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

Reuters

NEW YORK - U.S. television viewers will have one less commercial broadcast network to choose from next fall, as the struggling WB and UPN networks merge to form a single new entity aimed at capturing younger viewers.

The new CW network, to launch in September 2006, will be a 50-50 joint venture of UPN parent company CBS Corp. and Time Warner Inc. , which controls the WB.

Tribune Co. , which holds a minority stake in the WB, will not have any ownership interest in the newly merged broadcaster, which will combine such shows as UPN's "Everybody Hates Chris" and the WB's "Gilmore Girls" under one roof.

Executives said CW would be run more cost-efficiently than UPN or WB and would likely turn a profit at launch. They did not address how many layoffs or how much in cost savings would be created by the consolidation.

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

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.

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

"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 UPN broadcast stations signed 10-year affiliate agreements with the new network. Similarly, CBS said its 12 UPN stations signed 10-year affiliate deals.

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

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," he added.

The CW will use the WB's current scheduling model, which consists of Monday through Friday nights from 8 to 10 p.m. Eastern time and Sundays from 5 to 10 p.m. Eastern. 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 (for Warner Bros.) and UPN (for United Paramount Network) 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 18-34 crowd, with many of its shows -- including current shows "Everybody Hates Chris," "Girlfriends" and "Eve" -- aimed primarily at an African-American audience.

CBS shares rose 3.7 percent, or 95 cents, to $26.80 in late day trading on the New York Stock Exchange. Time Warner shares rose 1.4 percent or 23 cents to $17.32. Tribune shares fell 0.8 percent or 25 cents to $29.65.

(Additional reporting by Derek Caney)