"Letterman Holds, Resigned to CBS as Flawed Match"
The New York Observer
March 15, 2002
by Jason Gay


Not long ago, Rob Burnett, the president of Worldwide Pants, David Letterman’s production company, was watching an episode of the NBC hit The West Wing when a little NBC peacock logo fluttered across the screen, revealing an advertisement for The Tonight Show with Jay Leno.

Mr. Burnett was impressed. “You look at that and you go, ‘Wow, these people are really looking after The Tonight Show,’” he said, speaking of NBC.

Mr. Burnett said he didn’t mean to imply the Late Show needed a CBS version of the flying peacock. But talking late on the night of Monday, March 11—several hours after Mr. Letterman agreed to eschew a $31-million-a-year offer from ABC and stay at CBS for about a half-million more—Mr. Burnett said the fluttering peacock was an example of the kind of care and innovation the Late Show wanted from its own network.

“You just want to get the feeling that the network is looking out for you to the same extent that the competition is looking out for our competition,” Mr. Burnett said.

Mr. Letterman had agreed to remain with CBS after assurances that they, too, would energetically promote and attend to his show. But the marriage between CBS and star still felt—as it always has—slightly uncomfortable. Mr. Letterman had been aggressively courted by Disney to go to ABC, and promised lavish attention and promotion. The affection was not without consequence—Disney had alienated its news division and one of its own stars, Ted Koppel—but it had been exciting.

So, as much as it settled the roiling media controversy of the past week and a half, Mr. Letterman’s announcement had a melancholy, risk-averse feel to it. The devil Dave knew, the old theory went, was better than the one he didn’t.

Still, Mr. Burnett was in a good mood about the decision, saying he was happy that CBS won out by “stepping up.” He downplayed the squabbling on both sides, in particular reports of a rift between Mr. Letterman and CBS president Leslie Moonves. And yet he acknowledged the network and the Late Show remained an odd pairing.

“Is it a perfect fit?” Mr. Burnett asked. “Not exactly all the time. But the fit is getting better and better. I think CBS is a different network now under Les than it was five or six years ago.”

Under Mr. Moonves, CBS has indeed grown significantly in prime time. Mr. Burnett was quick to credit the network’s improving prime-time lineup for the Late Show’s own ratings gains over the past year. “The 12 percent gain we had in our demo last year—give it all to Les,” Mr. Burnett said. “He’s the reason—100 percent Les. It had nothing to do with us.”

Still, Mr. Burnett and Mr. Letterman feel the network can do more to lift its late-night franchise. Mr. Burnett, who also produces the prime-time show Ed for NBC, believes that neither CBS’s performance in prime time at the 10 p.m. hour nor the performance of its local news affiliates at 11 p.m. is what it should be.

Such impediments, Mr. Burnett said, prevent the Late Show from topping the ratings of Mr. Leno and the Tonight Show. Mr. Burnett theorized that if Mr. Letterman’s show appeared on NBC in Mr. Leno’s current slot, the Late Show’s ratings performance would improve drastically.

“Without insulting CBS as we sit here and launch into going into business with them for another great many years, hopefully, I do believe that if the Late Show were plucked off of CBS and put on NBC, for example, I believe the numbers would near double, frankly,” Mr. Burnett said. He added: “That’s O.K.”

To be sure, there is lingering frustration at Worldwide Pants because the Late Show regularly loses in the ratings to the Tonight Show. Though Mr. Burnett said the Late Show’s staffers do not focus on the ratings, clearly he and his colleagues are not satisfied with finishing a respectable second, winning Emmy Awards and polishing Mr. Letterman’s reputation as a late-night giant.

“You have a show that generates $225 million of income for the network, so there is a difference from being a sort of little cult show,” Mr. Burnett said. “This is a big-time network show, so now that you’re a big-time network show, do you want to be No. 1 in your time slot? Sure you do.”

That is partly why Disney’s bid for Mr. Letterman felt so enticing. Though its prime-time lineup is in tatters, ABC’s affiliates are stronger at the 11 p.m. local news hour, and Disney was promising mega-promotion on a multitude of properties, including the ESPN sports network.

Mr. Burnett said there were several times during the negotiations that he thought Mr. Letterman would go to ABC. “There were points during that decision-making process that I believed, if I had to bet my money, I would have bet we were going,” Mr. Burnett said. But he added: “And there were other times where I would have bet we were staying.”

Still, Mr. Burnett said he arrived at Worldwide Pants and the Late Show’s headquarters on West 53rd Street on March 11 not knowing what Mr. Letterman’s final decision would be. He had spoken several times to Mr. Letterman during the latter’s vacation in St. Barts the previous week, mostly to talk about media coverage of the tug of war, and he knew that Mr. Letterman wanted to resolve the issue by Monday or, at the latest, Tuesday.

It would only take one day. After both the ABC and CBS offers were reevaluated, Mr. Letterman decided by the afternoon to stay at CBS. Both networks were called and told the news. Not long afterwards, Mr. Moonves arrived at the Late Show offices, and congratulations and thanks were extended from both sides.

