The network said O’Brien only began talking to execs there last week, and Lopez even called O’Brien himself. “I can’t think of anything better than doing my show with Conan as a lead-in,” Lopez said in a statement.

BREAKING NEWS! 2ND UPDATE 10:45 AM: We hear that Conan O'Brien will own the late night show on TBS, the same way that David Letterman owns his show on CBS (both the Late Show and the Late Late Show). O'Brien's salary is north of $10M (not including ownership). And Fox is pretty shellshocked, apparently kept in the dark from the reaction we're getting to today's big announcement.

10:20 AM UPDATE: The news that Conan O'Brien has picked a new TV home comes just as Conan kicks off his comedy tour today. Yes, this venue is a surprise. But these days, it's not like there's a big difference between a network and a cable show: all those 500+ channels seem indistinguishable. And TBS has done a terrific job branding and promoting Lopez Tonight. (O’Brien began talks in earnest with TBS just last week, after George Lopez personally called him to ask that he consider joining the network’s late-night line-up. “I can’t think of anything better than doing my show with Conan as my lead-in,” Lopez said. “It’s the beginning of a new era in late-night comedy.”)

A lot of showbiz reporters got it wrong (not us!) speculating about where Conan would land. They were fixated on Fox and assumed he would only go to a network. But the fact is that, we knew from the very beginning, Team Conan (including his exec producer Jeff Ross, and WME's Rick Rosen and Ari Emanuel, and manager Gavin Palone), were thinking way outside the network box. For instance, there were discussions with Microsoft about an XBox deal for Conan's show that would have broken new ground. And yes, discussions took place with Fox. Long presumed the most natural choice for the comedian, who had been clear that he was only interested in a nightly talk show, the sticking point was clearing a time slot behind the late evening news where the Fox O&O [owned and operated] and affiliate stations all have long-term syndication deals.

On the other hand, TBS offered O'Brien a weeknight platform (Monday-through-Thursday) without the hassle of having to launch in only parts of the country if not all markets were able to be cleared. "But TBS was far more aggressive from the very beginning. They wooed him hard," one insider tells me. "And Conan was incredibly impressed by executives there." Team Conan also liked the strong lead-in of Family Guy and The Office, as well as the prospect that on cable he could have "more freedom to be creatively more exciting," a source tells us. "And then George [Lopez] called Conan and convinced him to do it."

The good news is that, since he is going to a cable network, Conan won't face the same ratings scrutiny as if he were to go head-to-head with David Letterman and Jay Leno on a broadcast network. But airing from 11 PM to midnight Monday to Thursday, O’Brien will now face off directly with the formidable basic cable late-night duo of Comedy Central’s Daily Show with Jon Stewart and The Colbert Report.

We understand the budget for the show will be the same as it was on NBC. And that, of course, "the deal is very good" especially considering he already has NBC's $40 million in his pocket. And, of course, Conan was, well, Conan about it all: “In three months I’ve gone from network television to Twitter to performing live in theaters, and now I’m headed to basic cable. My plan is working perfectly.”