A few days back we reported the unfortunate news that despite agreeing to a juicy new contract for Mad Men creator Matthew Weiner, AMC was trying to force some profit building shenanigans with the series — most troublesome of which was trimming the cast. This put Weiner and AMC into a staring contest. It seemed fairly illogical and unlikely that AMC would actually cancel their flagship show just to be dicks. Sure, they’ve also got other hit shows now, but Mad Men is what put them on the map. A more plausible scenario would find Weiner scrapping his new contract and walking away from the show, leaving AMC to put someone else in charge of the ship.

Well, no need to worry anymore, as AMC has just released this statement (abridged):

AMC and Lionsgate today announced the return of the iconic series “Mad Men” for seasons five and six with series creator Matthew Weiner back on board as showrunner. Concurrently, it was announced that Weiner has signed a new long-term deal with Lionsgate, extending into a possible seventh season. The announcements were made by Charlie Collier, president of AMC, and Kevin Beggs, president of Lionsgate Television Group.

“I want to thank all of our wonderful fans for their support.” said Weiner. “I also want to thank AMC and Lionsgate for agreeing to support the artistic freedom of myself, the cast and the crew so that we can continue to make the show exactly as we have from the beginning. I’m excited to get started on the next chapter of our story.”

“AMC’s original programming began with a mission to create bold storytelling of the highest quality, and ‘Mad Men’ was the perfect expression of that commitment. We’ve been proud to support this show from the day we read Matt’s ground-breaking pilot script and have loved building it with Matt and Lionsgate into the cultural phenomenon it has become,” said Collier. “For everyone involved in the show and its passionate fans, we are thrilled to announce that the series will continue on AMC under the exceptional vision of Matt Weiner.”

“We are proud to continue our successful relationships with AMC and the brilliantly talented Matt Weiner, whose vision has created one of the most distinguished series on television,” said Beggs. “We also appreciate the passion and patience of ‘Mad Men’ fans around the world who have been awaiting this good news, and we believe they will be rewarded with many more seasons of this extraordinary and groundbreaking series.”

Obviously the statement is not going to address any of the previous quarreling, but reading between the lines in Weiner’s statement leads me to believe he won that staring contest, not AMC.
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[UPDATE] Weiner talked to Deadline, clearing up some things. “I walked away from it 4-5 times in the last few days…I wanted to do the show I wanted to do and the show the audience has come to expect.“
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As for the worrisome cast cuts, he says: “The cast is safe from financial concerns” but also adds an ominous addendum, noting that he can cut whoever he wants “on creative basis.”
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As for the product placement AMC wanted: Weiner notes there have been only three instances of product placement on the series thus far. “I don’t want the audience to feel they are being sold on the show.“
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There will be no cut to the show’s run-time, which will remain at 47 minutes (though it will be cut slightly in reruns on AMC).
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In conclusion, Weiner says, “These will be the last 3 seasons. I’m going to take it one year at a time without the distraction to ever have to go through this again [ie, the re-negotiations]. I’m incredibly grateful for the outpouring of support and overwhelmed that I get to finish telling the stories I want to tell.“