Leno move to late night a done deal –NBC risks going from bad to worse
Two very highly placed individuals in the television industry – a well known network executive and a lawyer in the television business - tell me that NBC has made the decision to move Jay Leno back to 11:35pm.
However, Conan O’Brien’s situation remains fluid.
When Conan cut his deal six years ago to take over the 11:35pm show, he built in a large penalty payment –roughly $45 million – should NBC yank the show away from him before his contract was finished. O’Brien was worried that, based on NBC’s record of botching late-night transitions, he could suffer the fate of his predecessor, David Letterman.
For those who may not recall, the Leno-Letterman debacle followed Johnny Carson’s retirement as the long-time host of The Tonight Show. Letterman, who had the 12:35 time slot following Carson, was heir apparent to replace Carson upon his retirement. Leno, however, had been extremely successful as the guest host fill-in when Carson was away from the show and the network worried that Letterman’s edgy humor might not play well in the earlier time period. What ensued was one of the great dramas in television business history.
Leno won – Letterman left for CBS.
Stuck with this $45 million obligation to O’Brien, cost obsessed NBC would like to not have to pay up on the deal. However, they cannot afford to keep Leno at the 10:00pm slot as their local television station affiliates are in open revolt over Leno’s weak lead-in to their 11:00pm local news broadcasts. Keep in mind that local news broadcasts is where your local TV station makes almost all its money and their ratings have plummeted due to Leno’s poor performance.
As a way out of all this drama, NBC has offered Conan the opportunity to keep The Tonight Show if he agrees to move to the 12:05 time slot with Leno doing a half-hour beginning at 11:35pm. Technically, this would keep NBC from being in breach of O’Brien’s contract. They have also told O’Brien that if he decides to leave for another network, NBC will allow it, despite having the right to prevent him from doing so – but he can’t take the large penalty payment with him.
At the end of the day, this is all about the $45 million. If NBC can get out of the payment, they’ll let Conan do whatever he wants as long as it doesn’t involve hosting the 11:35pm NBC show.
I’m told that O’Brien, who has experienced less than stellar ratings in his new time period, is seriously ticked off because he believes he has not been given a sufficient chance to build his audience. He might be right.
NBC would do well to remember part two of the Leno-Letterman story.
After Leno was given the job, Letterman went to CBS where he spent the first year beating Leno in the ratings. So serious was the situation that NBC considered pulling Leno from the show. Bear in mind that The Tonight Show is NBC’s largest cash cow and losing advertising revenues to CBS was serious stuff. Eventually, and some say thanks to an appearance by Hugh Grant after being busted for picking up a hooker on Santa Monica Blvd., Leno took over as number one and never gave it back.
However, there was more to the story. What you may not know is that Letterman’s decline probably had more to do with the decision of CBS’s largest affiliate group (the New World Television owned and operated TV stations) to pull their affiliation with CBS and became Fox affiliates. Virtually overnight, a large number of markets were either without a CBS affiliate or were in the throes of the confusion that results when a network switches to another station on the television dial. The change caused Letterman, along with the entire CBS schedule, to lose a serious share of audience.
I know the impact this had on the show as I was president of New World Domestic Television – the owner of the stations that made the switch to Fox.
From what I’m told, short of Conan deciding to leave the network entirely without his $45 million penalty payment, NBC prefers putting Leno into a half-hour show at 11:35am before turning it over to O’Brien.
If there is one thing we know, late night television viewers are creatures of habit. They want Jay Leno in a format that allows him to do what they are used to him doing – and that simply cannot happen in a half-hour format.
If NBC goes this route, my prediction is that they will further tank their late night ratings – and wipe out hundreds of millions of dollars in profits in the process.
Jeff Zucker should wise up and try to avoid making another expensive mistake. It’s better to bite the bullet and take the loss on the O’Brien deal. It would also be better for Conan to find a new network home. Putting Leno in a half-hour format might very well turn out to be a terrible lead in for O’Brien, causing Conan’s ratings to sink further as Leno fans leave NBC after the half hour to catch Letterman begin the interview segments of his show.
Even worse, the audience is not likely to accept Leno in this half-hour format, creating an expensive disaster for everyone on the NBC late-night schedule.