Will Ferrell and director Adam McKay have made some of the biggest comedy hits of the last decade, but their working relationship transcends the silver screen. After meeting on Saturday Night Live, the duo achieved an instant connection that would spawn movies such as Talladega Nights, The Other Guys and Step Brothers.

Their biggest hit together was Anchorman: The Legend of Ron Burgundy, a movie that made modest returns on its initial release but gained a monstrous afterlife through word of mouth and DVD sales. The long anticipated sequel is Anchorman 2: The Legend Continues and it brings back all of the pieces of the original that made it successful in the first place.

Director Adam McKay recently came to San Francisco to promote the film and talk about making a new story with familiar characters. He’s happy to have waited to make the sequel and not rush anything, making the film stronger as a result. The following is a transcription of that conversation.

Q: How did you and Will Ferrell approach making the sequel?

The reason we didn’t do it for so long was that we were just like, “Why do a sequel?” They usually feel kind of perfunctory, or like a cash-grab. But then people kept asking us, “What about ANCHORMAN 2?” It suddenly became intriguing. We looked at what makes sequels work and what doesn’t. The ones that work continue the story and the ones that don’t just repeat it. The key at that point was, “Is there another chapter to this?”

We spent an afternoon kicking around ideas when we realized, “Oh my god — 24-hour news started in 1980…″ and that’s not that far from when the first one took place. That’s even bigger than “the first female [news] anchor.” Once we had that, we knew we had a movie. That is a different story to tell and it does put them through different paces.

Q: Your brand of humor is so tangential and wild, exploring corners of comedy that very few other films have the balls to approach. With this movie, was it difficult to one-up yourself and go to places that were even more absurd and hyperbolic?

I think, fortunately or unfortunately, that we could do that all day long. If you gave us 300 days to shoot, we could give you 300 days of tangential comedy. That’s never a problem. If you give us the straightest script in the world… if you gave us TINKER TAILOR SOLDIER SPY, we could fill it with comedy. Our background is improv. Ferrell [came out of the] Groundlings and I come out of Second City. The key is [having] a good story with enough emotional beats you can hit, and that engine is working and holding it up enough. We just want [a story] that holds it up enough. Once we knew we had that story of them coming to New York and all this change, we could do the comedy forever.

Q: It’s also because of the cast.

Yeah. The fact that you have four go-to point of views for comedy, you can always, in any scene, throw it over to Rudd, throw it over to Carell, Ferrell can become the straight man, or he becomes the guy doing the messed up thing and Rudd’s the straight man. It’s never-ending with that sized cast.

Q: You said you were kicking around several ideas for ANCHORMAN 2 before you decided on one. Could you share any of the ideas you discarded with us?

Keep in mind–the other ones were bad ideas! One was an “Irwin Allen” idea. I think it was still about 24-hour news, but the guy who owned 24-hour news built an underwater hotel, and the news story was that the glass they were using was faulty and Burgundy covered up the story because he didn’t want to lose his job. The end of the [film] was this crazy, 1970′s, Irwin Allen, underwater thing with the glass cracking, water flooding the room, those bad TOWERING INFERNO shots. We actually wrote and ending with that, but we could see it getting a bit boring.

Another one was as dumb as this–they go to space, somehow. Ferrell was like, “I don’t know what this is, but somehow we’re in space.” You could justify it! You go to the space shuttle; you could have it be that this is the first reporter to go up. I was wary of those action-y third-act endings, where it’s like, you’re in a comedy, so you’re doing action, but not quite as well. It can get a little boring. Ultimately, we stuck with the characters and made it about [Ron], his wife, his son, the news, and staying in that pocket.

Q: You still have an explosive climax in the movie, though.

We do. You’re talking about the gang fight?

Q: Yes.

