Entertainment Law, Television

What Does the Conan-Leno-NBC Debacle Mean for Entertainment Law?

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On Tuesday, we tuned in to the late night show debacle unfolding at NBC. On his show that night, Conan O’Brien shared insights about the lawyerly wranglings. From US Magazine:

“Hi, I’m Conan O’Brien, and I’m just three days away from the biggest drinking binge in history,” he said during Tuesday’s monologue. “I spent the afternoon at Universal Studios’ amusement park, enjoying their brand-new ride, the ‘Tunnel of Litigation.'”

Noting reports that he is legally prohibited from bad-mouthing the network behind the mess (Jay Leno is taking over O’Brien’s time slot after his prime time show was axed), O’Brien joked in his monologue Tuesday “Nobody said anything about speaking in Spanish.”

He then rails off an insult in Spanish which translates to: “NBC is run by brainless sons of goats who eat money and crap trouble.”

The Wall Street Journal reports this morning that the Litigation Rollercoaster Ride rolled to a stop at 1 a.m. PST, thanks to operators at Gibson Dunn and Glaser Weil.

The final deal includes a payout of approximately $32.5 million for Mr. O’Brien and roughly $12 million for his staff, according a person familiar with the matter. The agreement will allow Mr. O’Brien to appear on another network beginning Sept. 1, the person said….

NBC, which is controlled by General Electric Co., will retain the rights to at least some of the comedic material from the show, according to people familiar with the matter. The deal also includes a non-disparagement clause, both for the 46-year-old comedian and NBC, and a provision that was said to bar or limit Mr. O’Brien from appearing on others’ shows for a period of time, according to people familiar with the negotiations.

Jay Leno gets to reclaim his 11:35 p.m. show starting March 1. Meanwhile, David Letterman is probably just happy that Leno and Conan are monopolizing the late night news cycle instead of his own legal troubles.

What impact will this $45-million ruffling of the Peacock Network’s feathers have on entertainment law practices?

Two experts opine on what this means for the entertainment law industry, and the major takeaway lesson for talent lawyers, after the jump.

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Matthew Belloni — an entertainment lawyer turned journalist, who hosts the coverage for the Hollywood Reporter at THR, Esq. — tells us:

It’s not that the Conan debacle will lead to an increase in entertainment lawyers — there are already plenty of those in Hollywood, thank you very much. Most I’ve spoken with have noted how unique this situation is.

Typically a TV network can schedule a show whenever the heck it pleases, subject to cash penalties for canceling it before a certain number of episodes air. True, studio lawyers are probably combing through talent contracts checking if any timeslot language exists. And yes, any talent lawyer worth his 5% fee is probably calling to ask for timeslot guarantees (although we know that Letterman and Leno already have those clauses in their deals).

But the biggest impact might be on future A-list TV host negotiations. Plenty of my sources have been quick to jump on Conan’s team for not explicitly requiring that “The Tonight Show” air at 11:35 (although we’ve heard mixed messages on whether the language in the deal was explicit on the timeslot issue — NBC agreeing to pay Conan and Co. $40 million-or-so at least suggests NBC was nervous about the issue). Whenever the next top hosting gig opens up, whether it’s a deal for O’Brien to go to Fox or another host taking over a late-night slot, we’re betting the host’s lawyers are going to leverage the Conan situation into an explicit guarantee that the job stay at the timeslot originally contemplated for a certain amount of time. Or at least that will be the goal.

LA-based entertainment lawyer Larry Zerner represents actors, writers, and producers. He crushes the hopes of those who hoped this might lead to a boom for the field, though he does have reassuring news for those who love Triumph the Insult Comic Dog:

The recent late-night fiasco should not have any real impact on talent contracts for the majority of performers for a number of reasons. First, it is very unlikely that another network will make as many bad decisions as NBC made. The decision five years ago to replace Jay with Conan now seems like a huge mistake, the choice to move Jay to 10:00 proved to be a disaster, and the attempted fix to put Jay on for 1/2 hour at 11:35 backfired horribly, resulting in the loss of Conan and seriously damaging Jay’s likability factor.

