While everyone is busy fretting and fussing over Conan O'Brien's freshman Tonight Show run, his steady-as-she-goes CBS competitor, David Letterman, has been quietly inking a deal to stay on the air through 2012. With, sigh, a bit of a pay-cut.

Letterman's contract was originally through 2010, but the new deal will both extend his contract by two years and lower his Worldwide Pants licensing fees, because of the economy and all. As Letterman outright owns his own show, it's basically on rent to CBS. Letterman had been receiving some $30 million a year, but there's no word on what the new, lower figure will be. Still gonna be a lot, though.

So, good news Dave! The gap between his and Conan's numbers has been steadily narrowing since Conan debuted high, which means the time could be ripe for Letterman to once again take the top spot. Or not.

[THR]

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