Conan O'Brien come to agreement on exit deal,NBC

Seven months after taking the reins at The Tonight Show, Conan O'Brien reached a settlement agreement with NBC late Wednesday. The deal is said to be worth around $45 million, with roughly $33 million for O'Brien and another $12 million in staff severance payments.

"In the end, Conan was appreciative of the steps NBC made to take care of his staff and crew, and decided to supplement the severance they were getting out of his own pocket," Gavin Polone, O'Brien's manager, told The Wall Street Journal. "Now he just wants to get back on the air as quickly as possible."

Predecessor Jay Leno ends his prime-time perch Feb. 11 and reclaims Tonight on March 1, after the Winter Olympics.

And O'Brien walks, ready and willing to set up shop elsewhere, as soon as Sept. 1, when he's allowed back on TV. He and his writers may need the time to come up with new comedy bits since the intellectual property rights for trademark sketches like Triumph the Insult Comic Dog won't be going with him.

His most obvious new home is Fox, which, despite the messy split, provides a better fit for his brand of quirky humor.

"He actually has a TV tonality more appropriate for Fox than he did for NBC, which was part of the problem on The Tonight Show," says John Rash of ad firm Campbell Mithun. "He was not as mainstream as Jay Leno."

Fox has expressed interest in O'Brien, but had to wait for him to confirm his exit from NBC, stalled by negotiations over severance payments for his staff and legalese that may prevent him from trash-talking about his soon-to-be-former employer, following a nightly barrage of anti-NBC jokes.

At Fox, a major issue is getting stations to give up their profitable late-night block of syndicated reruns that follow local newscasts.

As a result, it's likely a Conan show would not air nationally at first, it would in most major markets thanks to Fox's ownership of 17 of its 205 affiliated stations. Alhough their local news signs off at 11, his show would probably would start at 11:30, leaving room for syndicated reruns like Seinfeld and The Office. That would slot Conan in head-to-head competition with both Leno and David Letterman, though the intention would be to ultimately move him to 11.

Fox also would seek to produce the show at a lower cost than NBC's hefty Tonight tab, much as ABC does with Jimmy Kimmel.

While Fox is the most obvious home, Rash says cable would offer more freedom. "Although it would be a smaller stage, he would really have a broad canvas to paint on if he were on Comedy Central or a similar basic-cable network," he says. "Instead of having to rein it in, he could have more of his quirky comedic sensibility come out."

But Comedy Central would have a harder time paying the tab and already has a successful late-night block with The Daily Show and The Colbert Report.

The settlement caps an intense two-week war over the struggling NBC's late-night talent that started with NBC's decision to cancel Leno's failed prime-time series and move him back to 11:35 p.m. ET/PT.

O'Brien refused to allow his show to be bumped a half-hour later and follow Leno yet again. In an impassioned public statement last week, he expressed "enormous personal disappointment" and added, "I cannot participate in what I honestly believe is (Tonight's) destruction."

Leno's return to late night is expected to instantly boost Tonight's ratings: O'Brien's audience of 2.5 million is half of what Leno commanded. CBS' Late Show With David Letterman has climbed to No. 1 for most of this season, with about 4 million viewers.

But O'Brien's ratings increased sharply in the past week as viewers embraced the spectacle — and as O'Brien's fans mounted an Internet campaign to save his job.

Even fellow comedians took sides: Leno pal Jerry Seinfeld last week said O'Brien's lower ratings were a bigger culprit than Leno's prime-time failure: "I don't think anyone has done anything to Conan," he said. "They can't hit the ball for you. They can only give you the bat."

Louis CK, a former writer for O'Brien, said he never understood why he wanted Tonight, which "was like what old people watched. It's hurting him inside because he wants to be the host of The Tonight Show. And it's a little presumptuous for me to tell Conan that his dreams are misguided. But they are."

In recent shows, O'Brien implied he knew the end was near but continued to mock the network and Leno: "Hosting The Tonight Show has been the fulfillment of a lifelong dream for me, and 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."