The War for Late Night

by Carter, Bill

  The big concern for Leno—and for NBC—was that Jay would face a backlash of blame as he tried to reestablish himself at 11:35. There would be only a few weeks between the end of the misbegotten ten o’clock show and his return to Tonight. NBC was concerned enough to call in a crisis-management firm, Sitrick and Company, nationally known PR experts specializing in countering bad news. Forbes magazine called its founder, Michael Sitrick, “The Flack for When You’re Under Attack.”

  The network was seeking to learn just how much damage had been done, and the best way to mount a response. In this case, the advice did not get too complicated: Jay needed to bring back his loyal fans and he would be fine. That meant keeping to his steady routine of outside stand-up appearances and benefit performances.

  Jay himself had some concerns about those, but he had several big houses booked in January—a good way to assess if he would encounter any fallout. One of them was the Borgata Casino in Atlantic City, a 2,500-seat house. When Jay called, offering to back out if the sales were slow, he was told the show had sold out in a day. This seemed to be a good sign.

  In one desperate stab at turning things around, NBC put together a promo ad to run during the Olympics that was a direct parody of the famous “It was all a dream” twist in the old CBS show Dallas. Several network executives were utterly appalled at this idea—it seemed unhip, old-fashioned, and horrendously insensitive. What? Now Conan’s term on the show wasn’t supposed to have even existed? Wiser heads prevailed, and the piece was shelved.

  Some of those wiser heads remained equally appalled at how personal and ugly the standoff with Conan had become. It seemed cold and crass, especially to some younger NBC staff members who had always felt an affinity toward him. The decision to return to Jay—due to turn sixty in three months—struck them as a conscious choice by the network to shift its priorities in late night toward a mass-audience strategy and away from the more targeted let’s-play-young focus that had prevailed when Conan was named to the job. Jay could not be expected to change his own approach, and there was no way to “young him up.” NBC seemed to be conceding that the audience for late night was going to be considerably older for the foreseeable future.

  The network signaled that shift in another way. In one of the first staff meetings about how NBC could relaunch Jay at 11:35, the gathered NBC employees wanted to know if a message that was going out that day was true: Was NBC really making the suggestion that any employees who had joined the “I’m with Coco” Facebook group were expected to unfriend themselves right away? The initial answer was yes. But then Jeff Gaspin, who was running the meeting, stepped in to say that if there were people who supported the page, he would not ask them to quit.

  The truth was, a horde of young NBC staff members had joined the “I’m with Coco” page, especially in New York. For at least a time, NBC, if not the Borgata showroom, looked as if it would remain a house divided.

  Certainly the posturing in the aftermath of the settlement did little to bring the snark between the two sides down to a murmur. Gavin Polone went out wide immediately, declaring that Conan had won “a big victory” and saying that his star “would be better off in the long run.” There might be a new set of affiliate issues at Fox, Polone conceded, but, unlike NBC, Fox knew it had the juice to stand up to its stations, juice that came from having shows its affiliates were desperate to retain, like American Idol and House. Gavin couldn’t resist pointing out that NBC actually owned the big-hit medical drama House but had allowed it to go to Fox because, he said, Jeff Zucker had lacked the savvy to see its potential.

  Polone also restated his belief that Conan should have left NBC when he had had previous opportunities to go to Fox in 2001 and 2004, but he had felt the need to chase his muddled dream of The Tonight Show. Still, Polone argued, these things happen for a reason, and Conan would win in the end.

  Jeff Gaspin put out a different message. On the one hand, he was conciliatory, saying that the agreement worked for both sides and granting at least one of Conan’s arguments—that his show had needed more time to grow.

  “Could it have grown? Absolutely,” Gaspin said. “We just couldn’t give him the time.” Not, he said, with the affiliates demanding immediate change at ten p.m.

  But NBC had a more stinging message to accompany the conciliation. The move made financial sense, the network said, because in Conan’s first year The Tonight Show, probably the most profitable program in television history, was going to fall into the red.

