Say goodbye to WB, UPN

[Ynot Shane]

This one made me do a double take. I had to check to make sure it wasn't April 1.

Source
The two networks were launched in 1995 with great fanfare. Both aimed at the youthful viewers who were lucrative and yet increasingly elusive for their bigger broadcast rivals.

Each has since lost its owners close to $1 billion.

Now, in a surprise move that's a sign of the struggles in network television, Warner Bros. Entertainment and CBS are shutting down their also-ran networks, WB and UPN, this September.

Instead, they are jointly forming a new network, dubbed CW, to replace both. CW will inherit the assets -- and most of the top shows -- from WB and UPN.

The outlook for both networks was grim. Both targeted the same audience of women ages 18 to 34.

"Neither one of these businesses looked like it had a great future," says CBS Chief Executive Leslie Moonves. By creating a single entity, "We get a better network, and the stations become immensely more valuable."

Warner and CBS each will own 50 percent of the venture, to be run by UPN president Dawn Ostroff, overseeing programming, and WB COO John Maatta, handling business operations.

No cash will change hands. Tribune Co., which owns 22.5 percent of WB, will trade the stake for a 10-year deal to have CW programming for its stations in New York, Chicago, Los Angeles and 10 other cities, but it will pay for the privilege.

"At this point we felt that being an affiliate was the best option," said Tribune Co. CEO Dennis FitzSimons. "Our TV stations will have a stronger prime-time lineup."

CBS will own CW affiliates in eight markets, including Philadelphia, San Francisco and Atlanta.

Despite public proclamations of support, parent Time Warner's interest in sustaining WB's losses has cooled. Last November, the company approached Walt Disney Co., offering to sell the network or partner with ABC on it, senior executives at both companies said. Disney rebuffed the offer, and Warner Bros. began discussions with CBS just after Thanksgiving.

"We recognized a while ago that the economic model of a stand-alone broadcast network that doesn't own its stations is not a good model," says Bruce Rosenblum, president of Warner Bros. Television Group.

Forming one network from the ashes of two direct competitors will immediately tighten the supply of ad inventory and reduce advertisers' negotiating leverage. For studios, it will eliminate one outlet for the sale of series. For its owners, it should in theory cut losses by focusing on a stronger stable of higher-rated shows that can command both bigger ad rates and higher payments from former WB and UPN affiliates vying to carry CW shows.

"There is a very good chance the network will be profitable from the get-go," says Warner Bros. Entertainment Chairman Barry Meyer, as costs are slashed, staffs merged and weak shows pruned.

But head-scratching greeted the new network's moniker, which borrows an initial from each company but evokes either "conventional wisdom" or "country and western" and loses whatever brand equity WB or UPN had built.

"We talked about a lot of silly names, but these are two great brands, and at the end of the day, that's what this merger's about," Moonves says.

For several years after WB's launch, the Warner Bros. studio was reluctant to develop programs for WB, worrying that the nascent network could never engineer a big enough hit to generate strong sales in syndication, where most of TV's profits are made.

A corporate mandate changed that, and Warner Bros. now supplies half of WB's programming, spinning profits from a few hit shows such as "Smallville." But parent Time Warner loses money in two ways on the inevitable failures:

The studio shoulders production deficits for some programs that will never earn a profit, and the network can't offset its own escalating programming costs because low ratings depress ad rates.

Just last week, exiting WB Chairman Garth Ancier blamed economics for the cancellation of its top-rated (and longest-running) series "7th Heaven" in May, saying the network will lose $16 million on the show this season. (The series is produced by Spelling Television, now part of CBS' Paramount).

For other studios, "The feeling was it was pretty hard to launch a show that has financial value on one of those networks," says 20th Century Fox Television president Gary Newman, who's more optimistic about a more "viable fifth network" combo.

On average, both networks reach little more than 3 million viewers, a fraction of their rivals' audience, and claim less than half the share of their target audience as leaders ABC and Fox. Both UPN and WB started with limited programming early in 1995: WB, launched by a group of former Fox executives, began by serving minority audiences with comedies, then moved on to teen dramas "Dawson's Creek," "7th Heaven" and "Buffy the Vampire Slayer." UPN, then co-owned by Paramount and station owner Chris-Craft Industries, relied on Paramount's lucrative "Star Trek" franchise, which petered out last spring, and has become the only home for comedies featuring minority casts.

"Despite slight seesaws in ratings, both networks have declined in recent years, and gains at one often came at the other's expense.

"They're playing a zero-sum game," says Initiative Media's top ad buyer Tim Spengler, "and they have not come up with enough destination programming for a large-enough audience." Combining the best of both "might have enough of a foundation to work."

The new network will eliminate the weakest links by programming 13 hours over six nights -- just as WB alone does now -- with a mix of the top WB and UPN shows plus a very limited supply of new series. Both networks sharply cut back their normal midwinter development of new series in anticipation of their demise as separate entities.

Among shows likely to survive are WB's "Smallville," "Gilmore Girls," "Supernatural," "Reba" and "Beauty and the Geek," along with UPN's "America's Next Top Model," "Everybody Hates Chris," "Veronica Mars," "Girlfriends" and wrestling series "WWE Smackdown," a safe bet to remain on Friday. Moonves says CBS' Paramount and Warner Bros. will jointly own shows they create for CW.

Mirroring WB's current lineup, CW also will carry five hours of children's programming on Saturday morning and two hours of reruns on weekday afternoons and early Sunday evening.

Merrill Lynch analyst Jessica Reif Cohen called the deal "mildly positive" for both companies with little risk attached, since both networks are already losing money.

