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Reporter's Notebook: Conan's Costly Mistake

Entertainment Tonight, Wednesday, January 20, 2010, 9:10am (PST)

Reporter's Notebook By Mary Murphy

We all have done it in our lives. We let our emotions get the best of us. We melt down when we should suck it up. We go with instant gratification instead of long term security.

That is exactly what Conan O'Brien did in refusing to move his Tonight Show to 12:05 a.m.

And it is going to cost him millions.

“Conan has no leverage,” says one high level network source.  “Instead of getting $15 million a year if he goes to FOX, he will probably get single digits.”

While waiting for last minute details of Conan's buyout package—held up by negotiations about how long he has to wait to trash talk NBC and the amount of money NBC gives his staff -- it is now clear that Conan went against his advisers advice in issuing his emotional letter refusing to move his show back a half hour. While that stand was personally gratifying to him and his Camp Conan fans, it was not a smart business strategy for the talk show host.

“The price he has to pay is high,” says our source close to the negotiations. “ABC doesn't want him, and he can't go to CBS so it makes FOX the only game in town unless he wants to go to cable. If Conan had pretended to go along with NBC's offer he would have set up a bidding war between NBC and FOX -- and that would have been much more lucrative.”

Don't cry tears for Conan since he will walk away with a reported $32.5 million and a non-compete clause that will keep him off the air nine months rather than the earlier reported three and a half years.

If he goes to FOX it will give them months to negotiate the deal and launch a new late-night show which will work to FOX's advantage. It gives the network time to get it right in late night, something executives at the network have been trying to do since day one with Joan Rivers, whose late night talk show quickly failed amidst battles between Rivers and network executives.

Heads will likely roll at NBC. The first one to walk the steps to the guillotine after the take-over by Comcast may be NBC CEO Jeff Zucker, especially since high level sources at the network believe he could have avoided the nasty turn of events by solving the problem before it erupted.

Zucker could have let Conan go a year ago with much less fallout when it became clear that Leno was still holding on to his No. 1 spot in the late night ratings. “Zucker didn't make the tough decision,” says our source. ”He didn't do the smart thing and pay Conan off, and then he came up with the cockamamie scheme to have both Jay and Conan off the air. He does not have many fans.”

Related stories: Jay Leno Clears the Air About NBC Late Night Shake-Up 

 Conan O'Brien Says He Has 'DWTS' Offer 
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