What's Dave's next step? Whether he stays or goes, Letterman will stir up late-night TV
Ted Koppel, David Letterman
Credit: Letterman and Koppel Illustration by Dan Adel

To flee or not to flee? That is the question facing David Letterman. At press time, the gap-toothed Hamlet of late night was expected to return from a weeklong jaunt in St. Bart’s and extinguish one of the biggest firestorms in recent TV history: Less than nine years after his big-bucks move from NBC to CBS, the 54-year-old comedian will announce whether he will strut and fret his hour upon the ABC stage.

The news that Letterman was in play came as a shock to almost everyone — including suddenly endangered ”Nightline” anchor Ted Koppel, who waxed eloquent in The New York Times March 5 about the ”relevance” of his 22-year-old newscast. Regardless of the outcome — and industry-wide speculation at press time leaned toward Letterman staying at CBS — ABC’s courting has shaken the late-night landscape faster than you can say ”stupid pet trick.”

ABC’s winter of discontent can be traced to last summer. According to numerous sources at both networks, it was then that ABC discovered a window in Letterman’s contract, which expires this August, that allows him to negotiate with other nets. ABC decided to make an approach and, according to sources, offered the host $31 million per year, his own studio in ABC’s Times Square complex, plus the production costs — which run about $40 million annually. CBS’ counter is just north of $30 million, which doesn’t include the program development funds for Letterman’s Worldwide Pants. In late February, ABC execs even met face-to-face with Letterman in New York City to hammer out a deal. As the meeting wound down, sources say, the suits believed they were close to selling the plan, but then the host hesitated and said he wanted to ponder its merits over his vacation. Soon after, the story broke.

Late night has been a sore spot at ABC for some time. The network was unhappy with ”Politically Incorrect” — host Bill Maher’s contract is not expected to be renewed in December — and ”Nightline” seemed vulnerable given Koppel’s frequent absences and pretaped shows. (An ABC insider says that in his last negotiation in 2000, Koppel, 62, wanted to work fewer days per week for a reported $8 million a year.) While ”Nightline”’s household rating rose more than 30 percent in the two months after 9/11, the show’s profitability has shrunk, according to an ABC source, from $30 million in 1997 to its current figure of $13 million. And not only do ”Late Show” and Jay Leno’s ”Tonight Show” draw the young viewers that advertisers crave, but ”Nightline” faces competition from 24-hour cable news channels as well. ”The function ‘Nightline’ served 10 years ago is not the same,” says analyst Bill Carroll of Katz Television Group.

According to an ABC insider, the network had earlier considered making a pitch to Conan O’Brien, even running numbers about the viability of a show headed by the ”Late Night” host. (Coincidentally, last month, O’Brien signed a four-year, $32 million contract with NBC.) Still, Letterman, newly rejuvenated post-9/11, was the obvious first choice for a raid. ”It’s extremely important to wrestle Letterman away from CBS,” says a major TV talent agent. ”It gives ABC something to really scream about, and they haven’t had much lately.”

Late Show With David Letterman
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