NBC and Conan Go Another Round

Jan. 19, 2010— -- With a contract settlement apparently still at least another day away, Conan O'Brien couldn't resist getting in a few more jabs at his estranged employer on Tuesday night.

Referring to his imminent ouster as NBC's "Tonight Show" host, O'Brien announced at the top of his monologue: "Hi, I'm Conan O'Brien, and I'm just three days away from the biggest drinking binge in history."

O'Brien explicitly referenced media gossip that he had been forbidden from badmouthing the network. However, he pointed out, "nobody said anything about speaking in Spanish. NBC esta manejado por hijos de cabras imbeciles que comen dinero y evacuan problemas." (Which translates to "NBC is run by brainless sons of goats who eat money and crap trouble.")

He also addressed the latest reports that he might not be able to retain intellectual property rights over some of the material he created at NBC. "Isn't it great to live in a country where a cigar-smoking dog puppet and a bear that masturbates are considered 'intellectual property?'" he joked.

O'Brien's last show is expected to be this Friday and he has made no attempt to suggest otherwise this week. Some show biz heavyweights are scheduled to pay a visit to the "Tonight Show" between now and then, including Adam Sandler, Robin Williams and Barry Manilow. O'Brien's final show will feature Oscar-winner Tom Hanks and comic actor Will Ferrell. Ferrell was O'Brien's first guest when he made his debut at the host of the "Tonight Show" last June.

O'Brien's latest digs come at at time when NBC had recently been striking back against claims that the outgoing "Tonight Show" host is battling to protect his soon-to-be jobless staffers; the network has accused the flame-haired comedian of launching "a PR ploy."

O'Brien's agent, Gavin Polone, told ABCNews.com that negotiations on O'Brien's exit agreement -- which would allow O'Brien to leave the network, making room for former "Tonight Show" host Jay Leno to reclaim his old turf -- were being held up as the two sides tried to reach consensus on how O'Brien's staff members will be compensated when the show ends.

"The main issue at this stage is how well they're planning on taking care of the people who are out of work, and that's Conan's main concern and that's the focus of all negotiations at this point," Polone said.

But in a strongly worded statement sent to ABCNews.com and other media outlets, NBC offered a different perspective.

"It was Conan's decision to leave NBC that resulted in nearly 200 of his staffers being out of work. We have already agreed to pay millions of dollars to compensate every one of them. This latest posturing is nothing more than a PR ploy," the network said.

The back-and-forth comes as the rancorous late-night programming squabble between NBC and its two biggest comedians appears to be entering its final stage.

Jay Leno announced Monday night on his prime-time talk show, "The Jay Leno Show," that "we should have an answer tomorrow" about whether he is going to displace Conan O'Brien and return to his former 11:35 p.m. "Tonight Show" time slot.

O'Brien is expected to receive a settlement of $30 million to $40 million plus severance and buyouts for his staff.

Leno on Monday night explained his side of the events that led to the standoff with NBC and said he considers O'Brien -- who publicly rejected a proposal to host his show at a new, later time -- a "great guy."

The former "Tonight Show" host and current host of the 10 p.m. "Jay Leno Show" said he'd tried to avoid doing a show in prime time but was convinced by NBC that it could work. Now, he said, four months later, because of problems with NBC's affiliated stations and low ratings, network executives informed him they were canceling his show but told him he was still "a valuable asset" to the company.

For his part, O'Brien was all jokes on Monday night's "Tonight Show," even while conceding that this was in all likelihood his last week as "Tonight Show" host.

"It's hard to accept that soon I won't have a show, but Snooki and the Situation will," he quipped, referring to personalities on MTV's hit "Jersey Shore."

O'Brien did not give any hints about whether he and NBC have agreed to the final points in a settlement deal that would allow him to leave the network and possibly establish a new show elsewhere.

The protracted negotiations between O'Brien and NBC point to what may have been flaws in O'Brien's contract, said entertainment lawyer Jonathan Handel with Los Angeles-based TroyGould, but they also pose a problem for NBC: Dragging the affair out is bad for both the network and for Leno.

"The last thing NBC and Jay need is to be dragged through a longer PR debacle than they have been," Handel said.

NBC Universal president and CEO Jeff Zucker defended the network's decision to shift Leno back into the 11:35 p.m. time slot he held for 17 years before O'Brien took over "The Tonight Show."