We kind of knew that somehow it’s crazy, since in the first movie, [the fight] is operating within the logic of that movie. Somehow, as crazy as it is, it became somewhat of a conservative ending. We weren’t going to do it at first. We said, let’s not repeat anything from the first movie. We were going to be really strict about it, but we said, “We’ve got to do another gang fight!” It would be too much fun, and now that we know how to make movies a bit better, we could do stuff we didn’t do the first time.

Q: How easy or difficult was it to secure some of the cameos for the climactic fight?

It was pretty crazy. We drew up a wish list of all the people we wanted, and what we ended up with was basically our wish list. It’s never happened before. Usually, when you do your dream casting, you get 30%, 40%, only one of the people. In this case, they all said yes and it was insane. When they all said yes, I thought, “Should we try crazier ones?” So we actually tried Barack Obama, Oprah Winfrey, and Bill Clinton. Bill Clinton was an immediate, decisive “no.” Oprah’s person was like, “You never know!” There was an hour where we thought, “She might do this!” But then [her reps said] no.

The Barack Obama one was crazy. We had a semi-connection in the White House, and the connection was like, “He might do this! If he gets to say something with a point of view…” The joke was going to be that he was from C-SPAN. He was going to say that C-SPAN was going to change the news, because it was going to be stripped-down, and you’d see the truth. “Someday, everyone’s going to be watching C-SPAN.” Of course, I’m sure someone underneath him was like, “Are you f—king crazy? He’s the President!”

Q: How did you and Will Ferrell develop your particular brand of humor?

It’s always been what I’ve liked, going back to the Fawlty Towers episode when the German comes in with a head injury. I remember laughing so hard I had tears in my eyes. Or in AIRPLANE, there’s a spinning headline that says, “Boy Trapped in Refrigerator, Eats Own Foot.” A lot of comedy writers have pointed to that joke as a seminal joke. It’s those moments when all order goes away and chaos [takes over]. To me, as a kid, there was nothing more exciting than watching a movie and realizing, “Oh my god, anything can happen!”

The first time Will and I ever collaborated was our first year on SNL, a sketch called “Wake Up and Smile,” which was about what happens when the teleprompter breaks [during a newscast]. It basically becomes LORD OF THE FLIES since they’re not being told what to say. They all revert to their animal selves. It ends with Ferrell ripping the head off of David Allen Grier, with lots of blood, and they form a cult like “The Order of the Hand.” They just regress immediately. The first sketch he and I ever wrote was called “Neil Diamond: Storytellers.” That was another one where we just got f—king insane. The joke was [that Neil Diamond was telling all the stories behind his songs, and he] has all these harmless pop songs, but the stories are just horrible. “When I killed a drifter to get a hard-on.” They just get more and more out of control, and we realized, “We both like this!”

Q: You have all this footage of these funny guys saying and doing funny things – so much footage that you have enough for a second edit – which you’re going to release. How much fun is it in that editing room and is the second edit done?

It’s done. I just went in and gave all the last notes on it. It’s crazy. It’s 350 new jokes. I think there’s, like, seven jokes we couldn’t replace that were spoken jokes. Otherwise, every single joke [has been] replaced. It’s about 10-15 minutes longer… whole new runs and riffs. I can’t imagine doing a comedy any other way. When we’re in that editing room, the worst feeling is when you’re painted into a corner by a crappy joke. “Shit! We have nowhere else to go!” With every movie I do, I hate that feeling more and more, so I just make sure to have alternate takes no matter what we’re doing. It’s the greatest. I’ll go to the editor and say, “There’s got to be a better joke than that.”

A lot of times I’ll remember [something we did on the day] and he’ll go and dig it out. One of the other editors will cut four versions of the scene, I’ll go “That one!” and we’ll test screen it. The sheer volume of improv on this one, because there are so many actors, we were doing two screenings at the same time most of the time. We’d run another cut in a different theater and I’d get to see every joke. You record the laugh track and you go, “Holy shit, that worked!” We were finding new jokes up until we locked. We screened the alternate version before we had locked picture on the regular release and I found four new jokes in the alternate version that went into the regular movie. By the way, I could still be doing it now. It never ends. It’s a blast.

