The Late Shift

by Carter, Bill

  Lassally talked it over with Morton: Should he do something to let NBC know how Letterman felt? And if he decided to do it, how would he do it? Couldn’t an approach like that backfire in some way, with NBC only getting another chance to reject Dave? And whom at NBC could he really trust to understand the power of this dream and what an emotional thing this was for Letterman?

  Lassally still had trouble believing that NBC could be completely satisfied with its choice of Jay Leno. As the new television season began that September, Jay’s ratings had started to slide downward from their early heights. The network had just gone through the insanity with Helen Kushnick and the firestorm over her departure. Could they be having a hint of second thoughts? If there was even a shred of a chance that Dave could be brought back into the “Tonight” show picture, it had to be worth the risk.

  So in mid-October, in one of their soft-spoken conversations in Dave’s office after the show, Lassally put the question directly to him. He had to know, he told Dave. “If NBC would still offer you the Tonight’ show, after everything that has happened, all the words, everything with Jay, would you say no?” They had been over this ground before, but Dave said it again. Of course he wouldn’t say no.

  “Under no circumstances would you say no?” Lassally asked, pressing the point so he would be able to add all the emphasis he felt necessary.

  Dave said it the way Lassally wanted to hear it. Under no circumstances would he say no to an NBC offer to host the “Tonight” show.

  When he got home later that night, Lassally carried the conversation with him. He was up most of the night talking it over with his wife, Alice. Then he made his decision. In the morning he would call Dick Ebersol.

  Lassally had known Ebersol for almost twenty years, back to the days when a young, long-haired Ebersol had been hired to create and develop a new late-night show for NBC to use on Saturday nights in place of Carson reruns. That show was “Saturday Night Live.” Ebersol had since bounced up through the network, and occasionally out of it. But his connections to late-night television ran deep. Aside from his initial association with “Saturday Night Live,” Ebersol had created and produced the original “Friday Night Videos,” which shared the weeknight 12:30 slot with Letterman for a time, as well as the Saturday night professional wrestling extravaganza that NBC used to great effect as the off-week replacement for “Saturday Night Live.” Ebersol had been lured back to NBC to try and save “Saturday Night Live” in the early 1980s at a time when the show was on the brink of extinction. As executive producer of “SNL,” he first helped raise Eddie Murphy to cult status, then filled the year after Murphy left with the huge creative talents of Billy Crystal and Martin Short. Two years later, Ebersol had conceived the newest (and truly latest) NBC late-night entry, the followup to Letterman, an ambitious, biography-style interview show called “Later” that featured the star of NBC Sports, Bob Costas. That became the successful postscript to the NBC late-night comedy lineup.

  At the moment Ebersol was back inside the network, having taken over the sports division as president in 1989. As always rumors swirled about Dick, one of the slickest strategists and schmoozers in network television. Lassally had heard talk that Ebersol, fresh from impressing his NBC bosses with the production of the Barcelona Olympics, might be getting moved here or there to shore up one of NBC’s problem areas. None of that was important to Lassally. All that was important was that he and Ebersol had a long history at NBC. Dick surely knew more about late-night programming than any other executive at NBC; and if anyone in the NBC hierarchy was likely to feel that the network was about to make a gigantic blunder in letting a talent like David Letterman go out the door, it was Dick Ebersol.

  Lassally arrived at his office the next morning still not sure what he was going to accomplish with this plan, or if Ebersol was really the right contact. But he was determined to see it play out. Lassally picked up the phone and dialed Ebersol’s extension.

  After only a few pleasantries he told Dick he had something important to tell him, and that he had been up all night with Alice debating about whom they could reach out to.

  “I don’t know what promotions you’re going to get, if you’re going to get any, if you’re going to leave NBC, or anything,” Lassally told Ebersol. “I don’t care which it is. You don’t have to give me an answer. But before we leave here, I have to tell something to somebody at NBC, and I’ve selected you because I’ve known you a long time. We know something that nobody else in the world knows, no matter what the agents say about it. I finally got Dave to admit yesterday after the show that if NBC would offer him the ‘Tonight’ show, under no circumstances would he turn it down.”

