Stalemate over Leno's late-night chat show could cost NBC dear

When Jay Leno signed a contract extension three years ago to maintain his position as the king of the late-night US TV chat-show circuit, he wasn't too perturbed about the contract's end-date in 2009. If anything, he welcomed it.

"You can do these things until they carry you out on a stretcher or you can get out while you're still doing good," he said at the time.

Now, however, 2009 is that much closer and Leno –an enduringly popular figure – isn't at all sure he wants to bow out of The Tonight Show in favour of the man who now follows him on the late-night NBC schedule, comedian Conan O'Brien.

Senior entertainment sources told the LA Times that Leno, now 57, is having cold feet about the deal he signed. And that, in turn, creates a headache for NBC, which doesn't want to lose Leno altogether – his is still the top rated chat show – but also doesn't want to lose O'Brien, who has stayed with the network largely because of the promise that The Tonight Show will soon be his.

The succession matters because the host of The Tonight Show is about the closest thing to an anointed monarch American television has. Before Leno, the longtime occupant of the job was Johnny Carson, a figure still revered in US entertainment circles.

The race to succeed Carson in 1992 turned into a distinct mess when NBC chose to go with Leno, Carson's understudy, rather than Dave Letterman, the cult host whose own late-night show on NBC followed on directly from Carson's.

The decision bruised countless egos and created buckets of bad blood. Letterman ended up leaving the network to start his own late-night show on CBS and made bitter rivals of two men who had previously been friends.

If Leno does fight to stay on, NBC has a big problem. The network can choose to find another slot for him, knowing he will more than likely bolt to another network, taking his large audience with him. Or it can renege on its deal with O'Brien, giving him a reported $40m and, more than likely, waving goodbye.