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NBC is being too foolish with the whole mess they did. Leno might have his loyal viewers but that is because they have been with him for past 17 years for the 11:30 time frame. If Leno was great then he should have in theory kept the majority of his viewers since most would be able to watch his show earlier instead of having to go to bed for work or school. Instead most of his "loyal viewers" dropped watching him at 10pm.
Meanwhile Conan was in the process of building up his viewership for the long run (maybe takes 1-2 years without interruption) so for NBC to negotiate with Leno without Conan would have hurt the long term ratings buildup NBC is going to need. If Conan leaves and Fallon is the new #2 guy, NBC is going to fail big time if Fallon is set to be their #1 guy in a few years.
Fallon needs to build up his late late night viewers which takes a few years and then build up his late night viewers which takes another few years before he can even think of being ready for post-news show. It also gives Fallon time similar to what Conan needed to find his "gig" to make him unique and funny for the show.
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