As Conan-Fox Heats Up, A Syndie Scenario Emerges (updated)

It's a longshot, but two companies have pitched Team Coco on the notion of early fringe syndication

Conan O'Brien and Fox continue their courtship dance, with a deal moving closer to reality — but hardly in the bag.

And in an interesting wrinkle, if for some reason O'Brien and Fox end up not doing a deal, there's been serious interest from at least two major syndication companies in launching a syndicated version of O'Brien's show not in late night — but as an early fringe talk show that would air in the hour just before primetime.

Debmar Mercury, the super successful syndicators behind TBS's Tyler Perry sitcoms and the upcoming Will Ferrell project in the works at Comedy Central, have talked with O'Brien's reps about such a scenario, two people familiar with the conversations said. Another major syndication player has also expressed interest in O'Brien.

UPDATE 12:15 PM CBS Television Distribution has discussed the idea of syndication with the O'Brien camp, two people familiar with the conversations said. The studio declined comment when asked about the matter.

Syndication is currently seen as a longshot for Team Coco, if only because O'Brien seems to have his heart set on trying to stay in the late-night network TV game. But if he opts for the notion, it could end up being extremely lucrative in success.

Fox, however, remains Option One. As TheWrap reported February 19, the biggest question is whether all sides can make things work financially.

And as TheWrap reported last week, Fox and O'Brien's camp are researching the economic feasibilty of launching the show, with O'Brien's team hopeful that the scheduled June end of the Legally Prohibited From Being Funny on Television road show will segue right into preparations for a possible fall launch of a Conan show on Fox.

The only outstanding issue has been whether senior brass at Fox parent News Corp. would put up any roadblocks to the idea of Conan on Fox.

A person familiar with the situation told TheWrap Wednesday that all indications are that News Corp. figures such as Rupert Murdoch and Chase Carey aren't opposed — as long as the price is right. The fact that talks have continued for weeks now certainly is a sign that there's been no decision to overrule Fox network executives who've been trying to make a deal.

The key to any Fox-Conan deal is making sure that Fox doesn't bleed money under any worst case scenarios. Specifically, Fox will likely go into a Conan show assuming that many stations won't air the show in pattern at 11 p.m., while others might push it past midnight — or not carry it all.

That's because some stations may opt to stick with more lucrative off-network sitcom repeats at 11 p.m., rather than go for O'Brien's untested talk show, which would net them less short-term ad revenue (since Fox would control more commercial inventory).

The goal all along has been for both Conan and Fox to view a new show as a long-term business partnership, with O'Brien in particular willing to sacrifice any huge upfront payday — he made more than $10 million per year at NBC — in order to buy Fox's long-term backing for the show, which all parties expect could take years to build.

NBC is said to have spent about $1.25 million per week — give or take a few hundred thousand dollars — to produce "The Tonight Show with Conan O'Brien." That doesn't take into account O'Brien's salary or the fact that "Tonight" was set to go on hiatus for between six to eight weeks per year.

While O'Brien's "Tonight Show" was already produced at a modest price point compared to some other big network late-night shows, it's believed O'Brien's camp thinks further cost savings could be implemented. That said, at a certain point, O'Brien's team might become concerned that the budget would be too small to maintain the level of quality associated with network shows.

One way to save a few dollars would be to produce Coco on Fox at NBC Universal. As TheWrap first reported back in January, there's been talk that O'Brien could lease back his old studio from NBC U once he finds a new home.

This, of course, assumes Fox and O'Brien reach a deal. While there remains plenty of optimism about such a scenario among people familiar with the talks, it's hardly a given that the two sides will make the money work.

At the very least, it seems likely there will be a few more weeks of back and forth negotiations before any deal would be announced.

If talks break off, however, Fox sibling FX has made it very clear it would jump at the chance to launch a nightly show with O'Brien. The network's track record with groundbreaking, buzzworthy comedies and drama would be a good fit with the suddenly hip again Coco Express.

And then there's syndication.

While people familiar with the conversations didn't want to get into specifics, it's understood that rather than try to make late-night work, early conversations have focused on the notion of an O'Brien show earlier in the day. One idea would be to try to clear O'Brien's show in the hour just before primetime.

That would seem to be a tough sell since so many big stations are locked into either "Entertainment Tonight," "Wheel of Fortune"/"Jeopardy" or "Access Hollywood."

But Debmar-Mercury in particular has been adept at reaping millions from unlikely sources with just OK clearances (think "South Park" repeats, which the company distributes). Founders Mort Marcus and Ira Bernstein were hailed Forbes magazine last year as quiet millionaires who've profited handsomely from outside the box thinking.

Representatives for both Fox and O'Brien declined comment, while a rep for Debmar-Mercury couldn't be reached late Tuesday.