It's time to play musical chairs specifically, the ones that the late-night hosts sit in. NBC is set to announce on May 12 that Saturday Night Live vet Jimmy Fallon will take over next year for Conan O'Brien (who'll assume the Tonight Show throne currently occupied by Jay Leno, in a move made public way back in 2004). Peacock execs first approached Fallon about the gig in 2003, the year that he guest-hosted on Letterman. While he left SNL in 2004 to pursue a film career that has yet to take off (Taxi, Fever Pitch), he's recently been honing his stand-up chops across the country. In Fallon's favor: SNL/Late Night With Conan O'Brien exec producer Lorne Michaels will oversee the new show. ''Jimmy's a smart pick,'' notes one network exec. ''He's a young, cute guy that will draw women in and I don't bet against Lorne Michaels.''
The real question, however, is whether Leno will Jaywalk out of NBC's door when his contract expires at the end of 2009. He's said to be miffed about having to relinquish The Tonight Show, which has remained highly profitable during his tenure. (The program is TV's most watched late-night talk show, and is rumored to make in excess of $100 million in profits annually.) NBC is more than eager to keep Leno in the fold, and has already offered him several options, including prime-time specials and/or hosting another show basically, anything that doesn't air at 11:30 p.m. (That said, Leno has made it known that he really likes that hour, and views himself as a late-night guy.)
Of course, the slumping network is just as concerned with holding on to Leno as it is with preventing him from jumping elsewhere. While the others can't officially bid for his services until next year, there's speculation that Leno could wind up at Fox (wide open at 11:00 p.m.!) or ABC (which would have to displace Nightline or the increasingly buzzy Jimmy Kimmel Live!). Sony Pictures Television, meanwhile, has hinted at an extremely lucrative syndication deal. ''The guy is an ATM machine,'' declares the network exec. ''Everybody's going to go after Jay. That's a given.'' In fact, some even wonder if he's valuable enough for NBC to consider backing out of its deal with O'Brien, whose ratings lead has shrunk this year. (If the network were to do so, it would pay a reported $40 million penalty to O'Brien, not to mention lose a critical on-air personality to a rival.) NBC insiders deny that scenario. ''Everyone signed off on the plan including Jay and we're moving forward,'' says one exec. ''Are we getting cold feet? The answer is no.'' Whatever happens, the after-hours business will be no snooze in the coming year. ''Not since the wars with Leno and Letterman has there been such an exciting time,'' says one late-night veteran. ''It's a good time to be a spectator.''