NEW YORK — Whither UPN?
Apparently not to Barry Diller. Sources indicated over the weekend that Diller, USA Networks chief, isn’t likely to make a play for the 5-year-old weblet, currently the object of a custody battle between its co-owners Viacom and Chris-Craft.
Speculation on a Diller/Chris Craft combination was rampant late last week after a New York State Supreme Court judge ordered Chris-Craft to either buy Viacom’s 50% UPN stake or sell its half to Viacom for $5 million by today’s deadline. It wasn’t clear whether or not Chris-Craft had appealed the ruling or planned to do so today.
UPN execs might shed some light on the future today as they present the newly hot net’s pre-upfront development slate in Los Angeles. Today’s the day that a UPN ‘buy-sell’ provision that Viacom triggered last month expires. The entertainment giant was exercising a right under the UPN partnership contract.
The trigger sent TV station group Chris-Craft trawling for another partner, a White Knight who would make it possible for the Herbert Siegel company to take over UPN and keep it running. He approached a number of potential allies, including Diller. That combination makes some strategic sense since it gives Diller much-needed distribution (Daily Variety, March 17), but it’s far from clear that the two sides were anywhere close to an actual deal.
Now, industry insiders and Wall Streeters wonder, does that leave the field open for Viacom chairman and CEO Sumner Redstone, who would dearly love to own UPN plus the Chris-Craft stations? Viacom has tried — so far unsuccessfully — to negotiate a purchase of Chris-Craft. But with Siegel’s back apparently up against a wall, some suggest he may be more amenable.
“Sumner is wealthier than ever, and he’s got a very powerful point of view,” vet entertainment analyst Hal Vogel said.
Viacom execs believe UPN could run much more effectively under one parent than it has under the often uneasy co-habitation of its current owners. And some insiders are optimistic that Viacom would be able to keep UPN despite its plans to merge with CBS Corp. and current FCC rules forbidding ownership of two TV networks.
Viacom called on the “buy-sell” provision last month largely in an attempt to clarify UPN’s status ahead of the upcoming CBS merger. Chris-Craft sued to block both the “buy-sell” and the merger. Judge Herman Cahn ruled otherwise.
Diller and Redstone have often been attracted to the same honey pot. In the early 1990s, the two faced off in an epic takeover battle for Paramount. Redstone, who made the first offer, won the studio but not until Diller had raised the stakes immensely.
(Michael Schneider in Los Angeles contributed to this report.)