I saw an interview Arsenio did with Tavis Smiley (which I think is circulating on YouTube) where he gave what certainly seemed to be a brutally honest post-mortem in an era of PR speak re: show cancellations. He and David Letterman had the same agent, Mike Ovitz, a.k.a. "The Godfather" as anointed by Dave from the book "The Late Shift". When Ovitz was able to get Letterman the 11:30 CBS gig, he sat down with Arsenio and explained what would most likely happen to his show (later clearances, lower-rated stations, loss of high profile affiliates, etc.) and recommended that it might be a good time to get out while the gettin' was good and try something different. Remember, too, that part of his success came riding the coattails of Eddie Murphy, and while he was able to parlay that into gold the first time with a big feature film and, ultimately, the talk show, by 1994 his own star was fading and so was Eddie's, so his options probably weren't what they were five years prior.
If I were Arsenio I'd have fired him on the spot- Ovitz basically double-crossed him.
I agree with you that his options probably weren't great, but let's not forget that Paramount had stuck with him for the better part of eight years and he proved he could carry a show. I don't think
Coming To America was the big boon for his career that everyone seems to think it was.
I have to wonder this time around if first-run syndication is the best route for him to take. If it were, I can't imagine why Conan didn't try that post-"Tonight Show". Maybe the landscape has changed enough in the past three years that the same objections Fox affiliates had for not wanting Conan 3 years ago (long term commitments to "TMZ" and other syndie properties, etc.) are no longer an obstacle.
Take away the Fox affiliates and you're left with the Tribune stations, who have their own commitments, the non-Fox owned MyNet stations, which have their own commitments, and not a whole lot else. That would've been Conan's worst option.
Seems Tribune's stations are hurting for late night programming now- Old Christine reruns aren't working as well, and they flopped with Entourage last year, maybe they have nothing to lose. IIRC most of the Fox stations are airing 30 Rock and/or The Office, plus The Big Bang Theory and The Simpsons, and are gonna be picking Modern Family up when that goes into syndication in the next two years. (My Fox-owned MyNet also has the Tyler Perry Power Hour, My Name Is Earl, and South Park- gotta figure those would play in too.)