New Network Could Leave News Corp. Scrambling

Jan 24, 2006  •  Post A Comment

Although the merger of The WB and UPN into new network The CW is being hailed by most observers as a smart move that addresses uncertain futures at both networks, the combination also is proving to have some unintended consequences for a major player in the broadcasting space: Rupert Murdoch’s News Corp.

The media giant could find itself scrambling to come up with a programming strategy for at least eight owned-and-operated television stations that currently carry UPN affiliations and are expected to lose those affiliations at the end of the summer, when UPN shuts down to make way for the launch of The CW.

Making matters even more delicate is that many of these stations are in the nation’s top TV markets, including New York, Los Angeles and Chicago. Other UPN-affiliated stations owned by News Corp.’s Fox Television Stations unit are in Washington, Houston, Phoenix, Minneapolis, Baltimore and Orlando, Fla.

News Corp.’s next move remains a huge question swirling through television circles. Among the many scenarios bandied about is that Fox Television Stations will simply program these affected stations to operate as independents with no network affiliation. Another has Fox perhaps launching a second broadcast network, something some News Corp. insiders say is not likely. In a third scenario, News Corp. sells the stations that lose the UPN link.

Richard Greenfield, a media analyst with Pali Capital, said the stations most likely affected by the shutdown of UPN were in New York, Los Angeles, Chicago, Dallas, Houston and Washington, all of which would be “orphaned.” Stations in Phoenix, Minneapolis, Baltimore and Orlando potentially could compete with existing WB affiliates or other independents in those markets for The CW affiliation, Mr. Greenfield said. But when it all shakes out, News Corp. will end up with several independent stations in key television markets.

“The question for News Corp. is now whether to program these independent stations, leveraging the Fox Television Studio’s programming capabilities, or to sell the stations,” he said in a research note.

Said a News Corp. spokesman: “This change presents us with an opportunity to reprogram stations in some of the country’s biggest markets.”

People close to News Corp. said the announcement of the launch of The CW was a total surprise that caught many people off guard. However, they added that the decision to shut down UPN is not totally unexpected and that it will allay the concerns of some News Corp. officials who were weary about their continued links to a struggling UPN. These people also noted that the UPN affiliation agreement with the News Corp.-owned stations was set to expire at the end of the current television season.

But News Corp. isn’t the only station group that finds itself with potentially orphaned stations after UPN and The WB shut down. In striking the 10-year affiliation agreement between The CW and Tribune Co., CBS Corp. and Tribune had to negotiate which station would carry The CW affiliation in markets where both companies owned UPN or WB stations.

In the end, Tribune’s 16 major-market stations and the 12 CBS-owned UPN stations will carry the CW. The 16 Tribune-owned stations will be in New York, Los Angeles, Chicago, Boston, Dallas, Washington, Houston, Miami, Denver, St. Louis, Portland, Indianapolis, San Diego, Hartford, New Orleans and Albany, N.Y. The CBS-owned stations will be in Philadelphia, San Francisco, Atlanta, Detroit, Tampa, Fla., Seattle, Sacramento, Calif., Pittsburgh, West Palm Beach, Fla., Norfolk, Va., Oklahoma City and Providence, R.I.

That leaves Tribune owning newly independent stations in Atlanta, Philadelphia and Seattle, while CBS will own independent stations in Dallas, Boston, Miami and New Orleans.