Reflecting on the recent 25th anniversary of the Seinfeld pilot, I found myself thinking about the environment that lead to the creation of that amazingly successful show.

While the massive successive of the show is widely known (billions of dollars of economic activity: Larry David’s deal alone apparently pays him up to a total of $1.7bil), one element is often skipped: federal subsidies.

David served as the inspiration for the character of George: famously he lived across the hall for 6 years from Kenny Kramer, the inspiration for Cosmo Kramer, on the show. The building where they lived at the time was Manhattan Plaza, (, a federally subsidized housing block with 75% of the tenants in the performing arts, receiving rent support through Section 8.

Since we can assume that unless a massive fraud occurred taxes were paid on the billions of activity generated by Seinfeld, this bet has paid for the government, since it did what government subsidies are intended to do: increased economic activity. In addition, since this was an arts subsidy, it was successful in playing a part in helping to create the best loved sitcom in history. Not solely responsible, of course, NBC and Jerry Seinfeld and countless other sources played a part. But the government here played an essential part in creating something that would likely not have existed otherwise.

Mr. David himself has paid his individual share of this back through taxes many times over, of course. But wouldn’t it be great if it had been set up similar to a startup incubator where a small percentage of future earnings would be returned to the institution that helped him directly at the start of his career? The function is the same: provide support during a difficult time (the beginning years of a company or a career in media), and in exchange, take a percentage of the profit in future years?

For those worried about choking off artists who can’t afford to loose even 1-2% of their income, there could be a floor (a few hundred thousand a year) below which nothing is taken, in order to insure that participation in the incubator doesn’t lead to a lifetime of starvation.

Setting it up like this would offer protection for institutions like Manhattan Plaza from changing feelings of different administrations towards supporting the arts by helping them get closer to self-sufficiency and need less continual support from the government after the initial seeding support to get the project going.  Ongoing revenue, even if it wouldn’t be enough to completely self support, would help the projects flourish and lessen the burden on government coffers.

Of course, Seinfeld and Larry David’s success is an outlier, but so what?  Incubators regularly make bets on a large swatch of companies in the hope that a few will pay off.  With hundreds of subsidized residents, only a few need to go on to great success in order to help support the institution that supported them during their early years.

JK Rowling has gone on record saying that she stays in the UK, and pays the heavy taxes there, rather than moving to a tax shelter country, since she is grateful for the government support she got when she was starting out.  Mr. David has stayed in the states and contributed to the general fund, but a system that directly benefited the direct subsidy he once benefited from would help ensure that benefit is available to the next generation of Larry David’s.