Such losses could be reduced "by selecting the strongest affiliates, best programming and highest-quality managers" from each side, Cohen says in a report issued Tuesday, adding the deal is unlikely to affect either company's stock price.

(Yet CBS rose $1.08 Tuesday, to $26.90; Time Warner climbed 18 cents to $17.27).

The creation of CW "takes two struggling networks and makes one that should have greater potential instead of competing for the same audience," says James Goss of Barrington Research Associates.

But it signals an upheaval in the staid TV-station business. The Tribune- and CBS-owned stations that carried WB and UPN programming overlap in seven cities, meaning one side will lose out in such cities as Atlanta, Miami and Boston.

In smaller markets, CW will essentially conduct a bidding war, choosing among the defunct networks' former partners based on "which is the stronger station, and also financial considerations," Moonves says.

And News Corp., which owns UPN affiliates in nine top cities, including New York, Los Angeles and Chicago, faces the biggest threat: The stations' prime-time lineups will evaporate this fall, forcing the company to invest in new programming or risk seeing ratings plummet by switching to moldy reruns or movies.

News Corp.'s current no-cost affiliation pact expires in August. On the plus side, the company will now get to sell all of its prime-time ad slots and could seek to borrow assets from corporate siblings, including its movie studio, Fox Sports, FX or Fox News Channel. "Every change presents a new opportunity," says spokesman Andrew Butcher. "This is a chance for us to reprogram nine of our stations in some of the biggest markets in the country."

Syndicators had a field day as news spread at their annual sales meeting in Las Vegas, where many pounced on suddenly orphaned station owners to offer replacement programming.

"We've gotten flooded with phone calls," says Tom Campo of Hearst-Argyle Television, which will lose its WB affiliation to a CBS-owned station in Sacramento.

[CaptHayfever]

Now people can not watch them twice as efficiently! *rimshot*

Meh, I thought I was getting out of the WB after this season when WILAY ended. Well, it seems Veronica Mars is smarter than me yet again.

And remember, "I'm-a Luigi, number one!"

[Eagle Eye]

Hmmm, as long as "Everybody Hates Chris" and "Half and Half" stay on air.

[Sean P Kelly]

I watched (in fact I didn't even have) neither station.

Any of their shows that I DID watch (right now, I only watch Supernatural) it's on a Canadian network

[Metal Man]

I stopped watching WB when I stopped caring about Pokemon.

I never watched UPN.

So... well. It's incredibly weird, still. CW? What the heck? Cow Watch?

[Curt]

Good riddance to UPN.

[DevilScar]

Hope this merge will get rid of UPN for good.

[CaptHayfever]

What do you mean "hope"? This does get rid of UPN for good. Also The WB. They're both gone once this happens.

And remember, "I'm-a Luigi, number one!"

[Eagle Eye]

As said, keep "One On One" (At least re-runs, new eps are crap), "Half and Half" (it can be good sometimes), and that one show uh...damn can't think of the name, but the exes in the show are actually married in real life...DAMNIT! WHATS THAT SHOW CALLED!?

[Ynot Shane]

I didn't realize they were axing WILAY, too. It's no wonder they're merging. They have almost as much trouble keeping shows around as Fox does.

I'm not real impressed with CW either. I never watched UPN once. Ever. Not even by accident. Not even while bored and going to random channels and happening to come across a good movie. Not even after they stole Buffy and Roswell from The WB (a classic example of why this union makes sense). Still, I've heard some good things about UPN over the past year or so. WB, meanwhlie, still is my favorite network, but they're slowly shedding all the shows that made them and replacing them with shows that just don't cut it.

Of course, I may be forced to give CW a chance by default, much like the reason why I watch American Idol no matter how much it sucks. I've never in my life watched CBS for anything other than reality shows. Now at least that network isn't for senior citizens only, but for anyone who doesn't watch crime shows, there's really not much point to it. I'm not as opposed to NBC as I am to CBS, but I've considered it an alternative that I'd consider watching rather than Must See TV. And I don't even know what the heck is on ABC, aside from Lost, which I may start watching considering how much I hear people talking about it. Fox is still a great big joke, though I really got into Prison Break (but how long can you really stretch that series?).

[CaptHayfever]

WILAY was probably gonna end this season anyway; the star's moving to NYC for college.
Four years ain't a bad run at all. Not at all.

And remember, "I'm-a Luigi, number one!"

[Metal Man]

The only network which garners my attention is FOX, a weird Japanese channel, and KDOC, which involves the Twilight Zone. FOX is only due to Simpsons reruns and stuff, so my TV watching is weird and minimal.

[Irkenwarrior12]

Both of the stations suck. I'll be glad to see them go. Now if only that would happen to TBS....

[Vic Fontaine]

I am saddened that Everwood wasnt mentioned as a keeper . . . .

[Bomby]

Now I might finally be able to see "Everybody Hates Chris!"

[Joker]

As long as Smallville is still on the air the merger does not bother me at all.

[Sean P Kelly]

Originally Posted by Irkenwarrior12

Both of the stations suck. I'll be glad to see them go. Now if only that would happen to TBS....

I lost all respect for TBS after they started airing commercials like this.

(aside: I can't believe I managed to find that commercial -- YouTube has everything)

[Ynot Shane]

The list of casualties is in. The only big names are Charmed and Everwood. Everything else probably would have been cancelled soon enough anyway. Most of the big shows will be staying put in the same time slots, with the notable exception of Everybody Hates Chris moving to Sundays at 7 (huh?).

[CaptHayfever]

^As someone on IMDb described it, "Black Sunday".

How the bleep do they justify resurrecting 7th Heaven?

And remember, "I'm-a Luigi, number one!"