CBS, Warner to form new network,close UPN,WB

[Angel Amor]

By Kenneth Li and Steve Gorman

Tue Jan 24, 5:49 PM ET

NEW YORK/LOS ANGELES (Reuters) - Struggling TV networks WB and UPN will merge into a single new youth-oriented broadcaster this fall in a surprise deal announced on Tuesday that reshapes the landscape of U.S. television.

The new CW network will debut in September 2006 as a 50-50 joint venture of UPN parent company CBS Corp. and Time Warner Inc., which controls the WB, shrinking the field of major U.S. commercial TV networks from six to five.

Tribune Co., which holds a minority stake in the WB, will not have any ownership interest in the newly combined entity. While no programming decisions were revealed, the merger will join the biggest shows of both networks, likely including UPN's "Everybody Hates Chris" and the WB's "Gilmore Girls."

Executives said CW would be run more cost-efficiently than UPN (which stands for United Paramount Network) or WB (for Warner Bros.) and would probably turn a profit at its launch, something neither predecessor network has managed to achieve. They did not address how many layoffs or how much in cost savings would result from the consolidation.

UPN President Dawn Ostroff will become the president of entertainment at the new network. John Maatta, chief operating officer of WB, will serve the same role at CW.

UPN and the WB, both formed 11 years ago, have each struggled to build ratings with programming aimed at younger viewers than the 18-to-49-year-old audience regarded as the advertising sweet spot for the Big Four broadcasters -- ABC, CBS, NBC and Fox.

CW will essentially follow the strategy of its predecessors, targeting viewers aged 18 to 34.

CHANNEL NOISE

The merger comes as the most obvious sign yet that the increasingly fragmented U.S. television market is incapable of supporting as many as six commercial networks. Until now, even the combined audiences of the WB and UPN typically pale in comparison to their larger rivals.

"Five might be one broadcast network too many," said Bob Thompson, head of Syracuse University's Center for the Study of Popular Television.

The most watched shows on the WB and UPN this season are "7th Heaven" and "America's Next Top Model," which rank 107 and 114, respectively, among all prime-time shows, with just over 5 million viewers each, according to Nielsen Media Research. By comparison, the nation's top-ranked drama, "CSI: Crime Scene Investigation," averages 25 million viewers a week.

"UPN was approaching a point where we were hoping to break even, and we were getting close," CBS Chief Executive Les Moonves told reporters. "The long-range plan looked far better with this (new network)."

Barry Meyer, CEO of Time Warner's Warner Bros. Entertainment, added: "We saw coming down the pike a challenged landscape to keep (the WB) alive. There's a very good chance that the (new) network will be profitable from the get-go."

The companies expect the newly merged network to reach 95 percent of the country.

Tribune said its 16 stations carrying UPN broadcasts have signed 10-year affiliate deals with the new network. Similarly, CBS said its 12 UPN stations signed 10-year affiliate pacts.

The two station groups reach 48 percent of the country. The companies expect the remainder of the new network to come from a combination of existing WB and UPN affiliates.

The Fox network, a unit of News Corp. Ltd., owns nine TV stations that are currently UPN affiliates, and those stations will seek new programming, News Corp. spokesman Andrew Butcher said. "Every change is an opportunity."

The CW will follow the WB's current scheduling model, carrying 13 hours of prime-time programming on six nights a week. It will also will include a Monday-through-Friday afternoon bloc from 3 to 5 p.m. Eastern and a five-hour Saturday morning bloc of children's shows.

The WB and UPN were both launched in January 1995 targeting younger, more female-skewing audiences than their larger network rivals.

The WB practically invented the 12-to-34-year-old demographic of teens and young adults, with an emphasis on female viewers, though 18 to 34 is considered its advertising sweet spot. Besides "Gilmore Girls," its prime-time lineup includes "Smallville," "Everwood," "Supernatural," "Reba" and reality show "Beauty and the Geek."

UPN likewise has focused on a female-oriented 18 to 34 crowd, with many of its shows -- including current shows "Everybody Hates Chris," "Girlfriends" and "Eve" -- aimed primarily at an African-American audience.

CBS shares closed up 4.18 percent, or $1.08, at $26.90 on the New York Stock Exchange. Time Warner shares rose 1 percent, or 18 cents, to $17.27. Tribune shares fell 0.84 percent or 25 cents to $29.65.

(Additional reporting by Derek Caney)

[MaxFly]

UPN is gone!!!! :lolsign:

That's what happens when you cancel Kevin Hill!!