Conan taking $45M to leave ‘Tonight Show’

By | January 21, 2010 at 5:04 PM

Conan O’Brien signed a $45 million deal to leave NBC after refusing to host the “Tonight Show” in a later time period, according to a person with knowledge of the situation. Jay Leno will return as host on March 1, NBC said.

The accord includes about $33 million for O’Brien and about $12 million for his employees, according to the person, who asked not to be identified because the terms are private. O’Brien was released from his contract, freeing him to pursue other opportunities after Sept. 1, New York-based NBC said today in an e-mailed statement.

O’Brien will make his last appearance as host of “The Tonight Show” tomorrow, according to the statement. The agreement ends two weeks of public feuding since the network announced plans to return Leno to 11:35 p.m. from 10 p.m. and delay “The Tonight Show” by 30 minutes. Today’s accord clears the way for Leno to take back his old job.

“The perception of the late-night franchise is a little bit damaged in the eyes of viewers,” David Bank, an analyst at RBC Capital Markets in New York, said today in an interview.

The network’s attempt to establish a prime-time talk show hosted by Leno led to viewer losses and complaints from local stations with shrinking audiences for their news. Since O’Brien took over in June, “The Tonight Show” has dropped to second place behind CBS’s “Late Show With David Letterman,” in part because of Leno’s smaller 10 p.m. audience.

FINAL SHOWS

O’Brien, 46, ends a late-night career at the network that began more than 16 years ago. His exit marks another setback for NBC, which regularly vied for audience leadership with shows including “Friends,” “Seinfeld” and “E.R.” NBC last led the ratings in the 2001-2002 TV season.

O’Brien’s guests tonight are scheduled to be Robin Williams and Barry Manilow, according to NBC. Tom Hanks, Will Ferrell and Neil Young are planned as his final guests tomorrow.

The current “Tonight Show” host said last week he wouldn’t host “The Tonight Show” at 12:05 a.m., upending plans by NBC Universal Chief Executive Officer Jeffrey Zucker to keep both performers as he returned to a traditional prime-time lineup of comedies, dramas, reality shows and news magazines to stem viewer losses.

Fox has expressed interest in O’Brien and is waiting for the situation to be resolved. O’Brien said in a Jan. 12 statement that he didn’t have an offer from a rival network.

ALIENATING VIEWERS

The tussle over late-night stemmed from the 2004 decision by Zucker to anoint O’Brien as Leno’s successor at “The Tonight Show,” with the change scheduled for June 2009.

To keep Leno, 59, from leaving, NBC offered the talk-show host a program on weeknights at 10 p.m., a move that was also supposed to bolster network profit by replacing costly dramas. The move alienated viewers, cut the 11 p.m. audience for local news and sparked protests from NBC’s affiliate stations.

This season, fourth-place NBC’s audience has declined 1.8 percent in total viewers in prime time, which runs from 8 p.m. to 11 p.m. in most time zones, based on data from Nielsen Co. The network’s 18-to-49-year-old audience, the group prized by advertisers, is down 6.3 percent for the season that started in September.

JAY LENO’S RATINGS

NBC announced a new 10 p.m. plan last week, featuring the new show “The Marriage Ref” from Jerry Seinfeld, the new program “Parenthood,” a mix of new episodes and reruns of the “Law and Order” series and “Dateline NBC.”

The network said today “Late Night with Jimmy Fallon” will continue to run from 12:35 a.m. to 1:35 a.m. on weeknights in most time zones.

NBC told Comcast in November that Leno’s ratings had hurt local stations, one of the factors that weighed on the value of the entertainment company, according to people with knowledge of the situation.

As of late December, O’Brien was averaging 2.84 million viewers a night, trailing Letterman’s 3.74 million, according to data from Nielsen. “The Tonight Show” has led in the 18-to-49- year-old audience, with 1.49 million viewers on average to Letterman’s 1.17 million, though CBS pulled even recently.

Leno led Letterman in both audience groups for 14 years, according to Nielsen data.

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