Associated Press In this combo made from file photos, NBC talk show personalities, from left, Jay Leno, Conan O'Brien and Jimmy Fallon are shown. 
 
 PASADENA, Calif.—NBC is going "back to basics" in a bid to fix its struggling evening lineup. 
 
 News Hub: What's Next for Conan? 5:27 Jay Leno's 10 p.m. show is officially canceled. WSJ's Sam Schechner and MarketWatch's Jon Friedman weigh in on the NBC shake-up and whether Conan O'Brien will accept a later time slot or leave. 
 
 The television network confirmed Sunday it was abandoning its prime-time experiment with "The Jay Leno Show" after tepid ratings and a backlash from local-TV stations, and plans to move the comedian back to the 11:35 p.m. slot. In his place, the network will return in part to more costly scripted shows. 
 
 "I think you have to take chances. Sometimes they work. Sometimes they don't," Jeff Gaspin, chairman of television entertainment at NBC Universal, the joint venture that owns NBC, said at a conference here. "We might have been too early on this one." 
 
 The abrupt midseason shift shines a spotlight on the mountain NBC has left to climb to turn around its prime-time schedule, after years of decline. The move will leave a five-hour hole—on weeknights at 10 p.m.—when it takes effect after February's Olympic Winter Games. Adding to the woes, the network confirmed Sunday that its coverage of the Games is likely to lose money because of enormous rights fees. 
 
 NBC executives said they will use the slot Mr. Leno had occupied to broadcast at least two more hours of original scripted television shows. Existing dramas like "Law & Order: Criminal Intent," a new reality series, reruns or an extended hour of NBC News's "Dateline" program could be among the fill-ins. 
 
 "I would have preferred to wait until September when we'd have more pilots to choose from, but we'll make do," Mr. Gaspin said in an interview. 
 
 NBC executives don't expect a quick prime-time turnaround, according to a person familiar with their thinking. "It's going to take a lot of investment, and some luck," the person said. 
 
 Mr. Leno's inexpensive one-hour nightly series had been billed, in part, as a way to cope with rising costs to create TV shows as broadcast networks' viewership dwindled. "Instead of trying to reinvent, going back to basics is probably the smartest play," Mr. Gaspin said. 
 
 Detractors had slammed the Leno experiment as a quick fix for NBC's failure to develop new hits in several years. In the end, it was doomed by the ripple effects of low viewership, especially at the local level. 
 
 The decision to return Mr. Leno to late night comes after Comcast Corp. announced a deal last month to acquire a majority stake in NBC Universal from General Electric Co. Mr. Gaspin said Comcast isn't involved in business decisions while the deal awaits regulatory approval 
 
 Meanwhile, the fate of NBC's once-dominant late-night slate remains in the air. Mr. Gaspin said the network hopes to move Conan O'Brien, who has hosted "The Tonight Show" since June, back half an hour to 12:05 a.m. to make room for Mr. Leno. Mr. O'Brien would be followed an hour later by "Late Night with Jimmy Fallon." 
 
 Those arrangements haven't been finalized and talks with the hosts and their management teams are continuing, Mr. Gaspin said. He added that Messrs. Fallon and O'Brien were "incredibly gracious and professional" when told about the changes. 
 
 Mr. O'Brien's advisers huddled over the weekend to determine his options, possibly including leaving NBC, according to a person familiar with their thinking. The person said that NBC executives had conversations with members of Mr. O'Brien's camp, but that Mr. O'Brien had neither agreed to nor declined the move to 12:05 a.m. 
 
 A person close to NBC Universal said Mr. O'Brien's contract doesn't restrict NBC to a particular start time for "Tonight." The person familiar with the thinking in Mr. O'Brien's camp wouldn't comment on Mr. O'Brien's contract. 
 
 One O'Brien suitor is News Corp.'s Fox network, which has had early talks with Mr. O'Brien, according to people familiar with the matter. News Corp. also owns The Wall Street Journal. Fox declined to comment on NBC's latest announcement. 
 
 Mr. Gaspin said NBC couldn't meet all of Mr. O'Brien's needs but tried to meet him halfway by allowing his show to retain the "Tonight Show" title. "What's important to Jay is telling jokes at 11:30. What was really important to Conan beyond that was having the franchise of 'The Tonight Show,' " Mr. Gaspin said. 
 
