Is NBC preparing to announce Jay Leno's departure from The Tonight Show?

The network says categorically no, but two high-level industry sources tell The Hollywood Reporter that NBC is moving toward a May announcement that the 2013-14 television season will be the last for Leno as host of the long-running late-night show. Sources expect the network to move Jimmy Fallon from his Late Night spot into the coveted 11:35 p.m. time slot with a soft launch during the summer of 2014 before a formal fall kickoff.

A Leno rep says, "We do not speculate on rumor." Whether the network finally executes the Tonight transition plan remains to be seen. Anyone with even a passing sense of Leno’s personality knows that the hardworking comic would be reluctant to leave his perch, especially before his rival at CBS, David Letterman, announces his retirement. Leno and Letterman are both signed through 2014

Sources believe the network will bring in Fallon partly out of concern about the competition on ABC, which moved younger-skewing Jimmy Kimmel Live! to the 11:35 time slot in January. “The more time Jimmy Kimmel is in that slot, the more the young audience goes that way, the harder it is for [Fallon] to keep that audience,” says a source familiar with the network’s thinking.

Leno's Tonight still performs well for NBC, regularly besting his late-night rivals. But Kimmel is competitive in the 18-49 demo. "Kimmel has done extremely well," a network veteran says, adding that he is unaware of any contemplated Leno move. "Jay wins overall, but on any given night, it's neck-and-neck in 18-49. I understand where they might have fear and also feel that they own the solution [in Fallon.]"

Comcast, which owns NBC, imposed layoffs at Tonight in August. At the time, Leno took a big salary cut from his reported $30 million.

NBC also could be concerned that if Letterman does retire in 2014, CBS would be looking for a replacement, potentially opening the door to a bare-knuckles battle for Fallon that could mirror a previous tussle involving Conan O’Brien. In 2004, then-NBC head Jeff Zucker promised the then-Late Night host he would inherit The Tonight Show in 2009 as part of his deal to re-up with the network. But when NBC installed O'Brien at Tonight and moved Leno to 10 p.m., the strategy backfired, leading to an embarrassing feud and a costly 2010 settlement with O'Brien, who now hosts a show on TBS.

If NBC elects to announce the Leno-Fallon transition at or before the May upfronts, one observer adds, the network would “get the benefit of selling Jay’s last year -- again.”