Anger at NBC

Now that NBC has paid Conan O’Brien to leave, staffers grumble, “We’re not allowed to buy mechanical pencils!” Kim Masters looks at the network’s future, as well as O’Brien’s.

01.21.10 11:23 PM ET

“I have chosen to stay on the Titanic.”

With those words in his monologue Thursday, Jay Leno assured the public that their long national nightmare is over: He will be returning to The Tonight Show as of March 1.

Not everyone on the NBC lot was thrilled at the news that the network had agreed to pay about $45 million to bid farewell to Conan O’Brien and his staff. “We’re not allowed to buy mechanical pencils!” complained a top staffer on an NBC prime-time show. “That’s how crazy things are—you can save pennies on mechanical pencils, but you spend $40 million on somebody who was mad because they moved his time. My show was moved! Why didn’t they pay me?”

“Going after all these big names is a recipe for disaster as well as a financial nightmare,” said an executive at a rival network, writing on his blog.

O’Brien’s team may have anticipated that they’d need to spin that big payout in case the tidal wave of sympathy that has rushed his way should happen to turn. Seriously—how does $32.5 million for a few months of unsuccessful work sound? Having laid the groundwork by stressing that O’Brien had spent the last several days fighting for severance for his staff—the closest thing to the common man that you’ll find in this saga—manager Gavin Polone put out word at first light Thursday morning that O’Brien was sweetening his employees’ deal out of his own pocket.

NBC Chief: ‘No Press Is Bad Press’

Kim Masters: Anger at NBC
With O’Brien departing, the general sense in the industry is that Leno can return to primacy at 11:35. But the damage to NBC’s prime-time schedule will be far harder to repair. Perhaps in hopes of improving frayed relationships with the creative community, which had been distressed to see hours of formerly scripted programming turned over to Leno, NBC has announced that it has made deals for shows from such high-end and high-priced producers as Jerry Bruckheimer and J.J. Abrams.

“Going after all these big names is a recipe for disaster as well as a financial nightmare,” said an executive at a rival network, writing on his blog. He predicted that the next big hit “will not come from the usual suspects.”

Launching brand-new shows at 10 p.m. is especially challenging in the DVR world, said another executive at a competing network. And the damage at NBC affects more than that particular timeslot, he added. “NBC is a shell of what it used to be,” he said. “It used to be that they could get people to that ‘very special ER’ or Frasier. They were shameless and they shilled it and it worked. I don’t think they have that anymore.”

Both of these executives scoffed at NBC Universal Television Entertainment CEO Jeff Gaspin’s notion that the network could use the upcoming Olympics to shine up its tarnished brand. “The Olympics has never been used to launch anything,” one said.

For O’Brien, the next question is whether he will sustain his newfound ratings momentum despite a lull before he can return to television, presumably on Fox at 11 p.m. (Fox executives, who have expressed interest in O’Brien, have been very quiet about their plans now that his release has been secured.)

One Fox competitor figured the network will work through a thicket of issues with its affiliates and put O’Brien on the air. But he was not predicting great success. “You could do OK, but I doubt he even does [the rating] that he did for NBC,” he said. “Make whatever excuses you want, but there’s a track record and trend of Conan at 11:30, and it’s not good.”

Certainly in any negotiation, it would appear that Fox has the whip hand, since there is no other place for O’Brien to go except cable. But he has every reason to make a reasonable deal. There are millions of NBC’s dollars in his pocket and he has a bellyful of animus.

But don't expect for hear much about all this from O'Brien after he signs off the air on Friday. At least, not for a while. According to a knowledgeable source, the deal calls for him to zip his lip until May.

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Kim Masters covers the entertainment business for The Daily Beast. She is also the host of The Business, public radio's weekly program about the business of show business. She is also the author of The Keys to the Kingdom: The Rise of Michael Eisner and the Fall of Everybody Else.