UPDATE: Here’s What CBS Is Saying About Oprah

EXCLUSIVE: One of the biggest questions in the TV biz has been when, and even if, Oprah Winfrey would give up her daytime syndicated talk show to focus on OWN, her long delayed Oprah Winfrey Network in 70 million homes that was supposed to launch in place of the Discovery Health Channel as a joint venture between Winfrey and Discovery Communications. The industry has been betting that the daytime diva would extend The Oprah Winfrey Show for at least another year or two because of the huge cash license fees which stations have long paid her. But people around Oprah are telling me that won’t happen. They say that Discovery Communications chief David Zaslav has demanded that Oprah “move it or lose it” — move her talk show to OWN, or risk losing the Oprah Winfrey Network altogether. I’ve learned that in coming days Winfrey and Discovery will issue a press release announcing OWN’s on-air launch for the start of 2011. And, in several weeks, Oprah will tell the public that she’s ending her syndicated Chicago-based daytime talk show when her current deal runs out and moving it to OWN headquarters in Los Angeles probably as soon as mid-2011.

Hardest hit by the news will be CBS Television Distribution which syndicates the show, Also hit will be ABC’s owned-and-operated stations which make up Oprah‘s core station group, and also Sony TV execs who’d been hoping Oprah would deliver any extension of her daytime talker into their hands based on the success they’ve had this season syndicating Dr Oz, Harpo’s latest daytime talk show star). “Les Moonves, Bob Iger, and Sony will flip out,” one of my insiders says about Oprah’s news. “The only winner is David Zaslav.”

*UPDATE: My news this morning caught CBS by surprise. The Eye was counting on a 1- or 2-year renewal of The Oprah Winfrey Show. “In all honesty, we have not heard she’s made a decision yet whether to continue,” an insider tells me. “We think we’re still in the talking stages. To our minds, it’s a non-decision.” CBS had scheduled a face-to-face meeting a month ago with Oprah and her personal and professional posse at her Santa Barbara compound to discuss her plans. But one of the people in the close group of people around her passed away. So it was canceled, I’ve learned. CBS is quick to point out that, a few years back, Winfrey re-negotiated her distribution deal with CBS TV Distribution so it “gets a lesser fee now”. The result is that, when Oprah stops her syndicated talk show and moves it to OWN, “It will be a hit for us, but not until 2012. And with the lower syndication fee, it’s not as big a hit as it would have been,” a CBS insider tells me. Besides, CBS has seen Oprah claim time and time again over the years that she’s “retiring” from the syndicated show. But to take Oprah to a nosebleed cable channel even if it reaches into 70 million homes? “She has always respected the fact that the pulpit she has now gives her such a huge amount of influence.” And CBS also plans to remind her that, thanks to the syndicated show, “she by far makes more money on TV than anybody else.” Now let’s see how persuasive Les Moonves and his people can be.*

I’m told that right now Oprah and her advisers are trying to figure out what to do with her mini-city in Chicago, and which personnel she can and will move out to LA in the next six months. Also Discovery will have to renegotiate her own deal. Even though it has yet to go on the air, OWN has experienced tremendous turmoil since it was announced, including the entrances and exits of many top female TV executives — three in just the last 7 months. Combined with the unprecedented delays, that has come at a cost for Discovery. “It’s so upside down because Discovery has lost millions of dollars since it was announced,” a source tells me. “It was rumored 50/50 that Zaslav would throw in the towel and her network wouldn’t launch. But Zaslav sees it as a loss leader.”

Last week, Oprah called a confab in Los Angeles and met with everyone associated with OWN. She also personally heard programming pitches. Only very recently has she put in place her two current top lieutenants to run OWN (but for how long?): Christina Norman, who at the start of the year was named CEO after spending 17 years with Viacom Inc’s MTV cable empire before stepping down as MTV president. And Lisa Erspamer who this week was named OWN’s Chief Creative Officer and is a 15-year veteran of Harpo Productions where she served as co-executive producer of Oprah since 2006. But I hear that recently appointed OWN head of programming Jamila Hunter, NBC’s former SVP of alternative entertainment, is out looking for a job after just 3 months.

I understand that Oprah was supposed to tell CBS Inc chief Les Moonves back on October 1st what her plans were but then cancelled several scheduled calls to him. Winfrey’s distribution deal was re-signed in 2004 with King World which is now part of CBS Television Distribution. It expires in fall 2011 which marks the end of Oprah’s 25th season. (News reports said a clause existed in her current contract that would have let her end the show in 2010, but that she chose last year to extend the show’s run through the contract’s full term.)

She said in 1997 that she was planning to retire, then renewed her contract through 2002. Then in 2002 she said she would call it quits in 2006, but in 2004 she re-upped through 2011. Back then she was still enjoying high ratings and fat cash license fees from TV stations and big popularity. But that was then, and this now. Her ratings have been in double-digit decline in recent years. And given the financial crisis which has put TV stations on life support because of the plunge in advertising, Oprah was unlikely to be able to demand another big cash raise to continue her show in syndication — especially in today’s climate when stations are bartering with syndicators, not paying them. “It had the potential to bankrupt stations. She would have wanted all cash up front. GMs would have told her to go away,” one source explains to me. When Oprah leaves syndication, it will open up time slots and free up station cash not just for syndication’s existing stars (which now include Harpo-started Dr Phil, Rachael Ray and Dr Oz) but also new ones.

Leaving the extraordinary visibility she enjoyed through syndication for a nosebleed cable channel is a huge gamble for Oprah as a TV brand. There’s the possibility that OWN could distribute her new talk show for syndication. But I hear no one is talking about that now. In the U.S., Oprah is viewed by an estimated 7 million people a day (though that audience has fallen by half over the past 10 years) and in 140 countries. It has been estimated that she currently earns about $275 million a year in showbiz income. Long the No. 1 rated daytime talk show, Oprah also made Winfrey into the richest African American woman worth $2.3B at last count, a worldwide media personality with a powerful media empire around her, a celebrated actress who doubled as a film and television producer, a force in both book and magazine publishing.

But there’s also no question that Oprah is a much more controversial figure now than she’s ever been before because of her wealth and fame and politics. “She’s lost her authenticity. Like when she said, ‘It’s good to have your own private jet.’ Or when she shut down the City of Chicago with this season’s ‘flash mob’ for the opening show. Where’s the relatability?” The word internally at ABC is that TV stations have been cringing at Oprah’s past and present and continuing support for Barack Obama, from her appearance at his inauguration (see photo) to her visits to the White House, because it antagonizes half the viewing public who don’t share her politics. Now Oprah will no longer be in their faces: instead she’ll be isolated on cable. The biggest question now in the TV industry is whether it’s “Good Luck!” or “Good Riddance!”