UPN In Jeopardy As Fox Sues For $108mBy Antony
March 5, 2003 - 3:55 PM
Enterprise network UPN is facing a legal battle after Fox TV stations filed a $108m lawsuit against the network for breach of contract. This altercation between the two powers could very well affect the future of UPN.
Although exact details aren't clear yet, it seems that the spiralling ratings of UPN — down around 23% on last year (story) — have triggered Fox into taking action, according to NY Daily News. "The Fox stations are pissed off," a source told the website. "They could do better as independents."
The Fox station group became affiliated with UPN two years ago, when the Chris-Craft station group was bought out by Fox parent News Corporation. Through this action, Fox gained control over eight key UPN affilliates, in top markets such as New York and Los Angeles. Fox thereby held the key to UPN's continued survival, and reportedly used this leverage to make UPN acquire the Fox-produced Buffy the Vampire Slayer at a cost of $2.3m per episode.
The Hollywood Reporter believes the action has been spurred on by UPN sharply reducing advertising and promotion during the past year, causing the affiliates to suffer from a ratings decline. But, Hollywood Reporter along with NY Daily News, concur that the legal action may just be a negotiating tactic.
Fox's affiliation contract runs through the 2003-4 season, but some speculate that Fox may be employing tactics early to secure the extension of the contract and to push UPN into investing into programming and promotion. "There's been a lot of buzz about UPN going away," the source told the NY Daily News. "The network is losing money. Sumner [Redstone, CEO of Viacom] has a low tolerance for losses."
UPN will probably want to appease its affiliates, but it isn't getting drawn into a fight - yet. "This is nothing more than a contract dispute that we hope to resolve privately and amicably," UPN said in a statement. "But if we have to go to court, we will clearly prevail."
But if Fox was to discontinue its association with UPN — the worse case scenario — the loss of key affiliates would diminish the network's reach within the US and would mean that many Trek fans could lose their weekly dose of Enterprise.
The original NY Daily News article can be found here, and the Hollywood Reporter article can be found here.