 NBC Chief Executive Jeff Zucker had promised Mr. O'Brien he would become the host of "The Tonight Show" more than five years ago, as part of a bid to keep the comedian from leaving the network for a rival. As the handoff approached, it was Mr. Zucker who decided to put Mr. Leno in prime time to keep him from departing as well. 
 
 Mr. Gaspin said Mr. Leno's comedy-talk series was profitable for the NBC network, but that local NBC stations had complained it didn't provide a strong enough lead into their local news broadcasts, a key revenue source. 
 
 "['The Jay Leno Show'] did not meet our affiliates' needs and we realized we had to make a change," said Mr. Gaspin. 
 
 Local stations welcomed the change. "It has been devastating for a number of late newscasts across the country," said Michael Fiorile, chief executive of Dispatch Broadcast Group and chairman of NBC's affiliate board. Mr. Fiorile's own WTHR in Indianapolis saw its late news fall to No. 2. 
 
 Mr. O'Brien's slumping performance at "Tonight" also had raised alarms. Since Sept. 21, Mr. O'Brien has averaged about half the number of viewers that Mr. Leno averaged a year earlier, according to Nielsen Co., though his declines are far less steep among younger viewers. 
 
 "We're very supportive of Jay and glad he's going to be back at 11:35," said Dave Lougee, president of the broadcast division at Gannett Co., which owns a dozen local TV stations that air NBC programming. 
 
 NBC's move to replace 10 p.m. dramas with Mr. Leno also had been criticized by TV producers and executives who saw the move as a retreat from spending money to develop new shows. Some NBC executives have said the perception of Mr. Leno's show as a cut-rate failure became something of a self-fulfilling prophecy by alienating viewers. 
 
 Competitors have used Mr. Leno's show to bash NBC and tout their own schedules. "ABC, CBS, and Fox, we've all fared, I think, very well during this experimental phase for NBC," Nina Tassler, entertainment president at CBS Corp.'s eponymous network, said Saturday. 
 
 Ms. Tassler said she thought the creative community was "bruised" by NBC airing a live comedy show at 10 p.m., because it employs fewer cast and crew than pricey original dramas. 
 
 Angela Bromstad, president of prime-time entertainment at NBC, said on Sunday NBC was bringing writers and producers back to the network. She announced several new NBC pilots in development including a series by "Alias" creator J.J. Abrams and a drama from "CSI" creator Jerry Bruckheimer. 
 
 — Shira Ovide 
 
 contributed to this article. 
 
