O’Brien, NBC contend with latenight aftermath

Peacock looks to save face; 'Tonight' host mulls moves

Now comes the hard part — for both Conan O’Brien and NBC.

Both sides are sprinting to map out what happens next now that the $45 million exit deal for Conan O’Brien has been finalized.

Exit agreement brings to a close an extraordinary fortnight of fighting among high-profile TV personalities and industry power players.

Once O’Brien and the Peacock go their separate ways after Friday night’s final seg of “The Tonight Show with Conan O’Brien,” both camps have a lot of work to do.

O’Brien and his reps are going to hunker down and sort out the best next move for the host, who’s unlikely to be unemployed for too long given his highly desirable skill set. Yet carving out a new late-night home at Fox isn’t a slam dunk — and it’s unclear where he might go if a deal with that net can’t be worked out.

NBC, meanwhile, has the Herculean task of rehabilitating its image after being the butt of jokes for weeks amid the chaotic O’Brien-Jay Leno shuffle.

Peacock also faces the tricky job of promoting Jay Leno’s return to helm of the “The Tonight Show” — which, on its face, is an admission that its experiment with the 10 p.m. “Jay Leno Show” was a failure.

For NBC execs, the decision that spurred the standoff with O’Brien — the effort to move Leno back to 11:35 p.m. and bump O’Brien’s “Tonight Show” to 12:05 a.m. — was “strictly a business decision,” said NBC Universal TV Entertainment chairman Jeff Gaspin.

“Based on business fact, the ‘Tonight Show With Conan O’Brien’ was scheduled to lose quite a bit of money in 2010,” Gaspin said. “If you look at the ratings in households, NBC is down 14 %, while Conan is down 49%. In adults 18-49, NBC was down 16% but ‘Tonight’ was down 23%.”

Those figures don’t include the ratings bump that O’Brien has seen in the past few days, Gaspin admitted, but that doesn’t change anything.

“These were the numbers when I made the decision,” he said. “When you see those kinds of stats, plus you know Jay used to win regularly there, and you have a problem at 10 p.m. with the affiliates forcing your hand, you have to come up with a decision.”

Gaspin said he believed the plan — which he outlined to the press during the TV Critics Assn. press tour earlier this month — “was a reasonable compromise based on these facts.”

O’Brien, meanwhile, is limited in what he can say about the debacle by the terms of the exit agreement that was signed and sealed early Thursday morning.

As part of the agreement, NBC will pay O’Brien $32 million — more or less the amount of money that the host was owed for the 2 1/2 years that remained on his contract.

An additional $12 million will go toward paying off contracts, handing out severance to staffers and paying other shut-down costs. O’Brien has also been given additional funds (around $600,000) to help out his “Tonight Show” staff; O’Brien’s reps say the host will also use some of his own money — said to be in the seven figures — to aid his staff as their jobs end.

That’s a hefty payout, as O’Brien’s executive producer, Jeff Ross, also has a large contract. The show’s other talent — from Andy Richter and members of “Max Weinberg and the Tonight Show Band” — are negotiating their exits as well. Everyone, from the show’s writers and all the way down to the janitorial team will receive a severance package.

Such a setup was said to be important to O’Brien, particularly because much of his staff uprooted from New York to Los Angeles last year when the host inherited the “Tonight Show.” Indeed, it’s understood that some staffers have been in discussions with NBC about moving back to Gotham on the network dime.

“In the end, Conan was appreciative of the steps NBC made to take care of his staff and crew and decided to supplement the severance they were getting out of his own pocket,” O’Brien’s manager, Gavin Polone, said. “Now he just wants to get back on the air as quickly as possible.”

O’Brien will have the opportunity to launch such a new late-night program starting Sept. 1, when a short non-compete window expires. (A new show would take at least that long to launch, insiders note.)

Despite previous speculation that NBC would pay less if O’Brien quickly landed another job, there is no “offset” clause in the deal. Indeed, even if O’Brien eventually signs with Fox or another net and receives a new salary, he’ll still get that $32 million payout — as long as he abides by the agreement.