Q: Were there any discarded plot lines?

No, amazingly. There are a lot of plotlines, too. I was joking with [Judd] Apatow that it’s like we’re 11-years-old and into minotaurs and tridents, that’s what [this movie’s] like. There are five storylines [running] through [the sequel]. There’s the love story with Meagan Good, there’s the broken marriage, there’s the relationship with the son, Tamland has a love affair going, there’s the news and the synergy thing…there’s a lot. I thought for sure one or two of them would be cut, but they all seemed to play.

In this case, it was just the alt jokes, the sheer tonnage of improv. It’s very funny when you tell the studio, in the first [movie’s] case, “We have a second movie.” They can’t comprehend it. I told them, and they were like, “Haha! Must feel like that, right?” I told them that we had a second movie and that we’d already cut it and it just didn’t compute. Later, when the movie kind of hit, they were like, “What did you mean about that second movie?” They didn’t even do anything with it the first time. It was the same thing in this case. I kept telling them we had a second movie with all new jokes. This time, they believed us a little more and they’ve already scheduled it to be released.

Q: What made you decide to give Brick a love interest? Why him?

I think the answer is almost in the question. Just say, “Brick has a love story.” Will and I sit down and just spray out possibilities. We write this 25-page document of what we’d want to see in the movie that makes no sense with the story at all, these dream moments. I don’t remember which one of us said, “Brick’s got to fall in love.” It wasn’t calculated at all. It just came out of what we wanted to see in the movie. I think it’s a little bit inspired by the first movie’s ending where it says he’s married with 11 kids.

Q: Are there any jokes that you went with even though they maybe didn’t quite work with test audiences?

That’s an interesting question. That’s the fun of it–there’s artistry to that. You’re not a slave to those test audiences. We put jokes in even though they don’t work just because we think they’re funny. But you need the audience to go on the ride with you. You can’t just isolate them. It’s this give and take you’re constantly playing with. There’s the line between Brick [and his romantic interest] Chani (Kristen Wiig) where she says, “I’m trained and certified…” (and then Brick finishes the sentence) “…to fire a military-grade missile launcher.” It never got a peep out of the audiences, but at one point I was like, too f—king bad, it’s going in the movie. Sometimes, there’ll be a joke that I don’t necessarily love, but then it kills, and you’re like, “What? Why is it killing?” If they love it that much, it’s like, all right, they can have that one. That process is just so much fun. You’re taking the audience on a ride, but messing with them a little bit.

They do test scores [with the test audiences] where they combine the “Excellents” and the “Very Goods” and you get a number out of it. You hear about movies that get a “98″ or “100.″ We don’t want that. For this one, I said the highest we should ever get is a “90″–I still want 10% of that crowd not liking the movie. That was the highest we got. There still should be some people walking out going, “That got too weird for me,” you know?

Q: It’s been going around that Paramount had cold feet about giving ANCHORMAN 2 the green light. What was their concern, and what changed their minds?

It was purely about the fact that since the first one, all these guys have become incredibly successful. They all have high quotes, and rightfully so. On paper, if you’re going to do the movie and pay everyone what they should be paid, it was going to be a certain budget level. We told them that, and they went, “Are you f–king crazy!?” We said all right, we won’t do it, and made THE OTHER GUYS [instead]. People kept asking us and asking us about it, and we went, “Shit, man. We should do this anyway.” We went back to the studio and said we’d [take] a pay cut and we still couldn’t get it right. Then at the last second, they were able to find the right budget level, but it still involved everyone taking 60% pay cuts. But, you know what? We can’t complain. We still get paid ridiculous amounts of money for the jobs we do. Ultimately, it’s so much fun.

Anchorman 2: The Legend Continues is now playing in theatres nationwide.