  Ebersol listened without committing himself, as Lassally went on: “Dave would love to stay at NBC if he could get 11:30. I want someone at NBC to know that this is very meaningful to David Letterman. You cannot underestimate Dave’s dream. Dave had a dream when he was a kid and he used to watch Johnny Carson; that’s what he wanted to do. Someday he wanted to do what Johnny did. That dream is very deep-seated. That’s never been out there. A lot of people think he would say no because he’s been embarrassed and hurt.”

  The dream is so deep, Lassally said, that Letterman had long since decided that he could never do the “Tonight” show from New York as he did “Late Night.” “Dave said: ‘If I got the eleven-thirty show, I would want to do the show from Burbank. That’s where Johnny Carson did it.’ It was no decision for Dave.”

  Lassally then told Ebersol that he wanted him to carry a message: All this business about mistreatment in the past by NBC executives was meaningless; Dave would happily make a deal with NBC if he could still get the “Tonight” show. Dick could convey these points to Bob Wright or whomever Dick wanted to tell this news to—and he could add one more thing. “I want them to know,” Lassally said, “that I will be more than happy to be a back channel for them to get directly to Dave.”

  Ebersol recognized the importance and the delicacy of the message Lassally had given him. Within an hour he was in Bob Wright’s office telling him that David Letterman would not spurn a new approach from NBC out of bitterness over what had transpired in the past, and that if Wright chose to use it, there was a way for him to reach out directly to David Letterman.

  A frustrated Michael Ovitz was having no success with NBC over David Letterman’s contract. The network held all the cards. Letterman couldn’t negotiate with any of the panting suitors surrounding him until NBC had exhausted its first negotiation period in February. Even then, if Letterman chose to make a deal with someone else, NBC had matching rights that could extend as long as a year. To Ovitz that meant NBC could keep Letterman off the air and possibly destroy his career.

  Of course, in the process, the network would also detonate every hope of retaining Letterman. The best Ovitz could do was try to exploit NBC’s need to maintain some semblance of positive relations with the star. That message had found some resonance with Bob Wright, who was still arguing that giving up all hope of retaining Letterman was an unacceptable strategy. John Agoglia knew the first negotiating right was worthless at this point, except in terms of delaying the inevitable. The only time a first negotiating right made sense was when dealing with someone who wanted to make a deal with you. Agoglia had long since concluded that David Letterman did not fall under that description. “When the person professes—to his representatives and on the air—to hate your guts, I’m not quite sure what the legal terminology of a good negotiation means anymore,” Agoglia said.

  Wright’s position was based on reason. He really wanted Letterman to stay at NBC, so if the only way to accomplish that ultimate goal was to show some flexibility, he was willing to try it—as long as there was something in it for NBC.

  Ovitz kept making the point to NBC: Dave is fragile emotionally. He can’t deal with this uncertainty about his future. Show some good faith and the situation will improve. Beyond that, Ovitz argued, it made no sense for NBC to try to wait until
the last minute. Agoglia had to agree that NBC needed to get its own house in order. Besides, NBC had some protection; as long as it retained its matching rights, NBC could still trump whatever offers Letterman might be able to elicit elsewhere.

  NBC constructed an escape for Letterman very much on its own terms. On October 30, in exchange for allowing Letterman the right to negotiate freely for his future employment, NBC agreed that it would extend the term of Letterman’s existing contract from April 2, 1993, to June 25, 1993. The deal had one special attraction for NBC. The network had already sold advertising in “Late Night” through the end of June. If Letterman had left in April, NBC would have had to insert repeats for three months, forcing the network to return some of the advertising revenue it had already taken in. Now it could keep all the money.

  What was most important to Wright, however, was that this part of the dispute was resolved rather amicably, leaving open the possibility that David Letterman, after hearing what was out there in the great big world beyond NBC, might decide there was no place like home.