In exchange for the $32 million payout, NBC execs got the concessions from O’Brien that they wanted “for a cooling-off period.”

Besides that noncompete window, stipulations include a disparagement clause that will limit what O’Brien can say in the press or on TV. As a result, O’Brien will likely lie low in the coming weeks and months and not give an interview on the circumstances, insiders said.

The disparagement clause also expires Sept. 1. On recent editions of “The Tonight Show,” O’Brien has made light of what he can or can’t say about NBC going forward. Insiders said he’s still allowed to poke fun at NBC on “Tonight” — but once that show goes dark, his lips are zipped.

O’Brien also won’t be able to bring the intellectual property that he created at NBC over the years, including even Triumph the Insult Comic Dog. But David Letterman faced the same thing — and found ways around it — when he left for CBS in 1993.

“Tonight Show with Conan O’Brien” staffers will be given the next few weeks to clear out and depart the show’s Universal Studios offices and soundstage. After that, the net will likely look to lease the stage out. Although there’s been talk of renting the studio to a future O’Brien show, that seems unlikely given the raw feelings on both sides.

Additionally, O’Brien’s production shingle — Conaco — will remain at NBC Universal for the time being, although the status of the company at the Peacock is still being worked out. Some Conaco projects may remain at NBC U, while others may not. Conaco, run by former Universal TV topper David Kissinger, had a year and a half left on its pact with the Peacock.

Insiders earlier said most of the exit agreement’s larger points had been settled days ago and an announcement of O’Brien’s departure was expected for several days, but was delayed as lawyers for NBC and the host hammered out small deal points.

A pact was finally signed around 1 a.m. Thursday morning.

Timing allowed O’Brien to alert viewers on Thursday’s “Tonight Show” that the following evening’s episode would be his last.

Robin Williams was set to be a guest on O’Brien’s second-to-last show, just as he was on Johnny Carson’s penultimate “Tonight Show.” O’Brien’s Friday finale will include guests Tom Hanks, Will Ferrell and Neil Young.

After that, “Tonight” was already set to go on hiatus as of next week. NBC is still mulling what to do in the slot — either airing more O’Brien repeats or perhaps re-airing old Leno repeats — until Feb. 11, when late night is preempted for the Olympics.

Meanwhile, Leno will host his final episode of the doomed primetime strip “The Jay Leno Show” on Thursday, Feb. 10. After a break for NBC’s coverage of the Winter Olympics, Leno returns to the 11:35 slot and “The Tonight Show with Jay Leno” will makes its return Monday, March 1.

Thursday’s official announcement capped a surreal two weeks in the latenight world. In the end, NBC had two latenight hosts who wanted the 11:35 p.m. slot, but there was only room for one.

And just as they did in 1992, when Jay Leno and David Letterman battled for Johnny Carson’s chair, NBC execs opted to stick with Leno. Gaspin acknowledged that he made sure to get Leno’s signoff on the proposed 11:35 p.m.-12:05 shuffle first. But word of the plan leaked early this month before it could be presented to O’Brien, which inflamed the situation from the get-go.

O’Brien made his unhappiness known — first via reps, and then by an extraordinary statement issued Jan. 12.

“For 60 years the ‘Tonight Show’ has aired immediately following the late local news,” O’Brien wrote in the statement. “I sincerely believe that delaying the ‘Tonight Show’ into the next day to accommodate another comedy program will seriously damage what I consider to be the greatest franchise in the history of broadcasting. The ‘Tonight Show’ at 12:05 simply isn’t the ‘Tonight Show.'”

Gaspin admitted that the network never presented O’Brien with an alternative to the 12:05 move.

“I suppose there could have been other possibilities, but nobody actually discussed those possibilities,” he said. “The only choice for Conan was keeping the ‘Tonight Show’ at 11:35. We never got around to any other (options).”

But the network also didn’t push another alternative on Leno, whose contract had a time slot guarantee for 10 p.m. In the mind of NBC execs, Leno had already agreed to a compromise — producing a 30-minute “Jay Leno Show” at 11:35.

“He was willing to compromise, which maybe gave me the false optimism that Conan would agree to this as well,” Gaspin said.

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