  Gaspin didn’t offer a specific number to the press, saying only that it would amount to “tens of millions of dollars.” Later NBC offered a peek at some figures showing a projected $3 million loss early in Conan’s run that had grown to a $23 million loss by the time the decision to make a change came down. The revelation that The Tonight Show had in the middle of that a sort of startling financial turnaround stunned insiders across the television industry, especially those working in late night. Within the Conan camp, however, it raised the sense of outrage to paroxysmal levels.

  Jeff Ross, who ran the show’s budget, communicated often with the NBC sales department, and even sometimes lined up special product placement commercials within the show, had an instant and violent reaction: “That is total bullshit.” He quickly speculated that NBC must have folded in the $60 million cost of constructing the new offices and studio, or else the overall start-up costs for the show. There was no other way, Ross insisted, that the figures could have come out on the minus side.

  Conan himself had a similar bout of apoplexy at this accusation, to the point where he suggested he would be willing to stand up and actually fight anyone who advanced the lie that his show was a money-loser. To Ross and O’Brien—who were well aware that their show cost much less than Jay’s to produce (Conan himself was making less than half Jay’s salary) and that they had brought in new sponsors like Intel—this smacked of a cheap, vindictive slur on NBC’s part.

  But NBC executives, representing various corporate departments stuck by this assessment, insisting that Conan’s numbers had fallen to a point where the ad revenues were simply not able to meet the costs—at $23 million, not even close.

  Almost nobody else in the television business bought that explanation. Executives at several other late-night shows treated it with derision. Conan’s budget came in at $70 million to $80 million for the year. The other shows knew what NBC was charging for its thirty-second ads, and the revenue simply had to be there to cover that nut—unless the network indeed was throwing in costs like the studio construction or the staff’s relocation.

  Even one NBC executive familiar with how the network sold its late-night packages said that prior to Gaspin’s comment (which followed Conan’s departure) there had been no mention whatsoever of NBC’s heading for a loss at The Tonight Show. At each quarterly sales meeting, when such subjects might be raised, this one never was. But as with everything else in television, it all depended on how the books were massaged.

  There was no doubt that Conan (and Jay, for that matter) had performed at levels below what NBC had guaranteed to advertisers. Shortfalls like that were made up for with what were known as make-goods—essentially, free ads. Maybe, the NBC executive speculated, the make-good breakdown was responsible for showing that loss for Conan. And who knew what make-goods were being folded into the total? Nothing could be certain, this executive knew, because the sales department never gave anyone a straight answer.

  Polone knew just who to blame for this latest insult to Conan. To him, this was one more indication that Jeff Zucker played dirty—and it demanded a response. It was all of a piece, Polone believed. Because Zucker could never engage in long-term thinking, in Polone’s view, all he could do was react. He had never gotten past his news training—see the news; react to it—which had left Zucker lost in a miasma of confusion as he tried to fit the eclectic events of the entertainment business into a news context. Now that Zucker also had Comcast looking over his shoulder, Polone imagined, he first
had to act in the interests of self-preservation by shaking up the late-night landscape to make up for his blunder with Jay and Conan. And he also needed to justify the move by sticking a “loser” tag on Conan’s forehead.

  For Zucker’s part, the noxious vitriol being spewed at him by some in Conan’s camp (he never blamed either Conan or Ross, or Rick Rosen, for that matter), as well as on some Hollywood blogs, and even by the competition (Letterman displayed Zucker’s picture several nights earlier, launching into a diatribe on NBC pinheads, knuckle-draggers, and mouth-breathers), only added to what was a dark, unhappy experience for him—not that he expected anyone to care.

  Jeff Zucker had also never expected to be ranked as some kind of Bond villain of a boss. (Conan would go on to make the white-cat-petting Ernst Stavro Blofeld associations with Zucker ever more specific.) Jeff was generous to and considerate of his staff, engaging socially, and devoted to his wife, Karen, and their four children. He never missed birthday parties or his sons’ Little League games, no matter what the press of business. In private, off the firing line, his likability and decency won him a corps of loyal friends, Jeff Ross being among the most conspicuous.

