UPN News & Article

By Christian
August 15, 2000 - 9:21 PM

  • Several news sources quoted UPN President Dean Valentine, who said UPN would soon start talking with Chris-Craft on a possible new affiliation agreement. "We will be having conversations about our affiliation and hopefully they will be positive." UPN's current affiliation pact with the Chris-Craft stations will expire on the 15th of January, before the News Corp. deal closes, so Chris-Craft will have to decide on its own whether to renew the contract at least for the short term.

  • Valentine also said, "No one wants to shut down a broadcast network. [We] will do everything possible to keep it alive." Commenting on what Viacom would decide, he said "Viacom is in the business of building assets rather than shutting them down. [...] They'll be talking over the next few weeks, [but] we're far from feeling the fat lady's sung. We don't think she's gotten onstage yet."

  • Rupert Murdoch's News Corp. wouldn't say whether it would have the stations remain affiliated with UPN, if given the choice. However, Murdoch said that the company is assuming Viacom will take away or close UPN. Earlier, company president Peter Chermin said he didn't think News Corp. really cared one way or another about UPN's fate. Though many analysts speculated that News Corp. would want to replace UPN programming with its own sports and news programs as well as Fox TV reruns, Murdoch and Chernin both indicated no such plans have been made and the company has multiple ways to go.

    Analysts are in fact in disagreement over who would be responsible for pulling the plug on UPN: News Corp. or Viacom's own Summer Redstone and Mel Karmazin. Karmazin has been threatening for a while to close UPN if it doesn't improve over its large yearly losses, and this would give him a good opportunity to fulfill these plans and make Wall Street happy by improving Viacom's cash flow.

  • Analysts, meanwhile, are not very positive about UPN's future. Merril Lynch analist Jessica Reif Cohen was quoted as saying the "easiest answer would be to shut it down", though she also noted there are other options for Viacom. Lowell Paxson, chairman of the PAX TV network, said UPN and its $150 million losses would be too expensive to keep for Viacom. Programming consultant Bill Carroll of the Katz Television Group said the chances were 60-40 against UPN surviving this.

    Ad buyer Robert Igiel predicted UPN would last another season as a business entity, but also said it was a loss "because they were beginning to regrow [and] build an identity." Other analysts also pointed to this, and said that it would be a shame to throw hundreds of millions of dollars of investments away, though that could happen. However, they also said that Viacom might want to keep UPN running as a programming outlet for Paramount, and pointed to the 20 Viacom-owned UPN affiliates that would be without programming if the network folded as a reason to keep the network alive.

  • A bit more positive is also the news in the Wall Street Journal that UPN would actually be able to find new affiliates in the New York and Los Angeles markets, but these are all small stations, and would have a hard time attracting viewers to UPN. Also still a possibility would be an affiliation with stations owned by Barry Diller's USA Network group, though that would give Diller a bargaining position Viacom might not want to give up.

  • Meanwhile, this same Barry Diller is called a "wild card" by some analysts, who noted that the News Corp./Chris-Craft deal lacked a breakup fee, and as a result could lead to a counterbid for Chris-Craft. Many analysts speculated this could come from Diller and his USA Network, who have always been looking for a stronger television station position, though of course Viacom itself could also still reenter the bidding.

  • Looking at the stations itself, a Reuters article by Patricia Vowinkel is predicting that the News Corp. deal could lead to Viacom and News Corp. swapping some stations in order to benefit both companies as much as possible. The reason for this is that this swapping could lead to both stations having duopolies (two television stations in one market) in several cities, leading to much higher profits and also keeping the companies in compliance with FCC regulations prohibiting companies from owning stations in more than a certain percentage of the market.

  • Michael Hinman at the Trek Nation has written an article on the UPN situation, looking back at the network's troubled past, including the network Paramount was planning to launch with 'Star Trek: Phase II' and the problems between Chris-Craft and Viacom.

  • And ending on a positive note, a CNN article has analysts suggesting there is still a good chance for at least a short-term UPN survival, as advertising and other contracts have already been signed for the coming television season. Media analyst Edward Hatch said UPN has at least a 50-50 chance. "Things may move around. But so much of the programming has already been pre-sold for one or two years, that I don't know how much leeway News Corp. has to shut UPN down if they wanted to."

    If worst comes to worst, market experts noted that UPN's hit shows, including 'Smackdown', 'Voyager' and 'Moesha', could also end up somewhere on the CBS schedule.

  • More on this can be found in this article by the Wall Street Journal's Joe Flint (reprinted by permission at MSNBC), containing quotes from most of the people involved and a look at News Corp.'s benefits and problems with the deal, particularly concerning FCC regulations. Also interesting is this USA Today report, while the aforementioned CNN article contains a look at the personalities behind all this.

  • Thanks go out to Jeff 'Koganuts' Koga, Heather Jarman, Michael Hinman and Jose Gonzalez for some of these items!

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