Rosie O'Donnell will not be returning to "The View" when her contract is up. Yes, I know it's a great disappointment to you, but I don't think we're getting the whole story. Some, like Rosie and ABC, say they just couldn't reach an agreement that would keep Rosie on the air. Others, like Laura Ingraham, said public outrage forced ABC's hand. I don't think either of these is the case. Here's what I think happened.
Remember when Rosie was going on about all the alleged coverups and said the media helped? She called out ABC on air in front of a nationwide audience and accused the company of perpetuating a lie. That's grounds for termination in most companies, but since Rosie is seen as singlehandedly saving "The View," it wasn't a good enough reason to toss her out on her ear.
There's also another reason why ABC wouldn't have released her after the aforementioned tirade. Rosie tends to talk a lot about injustices, real or imagined, and being fired for speaking out would give her a LOT to talk about. And ABC doesn't want to appear to be anti-gay, since there are fringe elements out there who would look solely at Rosie's sexual orientation and claim a firing was motivated only by homophobia. The PR nightmare alone would be enough to make ABC hold off on firing Rosie.
On the other hand, ABC suffered a lot of backlash from Rosie's comments. They understand ratings, but they also understand pressure by sponsors since advertising is how shows like "The View" make their money. Once sponsors start complaining, it's time for the tough decisions within the network. Do you keep Rosie in the hopes of keeping up the ratings, or do you fire her to please the sponsors?
Neither party in this case had an upper hand. Rosie knew ABC could fire her outright for her comments and that money could make her walk in a heartbeat. ABC knew Rosie could lash out at them for firing her, putting them in a world of hurt from a PR standard. Thus, the environment was perfect for a mutually beneficial parting and the subsequent "we just couldn't reach a mutual agreement on Rosie's contract" story. By coming to the agreement I think really happened, ABC gets rid of Rosie and a PR backlash, and Rosie gets to leave without being fired and without having to alienate sponsors she might need later on should she do TV again. A win-win for both parties.
And one that is being obscured by spin.