From a strictly business perspective, Letterman's revelations on Thursday's show were an immediate success: His overnight ratings were up 38 percent over the same night a week ago, the Nielsen Co. said.
It remains to be seen whether Letterman will suffer long-term damage just as his career appears to be peaking. Letterman has taken over as the king of late-night in the ratings this summer, and last week he beat NBC's Conan O'Brien for the first time among young viewers.
Friday night's "Late Show" was taped in advance on Thursday, meaning Letterman won't be taping an episode after his revelation until at least Monday.
Jay Leno, Letterman's longtime late-night rival, didn't waste a moment commenting on the situation. He kicked off his monologue on NBC's "The Jay Leno Show" on Friday with several jokes about Letterman.
He opened: "If you came here tonight for sex with a talk show host, you've got the wrong studio."
Leno continued: "What is going on? First Conan hit his head, and then somebody tries to extort money from Letterman. I'm so glad I'm out of late-night." (Last week, O'Brien suffered a mild concussion during a skit.)
Robert J. "Joe" Halderman, a producer for the true-crime show "48 Hours Mystery," pleaded not guilty in a Manhattan court as he was arraigned on one count of attempted first-degree grand larceny, punishable by five to 15 years in prison. He was released after posting $200,000 bail.
Halderman's connection to Letterman was not immediately clear, but public records show that until August, he lived in Norwalk, Conn., with Stephanie Birkitt, a 34-year-old woman who works on the "Late Show" staff and used to work at "48 Hours."
Birkitt was an assistant to Letterman on the "Late Show" and frequently appeared on camera with the host in comedy bits. Last month, Birkitt moved to Manhattan's upper West Side. There was no answer Friday at a phone listed in her name.
It was unclear how many women were involved in relationships with Letterman, 62, who married longtime girlfriend Regina Lasko in March. The couple began dating in 1986 and have a son, Harry, born in November 2003.
All the affairs took place before Letterman's marriage, said Tom Keaney, spokesman for Letterman's production company, Worldwide Pants. Keaney also said Letterman "is not in violation" of the company's harassment policy "and no one has ever raised a complaint against him."
CBS issued a statement Friday: "We think it was appropriate for Dave to disclose the matter publicly as he has, and we are continuing to cooperate with authorities."
CBS would not address questions about whether Letterman faced any disciplinary actions for relationships with subordinates. CBS News also declined to address questions about whether Halderman's alleged actions call into question any of the work he has done for the news division.
David Lande, a New York City-based civil attorney whose cases have included sexual harassment, said Letterman presumably was in a position of power with a voice in hiring, firing and promotions.
"So, to the extent that he had control over these factors with the women he was involved with, he could be subject to liability," he said. "I am sure CBS lawyers are reviewing the matter very carefully."
Shanti Atkins, president of ELT, a firm that consults on ethics and sex in the workplace issues, said Letterman, his company and CBS could also be vulnerable to claims of sexual favoritism by others in the company if they believe people got ahead because they were sleeping with the boss.
Assistant District Attorney Judy Salwen told the judge Halderman was in debt, but did not elaborate.
"The evidence is compelling," she said. "It shows the defendant is desperate, and he is capable of doing anything." The prosecutor said Halderman gave the talk show host a package of materials that "contained clear, explicit and actual threats that indicate this defendant ... (wanted to) destroy the reputation of Mr. Letterman and to submit him and his family to humiliation and ridicule."
Halderman, hands cuffed behind his back, stared at the floor during most of Friday's court hearing and said only "not guilty."
His lawyer, Gerald Shargel, said Halderman worked at CBS for 27 years and had no prior criminal record. He described him as an involved father who coached soccer, baseball and football and has two children, ages 11 and 18.
"This story is far more complicated than what you heard this afternoon," Shargel said outside court, but he would not elaborate.
Halderman earned about $214,000 in 2007. He was ordered in 2007 to pay his ex-wife $6,800 per month in child and spousal support until May 2011, when the payments will be reduced to $5,966 until May 2014, according to papers filed in Stamford Superior Court.
He had asked for a reduction to $2,039 per month because his ex-wife, Patty Montet, was sharing a house in New Canaan with a man. But Montet argued - and the judge agreed - that her living arrangement was for convenience and not romantic. Montet also claimed Halderman was getting $1,500 a month from Birkitt.
"Mr. Halderman claims he is struggling financially, but it is difficult to see what, other than mismanagement and extravagant spending, is the reason for this," Montet's attorneys said in the court file. "His is a world of golf trips, vacations, increasing 401k assets, comprehensive benefits, security in employment, earnings as an award-winning producer for CBS, and home ownership."
Halderman allegedly left an envelope in Letterman's car early Sept. 9. According to authorities, he wrote that he needed "to make a large chunk of money" and said that Letterman's world would "collapse around him" if damaging information about him were made public.
Letterman acknowledged that the letter contained proof that the late-night host had sexual relationships with members of his staff.
Three meetings between Letterman's lawyer and Halderman subsequently took place in Manhattan's Essex House hotel, the last two with the lawyer recording the conversations and prosecutors listening in, District Attorney Robert Morgenthau said.
At the last meeting, on Wednesday, the lawyer gave Halderman a phony check for $2 million, Morgenthau said.
Halderman deposited the check Thursday in a Connecticut bank and was arrested later that day outside CBS News' Manhattan office, he said.
Halderman has been described by colleagues as a talented and occasionally volatile producer. His boss, Susan Zirinsky, called "48 Hours" staff members into a meeting on Friday to discuss the case, calling it a personal tragedy.
Marcy McGinnis, who was Halderman's boss when she was CBS' London bureau chief, said she had him work on many important stories, like Princess Diana's death and the war in Bosnia. She said she was shocked by the alleged extortion.
"The idea of it is so unbelievable. This is a very smart guy. There must have been some sort of mental breakdown. I'm no expert, but it just seems like it was 100 percent out of character."
It's the second set of embarrassing headlines for Letterman in four months. He apologized on the air earlier this summer for a crude joke involving Sarah Palin's family. But when the controversy continued to swirl, he came back after a weekend to offer a stronger mea culpa.
Letterman's contract with CBS runs through next August, although the network has been in negotiations to continue that through 2012. Advertisers spent $145.2 million on the show from January through June this year, according to TNS Media Intelligence. They appear to be holding firm behind the late night host.
"We haven't seen any clients nor do we anticipate any clients looking to move inventory out of the show," said Laura Caraccioli-Davis, an executive vice president and director at Starcom. "We believe that he handled it with full transparency. Consumers are looking for that authenticity and honesty."
Associated Press writers Emily Fredrix, Jake Coyle, John Christoffersen, Colleen Long, Mesfin Fekadu, Jennifer Peltz, Hillel Italie, Ryan Nakashima and news researcher Rhonda Shafner contributed to this report.