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News Corp. in Talks to Buy UPN

April 25, 2001|From Reuters

Rupert Murdoch's News Corp., the parent of the Fox television network, is in advanced talks to buy either all or part of rival network UPN from Viacom Inc., a source familiar with the negotiations said Tuesday.

A News Corp. spokeswoman, Teri Everett, confirmed that such discussions between UPN and News Corp. are going on but could not comment on their progress. A spokesman for UPN had no immediate comment and a spokesman for Viacom could not immediately be reached.

News Corp. currently is completing a $5.35-billion deal to buy the 10 television stations owned by Chris-Craft Industries Inc., the largest owner of UPN affiliates. That deal is expected to be completed in May.

The source, who asked not to be identified, said News Corp. hoped to complete its negotiations for either all or part of UPN at that time. News Corp's negotiations to buy all or part of UPN have been underway since the Chris-Craft deal was launched last year.

If successful, News Corp. probably would maintain UPN as a separate network in addition to Fox. With 176 affiliates UPN is the smallest of the networks. Its rival WB has 221 affiliates and Fox has 222.

News of the talks comes as the Federal Communications Commission has repealed a rule that prevented companies that owned the major networks--ABC, CBS, Fox and NBC--from buying the smaller networks, WB and UPN. The FCC, however, refused to allow two major networks to merge. Viacom, which bought CBS last year, owns UPN.

In addition, the television production arm of Fox has just shifted its hit series "Buffy the Vampire Slayer" from the WB network, where it has been a ratings grabber for the past five years, to UPN, saying that UPN was willing to pay $2.3 million an episode compared with $1.8 million from WB.

Fox and UPN officials denied speculation that the shift was aimed at weakening WB or giving UPN a nice asset from Fox before it was sold to News Corp.

When it was announced that News Corp. was buying Chris Craft's 10 television stations, the initial speculation was that the owner of the Fox network might end the stations' UPN affiliation in a bid to undermine a Fox competitor.

But contrary to the talk, Chris-Craft renewed the UPN affiliation in January with News Corp.'s approval.

News Corp.'s vote of confidence in UPN--reinforced by direct words of encouragement from News Corp. executives--led many to speculate that the Australian-based company might be interested in buying some or all of UPN, whose parent Viacom clearly was impatient for the network to turn a profit.

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