UPN’s attempt to prevent Sinclair Broadcast Group stations from defecting to the WB network received what may prove to be a fatal blow on Monday.
The ruling came in a summary judgment issued by the Baltimore City Circuit Court in response to a suit filed by Sinclair, to determine whether the station group had given UPN proper notice of its intention to switch five stations from UPN to WB affiliation in January.
The judge ruled that Sinclair had given proper notice to UPN, meaning Sinclair can move forward with its affiliate switch Jan. 15.
“This is a victory,” Sinclair CEO-designate Barry Baker told Daily Variety. “It was pretty conclusive. In spite of them saying we were stupid and had misread the contracts, they (UPN) needed to do a little reading themselves.”
L.A. case pending
A similar suit filed by UPN in August in Los Angeles County Superior Court is still pending. However, a judge will typically look favorably on a ruling made in the same case in another state, meaning that UPN now has incentive to settle. One source, in fact, hinted that settlement talks are under way.
“We’re disappointed by the judgment,” a UPN spokeswoman said in a statement. “We haven’t read the full text yet, but we’re examining our options.”
At issue is the fate of five key Sinclair stations in Pittsburgh, Baltimore, Cincinnati, San Antonio and Oklahoma City that Sinclair announced in July would convert to WB affiliation for $84 million over 10 years. The stations were crucial to the two netlets because there are few strong alternatives in those markets, and the loser would have to pay through the nose to find new affiliates there.
In the Los Angeles suit, UPN is seeking to force Sinclair to keep all 11 of its affiliates with UPN until 2001 (Daily Variety, Aug. 6). The netlet charged Sinclair with breach of contract because, the suit contended, Sinclair failed to notify UPN in writing by a certain deadline of its intention to end its affiliation agreements.
Sinclair countersued in Baltimore, and sources say Sinclair also informed UPN in September that it intended to end most of the group’s remaining UPN affiliation agreements, reupping only in Raleigh, N.C. Baker confirmed that Sinclair had “canceled (most of) our other stations with UPN. We made a bet on the WB, and we feel it was a good bet.”
Sinclair’s former UPN affiliate in Indianapolis is eventually expected to become a WB affiliate, and the fate of four other UPN-Sinclair stations in Kansas City, Las Vegas, Milwaukee and Tampa will presumably be the subject of any talks between the two parties. UPN owners Chris-Craft and Paramount respectively dished out huge sums of money buying new stations in Baltimore and Indianapolis.
Sinclair is expected to ask for a pretty penny itself before renewing or signing any new affiliation agreements with UPN. Baker also said he believes Sinclair can extract some compensation from UPN based on the old contracts alone.
Baker said the judge in Baltimore not only ruled that UPN had no case against Sinclair switching its five stations to the WB, but that Sinclair’s affiliation contracts contain a “most favored nation” clause granting Sinclair terms of any more favorable contracts with other affiliates.
Sinclair, in a Los Angeles cross complaint, contended that UPN owes Sinclair affiliate compensation under the “most favored nation clause,” because UPN pays some stations from other groups for affiliating with UPN. Baker said Sinclair may be due compensation “for the last three years and maybe the next three.”
“We’re in great shape,” Baker said, adding that he would continue his boycott of Paramount’s syndication division until “we reach a settlement on how to do business together. I was absolutely shocked when they sued us. It’s best to solve problems in private, but they chose to negotiate in open court. They fell in love with their lawsuit.”