NBC: Conan O'Brien reaches $45M exit deal

NEW YORK (AP) - If it wasn't already official enough by airtime Thursday, "Tonight Show" host Conan O'Brien left no doubt that he is leaving.

He did it, of course, with jokes.

In his monologue, he apologized to the guests he had scheduled for next week, including President Barack Obama, the Queen of England and "our good friend, Elvis Presley."

He confided that his separation from the network meant "NBC dropped off all my CDs and picked up its lava lamp."

And he shared some unusual terms of the agreement, including his returning "the Etch-A-Sketch my contract was written on," and that, "Effective today, NBC will stop paying for (announcer) Andy Richter's medical marijuana."

But seriously, folks: With Thursday's show, O'Brien was just one day away from bidding NBC good riddance in a $45 million deal for his exit from "The Tonight Show," while leaving his immediate future in television a question mark.

The contentious two-week battle that would allow NBC to unseat O'Brien (and move Jay Leno back to the program he hosted for 17 years) came less than eight months after O'Brien took the "Tonight" throne from Leno.

Under the deal, O'Brien will get more than $33 million, NBC said. The rest will go to his 200-strong staff in severance.

What happens next for O'Brien?

"We don't know," said his manager, Gavin Polone. "While we have had expressions of interest, we have not had any substantive conversations with anybody."

Ideally, said Polone, O'Brien "wants to get back on the air, doing the show he's doing now, as soon as possible."

There has been much speculation on where that might be. ABC (which airs "Nightline" and "Jimmy Kimmel Live!") has said it wasn't interested, while Fox, which lacks a network late-night show, expressed appreciation for his show - but nothing more. Comedy Central has also been mentioned as a future home.

Meanwhile, O'Brien might conceivably conduct off-camera business with his soon-to-be-ex-bosses.

"We do have a continuing development relationship with Conan's (production) company," said Marc Graboff, chairman of NBC Entertainment and Universal Media Studios. "So we still keep the door open."

Leno, whose weeknight prime-time hour ends Feb. 11 after just five lackluster months, will return to "Tonight" on March 1.

Noting O'Brien's imminent departure from NBC, Leno reminded his audience Thursday night, "I have chosen to stay on the Titanic," then added hopefully, "I don't believe the iceberg is that big."

He will continue to tape from the same Burbank stage where currently he hosts his prime-time show. The staff of "The Jay Leno Show" is expected to be kept mostly intact with the transition to "Tonight."

Leno's viewer appeal will also prove intact when he resumes his rivalry with CBS host David Letterman, predicts Jeff Gaspin, chairman of NBC Universal Television Entertainment.

"We believe Leno will be very competitive right away," he said, "and that over time Leno will be the late-night leader again."

Compensation for O'Brien's staff and crew was the final hurdle in negotiations between NBC and O'Brien. O'Brien was said to have been "dug in" on the issue out of concern for the workers, while NBC said this week that it had already agreed to pay "millions of dollars to compensate every one of them" and deemed it a public relations "ploy."

On Wednesday night's show, speaking of a push to get a severance deal for his staff from NBC, O'Brien joked, "At first they thought I was gullible. They said the staff would be taken to a big farm, where they'd be allowed to run free forever."

Clearly, the differences were worked out.

"Conan appreciated what NBC did to take care of his staff and crew, and decided to supplement the severance they were getting from the network out of his own pocket," Polone said.

O'Brien will be free to start another TV job after Sept. 1, NBC said. His final show will be Friday, with Tom Hanks scheduled to appear as well as Will Ferrell - his first guest when O'Brien debuted as "Tonight" host last June.

O'Brien landed the "Tonight" show after successfully hosting "Late Night," which airs an hour later, since 1993. But he quickly stumbled in the ratings race against Letterman. Under Leno, the "Tonight" show had been the ratings champ at 11:35 p.m. Eastern, but he proved an instant flop with his experiment in prime time.