  But the travails of NBC under his leadership had come close to turning Zucker into a caricature, and he was far too intelligent not to be aware of that. He professed to being able to shrug it all off, but Zucker didn’t have the necessary automaton characteristics. He may have been making an outrageous fortune, but he felt all the slings and arrows.

  When he consented to an interview with Charlie Rose on PBS at the height of the late-night blowup, Zucker made a concerted effort to present his case, conceding the late-night plan had not worked out, but arguing that it had made sense to have given it a shot. He noted that the plan—and this was his plan all the way—had managed to keep Jay Leno and Conan O’Brien together at NBC for five more years. It ended in a mistake, he acknowledged, labeling both shows failures, but Zucker defended the overall strategy, at least, as sound.

  Still, he seemed to strain in presenting his case, emphasizing a number of times that this was the kind of thing a leader does. (To some of his critics, that sounded like a pitch intended for Comcast ears.) He also introduced a startling new element to the story: He had been subjected to death threats over the Conan business. Again Zucker was undoubtedly making a point—this time to illustrate just how crazy people had become over this issue—but he ended up inviting accusations that he was in some way begging for sympathy. The enmity Zucker aroused in many Hollywood circles, certainly not solely the product of Gavin Polone’s ministrations, had made it almost impossible for Zucker to make a sincere argument—he was always being seen by some as either sinister or manipulative.

  Still, others stepped forward to make, in effect, some of his arguments for him. Two principals from competing late-night shows—neither of whom had any reason to hold a brief for Zucker—had reached the same conclusion: Overall, Jeff Zucker might have come out ahead.

  “Did Zucker make a mistake?” one competing late-night figure said. “I think he has a good argument—he got five years of revenue out of The Tonight Show and Late Night. I don’t think he’s an evil genius. This wasn’t something he wanted to do; it was something he felt he had to do to keep Jay in the tent. Now as a result Conan is out of the picture. He’s damaged. So it’s a little hard from just a business standpoint to say Jeff Zucker made a mistake here.”

  The other high-profile competitor put it more directly. “Jeff Zucker made tens of millions on late night. Then he had to pay $40 million. He can look at it this way: ‘I badly damaged someone who could have been our competitor and made a lot of money. And what did it really cost me? Bad press.’ ” But he’d already survived a ton of that, the competitor added.

  Because NBC executives figured they would have had Jay anyway, they did a financial analysis based on what NBC would have lost had Conan bolted for Fox in 2004. The estimate: $235 million. Some of that total the network would have made up, of course, had they chosen a promising host to replace Conan. But that figure easily surpassed the $45 million it ultimately cost NBC to resolve its Conan dilemma.

  Zucker didn’t expect plaudits for his perspicacity—it all came down to doing everything possible to keep one or the other of his late-night hosts from bolting. What happened with Leno and Conan would never make its way into MBA textbooks as an example of how to manage talented underlings.

  Besides, the way it played out had not only been professionally unhealthy for Zucker, it was also personally wrenching. Zucker felt terrible about the way it had ended with Conan. Though they were never exactly family-dinners close, their relationship went much deeper than just professional contact—at least for Zucker. Only Lorne Michaels truly knew the extent of Zucker’s commitment to Conan, and how Jeff had quietly backed O’Brien when others inside NBC wanted to bail on him.

  The Jeff Ross connection went to an unusually deep emotional place for Zucker. Having to make a decision that had the potential of ending a friendship that probably meant more to him than any other he had established during his days at NBC was an almost overpowering burden for Zucker. Almost, because Zucker knew what was expected of CEOs—especially at GE. Sentiment didn’t count for anything.

  Still, in every way, a terrible experience, as Zucker saw it.

