Conan laughs all the way to the bank

The end of the Conan O'Brien chapter of "The Tonight Show" was officially hammered out on Thursday with a lot of money being dished out.

O'Brien's settlement with NBC will pay him $32.5 million, essentially a buyout of the remaining 2 1/2 years of his contract. His salary, which has never been confirmed, has been estimated at $12 million to $15 million a year.

NBC will also pay about $12 million to settle the contracts of others associated with show, including O'Brien's longtime executive producer and closest colleague, Jeff Ross.

The settlement, negotiated over the past week, brings to an abrupt end O'Brien's nearly 20-year career with NBC, where he began as a staff writer for "Saturday Night Live" in the late 1980s. It was not certainly how NBC anticipated O'Brien's "The Tonight Show" run playing out when it declared him the "king of late night" in June after his debut.

In one coincidence, the total amount that NBC is paying -- about $45 million -- is precisely the amount that NBC had promised O'Brien as a penalty payment if he did not get "The Tonight Show" when it was first promised to him in 2004.

Jeff Gaspin, the chairman of NBC Entertainment, called the deal "a settlement that worked for both sides."

O'Brien's final "Tonight Show" appearance will be Friday. But he may not be off the air for long. The comedian will be allowed to work on a competing network by September.

The costly resolution ends two weeks of high drama that damaged the images and reputations not only of NBC executives, but also of Leno, who was painted as the villain by many in the media, including CBS' David Letterman, who took numerous jabs at Leno over the past week. He was also the target of a grass-roots Internet campaign to demonstrate support for O'Brien. This week, Leno provided his side of the story on his program, saying he told NBC executives that he was skeptical that a prime-time show would work.