UPN's Future Secured For Another 18 Months

Just hours before their old affiliation contract was scheduled to expire yesterday, television network UPN and station group Chris-Craft signed a new deal that will allow viewers in major markets such as New York, Los Angeles and San Francisco to continue watching shows such as 'Star Trek: Voyager'.

Exact terms of the new affiliation agreement were not revealed, though it has been announced that it will run through at least the end of the 2001-2002 television season, with some Variety sources suggesting the contract may last until 2003. Being able to extend the current affiliation contract was seen as vital to UPN's future, as the Chris-Craft station group represents 20% of the country and includes several of the most important television markets. Several months ago, there seemed to exist a strong possibility that UPN would be forced to shut down, after Chris-Craft was bought by News Corp.

The new affiliation deal seems to have been closed with rather positive terms for UPN, as it doesn't require the network to pay any extra monetary compensation to Chris-Craft for continuing to show UPN programming. UPN has previously said that it won't pay compensation under new affiliation pacts in any circumstance, instead just allowing affiliates to sell a portion of available advertising slots, and according to UPN Chief Operating Officer Adam Ware this was no exception. "We approached this in the same way we approach all of our affiliate deals," Ware was quoted as saying. "Are we providing value? If so, then that's the basis of entering into a new agreement"

According to UPN executives, they always expected to be able to reach a new agreement. Supposedly, the contract's major points had been agreed upon a while back already, but it took "a lot longer to negotiate [the] dozens of minor points." UPN CEO Dean Valentine said that for the network, "there was never any question in our minds that this would happen. [A deal] was in the best interest of both parties. We think we bring enormous value to stations."

According to some observers, however, UPN's programming value may not be the only reason for this deal closing. Though the new affiliate agreement is said to not include a clause regarding a possible News Corp. stake in the network, the company has publicly stated that it would be interested in operating UPN together with Viacom. Indeed, News Corp. was heavily involved in the contract negotiations, and was said to have "have consented to the extension of the Chris-Craft/UPN affiliations."

For the near future, however, it doesn't seem likely that anything will change in UPN's ownership. Reuters reported yesterday that News Corp. chairman Rupert Murdoch has put a freeze on new acquisitions for the company, so that it can save money for a planned $40 billion acquisition of satellite broadcaster DirecTV.

Other deals between Viacom and News Corp. are still possible - in particular, the Hollywood Reporter speculated that the two companies might want to swap television stations in several markets, in order to gain control of affiliates of their own television networks. The resulting economic synergies from this would be very attractive for both companies, but any such deals are dependent on how the new Bush administration decides to change current station ownership regulations.

Meanwhile, UPN's future seems to have been secured for at least the next 18 months, making sure that 'Voyager' fans will be able to see the series finale. The Chris-Craft affiliation deal covers stations in Baltimore, Los Angeles, Minneapolis, New York, Orlando, Phoenix, Portland and San Francisco, while new affiliation agreements were also signed with stations in Bakersfield and Green Bay (Wisconsin); Lubbock (Texas) and Boise (Idaho).

For more on this, please read the reports by Variety and the Hollywood Reporter.

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