Oops, yes you're right, it is a percentage of the net. I suspect that the contract in question is a relic from the sixties, when Hollywood accounting was nowhere as sophisticated as it is now and a percentage of the net actually got you some money.
I came across this site and found an thread about TK so I figured this was as good a place as any to talk about TK. Friday is his final show and it's kind of depressing. Almost everyday I listen to him and his ramblings and I love it, he will be missed.