UPN, Sinclair settle

Broadcast group agrees to reinstate netlet

The legal battle between UPN and the heavyweight Sinclair Broadcast Group has been settled, and detente has led to an affiliate reunion in Milwaukee and other markets.

Sinclair has agreed to reinstate the netlet — for a price — on its stations in Milwaukee and Birmingham, Ala., as part of a settlement of lawsuits sparked by Sinclair’s decision last year to switch five of its stations from UPN to its archrival, the WB Network.

Sinclair also inked long-term affiliation renewal deals with UPN for its stations in Raleigh, N.C., and Charleston, S.C., which did not dump the netlet. All of the affiliation agreements expire in 2004.

UPN CEO Dean Valentine said of the settlement, “I don’t think engaging in a war with any affiliate group is a worthwhile way to spend time and money. I’m really pleased it’s over.”

Fiscal arrangement

UPN will pay Sinclair an undisclosed sum for carrying its programming, an arrangement also worked out as part of the settlement. Sinclair is known in the broadcasting biz for hard bargaining with its network partners; indeed, the WB lured away the five Sinclair stations last year by agreeing to pay Sinclair $84 million over 10 years.

Reps for UPN and Sinclair would not comment on financial details of the settlement, citing a confidentiality agreement. However one industry source estimated the payment to be north of $10 million.

UPN was wounded by its battle with Sinclair, which dropped the netlet in a total of 10 markets once the lawsuits began to fly last August. The loss of the Sinclair stations coincided with weaknesses in UPN’s primetime sked, the combination of which helped the WB pull ahead of UPN for the first time since both netlets bowed in January 1995.

With the Sinclair settlement agreement, UPN has replaced or reinstated coverage in each of those markets, although in some markets the netlet was forced to move to a weaker station or sign a secondary affiliation deal with a station already aligned with another web.

The accord came about after UPN had exhausted its appeals in Baltimore, where Sinclair last August asked a judge to determine whether its stations had the legal right to proceed with its planned switches to the WB. The court ruled in Sinclair’s favor last December.

Contract squabble

Sinclair’s legal maneuver in Baltimore was spurred by a breach-of-contract lawsuit filed the day before by UPN in Los Angeles. That suit was dropped Friday as part of the settlement. Sinclair’s boycott of Paramount’s syndication division also is now over.

Curiously, Sinclair will now operate both the WB and UPN affiliates in Milwaukee, Birmingham and Raleigh, thanks to its local marketing agreements. Those agreements allow one station owner in a market to manage a second station in the same market — outright ownership of more than one TV station in a market is barred by law.

Sinclair’s aggressive pursuit of LMAs has increased its clout, particularly with startup webs like UPN and the WB, as the group controls more than one station in 18 different markets.

The war of words between UPN and Sinclair execs was bitter at the height of the legal sparring last summer, but tensions seem to have eased on both sides. And through its ongoing station buying spree, Sinclair has picked up a handful of UPN affils this year and there are no plans to dump the web in any of those markets, execs said.

“In this instance we looked at those markets and thought that (affiliating with UPN) was the right move for the company,” said Robert Quicksilver, VP and general counsel of Sinclair. “We’ll continue to explore affiliation possibilities with any network that can maximize our stations and recognize the value we bring to a network and compensate us for it.”

Kevin Tannehill, prexy of distribution for UPN, said the netlet’s priority had been to plug up the holes in its affiliate lineup before the new season begins. Tannehill added that a half-dozen new affiliates, mostly in small markets, will sign on with UPN in the next few weeks.

“We’ve got our affiliate base back on track and it’s growing, and now it’s all about the programming,” said Tannehill.

UPN also is pursuing a plan to beef up its national reach by securing cable carriage for the web in so-called “white” areas, mostly in smaller markets where no stations are available. UPN execs are currently pitching the plan to cable operators, but the cable component is not expected to bow until next year at the earliest, Tannehill said.