Jobs quote? “The only way to be truly satisfied is to do what you believe is great work.”
But those rewrites took a while. Episode 1 didn’t begin filming until March, and then… stops and starts, script changes on the fly, days not made, character arcs shifted. A Sudeikis-led brainstorm led to an April location shoot in Amsterdam, where he once lived, that added weeks to the schedule. A plan to film at Stamford Bridge, home of Chelsea Football Club, was frozen for a bit when its owner, oligarch Roman Abramovich, was forced to sell the team after Russia’s invasion of Ukraine. The season’s final episodes, which I won’t spoil here, are upping the production stakes even more. And post-production takes forever compared to most comedies because many of the soccer stadiums are digitally added.
Thanks in large part to the delays, the Season 3 budget has ballooned between 20 percent to 30 percent (and counting), one source estimated, and Season 2 was already a lot more expensive than that great first season. The result: A season of TV that was originally supposed to air this past summer blew through its summer production timeline and isn’t even close to finished. The latest estimate I heard is that Lasso will wrap before the end of the year, likely in November, and air in the winter or early spring. But who knows?
This might sound insignificant; after all, everyone wants Ted Lasso to be as great as possible, and Sudeikis and crew have proven themselves worthy of the time and expense. Plus, most shows and movies are suffering delays these days thanks to Peak TV ambitions and Covid shutdowns. The Lord of the Rings: The Rings of Power cast and crew was sequestered in New Zealand for more than a year, for example, so long that Amazon actually prematurely picked up cast members for Season 2 and advanced them money. Lots of bad shows go over budget and miss deadlines, without much fanfare.
Lasso is interesting, though, because it’s extremely high profile, its star is also its key writer-producer-auteur, and because of the business relationships behind the show. Remember, Apple might be the world’s biggest company, but it doesn’t own its biggest TV hit. Lasso is a Warner Bros. show (with NBCUniversal as a passive producer thanks to Sudeikis having first performed the character in NBC Sports promos). So Warners employs the talent and manages the production. Apple licenses the show on the “Cost Plus” model, which has taken over the streaming business but isn’t often explained.
According to industry custom, Cost Plus works like this: Apple licenses Ted Lasso by paying the cost of production plus a set premium, and it controls global rights plus library rights for as many as ten years. That de-risks Warners, which, under the old model, would take just 50 percent to 70 percent of the production cost up front, then make its money selling the show worldwide. But it caps the potential upside because Warners can’t hawk the show in other territories—at least not at first. (On Lasso, Warners retains some linear TV rights, which is music to Warner Bros. Discovery David Zaslav’s ears as he looks to squeeze more revenue out of shows on different platforms.)
Each season, Apple and Warners agree on a budget. Apple generally is friendly to talent; Warners generally is… less friendly, which has led to many situations where talent will cry to Mom about being mistreated by Dad. Then the premium is applied. It can be a percentage of the budget or a set fee. On streaming comedies, that fee usually starts at around $1 million to $2 million an episode, and on dramas, it’s between $1 million to $3.5 million per episode, per sources. Premiums are usually fixed, meaning they don’t go up if the show is a hit, so let’s say the Warners premium for Lasso is around $1.5 million an episode (I don’t know this, I’m estimating using comps); if so, the studio would make about $18 million in profit per season. Not bad, but remember, Lasso is a huge hit, and Warners will never make, say, Big Bang Theory money off of it. Instead, Warners makes its numbers these days by producing more Lassos than it once did—and often for its own platforms.
But let’s say the show goes over budget, as Lasso has this season—who pays those overages? Warners and Apple then duke it out. A hands-on distributor, like Apple, would be involved and approve expenses associated with a delayed shoot. Typically, those can include everything from an Amsterdam sequence to the increased living stipends that talent request when their London accommodations need to be extended. But Apple might argue that Warners, as the studio and manager of the talent, should have controlled costs more effectively. So who ultimately pays to indulge Sudeikis’s creative whims? That will be a negotiation once the season is wrapped. Both Apple and Warners declined to comment.
Warners also pays profit participants out of the premium, and on Lasso there are two major participants: Sudeikis, and executive producer Bill Lawrence, who was the showrunner of Seasons 1 and 2. Lawrence isn’t really considered the creative engine of this show, but he was an experienced adult in the room. This season, he’s not on set in the U.K. because he’s back home working on other Warners shows, like the in-production Bad Monkey with Vince Vaughn, which is also for Apple TV+. Lawrence is an interesting piece of the Lasso puzzle; the Scrubs and Cougar Town creator was ice cold after a few flops. Now, thanks to Lasso, he’s got a massive new overall deal at Warners, and his backends were largely bought out in a recent renegotiation. He wasn’t particularly well-liked on set, but it’ll be interesting to see what Season 3 looks like with less of his input.
