Leno: 'We Should Have an Answer Tomorrow' About Late-Night Mess NBC could pay O'Brien $40 million; fans hold "I'm With CoCo" rallies.

Jan. 18, 2010 -- Jay Leno put all kidding aside tonight and got serious for change.

Mired in a rancorous programming squabble with his network and fellow comedian Conan O'Brien, Leno announced on his prime-time talk show, "The Jay Leno Show," that "we should have an answer tomorrow" about whether he is going to return to his former 11:35 p.m. "Tonight Show" time slot.

Leno also explained events that led to the situation from his standpoint and says he considered O'Brien -- who publicly rejected a proposal to host the show at a new, later time -- a "great guy."

The former (and apparently future) "Tonight Show" host said he'd tried to avoid doing a show in prime time but was convinced by NBC that it could work. Now, he said, four months later, because of problems with NBC's affiliated stations and low ratings, network executives informed him they were canceling his show but "told me you're still valuable."

The network asked him to move back to 11:35 for a half-hour show, with O'Brien to follow at 12:05 with "The Tonight Show."

Leno said he asked whether O'Brien would go along with this plan and was told that NBC was sure that he would. Leno said he agreed to the change because he wanted to protect the jobs of his staff members.

According to Leno, the network learned that O'Brien would not accept the shift, but he said he does not blame O'Brien at all.

A source familiar with the contract negotiations told ABCNews.com that NBC will pay the flame-haired comedian an exit package between $30 and $40 million, while the rest of the "Tonight Show" staff -- many of whom moved from New York to Los Angeles after O'Brien left his "Late Night With Conan O'Brien" show to succeed Leno earlier this year -- would receive severance and contract buy-out packages.

Nailing down the staff's severance packages has become a sticking point in the negotiations, which began last Wednesday, the source said. Some staff members were nearing the ends of their contracts while others didn't have any contractual protections at the time NBC announced its late-night shake-up plan, the person said.

O'Brien's team, the source said, "want to make sure everyone's treated really well."

The settlement could allow O'Brien to move to another network by the fall. News Corp., the owner of Fox, has been O'Brien's most vocal suitor, though it's uncertain where the host will ultimately settle.

O'Brien's last show is expected to air this Friday, making this his final week. Guests on tonight's show will include director Martin Scorsese and actor Colin Firth, while Oscar-winner Tom Hanks is scheduled to appear Tuesday, along with actor Paul Bettany.

NBC's late-night comedy line-up first took a dramatic turn earlier this month when, amid flagging ratings for "The Tonight Show" and "The Jay Leno Show," NBC announced that it wanted to move Leno's program to 11:35 and push O'Brien's show back to 12:05 a.m.

Last week, O'Brien issued a statement rejecting the plan, saying the shift would "seriously damage what I consider to be the greatest franchise in the history of broadcasting."

(For O'Brien's full statement, click here.)

Despite lackluster ratings during his first seven months on the job, O'Brien has seen a groundswell of public support as the details of the scheduling negotiations emerged. O'Brien fans in New York, Chicago, Los Angeles and Seattle held public demonstrations today to "show love" for O'Brien, whom many fans affectionately refer to as "CoCo."

Rally organizer Mike Mitchell, the administrator of the Facebook group "I'm With COCO," acknowledged in an interview with ABCNews.com that the demonstrations likely won't change NBC's plans.

"I don't think we're going to change NBC's stance on what they want to do with late night -- I think that's already been inked," he said. "I think hopefully we're going to show Conan's got a huge following and we're behind him no matter where he ends up."

Conan O'Brien's Support Strengthens

Mitchell, 27, a Los Angeles-based freelance illustrator, quickly found himself close to the O'Brien controversy after he created a black, white and orange illustration of the comedian emblazoned with the "I'm With COCO" slogan.

The Facebook group has grown from 200 members to more than 315,000 in a matter of days, he said.

"Now is just a good time to support him because he's kind of been put in a tough spot and people can relate to his situation," he said. "Everybody's had a bad boss that has maybe put them in a position that they didn't want to be in."

Mitchell said he has heard from members of O'Brien's crew who have also voiced their support for the host.

"Everybody on the show has 'I'm With CoCo' avatar on Facebook," Mitchell said, referring to his famous image. "I know personally they want to follow Conan wherever he goes … They love him and they respect him."

O'Brien's ratings, meanwhile, have surged last week as the host peppered his show with jokes at his network's expense, at one point suggesting that NBC considered him such an idiot that he might be qualified to actually run the network. His Friday ratings jumped 50 percent, and he also bested CBS' David Letterman, according to a preliminary Nielsen Co. estimate.

O'Brien's manager, Gavin Polone, told ABCNews.com that part of the reason O'Brien's ratings were lower initially was because of the weak lead-in audience provided to him by Leno's show.

On Friday, Polone said, O'Brien actually beat his predecessor, with "The Tonight Show" pulling in higher ratings than "The Jay Leno Show."

"It's pretty amazing since he's on at 11:35 and (Leno's) on at 10," Polone said.

Polone said viewers who initially who began tuning to see what O'Brien would say about the controversy ultimately decided they liked the show, helping drive the continued ratings surge.

"The ratings just kept building and building and building," he said. "If they didn't like his stuff, they wouldn't come back."

Not everyone is in O'Brien's corner.

Last week, Dick Ebersol, the chairman of NBC Universal Sports, told The New York Times that O'Brien has no one to blame for his fate besides himself and his disappointing performance and also criticized the host for mocking Leno. He said it was "chicken-hearted and gutless" of the comedian to use his shows this week "to blame a guy you couldn't beat in the ratings."

Ebersol added that "what this is really all about is an astounding failure by Conan."

With reports from The Associated Press.