NEW YORK — David Letterman will keep his late-night talk show at CBS, he announced Monday, spurning a strong bid from ABC that would have displaced that network's highly regarded news program "Nightline."

Letterman made his decision official in a statement he delivered just after the start of the taping of his program on Monday night in Manhattan. On the program, Letterman told his audience that he appreciated the generosity of the offer from ABC but that he had decided to stay at CBS, and he hoped ABC would continue with "Nightline" and its anchor Ted Koppel "for as long as that guy would like to have that job."

Koppel, who has been angered by ABC's treatment of him and the staff of his program, issued a sternly worded statement on Monday night, joined by his top producers. The statement said that the network had damaged "Nightline," hurt its staff members and that it was the network's obligation to repair the damage.

"We hope the corporate leadership of Disney understands that it would not be reasonable to expect all of us at 'Nightline' to continue our work in a climate of ongoing uncertainty," the statement read. "There must be a great many talented comedians who would welcome the opportunity to take over the 'Nightline' time slot. 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." (ABC is a unit of the Walt Disney Co.)

A senior ABC executive defended the network's effort to win Letterman as "sound business reasoning."

He said, "I'm proud of what we did," and noted that the situation was extremely delicate because ABC had to go all out to woo Letterman while trying not to offend the staff of "Nightline" and the ABC News division.

"I don't see how we could have handled this much more adeptly," the ABC executive said. "It was a very, very difficult corridor we were navigating."

Rob Burnett, the president of Worldwide Pants, Letterman's production company, praised ABC's effort: "ABC made a fantastic run at it. They are terrific guys, and we believed they would have done everything they promised."

CBS was forced to make a number of concessions to keep Letterman, who was disappointed with the network's initial approach in the negotiations. Rob Burnett, president of Letterman's production company, said that Letterman, after seriously considering ABC, chose CBS because it had "seriously stepped up" in the most recent negotiations. For example, CBS made the unusual concession of agreeing to trim the local news on the stations it owns to start Letterman's show on time at 11:35 p.m. whenever a network program, like an awards show or a movie, runs five minutes or less past 11 p.m.

"CBS finally convinced Dave they wanted him to stay," Burnett said. "It's very difficult to start up a new late-night franchise. Dave has done it here. He loves the theater he works in. He feels like he's really built something at CBS. It all came down to a gut decision on his part that right now he wasn't ready to leave. Ultimately, he just wanted to stay home."

Letterman's decision to stay at CBS brought an end to more than a week of intense speculation about his future and how it would affect Koppel.

Execetives close to Letterman said Monday that he returned from a weeklong vacation eager to resolve the issue without any further delay.

On his program on Monday night, Letterman joked about the reports of conflicts with CBS executives that had led to the opportunity for ABC to lure him away. "It's like family," he said. "There's been good times, and there've been fistfights. I'm not speaking figuratively, I'm speaking literally. I actually punched some executives."

Leslie Moonves, the president of CBS Television and the man in the middle of the Letterman negotiations, said Monday: "When the call came I was legitimately thrilled. It made me realize, though obviously I had before, exactly how important this was to us."

Letterman kept executives at both networks in suspense to the end. His representatives did not call either network until minutes before he began his taping on Monday evening. Then he insured prolonged secrecy by blocking out the transmission of the taping to CBS offices in both New York and Los Angeles.

No specific terms of the deal were disclosed, but both networks had reportedly been in the same range with their offers. The salary for Letterman was said to be about $31.5 million a year, a 5 percent increase from the $30 million he was making in the last year of his current CBS deal.

A CBS executive said the deal was "between three years and five years," which means that Letterman is likely to have the opportunity to renegotiate in three years. "The deal leaves Dave room to do whatever Dave wants to do," the CBS executive said.

Both networks sought Letterman aggressively because of the profits his shows generates. Some reports limited that figure to numbers as low as $25 million a year — about double what "Nightline" executives had reported as that program's profits. Executives involved in the negotiations said that the profit figure for Letterman was actually well more than $50 million. One executive said that when the profits that stations owned by the network are figured in, Letterman's show might generate more than $80 million in profit a year.

The most significant reason for the differences in profits have to do with the makeup of the audiences for the two shows. "Nightline" reaches a news audience that is generally somewhat older than the audience for Letterman's show, and advertisers still prefer reaching younger viewers.

Moonves acknowledged that ABC had been very competitive in its bid to win Letterman. "They were a serious contender," he said, adding that while not exactly on the edge of his seat on Monday night, he remained at least a bit worried until the moment the call came through telling him Letterman had chosen CBS. "I wanted this very badly," Moonves said.

He added that he believed the reports of personality conflicts between him and Letterman had been "blown out of proportion."

In his comments on the air, Letterman made the point that when he joined the network in 1993 "CBS was nothing," and that since then "we were able to build something." He added, "We've had a lot of wonderful things happen."

Later, he noted that despite his kind words for CBS, his analysis of network executives may not change, at least in his on-air commentary. "The morons running the network think there won't be any fistfights," he said. "There will be fistfights and that's too bad."

But then he said he hoped to finish his career at CBS.

A crucial part in the decision, all sides in the negotiations said, was CBS's recent improvement in its prime-time schedule, at the same time that ABC's schedule has been in a steep slide. ABC tried to convince Letterman that it would provide him with better lead-in audiences because its local station lineup was so much stronger that CBS's.

Robert A. Iger, the president of the Walt Disney, and Lloyd Braun, the president of ABC Entertainment, flew to New York from California and met with Letterman's representatives on Monday morning. They made a last-ditch effort to persuade Letterman to jump networks. But they received a call just prior to the call to Moonves informing them of the decision.

"We're disappointed," a senior ABC executive said. "We thought it was a long shot, but we were very aggressive, very competitive."

The executive noted that ABC had recently added both the games of the National Basketball Association and John Madden as a commentator for its "Monday Night Football" games. "We're going to continue to look at business opportunities," the executive said.

On the question of damage to "Nightline," the executive said: "I have no doubt we can repair the situation. It's my hope that we're all stronger from this. We're committed to the show."

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Of Koppel, the executive said that he believed he could take advantage of the increased awareness of the show. "This gives him the opportunity to make the show whatever he wants to make of it," he said.

In his remarks on his show, Letterman acknowledged that ABC had run a gantlet of criticism for its aggressive attempt to win him. "I would rather ride naked on the subway than go through what these people had to go through the last couple of weeks," Letterman said. "To me they were gracious and generous and very, very patient."

Letterman's decision leaves the competitive status in late night television unlikely to change, at least in the short term. Letterman has trailed Jay Leno on NBC's "Tonight" show for most of the past six years, though he has made some inroads on Leno's lead in the past year.

"Nightline" and its companion show "Politically Incorrect" finish third most nights. ABC has made little secret of its plans to at least replace "Politically Incorrect" with a new entertainment program by next fall.

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