  Each of the Letterman bidders received a letter from Ovitz containing nine specific demands relating to the negotiation. The points included such items as salary for Dave, budget for the program, and rights of ownership. One point was the simplest, but clearly the most crucial: Under no circumstances would any bid be entertained for a show later than the 11:30 time period.

  The demand seemed to affect only one bidder: ABC. The network had recommitted itself to “Nightline,” so it had decided to formally propose a midnight start for Letterman, packaged with “Nightline.” ABC’s executives had thought such a tandem might lock in near 100 percent live clearances. But when CAA would not compromise on the 11:30 demand, Bob Iger informed Ovitz that ABC was passing on Letterman without even submitting a formal proposal.

  That decision disappointed some on the Letterman side who had seen ABC as the likely first choice if everything else had been equal. Even ABC at midnight had some support. Bob Iger had made a lasting impact.

  CAA set a mid-November date for initial bids. As the offers came in, CAA prepared a spreadsheet for Letterman and his associates. When they saw the numbers being offered to David Letterman, and the sheer magnitude of the deals, Lassally, Morton, and the others close to Letterman were stunned—and elated. Their unstinting faith in David Letterman as a major television star was being completely validated by virtually every important company in the television industry. It was only an initial round, but the figures were so staggering that the Letterman staff was caught up in the excitement.

  That night Morton, Lassally, and a group of others decided to celebrate after the taping of the show with a dinner at San Domenico on Central Park South. The talk was all about Dave’s prospects, of course, and the illustrious waiting list for his services. Many at the table had not been a part of the original pitch sessions in L.A., when the Hollywood heavy hitters had turned out in force for Dave. So Morton decided to tell them all a story of one of the many bizarre moments from those two heady days:

  Peter and Morty and Dave had had dinner on Sunday, the night before the first session of pitches, at a Malibu restaurant called Granita. That warm summer night the three of them had sat at an outside table overlooking the Pacific, discussing what they might expect to hear in the morning. They were all excited but apprehensive. Then a waitress approached with some news: Warren Littlefield was in the restaurant.

  The three of them had just been talking about how weird it felt to be in L.A., so near the NBC program executives while all this was going on. “We were plotting the assassination, and there he is,” Morton told those listening to his story. Warren walked by the table to see them, he said. Without questioning for a moment why they might be there, Littlefield greeted them winningly and suggested they try the salmon. At that moment Warren’s wife, Theresa, and their two children appeared. Warren’s young son, Graham, walked over to the table and said to his father, “Daddy, is this the man who’s been giving you all the trouble?” They had all laughed, of course, though Morton said he was convinced at the time that Graham had been fed the line—which he had delivered quite well. After a few more somewhat awkward exchanges at the table, Littlefield had left.

  The table at San Domenico had just finished laughing at Morty’s story and the overt digs at NBC when, they looked up and saw a well-dressed group coming toward the table. It was John Agoglia, with several other NBC corporate executives in tow. By less than a minute, Agoglia had missed hearing them giggling like guilty kids about the Granita story. In New York for some NBC business, Agoglia seemed mildly surprised to have run into the Letterman group; but he made some small talk at their table before sitting down at his own table with his corporate NBC friends. Morton and Lassally began hatching an idea. They asked if the restaurant had a cake, but had to settle for a tray of cookies. At dessert time they had the cookies sent to Agoglia’s table. As the waiter set the tray down, gesturing at the Letterman table for having provided it, Agoglia looked surprised, then looked down at the cookies. He threw his head back and laughed his hearty Brooklyn laugh, while shaking his head and waving to the Letterman table.

  In the middle of the tray of cookies, the restaurant had written large in decorating icing; “11:30!”

  Even before he knew the outcome of the bidding, John Agoglia had analyzed the prospects of his opposition. He put CBS down as the heavy favorite to win the bidding for several reasons, beginning with its ability to give Letterman the 11:30 position he most wanted. Agoglia believed he knew Letterman’s psyche well enough to be certain he would lean to a network instead of a syndicator or Fox, a new network with more in common with the syndicators than with CBS. The syndicators would surely put together a package with the biggest bottom line, but Agoglia knew a lot of the money promised by the syndicators would not be guaranteed.

