NBC and Conan O'Brien finalize settlement

 

Ending his brief reign as host of one of television's longest-running shows, Conan O'Brien today finalized a rich severance deal with NBC that releases the comedian from "The Tonight Show" and frees him to join another network in time for the new fall season, an NBC spokeswoman confirmed.

The settlement, hammered out over the last week, brings to an abrupt end O'Brien's nearly 20-year career with NBC, where he began as a staff writer for "Saturday Night Live" in the late 1980s. His separation from NBC includes a payout that will go down as one of the most eye-popping in the annals of Hollywood: O'Brien, who has 2 1/2 years remaining on his contract, will walk away with about $32 million, according to people close to the negotiations who spoke on condition of anonymity because they were not authorized to discuss the matter publicly.

Overall, NBC will have to shell out $40 million to $50 million to close the book on its late-night drama.

NBC agreed to compensate the show's staff members, including executive producer Jeff Ross. About 190 people worked on the show, including nearly 70 people who relocated to Los Angeles from New York early last year to work with O'Brien at the program's newly built studios on the Universal lot. NBC and O'Brien's team spent the last few days ironing out severance packages for all the show's workers.

O'Brien's manager, Gavin Polone, said the talk show host would kick in some of his own money for his staff as well.

O'Brien's final "Tonight Show" appearance will be Friday. But he may not be off the air for long. The comedian will be allowed to work on a competing network by September. Jay Leno will be back in his old time slot even sooner. Leno, who surrendered "The Tonight Show" to O'Brien last spring and then was handed his own prime-time show on the network at 10 p.m., will return to late night after NBC's Olympic coverage concludes at the end of February.

The costly resolution ends two weeks of high drama that damaged the images and reputations not only of NBC executives, but also of Leno, who was painted as the villain by many in the media including CBS' David Letterman, who took numerous jabs at Leno over the last week. He was also the target of a grass-roots Internet campaign to demonstrate support for the embattled O'Brien. Earlier this week, Leno provided his side of the story on his program, saying he told NBC executives that he was skeptical that a prime-time show would work.

It was an undignified end to O'Brien's long career at NBC -- he spent 16 years as host of "Late Night With Conan O'Brien" -- and his short tenure at "The Tonight Show." Certainly this was not how NBC anticipated O'Brien's run with "The Tonight Show" playing out when it declared him the "king of late night" in June after he made his debut as host.

Ironically, NBC looked to avoid this exact scenario when it decided in 2004 to make O'Brien host of "The Tonight Show" in 2009. That move, engineered by the company's chief executive, Jeff Zucker, was done to keep O'Brien from jumping to Fox. NBC also was betting that by 2009 Leno would be ready to exit the stage and that O'Brien, who appealed to younger viewers, would be ready to take over. But as his retirement loomed, Leno became increasingly unhappy at the prospect of stepping aside while still No. 1 in the ratings.

Moreover, with rival networks expressing interest in hiring Leno, Zucker faced a difficult choice: Renege on his promise to give O'Brien "The Tonight Show" -- and pay him a $40-million breakup fee -- or follow through with his plan and nudge Leno out the "Tonight Show" door.

Instead, Zucker crafted a quick fix: Give Leno a 10 p.m. show, which would keep both comedians in the NBC fold. O'Brien went along with Zucker's "Leno in prime-time" plan when it was announced in 2008. He moved his family to Los Angeles to prepare to inherit the late-night institution previously hosted by Johnny Carson and, before him, Jack Paar. But Leno's show at 10 p.m., which launched in September, drew weak ratings and critiques by TV critics that Leno seemed off his game.

The low viewership level hurt NBC's affiliates, who count on a large audience at 10 p.m. to boost their late local news programs, a big revenue generator. Many local stations experienced ratings declines of more than 20%, and NBC was facing a mutiny as many affiliates threatened to push Leno to 11 p.m. and run their local news at 10 p.m. NBC executives decided they needed to make a switch and told O'Brien they were pushing the start time of his show half an hour later, to 12:05 a.m., to make room for Leno at 11:35 p.m. 

NBC expected that O'Brien would go along. But he refused, triggering a firestorm of controversy and rich material for other comedians.

Now O'Brien is free to decide his future. Most industry observers are betting that Fox, which has struggled in the past to get into the late-night game, is his next stop. Indeed, O'Brien has a history with Fox, where he spent two years as a writer on "The Simpsons" in the early 1990s. Just last week, Fox Entertainment President Kevin Reilly expressed enthusiasm for O'Brien -- but the network may face a hard sell with its affiliates, some of whom are locked into contracts to run syndicated sitcom reruns in the 11 p.m. time period.

But if Fox really wants O'Brien, odds are it would find a way to make it happen. The earliest he would be on the network would be in the fall, but next January is more likely.

Meanwhile, Leno, whose prime-time show ends Feb. 11, will face the challenge of improving on O'Brien's ratings. NBC has been trailing CBS' David Letterman and is tied with him in the coveted demographic of adults ages 18 to 49. During the last week, O'Brien's ratings have nearly doubled. Whether the backlash against Leno, fair or not, will hurt him when he returns to his old 11:35 p.m. time slot remains a question mark.

And finally, NBC, which is already enduring a tough season, now has to spend heavily to develop new shows for the 10 p.m. hour, at a time when the General Electric Co.-owned network already conceded that it would lose about $200 million on its coverage of the Winter Olympics in Vancouver.