Second, from my understanding of the issues (and, of course, I haven’t actually seen Jay or Conan’s contract), the real bone of contention was whether NBC would be in breach of the agreement with Conan if they moved the Tonight Show to 12:05. Conan’s contract to host The Tonight Show apparently didn’t specifically state he would be on at 11:35 (something Letterman had in his contract), so issues were raised as to whether his show could still be considered The Tonight Show if it was moved. This is just not an issue that will keep other studios up at night, although future negotiations for late night hosts will certainly include specific language as to the time the show will air.

With regard to whether Conan can take some of the characters and sketches with him to his new job, it is almost certain that the contract with Conan and his writers had a work-for-hire provision and an assignment of all copyrights to NBC. The same thing happened to David Letterman when he left NBC for CBS, which is why Larry “Bud” Melman could not appear on Late Night, but the actor who played him (Calvert DeForest, Jr.) could. Therefore, the only way that Conan would be able to continue to use those characters would be if NBC agreed (perhaps in exchange for Conan’s promise not to bash NBC on his new show).

However, it appears a little unclear as to the ownership of what is probably the most popular character to come out of Conan’s show, Triumph the Insult Comic Dog, who was created by long time SNL writer Robert Smigel. Although Triumph started on Conan, he has appeared on a number of non-NBC shows, and there is certainly reason to believe that Mr. Smigel created Triumph on his own, and not under his duties as a writer employed by NBC. If that’s the case, then Mr. Smigel would be free to take Triumph anywhere without NBC’s interference. An interesting clue to the ownership of Triumph is that the official website for Triumph (www.Triumphtheinsultcomicdog.com), is owned by Warner Records, which put out the Triumph CD. This would seem to indicate that NBC is not Triumph’s owner, leaving Triumph free to poop on NBC as soon as Conan gets settled elsewhere.

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What is clear is that O’Brien’s contract kind of sucked. [FN1] TV by the Numbers picked up on this tidbit from the New York Post:

The decision to let O’Brien walk apparently came down to who was cheaper to let go.

Leno has an ironclad, “brilliantly written” agreement that guarantees his production company a staggering $150 million if NBC Universal axes his flailing primetime show, an insider said.

According to the National Law Journal, O’Brien’s entertainment contracts lawyer is Leigh Brecheen of Beverly Hills entertainment boutique Bloom Hergott Diemer Rosenthal LaViolette Feldman and Goodman, while Leno’s contracts are handled by Skip Brittenham Ken Ziffren of Beverly Hills entertainment boutique Ziffren, Brittenham, Branca, Fischer, Gilbert-Lurie, Stiffelman, Cook, Johnson, Lande & Wolf.

Ziffren Brittenham may have a difficult time honing its name, but it certainly knows how to craft a tight contract.

UPDATE: A tipster tells us that Ziffren Brittenham has tightened up its name, and is now just Ziffren Brittenham LLC.

[FN1] On January 29, we spoke with Patricia Glaser and Leigh Brecheen. Glaser clarified that Conan’s contract did not suck, saying that the “underlying agreement was excellent.”

Glaser said the contract was a tight one, sending her into negotiations with NBC well-armed. “Everything I needed was there,” said Glaser. “I had a powerful weapon had we needed to go to war.”

Conan O’Brien Seals Deal to Exit NBC [Wall Street Journal]
Conan’s $32m leap for joy [New York Post]
Conan O’Brien @$40 Million Cheaper To Boot Than Jay Leno @$150 Million [TV by the Numbers]
Parties to NBC ruckus lawyer up [National Law Journal]

Earlier: ‘Bye, everybody, bye!’: An End in Sight for the Conan-Leno-NBC Debacle?

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