  As Agoglia targeted CBS, he and other NBC executives began storing up ammunition. They expected that CBS would never be able to get past about 90 percent total clearances in late night, and maybe 30 percent or more of that would come at midnight or later. NBC began preparing a complete workup of every CBS station and how much time was left on their existing deals for syndicated shows at 11:30. If Letterman and CAA picked CBS, Agoglia was prepared to state flat out: Letterman will never be competitive on CBS.

  Agoglia didn’t expect to match CBS’s money. He knew that the CBS executives would be able to bid higher than NBC because they would be offering the 11:30 time period, while NBC’s offer would be for 12:30. The ad revenue available from 11:30 to 12:30 would naturally be considerably higher than what could be brought in from 12:30 to 1:30, and CBS was likely to be willing to hand more of it over to Letterman just to get a late-night franchise started. Agoglia derisively added another factor that might block any NBC bid to keep Letterman: if Larry Tisch decided to open the CBS vault again. NBC planned to slam any big-money bid CBS might make for Letterman by making mocking comparisons to CBS’s ill-fated $1 billion bid for four years of rights to major-league baseball, a deal that wound up losing CBS a staggering $500 million. The move was blamed for driving the entire network into two years of annual losses. Of course, it wouldn’t matter to Letterman if CBS seemed to be willing to lose another bundle. But Agoglia concluded it would soften the PR blow to NBC from losing Letterman if NBC executives could dump on CBS for winning him only through more lunatic spending.

  Bob Wright was in no way impressed by the fact that CBS seemed to be going full bore in pursuit of Letterman. To him every CBS move had to be judged against that baseball deal. What Wright knew was that CBS hadn’t made a nickel in late night in its history. The network seemed to be willing to lose $30 million or $40 million a year without flinching. So he ruled out just about anything CBS did. He was more impressed when ABC showed such intense interest in Letterman because he respected the ABC corporate leaders. And even Fox’s interest in Letterman had impact because Wright saw Fox operating a system more like NBC’s than CBS was. But Fox, he reasoned,
was out to get Letterman in order to raise the entire image of Fox as a network. As Wright sat back and watched the offers for Letterman pour in, he did not immediately conclude that those company’s programmers who were so hot for Letterman might know something his own programmers didn’t; he just concluded they all had different agendas.

  Wright was feeling pressure from two directions: The group on the East Coast that was arguing for keeping Letterman was finding more support among his New York executives at the same time his West Coast executives were pushing to reconfirm the choice of Leno on the “Tonight” show.

  At the President’s Council, the regular Tuesday meetings of NBC’s top division managers, sentiment toward Letterman was being spoken out loud by Ebersol and others. They raised the issue of how potent a competitor Letterman would be for Leno. The West Coast executives, who attended by conference call, were increasingly challenged by Ebersol and other East Coast executives. What are you doing to solve the situation with Letterman? they asked the executives in Burbank. Littlefield and Agoglia said: We’re working on it. John Rohrbeck, the head of the network’s owned-and-operated stations—the man responsible for running the six stations that NBC owned—complained most vocally about the prospect of losing Letterman. He began assembling support in New York for keeping Letterman at all costs—even if the cost was Jay Leno. Rohrbeck made a powerful point: His division, the network’s o-and-o stations, generated more profits than any other area of the company.

  But Wright was also being pressured by Littlefield and others on the West Coast. Just push the button on Letterman, they said to Wright. Wright figured this suggestion was at least partly attributable to Leno’s lobbying through Littlefield to get NBC to make an announcement: Good-bye David, good-bye and good luck, we’re sticking with Jay Leno. Wright told Warren and the others he wasn’t going to take that step. “I just can’t do that,” he said. When they said it was a question of loyalty to Jay, Wright told them, “No, it’s a question of NBC. Jay is going to be there. He’s got the show. He doesn’t need our expressions of loyalty. That isn’t going to get him one viewer. The issue is, What do we do if we lose this very important late-night personality? So show me the new plan.”