"From a financial standpoint, this is the right move," Zucker said in an interview with The Wall Street Journal. "We didn't want to do it, because we wanted to keep Conan. But we're going to be fine, even paying Conan to go away."

He told the newspaper he was surprised at the "nasty" turn the shake-up had taken. "We were not surprised that Conan was disappointed in having his show back up a half hour. But we were very surprised and disappointed at how nasty it turned," he said.

Both O'Brien and Leno have taken shots at NBC since the late-night controversy began, with O'Brien once joking that NBC considered him such an idiot that he might be qualified to actually run the network. O'Brien has also aimed some barbs at Leno, saying, "I just want to say to the kids out there watching: You can do anything you want in life … unless Jay Leno wants to do it, too."

People close to the negotiations confirmed to ABCNews.com that O'Brien's exit agreement could include a "nondisparagement clause" that would stop O'Brien and NBC from saying negative things about one another.

But Polone told ABCNews.com that such a clause and questions about whether O'Brien would be able to move some his most-famous bits and character (see the next page) to a new show are in the periphery of the negotiations, and that staff severance continues to be the priority.

"When you're in a negotiation, you gotta try to get everything worked out from the top down perspective," he said. "I don't want to muddy the water [by] focusing on other things less important than people's lives."

O'Brien's Next Move

In an interview with PBS's Charlie Rose, Zucker also said he did not regret his initial decision to promise the "Tonight Show" to O'Brien in 2004, saying that it kept O'Brien from leaving NBC at the time to take a job with a competitor.

The decision, he said, "allowed us to continue to enjoy great success both creatively and financially for the next 5½ years."

If O'Brien, following his expected departure from NBC this year, creates a new show on another network, it's unclear whether he'll be able to bring some of his best-known bits and characters, such as Triumph the Insult Comic and the Masturbating Bear, among others, with him.

The characters and sketches, according to The Hollywood Reporter, are intellectual property that belongs to NBC, and the network doesn't plan to give them up.

But history may be on O'Brien's side. NBC threatened legal action against David Letterman after the late-night TV veteran moved to CBS in 1993 and began using characters and sketches from his old NBC show. Letterman eventually dropped some of his staples and changed the names of others, according to The Hollywood Reporter, but his classic "Top 10 List" survived.

"It was a wash," New Yorker media critic Ken Auletta told ABCNews.com. "At some point, you make a decision [and say] 'I've got to cut my losses here and make this go away,' and that's what happened to Letterman. NBC finally said 'Make this go away … it doesn't help us.'"

Still, even if he keeps his bits, O'Brien faces other obstacles, said Washington Post media columnist Howard Kurtz.

"Conan will probably be able to take his entire act to Fox or some other television outlet. But if he was getting creamed by Letterman (and 'Nightline') at 11:30, how's he going to compete against both programs AND Jay Leno?" Kurtz wrote in an e-mail to ABCNews.com.

Fox has been O'Brien's most vocal potential suitor. Last week, Fox Entertainment president Kevin Reilly told reporters that he loves "Conan personally and professionally" and said that Fox has had "informal conversations, mostly commiserating about the situation" with Conan's team.

But "beyond that," he added, "we're not free to talk about any business negotiation or proposition that we have."

Fox speculation grew in fervor late Tuesday after reports surfaced that Fox's intellectual property department had registered the domain name ConanonFox.com. Earlier this evening, visitors to the site were redirected to a page selling Fox television show merchandise.

But hours later, the ConanonFox.com URL redirected visitors to a Twitter page, where an apparent O'Brien fan confessed online that he was behind the domain name, not Fox. A Fox representative had confirmed to ABCNews.com that the domain was not registered by Fox.

On his Twitter page, the fan, listed as Brandon Cecil, said he tried to reserve the domain name for O'Brien and Fox so "they wouldnt (sic) get screwd (sic) like JimmykimmelLive.com."

The domain name JimmykimmelLive.com does not direct fans of ABC comedy show host Jimmy Kimmel to his official, "Jimmy Kimmel Live" Web site, but rather to a non-ABC site.

Handel said if O'Brien does strike a lucrative deal with another network, it could, in at least one way, be a boon to NBC: Under a legal concept known as "mitigation and offset," NBC might be able to reduce its exit package to O'Brien by some amount depending on the host's new salary at his next job.