Those are the macro financials on Lasso, and then it trickles down to the talent. They’ve all done fine, but it’s easy to understand why many were grumbling about Season 3 delays as they celebrated at Emmy parties this past weekend. Several stars in the large ensemble—Hannah Waddingham, Brett Goldstein, Juno Temple, Brendan Hunt, Phil Dunster, Nick Mohammed, Toheeb Jimoh, and more—have been handcuffed to the show, even as it has made them all famous. Several have been offered big acting gigs, I’m told, and Warners, with very few exceptions, has shut down requests to be let out of production to do them. That’s not a new gripe—actors on hits love to bitch about all the bigger jobs they could be taking if they weren’t stuck on the damned show that made them an in-demand actor in the first place—but it’s exacerbated by so many production delays. (Lasso is a good example of why the guilds want to look at onerous exclusivity and first-position requirements.) And, worse, Warner Bros. is holding the actors not just until the end of this season, whenever that may be, but for a potential fourth season next year—even though Sudeikis has said repeatedly that he wants to end the show at three.
The hope at Warners, and at Apple TV+, is that Sudeikis will finish Season 3, take a nice vacation, reflect on the fact that this show will likely be his career apex, and decide to take one more go-round. Will that happen? Probably not, but thanks to a renegotiation with the cast and writers after Season 2, Warners has the stars locked up. There’s even a possibility that Season 4 happens after a longer break, or with Sudeikis in a more diminished role. Nothing will be decided until Season 3 is done.
Speaking of that renegotiation, it got super heated, with the talent often going to Apple when they believed Warners was being unreasonably hostile. There’s also a sense—whether justified or not—that the supporting cast, while getting significant pay bumps, didn’t totally reap the benefits that the megahit status of the show might have suggested. Sudiekis got paid, of course, and is earning more than $1 million per episode for this season, per multiple sources. And Goldstein and Hunt earn separate fees for acting, as well as writing and producing. But two sources confirm Lesley Goldberg’s reporting from last year that Goldstein, a double Emmy winner, took about $150,000 per episode as an acting fee (a big lift from what he was making but perhaps below his value), in part because he is earning other fees as a writer and producer. Yet Warner Bros. is said to have used that $150,000 number as a ceiling for several co-stars that don’t write or produce. So at least some of the reps think the cast could have done better, given the popularity and impact of the show.
This gets to the larger question that studios like Warner Bros. Television and the talent community haven’t really figured out: How the hell should a show like Ted Lasso be valued these days? Compensation is usually based on “comps”—if this show with X metrics paid its studio and talent Y, then our show with X metrics should be paid similarly—but what is a comp for such a transformational show? Studios and agencies compile arsenals of data before these negotiations—it’s still the only Apple show to crack the Nielsen Top 10 list! Search demand for the show is off the charts!—but the lack of data transparency from the streamers themselves means only Apple knows the true value of Lasso to Apple TV+. That’s not a great bargaining position.
Depending on which analyst you talk to, Apple TV+ has between 25 million and 40 million subscribers—and the truth is, nobody outside the company really knows. Nor do we know how many subscribers are there because of Lasso—and I’m betting it’s a lot. The show entered the cultural zeitgeist, probably alerted millions of people to the existence of an Apple streaming service, may have led to increased sales of Apple hardware or other services, and generated a jolt of positive attention on the Emmys telecast for the world’s largest corporation. Plus, it gives its C.E.O. Tim Cook something fun and impactful to talk about on earnings calls.
That said, the Lasso audience, thanks to the platform, is far smaller than the big Netflix or even Disney+ juggernauts. Apple TV+, on its own, is still not profitable, and the Apple share price certainly doesn’t budge if it wins Emmys, or even if tens of millions of people watch. At this point, Apple TV+ is largely a loss leader for its other business, as well as a branding exercise.
So while Apple TV+’s leaders, Zack Van Amburg and Jamie Erlicht, would certainly love if Sudeikis did a fourth season, neither the service, nor certainly the parent company, will suffer all that much if he doesn’t—certainly not compared to, say, the broadcast networks in the heyday of their signature shows like Friends or E.R., or even Netflix, a pure-play streaming company, with Stranger Things. Apple’s Eddy Cue could kill Apple TV+ tomorrow and few would be shocked. Again, not a great bargaining position.
At this point, the lore of Lasso is such that Season 3 will arrive—whenever it arrives—with huge expectations. And as long as it airs before the Emmys deadline at the end of May, likely allowing for another year of domination that we saw on Monday night, Apple TV+ will be happy to have it, headaches and all.
