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Viacom
wins UPN
so let the digestion begin
Bold plan to bring young network into fold
Prompted by a federal judge, Chris Craft
opted to sell its stake in the UPN network to partner Viacom for $5 million
yesterday.
Now, as Viacom takes sole possession of UPN
while preparing to absorb CBS as well, all eyes turn to the FCC to see what it
will do.
Most, including the heads of all three companies, predict it
will do nothing.
The regulatory body is not expected to interfere with Viacom?s
play to own two broadcast networks, though such an arrangement violates FCC
rules.
Viacom has argued that if it is ordered to sell one of the
networks, it may have to close UPN in the likely event that no buyer can be
found.
That argument is supported by Chris Craft Industries?
recent experience trying to find a partner to help run the network. The
erstwhile half-owner unsuccessfully cast about for an investor that would allow
it to operate the network without Viacom?s aid. When none could be found, it
grudgingly sold its stake to Viacom for $5 million.
UPN is a somewhat unattractive property to potential
investors as it has been losing around $160 million a year since it was started
five years ago.
There?s reason to believe that will change, however, once Viacom
takes control.
For starters, UPN?s ratings have been on the way up, with
"WWF Smackdown" playing a big part in the increase. Moreover, Viacom
is expected to try to woo the WWF into moving all its programming onto Viacom
channels.
Also, Viacom could fill out UPN?s leaky schedule with
programming from its own cable empire. And with CBS in hand, Viacom would have
an additional fund of shows to draw on.
Then there are the opportunities for promoting UPN on CBS and
Viacom?s popular cable properties, which include MTV, VH1 and Nickelodeon.
Of course, this is just the sort of maneuvering that make
regulators nervous.
But there are other reasons why the FCC will be reluctant to
rule against Viacom.
First, UPN is home to numerous minority-produced shows, in a
season in which the underrepresentation of people of color on network TV has
been a hot button topic. For UPN to shut down would add fuel to the controversy,
and the FCC would end up taking the blame.
Also, with the rise of cable and the internet, the broadcast
networks don?t hold the place of prominence they once did in the media world.
For one company to own two of them no longer gives it a stranglehold over the
television industry.
Viacom?s acquisition of CBS is scheduled to close next
month. At that time the FCC either have to make a ruling or grant a waiver
allowing Viacom to proceed until a final decision can be reached.
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