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Editor: D. A. Jeremy Telman
Valparaiso Univ. Law School

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Wednesday, January 13, 2010

Conan the Contractarian?

ConanYesterday's New York Times reported that Conan O'Brien is being courted by the Fox Network.  Apparently Jay Leno's prime time talk show was not the hit NBC was hoping for, so they are carting his chin back to Jay's old 11:35 PM EST time slot.  Conan would still host The Tonight Show, but with a start time of 12:05 AM, the show would be better named The Late Show.  Is that name taken?  As the picture at left indicates, Conan is so angry at this treatment, his hair is on end.  But would he go so far as to jump ship to Fox?

Jay_LenoAccording to the Times, O'Brien might not be free to take Fox up on its offer.  The Times suggests that O'Brien's contract with NBC includes a non-compete clause that could prevent him from jumping to a rival network for a year or more.  In order for O'Brien to extract himself form this NBC contract, he would have to show that the 1/2-hour time change constitutes a breach of contract by NBC.  Unfortunately, for Mr O'Brien, his contract with NBC does not specify the time slot for The Tonight Show.

At least one commentator thinks that Conan's lawyers "screwed up" by failing to specify the time slot of The Tonight Show in his employment agreement.  At least one other commentator thinks the "screw up" insignificant because a court will assume that the parties intended for The Tonight Show to air in its traditional time slot. Unfortunately, this latter commentator can only cite this blog as her authority.  Of course, we were not privy to the negotiations that resulted in that contract, but certainly NBC's good faith could be questioned if Mr. O'Brien emerged from the negotiations in the reasonable belief that The Tonight Show would continue to air at its usual time.

Two updates

First, over at Concurring Opinions, Lawrence Cunningham has given the Conan O'Brien/Jay Leno controversy the full-blown IRAC treatment.  I think I'd give myself about a B- on the issue-spotting exam, since I didn't address the mitigation issues nor did I think about the effect of the controversy on third-parties.   But I still have the temerity to quibble with Professor Cunningham's conclusion that, on the whole, NBC would have the stronger position if the controversy were to end up in court.  Much might depend on what percentage of The Tonight Show's target audience has the stamina to pay much attention after the opening monologue, but I suspect that viewership declines drastically after the witching hour.  

One factor that might be crucial to a determination of which party has the stronger bargaining position is the rumor that Conan's agreement with NBC included some sort of $45 million penalty clause.  The Daily Beast here contemplates the consequences of a broad reading of that penalty clause.  In the report cited above, The New York Times, suggests that the $45 million would only have come into play if Conan had never gotten to host The Tonight Show.  But if NBC's intention all along was to bring Jay Leno back if his prime time show failed, was Conan really given a chance?

Second, today's New York Times reports -- on page A1 above the fold no less! -- that Conan has thrown down the gauntlet, pronouncing that he will not go back to early a.m. television.  His intention is apparently to soldier on until NBC throws a pile of money at him and allows him to get on with his career unimpeded.

[Jeremy Telman]

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Comments

I hate to be a naysayer here...but shouldn't we wait until we either (A) have seen the contract, or (B) know what it actually says instead of "suggests?" Any analysis past pure speculation is futile without the cold hard facts.

Posted by: D. Marck | Jan 13, 2010 7:46:08 PM

But it's the speculation that's so fun. If we waited until we saw the contract (which is likely never) then we would never be able to talk about this very interesting and relevant case. Contract law is rarely in the news this way - I say let's take this golden opportunity to talk about it while we can!

Posted by: Nancy Kim | Jan 14, 2010 8:50:01 AM

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