The War on Jay Leno
A Soho House summit, secret e-mails, brutal economics: the inside story of how TV's No. 1 late-night host ended up on the way out at NBC.
This story first appeared in the April 5 issue of The Hollywood Reporter magazine.
Visitors to West Hollywood's posh Soho House on March 21 could be forgiven for craning their necks. Amid a dining room filled with the usual mix of actors and agents on the 14th floor of the private club, two unlikely dinner companions commanded attention: NBC entertainment chairman Robert Greenblatt and Jay Leno, the Tonight Show host whose status at the network had become a running joke of its own.
Leno's on-air ribbing of NBC and its ratings struggles had drawn the ire of Greenblatt, who had fired off an angry after-midnight email to Leno. The missive, which blind cc'd several NBC executives, led to a terse electronic exchange between Greenblatt and the longtime host. Shortly thereafter, on March 1, The Hollywood Reporter revealed that NBC was planning an exit strategy for Leno, 62. Despite his status as the most-watched late-night host, he would be asked to hand over The Tonight Show to the network's 38-year-old Late Night star Jimmy Fallon, 24 years his junior, around the time Leno's current contract expires in September 2014. Sources say Leno, when he signed his most recent deal, expected it could be his last at the network. But he is said to have been upset by what he perceived to be an NBC leak to THR and by the prospect of another messy transition that would play out in the press.
Indeed, news of the NBC plan prompted a media frenzy not seen in late-night TV since, well, the last time NBC attempted to dethrone Leno. That 2009 effort to install Conan O'Brien at Tonight and move Leno to a nightly 10 p.m. show backfired colossally. Within months, Leno reacquired his 11:35 perch and O'Brien left for a lesser-watched TBS gig and a $45 million payout. But while Leno remained mostly silent during the Conan debacle -- even as his rivals and the media pushed a Leno-as-villain narrative -- this time he fueled the flames of speculation. Leno and other hosts always have poked fun at their networks, but after the Greenblatt email conversation became public March 15, Leno launched a week's worth of pointed jabs at his employer, referring to NBC execs as "snakes" and suggesting the network would send its top star on an ill-fated Carnival cruise. For NBC, the timing was terrible because it coincided with an embarrassing fifth-place finish during the February sweep (below Univision) and highly critical media coverage of its Today franchise that revealed a mishandling of the ouster of Ann Curry -- the kind of press NBC seems unable to finesse.
Sources say Fallon, fearing he could be painted as the guy who put TV's late-night king out to pasture, reached out personally to Leno. And the Greenblatt dinner, which had been rescheduled after the NBC exec canceled an earlier sit-down, was an attempt to mend fences. It is said to have worked. Leno is believed to have left Soho House with at least a temporary confidence that despite the signs of yet another PR disaster at NBC, the Tonight transition will be handled better than it was last time. But the shift will happen, which raises the question: Why is NBC again ousting its No. 1 host from the only time slot it regularly wins?
By almost all broadcast TV metrics, Leno's Tonight is tops, leaving some to question why a forced handoff is even on the table. With inoffensive, meat-and-potatoes humor that resonates in middle America, Tonight regularly bests CBS' Late Show With David Letterman and ABC's Jimmy Kimmel Live!, even in the key 18-to-49 demo, where Leno is averaging an 0.8 rating (about 1 million viewers) for the season.
But the diminishing economics of late night render a first-place finish less meaningful. Leno turns 63 in April and Kimmel, 45, has made inroads with younger viewers since his January move from 12:05 to 11:35. Fallon, at 38, is seen as able to lure both younger viewers, as O'Brien did, as well as the older crowd Leno is able to court. In fact, Fallon's median viewer age is 53.3, not too far from Leno's 58.1, suggesting the late-night talk format in its current broadcast network form might be aging out of existence no matter who the man in the suit telling jokes.
Network sources say Tonight now generates just $30 million to $40 million a year in profit -- a far cry from the $150 million the storied franchise made during the heyday of broadcast late night. Tonight booked $255 million in ad revenue in 2007 compared to $146 million in 2012, a decline of more than 42 percent in five years, according to Kantar Media. CBS, which has a transition of its own looming with 65-year-old Letterman, has suffered similar ad declines in the space (though CBS Corp. CEO Les Moonves has always said Late Show is Letterman's until he wants to leave). "You can just see what's happening in [late night]," says one source. "The longer you wait, the more it gets fractured and smaller, less relevant."
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