Last week, NBC announced that the five-hour vacancy in prime time left by Leno will be filled by scripted and reality fare calculated to bring NBC affiliates a more robust lead-in audience for their local news than Leno had been delivering. A provisional slate of shows will include new and veteran NBC dramas, a comedy panel series produced by Jerry Seinfeld, and "Dateline NBC."

It had been no secret that the 46-year-old O'Brien was scoring puny ratings numbers on "Tonight," averaging 2.5 million nightly viewers, compared with 4.2 million for Letterman's "Late Show," according to Nielsen figures.

It was even more obvious that "The Jay Leno Show," airing weeknights at 10 p.m. Eastern, was a disaster. Mostly justified by the network for its bargain-basement production budget, it not only was critically slammed but also found a disappointing popular response. It has averaged 5.3 million nightly viewers since its fall debut - about the same number that watched Leno's final "Tonight" season, in a time slot when far fewer viewers are available. By comparison, the season's top-rated 10 p.m. network drama, CBS' "The Mentalist," has an average audience of 17 million.

But few observers expected the abrupt upheaval that erupted publicly just two weeks ago, when two Web sites posted unsourced stories that the 59-year-old Leno's show would soon be canceled or moved into O'Brien's late-night domain.

Days later, NBC executives unveiled a plan to restore Leno to 11:35 p.m. with a half-hour program, then slide O'Brien's "Tonight Show" to 12:05 a.m., followed by "Late Night With Jimmy Fallon," also pushed back a half-hour.

Disgruntled affiliate stations, which have lost viewers and advertising revenue for their late local newscasts since "The Jay Leno Show" premiered, appeared to spur NBC's sudden changes. The 210 local NBC stations saw their late news audience drop, on average, by 25 percent in November compared with the previous year among desirable 25- to 54-year-old viewers, with the Leno experiment costing the stations collectively $22 million over a three-month period, according to the research firm Harmelin Media.

In a clear vote of no confidence, some rebellious stations were threatening to drop "The Jay Leno Show" and air their own programming.

The network had been counting on O'Brien's cooperation, and wanted an answer quickly, so it could have the reconfigured lineup ready to launch after the Winter Olympics, which will dominate NBC's schedule from Feb. 12-28. But O'Brien threw a wrench into NBC's plans, and triggered a public relations firestorm for the network, when he issued a statement rejecting the offer to delay his show to make room for Leno's return.

The escalating mess furnished plenty of material for jokes by competitors of Leno and O'Brien, as well as the two NBC hosts at its center, who bashed each other and their network.

On Wednesday's monologue, Leno said the rainy weather in California "couldn't have come at a worse possible time. Today was the day NBC was supposed to burn down the studio for the insurance money."

A couple of hours later, O'Brien cracked, "I should have known something was up when NBC sent me that 2010 calendar that only went up to January."

Online, many leaped to O'Brien's defense and applauded his stand against NBC. "Team Conan" became a popular Twitter topic for viewers who pledged their allegiance to O'Brien.

For many observers, this clash of talk-show hosts recalled the late-night follies played out by NBC in the early 1990s as the network wavered confoundingly over who - Letterman or Leno - should inherit "The Tonight Show" from Johnny Carson.

The current revival was set in motion nearly six years ago, in what was hatched by NBC executives as a farsighted strategy to ensure an orderly transition.

In the fall of 2004, the network announced that O'Brien would take over for Leno in 2009. That move by NBC - endorsed by Leno, despite his clear aversion to leaving "Tonight" - was designed to keep O'Brien from jumping ship when his contract expired. As years passed and Leno strengthened his grip as the late-night ratings leader, NBC anguished over how to keep him usefully occupied on the network elsewhere than "Tonight," and safely out of reach of rival networks who were courting him.

In late 2008, the network caught the public and the industry by surprise with its virtually unprecedented scheme: a new Leno hour "stripped" in prime time from Monday through Friday.

"A lot of people were shocked," Leno joked to reporters when the plan was announced. "They didn't know NBC still had a prime time."

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AP Television Writers Lynn Elber in Los Angeles and David Bauder in New York contributed to this report.

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NBC is owned by General Electric Co.