"If NBC has a deal to give $40 million," Handel said, "but [another network] pays him $30 million over the next 2.5 years, then NBC might be on hook for only $10 million."

O'Brien's Last Show?

O'Brien's last show is expected to air this Friday. Tonight's scheduled guests are director Quentin Tarantino and actor Paul Bettany. Oscar-winner Tom Hanks and comic actor Will Ferrell are slated to appear on O'Brien's last show. Ferrell was O'Brien's first guest when he made his debut as the Tonight Show's host in June.

NBC's late-night comedy lineup first took a dramatic turn earlier this month when, amid flagging ratings for "The Tonight Show" and Leno's 10 p.m. "Jay Leno Show," NBC announced that it wanted to move Leno's program to 11:35 and push O'Brien's show back to 12:05 a.m.

Last week, O'Brien issued a statement rejecting the plan, saying the shift would "seriously damage what I consider to be the greatest franchise in the history of broadcasting."

(For O'Brien's full statement, click here.)

Despite lackluster ratings during his first seven months on the job, O'Brien has seen a groundswell of public support as the details of the scheduling negotiations emerged. O'Brien fans in New York, Chicago, Los Angeles and Seattle organized public demonstrations Monday to "show love" for O'Brien, whom many fans affectionately refer to as "CoCo."

A grateful O'Brien aired footage of Los Angeles protesters rallying in the pouring rain by NBC's studios.

Rally organizer Mike Mitchell, the administrator of the Facebook group "I'm With COCO," acknowledged in an interview with ABCNews.com that the demonstrations likely wouldn't change NBC's plans.

"I don't think we're going to change NBC's stance on what they want to do with late night -- I think that's already been inked," he said. "I think hopefully we're going to show Conan's got a huge following and we're behind him no matter where he ends up."

Mitchell, 27, a Los Angeles-based freelance illustrator, quickly found himself close to the O'Brien controversy after he created a black, white and orange illustration of the comedian emblazoned with the "I'm With COCO" slogan.

The Facebook group has grown from 200 members to more than 315,000 in a matter of days, he said.

"Now is just a good time to support him because he's kind of been put in a tough spot and people can relate to his situation," he said. "Everybody's had a bad boss that has maybe put them in a position that they didn't want to be in."

Mitchell said he has heard from members of O'Brien's crew who have also voiced their support for the host.

"Everybody on the show has 'I'm With CoCo' avatar on Facebook," Mitchell said, referring to his famous image. "I know personally they want to follow Conan wherever he goes. … They love him and they respect him."

O'Brien's Ratings Spike

O'Brien's ratings, meanwhile, surged last week as the host peppered his show with jokes at his network's expense, at one point suggesting that NBC considered him such an idiot that he might be qualified to actually run the network.

O'Brien's Friday show, according to a preliminary Nielsen Company estimate, drew more than 4 million viewers, jumping more 50 percent from late last month. (By comparison, CBS's Letterman drew nearly 4.2 million viewers, a drop from earlier in the week, while ABC's Nightline also drew just more than 4 million.)

O'Brien's manager, Gavin Polone, told ABCNews.com that part of the reason O'Brien's ratings were lower initially was because of the weak lead-in audience provided to him by Leno's show.

On Friday, Polone noted, O'Brien actually beat "The Jay Leno Show" in the coveted 18-to-49-year-old demographic.

"It's pretty amazing since he's on at 11:35 and [Leno's] on at 10," Polone said.

Polone said viewers who initially began tuning to see what O'Brien would say about the controversy ultimately decided they liked the show, helping drive the continued ratings surge.

"The ratings just kept building and building and building," he said. "If they didn't like his stuff, they wouldn't come back."

Not everyone is in O'Brien's corner.

Last week, Dick Ebersol, the chairman of NBC Universal Sports, told the New York Times that O'Brien has no one to blame for his fate besides himself and his disappointing performance and also criticized the host for mocking Leno. He said it was "chicken-hearted and gutless" of the comedian to use his shows this week "to blame a guy you couldn't beat in the ratings."

Ebersol added that "what this is really all about is an astounding failure by Conan."

With reports from ABC News' Brian Braiker and The Associated Press.