Variety's Michael Schneider lays out in full detail why Conan O'Brien did not end up at Fox:
The reason had less to do with Fox's desire for O'Brien—but instead a critical decision by Fox and its stations made it nearly impossible for the network to clear a latenight timeslot.... [A]t some point during the past five years, in renegotiating its affiliate deals ... Fox gave up the ability to grab a late night slot back.
Such a concession didn't cause much of a ripple, as there was no indication that a late night show was on the horizon at Fox—which last programmed the daypart with 1993's disastrous "Chevy Chase Show."
Some Fox execs, unaware that they no longer had the ability to take back 11 p.m., were optimistic that an O'Brien deal might happen—until they realized an O'Brien show would have to be cleared market-by-market.
Then there was the question of the Fox stations' sitcom commitments. Fox's owned-and-operated outlets, for example, were committed to carry "30 Rock" repeats in the 11 p.m. hour on WNYW New York and KTTV Los Angeles, among others.
In losing local ad time, and perhaps facing a penalty for moving off-net fare out of guaranteed slots, Fox-owned stations could have faced losses of as much as $40 million to $50 million, one observer said.
So in the end, O'Brien found his slot at TBS, bumping George Lopez to midnight. (And something tells me Lopez will not put up a fight in this move.)