-- Meg James and Joe Flint

Photos: Conan O'Brien and Jay Leno in seemingly happier times. Credit: Margaret Norton / NBC

NBC Universal CEO Jeff Zucker. Credit: Matt Sayles / Associated Press

Related

Conan O'Brien agrees to exit "The Tonight Show"

Conan O'Brien's post-NBC options

Comments

[mel]

LENO SHOULD HAVE WALKED AWAY!!!! I HOPE LENO FLOPS!!

[SG]

While I'm sad to see Conan leave and Mr. Unfunny Leno take over again, I think another network will be more suitable for Conan's humor. It's also nice that he took NBC to the cleaners. Aside from 30 Rock, there is nothing good on NBC.

[Jon K.]

How is someone like Zucker able to keep his job?

It seems that the financial industry and the entertainment industry are particularly good at protecting incompetence at the top. There's something just plain icky about fact.

[El Guapo de la ciudad de Los Angeles]

Bring back Johnny Carson...Oh wait a minute , he's dead.

[Brian]

Sorry to see you leave NBC Conan. Letterman is probably happy that he's off the front pages for his little scandal anyway. Max's band on Conan is the best in the business. Hope Jay does well in his old slot. Can we all move on now please.

[Brian]

Used to watch Johnny (the king), thought Leno boring, and loved Conan. Bye bye NBC.

[D Lehman]

NBC, a network I used to watch, has shown how it's marketing dept and management really are inept. Did you hire the Lloyd Blankfein public relations firm? People do not think Conan is funny. People have other favorites to watch at 10:00 particularly if Jay uses the same tired format. Question? you folks are in the media business...one source said you paid Conan $45mil, another $40mil and the LATimes says $33 mill...who cares? Getting paid to leave because you didn't do the job?! Guess what people are angry and they don't want to hear this right now, move on. I hope you do an excellent job in Vancouver. I'll try to watch.

[jONNY rEb]

I'll leave the witty for another time but here's the bottom line: NBC: you screwed up. Bigtime. Giving Leno what he wants isn't going to make him any funnier or entertaining.

CO'B: All the best to you and your family and I'll be like the millions who'll follow you to your next gig. Godspeed, Sir.

[tj]

The sad fact is, Conan wasn't funny. He had five years to get funny enough for the late show, and he didn't. He was at his best in the last 2 weeks, but it's too late by then....

[jad]

If only we could all screw up our jobs this badly.

[Aang]

it's official, the NBC suits look like total idiots now. this is an epic mess. I used to watch both Leno and Conan, but I can't watch Leno anymore. sure, Leno told his side of the story, but in the end, he is still accepting The Tonight Show seat back. no one is forcing him to jump back in, so I find his story not too convincing.

can't wait to see where Conan will end up.

stupid NBC suits. I hope you get 4th or 5th place ratings.

[jjw]

Zucker and the other geniuses at NBC need to give themselves a really big bonus this year.

[Jim]

What a bunch of idiots.

[truthspeaker]

Conan is way better than Lenno. In fact, Lenno has no talent what-so-ever and is the least funny person on television.

[Vin S.]

It would be hilarious if the ratings continue to drop with Leno's return! The NBC execs should fire themselves instead.

[tombo3]

Jerry Zucker should have to pay this severance himself out of his own money instead of the shareholders of General Electric. The phrase "he pulled a Zucker" will live forever as a monument to an ineptness perhaps never before seen in the annals of television.

And Jay? He comes off looking like a pathetic fame addict who doesn't honor agreements he made and who doesn't know when to walk away.

Great job, Jerry. Great job. Great job, Jay. Great job.

[Josh]

Conan- class act all the way. How many bosses do you know that would decrease a large percentage of a payout, in order to take care of their employees? He didn't "need" to do that, but he did because he's the real deal. Good luck Conan!

[regman999]

Who gives a rat's ass anyway. I can't stay up late enough to watch these shows because I WORK. :-P

[Tom LA]

Much of this latest mess could have been avoided if Leno had decided to do the right thing and remove himself as a possibility for 11:35 instead of continuing to be NBC's corporate "puppet" (a kind description). Leno is no better than the incompetent, unethical network execs.

[whybedumb]

BREAKING NEWS: TIGER WOODS TO APPEAR ON CONAN'S LAST TONIGHT SHOW!!!

http://whybedumb.com/index.php/2010/01/tiger-to-appear-on-conans-last-tonight-show/

[DonPV]

During the interim period between Conan's last show and the Olympics, how about a couple of weeks of reruns of Johnny Carson? The master videotapes of his shows from May 1972 to May 1992 are well-preserved, and would demonstrate to a new generation how late-night SHOULD be done.

[Mary]

I've watched Conan and never thought he was very funny. On the otherhand, I think Jimmy Fallon is great and up and coming talent. As for Jay, I like him and enjoyed his show. I wish him well.

[D. Alexander]

So NBC could have simply dropped O'Brien and paid $40 million but instead chose to expose themselves as inept executives and end up paying $50 million and garnering a lot of bad will.

Brilliant!

[Stacy]

Why Jeff Ross, the real architect of failure, is getting a bonus is beyond me.
Ross is the guy who decided that the things that made Conan funny in late night should be jettisoned in the new time slot. He also okay'ed the return of Andy, the un-amusing side-kick.
And the writers all had contracts--WGA contracts--so NBC isn't doing anything generous.
Gavin Palone can pat himself on the back, but Leno's got the better contract. Jay's spelled out the time slot, which Palone didn't do for Conan. NBC would have had to pay over double to get rid of Jay.

[pasadena jag]

Watching these two boring guys is like committing suicide.