Mr. Burnett said that conflicts between Mr. Moonves and his network and the Late Show had been overstated. “It’s a nine-year relationship,” he said of the Late Show, which moved to CBS in 1993. “It’s an intense relationship. There’s going to be tussles, there are going to be some arguments, there is even going to be some screaming here and there. Any time you have a bunch of smart people that care in a room, you are going to have some tussles. But that’s all they were.”

Mr. Burnett said that Viacom-owned CBS had made a recent, vigorous bid to secure the Late Show with its own multi-property promotion plan. In the end, he said, “there was nothing in the CBS relationship alone that warranted us leaving the network.”

Mr. Burnett said that Worldwide Pants had not, as has been suggested, made a contractual demand to retain control of the 11:30 p.m. time slot once Mr. Letterman retired. However, he said, Worldwide Pants hoped it would get first crack at developing that hour when Mr. Letterman decided to leave.

Mr. Letterman walked onstage at the Ed Sullivan Theater that night and cracked that things had gotten so strange, NBC had offered him the Tonight Show. He then went to his desk and, in a speech that Mr. Burnett said was expected but unscripted, announced he had decided to stay at CBS.

Mr. Letterman also spoke fondly of Ted Koppel, saying the ABC newscaster—whom the Late Show had almost displaced—“deserved the right to determine his own professional future.”

Mr. Letterman, of course, had at least decided where his own professional future would be. Now it was time to see if everyone could make it work.

Tonight, the Late Show with David Letterman. [CBS, 11:35 p.m.]


Thursday, Mar. 14

The real beneficiary of the Letterman dispute was probably The Daily Show’s Jon Stewart, who did jack nothing and saw his boiling stock rise amid the ABC-CBS late-night showdown. Mr. Stewart’s name was repeatedly mentioned as a Plan B if Mr. Letterman departed CBS—or chose to stay, forcing ABC to consider different late-night options.

This attention is a mixed blessing for Mr. Stewart’s current employer, Comedy Central. The cable network is pleased that their guy is so coveted by broadcast executives, but knows that the attention will only make negotiations for Mr. Stewart’s services more competitive—read: expensive—as the expiration of his contract approaches, in January 2003.

Mr. Stewart is currently one of the cheaper hosts in late-night television, at about $2 million per year. That’s not exactly minimum wage—especially for cable, where the audiences and revenue are significantly smaller than broadcast—but it’s a fraction of Mr. Letterman’s $31.5 million haul, or Conan O’Brien’s new $8-million-a-year deal with NBC.

Comedy Central has been in the midst of trying to renegotiate Mr. Stewart’s deal for nearly a year. Bill Hilary, Comedy Central’s general manager, said he is eager to keep Mr. Stewart, calling him a “huge asset” for the network.

“Jon will stay at Comedy Central for as long as Jon wants to stay,” Mr. Hilary said.

Mr. Hilary rejected speculation that Mr. Stewart could leave and take the Daily Show with him. Before Mr. Letterman opted to stay at CBS, there was talk that if the Late Show left, Viacom, CBS’s parent and a half-owner of Comedy Central, might slide the Daily Show to its late-night broadcast operation, in an act of corporate synergy.

But Mr. Hilary said such a maneuver would be highly unlikely. First, he said, AOL Time Warner owns the other half of Comedy Central, and would probably be resistant to Viacom, a rival, moving the Daily Show to CBS. The same would be true of Viacom if AOL Time Warner tried to move the Daily Show to one of its networks, such as HBO, Mr. Hilary said.

Further, Mr. Hilary said that Comedy Central regards the Daily Show as a prized network property—one it would not easily part with. The Daily Show has established itself as a flexible format, succeeding with two stylistically different hosts: the self-deprecating Mr. Stewart and his cocky-boy predecessor, Craig Kilborn. Mr. Hilary said he could see the show continuing on with a new host when and if Mr. Stewart leaves.

“I think the Daily Show is with Comedy Central to stay for a long time,” he said.

Though others at Comedy Central said Mr. Stewart’s popularity had magnified concern about keeping him, Mr. Hilary said the affection of competing network executives had not made Comedy Central more aggressive about reworking his deal.

“Let’s put it this way: As soon as the press sort of got this story two weeks ago, I didn’t all of a sudden go, ‘Let’s renegotiate Jon’s contract,’” Mr. Hilary said. “We’re always talking to him.”

But Mr. Hilary acknowledged he had considered his options should Mr. Stewart leave sooner rather than later. “That’s my job,” he said. “Do I want Jon Stewart to leave? Absolutely not. He is a brilliant star, and he has done a lot for the network. Do I have a secondary plan? Of course.”

Ladies and gentlemen, the Daily Show with David Brenner! A representative for Mr. Stewart did not return a request for comment by press time. Mr. Stewart, however, did joke about his belle-of-the-ball status when he hosted Saturday Night Live on March 9.

“I would do anything,” he said. “I would do Dave, Leno, Conan—anybody who wants to leave. Willard Scott, you tired of waving at old people? I’ll take that. I work on basic cable.”

Tonight on the Daily Show, Mr. Stewart dishes out Smuckers to geezers. [Comedy Central, 11 p.m.]


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