Low-Drama Negotiation Skills at the “Late Show”

By — on / Negotiation Skills

Just one week after David Letterman revealed his decision to leave his long-running talk show, the Late Show with David Letterman, CBS announced that comedian Stephen Colbert would be his replacement. The negotiations surrounding the changing-of-the-guard were remarkably business-like and calm for the tumultuous world of late-night television.

Letterman debuted his show Late Night in 1982 and then switched to CBS in 1992 following a contentious battle with Jay Leno for Johnny Carson’s chair at the Tonight Show. Letterman’s voluntary decision to retire comes on the heels of Leno’s forced retirement from NBC, which replaced him with Jimmy Kimmel while his ratings were still healthy.

During his show on April 3, Letterman related how he had called CBS chairman and CEO Les Moonves and reportedly said, “Leslie, it’s been great, you’ve been great, and the network has been great, but I’m retiring.” The talk-show host explained to his audience that he and Moonves had agreed in the past that “we would work together on this circumstance and the timing of this circumstance.”

Negotiations to hire Letterman’s replacement were similarly low in drama. Colbert had indicated his interest in the job, in part by syncing his recent contracts to Letterman’s to ensure he would be available to CBS if the time came, according to the New York Times.

Moonves told the Times that “a barrage of calls” came from the agents of top comedians, but only talks with Colbert’s agent became serious. Given interest on both sides, a five-year hosting deal for Colbert was wrapped up quickly.

Colbert reportedly had one special request, according to Moonves: that he have “Dave’s blessing” as his replacement. Letterman indicated his approval by issuing a statement endorsing Colbert.

“This is like a 20-year decision,” said Moonves. “I’m confident I made the right one.”

The smooth transition stands in stark contrast to a past prominent succession plan in late-night television. Back in 2004, NBC asked Leno to turn over his job to Conan O’Brien—then the star of CBS’s Late Night, Letterman’s former show—in five years, even if his ratings remained high. Though reportedly devastated by the request, Leno agreed.

In 2009, CBS gave Leno an hour-long prime time show and instated O’Brien at the Tonight Show. Both shows suffered in the ratings. CBS tried to reverse course and give Leno a half-hour show to air after the local news and before the Tonight Show. An angry O’Brien rejected the plan, and Leno was reinstated as the Tonight Show host. O’Brien eventually secured a late-night show with TBS.

The angst-ridden game of musical chairs indicates how strongly fairness concerns can affect perceptions in negotiation. The public perceived that NBC had treated first Leno shabbily and, later, O’Brien. NBC’s flip-flopping also betrayed the network as indecisive and uneducated about its own market.

By contrast, Moonves apparently built a trusting relationship with Letterman over the course of many years and allowed him the freedom to plan his own retirement. Then, rather than carrying out a protracted search for a replacement, CBS acted decisively in securing Colbert. The moves reflect the benefits in business negotiations of treating counterparts with respect and basing business decisions on a thorough understanding of the market.

Related Article: The Late-Night TV Disputes

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