 Write to Amy Chozick at amy.chozick@wsj.com and Sam Schechner at sam.schechner@wsj.com ||||| Jay Leno, the former king of late-night television who was pushed out as host of NBC's "The Tonight Show" last year and then struggled in his new prime-time slot, is in talks to return to 11:30 p.m. Conan O'Brien, who succeeded Leno, would either go back to following Leno or leave the network.The reshuffle could happen as soon as March, after NBC finishes airing the 2010 Winter Olympics, according to people familiar with the situation who spoke on condition of anonymity. Although Leno is on board with the plan, O'Brien has not yet signed on and that needs to be resolved before the network can make it official, sources said.The network's flip-flop is being driven in large part by complaints from NBC affiliates across the country who have lost viewers and advertising revenue because of Leno's performance in the 10 p.m. slot. The imminent move also highlights the fourth-place network's difficulty in reviving its anemic prime-time lineup at a time when a majority stake of the company is in the process of being sold from parent General Electric Co. to cable giant Comcast Corp.The leading scenario is for Leno's late-night show to shrink to half an hour and then be followed by O'Brien at 12:05 a.m. Even though Leno's workload would be cut in half, his estimated $30-million annual salary would not be, sources close to the comedian said.Restoring Leno to his former slot represents a tacit admission by NBC that its daring move to replace him with O'Brien and shake up its 10 p.m. time slot was a huge mistake. When NBC Chief Executive Jeff Zucker made the decision in September 2004, it was done as a defensive measure to keep O'Brien from defecting to a rival network. Also, though Leno was No. 1 then, NBC was betting that the younger O'Brien would be ready to take over the "Tonight Show" desk and keep the program fresh for the next generation.But as Leno's late-night exit date drew closer and he considered competing against O'Brien, NBC gave Leno his own show at 10 p.m. It was a plan that NBC hoped would allow it to have its cake and eat it too.Instead, both moves proved to be big disappointments. Leno's show has not performed well at 10 p.m. and O'Brien has not been able to fill Leno's shoes at 11:30 p.m.Since premiering in prime time in September, Leno's show has averaged 5.34 million viewers, according to Nielsen. That's a 29% drop from the same period last season when it was running dramas such as "Law & Order" and "ER."NBC has publicly stood by its decision to put Leno on in prime time. One of its key arguments has been that although Leno's numbers are lower than the dramatic fare that the network used to run in that hour, the show's production costs are much cheaper.Though NBC may be saving money on Leno, the local stations that carry the network's programming across the country are feeling the pain of Leno's weaker ratings. The affiliates need the network to deliver a big audience at 10 p.m to feed into their late local news, which is where they make as much as 33% of their revenue.Leno's declining ratings have led late local news at many NBC stations to fall by as much as 30%. The affiliates were patient with NBC in the fall when Leno's prime-time show premiered, but now many are griping to the network. NBC has acknowledged that Leno's performance has become a major issue for their stations.The network's affiliates aren't the only ones that have been vocal about Leno's lackluster performance. The creative community has been bitter about NBC turning its back on 10 p.m. dramas that gave the network beloved signature shows such as "Hill Street Blues," and "ER.""I feel they should take down their American flag and put up a white one," cracked Peter Tolan, executive producer of FX's hit drama "Rescue Me," last year about NBC's decision to put Leno in prime time. John Wells, who was an executive producer of NBC's "ER" and "The West Wing," said last fall that he was "disappointed that NBC no longer has the time periods available to support the kind of critically acclaimed series that was for so many years the hallmark of their success."NBC would have to scramble to find programming for the 10 p.m. hour that can be ready by March. The network would probably use its veteran news magazine "Dateline" as a stop-gap measure and shift some of its current hourlong dramas to Leno's slot as well.Leno's woes in prime time have been well-publicized, but O'Brien's move from 12:30 a.m. to 11:30 p.m. has been equally traumatic. He trails CBS' "The Late Show with David Letterman" by about 2 million viewers. The two shows are tied in the coveted adults 18-49 demographic. Leno routinely beat Letterman in both categories.On Thursday night, Leno addressed the situation on his show, joking that he didn't think the rumors were true because "it's always been my experience that NBC only cancels you when you're in first place. So we are fine. We are OK."O'Brien's camp is keeping quiet and he, unlike Leno, did not address Thursday's news on his show. In a statement, NBC said: "We remain committed to keeping Conan O'Brien on NBC." NBC is probably trying to find some wiggle room with O'Brien. His contract, which pays him about $25 million a year, has a $40-million penalty fee if NBC were to force him out as host of "The Tonight Show."One point of contention is whether O'Brien's program would continue to be called "The Tonight Show" even if it follows Leno's 11:30 p.m. program. Leno, sources said, is more concerned with regaining his old time slot than wrestling over a title.Whether Walt Disney Co.'s ABC or News Corp.'s Fox would go after O'Brien remains to be seen. It was Fox's pursuit of O'Brien six years ago that led NBC to set up the Leno succession plan in the first place.Fox doesn't have a late-night show, but a senior executive at the company downplayed the idea that it would chase O'Brien.ABC now runs the news magazine "Nightline" followed by its late-night show hosted by Jimmy Kimmel. "Nightline" has actually performed decently for the network and is significantly cheaper than O'Brien's show.Times staff writers Maria Elena Fernandez and Matea Gold contributed to this report.
– As everyone wonders whether Conan O’Brien will stay at NBC or move to Fox, the Tonight Show host offered up a few more novel ideas yesterday: Perhaps he’ll “pretend to put my son in a giant foil balloon, then sit back and watch the offers come pouring in!” Watch him deliver the rest of his options on the video above—then check out Jay Leno, who also addressed the drama last night on his show. “NBC says the show performed exactly as they expected it would, and then they canceled it,” Leno said. “Now don’t confuse that with when we were on at late night and we performed better than expected and then they canceled us. That was totally different!” Meanwhile, the Los Angeles Times takes a closer look at Fox’s early talks with Conan—who “would be a very compatible fit for our brand,” says the president of Fox Entertainment.