  Jeff Zucker had produced thousands of hours of news shows, and the key to staying fresh in news was moving, always moving. Here he knew he had to move on; everybody had been diminished a little by this episode, but they all needed to move on to the next phase in their lives.

  Of course, making sure Jay could move on unscathed became an intense preoccupation, which was why Zucker called in his chief emissary.

  Dick Ebersol was due to fly west in mid-January to plant himself in Vancouver to prepare for the big push of the Winter Olympics, starting in February. Zucker asked Dick if he would stop in at Burbank on his way and have a sit-down with Jay and Debbie Vickers to discuss what their return to Tonight could be—and should be—especially in terms of bringing back old elements and adding some new ones.

  Ebersol would have taken on the assignment in any case, because of his relationships with Zucker and Vickers, and his confidence that he could add something of value to the discussion. But he understood that NBC also needed an executive presence with Jay, because Rick Ludwin was not going to be able to perform that duty.

  One of the chief inside casualties of the Jay-Conan pileup had been the man serving as NBC’s executive liaison to its late-night shows for more than two decades. The episode had fractured Ludwin’s long relationship with Jay, simply because Jay blamed Rick for having fired the gun that started the demolition derby in the first place. Others had tried to persuade him that Rick did not rank high enough to make a decision as big as moving Jay Leno out of The Tonight Show—that it had to be the master plan of someone as high up as Zucker. But Jay continued to cite Ludwin as the source of this genius idea.

  Ebersol knew from Debbie that Jay felt Ludwin had betrayed him: not just by pushing for Conan to get the 11:35 job, but also because he thought Ludwin had disappeared on him during the ten o’clock mess at a time when they were so vulnerable.

  It made for an uncomfortable position for Ludwin. Jay had returned as the centerpiece of NBC’s late night and he was no longer speaking to the network executive in charge of late night. Ludwin, brutally aware he was being iced out, decided to give Jay space and hope they would eventually get back to their old interaction.

  In the meantime, Dick Ebersol had become the network’s main conduit to The Tonight Show. The night before he was due to fly to Burbank to meet with Jay and Debbie, Dick sat down to a dinner with the managers of the NBC affiliate board, finally in town for their long-delayed semiannual conference with the network. Now that all had been resolved in late night, the mood among the affiliates was warm, especially toward Ebersol, whom the station managers credited with providing some of the biggest, most reliable numbers NBC still attracted: NFL games on
Sunday night and the Olympics, now right around the corner.

  But Ebersol had more on his mind than receiving congratulations. As he sat down with the board, he told them, “The one thing I want to say about all this is that this has all worked out the way you guys wanted it to. I understand all that. But you have to remember that you’re complicit in why Jay’s show didn’t work. We are, too. We put so many restrictions on what his show could be that it had no chance in hell to be what the audience expected it to be.”

  He lectured them on the wrongheadedness of the demand that Jay save his second-best comedy element until the end of the show. He acknowledged that NBC had fumbled with the idea that Jay could have only one guest each night because somehow that wouldn’t be fair to The Tonight Show. Ebersol then returned to the unreasonable insistence on burying the established comedy bits—“Headlines,” “Jaywalking,” etc.—at the back, because it destroyed the rhythm of the show and forced Jay to put on what he called “unknown comedy” right in the second act.

  “Let’s not lose sight of that,” Ebersol concluded. “Because when he gets back to his old show in his old time period, Jay’s gonna be successful again.”

  Jay took his own first step to push the rehabilitation effort. Possibly out of the tradition of host logrolling—you come on my show, I come on yours—Jay agreed to sit down for his first big post-blowup interview with Oprah Winfrey. As she often did, Oprah skillfully combined chumminess with a somewhat pressing interrogation.

  Jay went through his account of the events that had led to the shake-up of that fall, including how NBC’s decision to oust him “broke my heart.” He admitted to telling “a white lie on the air” when he said he’d retire at the end of the five-year waiting period. And he professed no hard feelings toward Conan, whom he said he “very much” considered a friend.