After much speculation, Letterman says he'll stay at CBS as `Late Show' host

<br>NEW YORK (AP) _ David Letterman put an end to the late-night soap opera that has preoccupied television for more than a week, telling his ``Late Show'' audience that he is staying at CBS and

Tuesday, March 12th 2002, 12:00 am

By: News On 6

NEW YORK (AP) _ David Letterman put an end to the late-night soap opera that has preoccupied television for more than a week, telling his ``Late Show'' audience that he is staying at CBS and rejecting an enticing offer from ABC.

Letterman's future has been the subject of widespread speculation since reports emerged that ABC was trying to woo him with a multimillion-dollar offer that would have displaced veteran newsman Ted Koppel from his ``Nightline'' slot.

Letterman ended the speculation on Monday _ his first day back after a Caribbean vacation that coincided with the buzz about his future.

``I've never been in a situation like this in my life (and) the whole thing has made me dizzy,'' he said.

The fallout from the decision is certain to be felt at ABC, which has repair work to do at its news division.

Koppel said that ABC parent Walt Disney Co.'s bid for Letterman had damaged his show. He said it would be unreasonable to expect people at ``Nightline'' to continue working in a climate of uncertainty.

``There must be a great many talented comedians who would welcome the opportunity to take over the `Nightline' time slot,'' Koppel said. ``Our hope is that Disney will send a clear and unmistakable signal to them, to us, to the advertising community and to all of our loyal viewers interested in the robust future of network television news that `Nightline' can count on serious corporate backing.''

Koppel said ``Nightline'' deserves ``more than bland assurances or a short-term guarantee.''

ABC President Alex Wallau said ``Nightline'' will remain in its time slot. But he described the move to go after Letterman as a smart one that fell just short, and said ABC would aggressively try to improve itself as it did with the recent signing of John Madden for ``Monday Night Football.''

Wallau also defended the network's support of its news division in an episode that's been seen as a test case for whether large media companies would stand beside journalists.

``We invest a tremendous amount of money to make our news brand and support our people in the news division, and give them the ability to be the best news division that can possibly exist,'' he said. ``We're very proud of that and we think that at the end of the day, that support will be recognized.''

ABC and CBS dangled similar financial offers to Letterman, deals that would pay him about dlrs 31 million a year. The networks were touting the promotional muscle of their parent companies, Viacom for CBS and Disney.

CBS promised to be more aggressive promoting Letterman on Viacom's other networks, including MTV, VH1 and TNN. They provide the younger audience Letterman needs to reach his goal of unseating Jay Leno's late night dominance at NBC's ``Tonight'' show.

The 54-year-old comedian's current contract with CBS expires in August.

``We are thrilled that CBS will continue to be the home of David Letterman,'' CBS President Leslie Moonves said in a statement. ``Without question, he is one of the great talents of our time.''

In his monologue Monday night, Letterman managed to live up to his funny yet prickly reputation.

Not only did he bitterly disappoint ABC executives by rejecting their offer, he compounded the agony by delivering Koppel a ringing endorsement.

``He, at the very least, deserves the right to determine his own professional future,'' Letterman said. ``Absolutely no less than that.''

The veteran talk show host, who has brought CBS a string of Emmy Awards yet burns to beat Leno, said he hopes to end his career at CBS. He said the network was ``nothing'' when he arrived from NBC in 1993 and has built something. CBS is currently much stronger in prime-time than ABC.

Yet Letterman has had a contentious relationship with Moonves, relentlessly ribbing him on his show _ and the CBS executive hasn't always laughed. Letterman said ``it's like a family. There's been good times and we've had fistfights.''

In the future, ``the morons running this network think there won't be fistfights,'' he said. ``By God, there will be fistfights and that's too bad.''