CBS, Chris-Craft start talks again

The on-again off-again negotiations for sale of 8-station UPN group are quietly resumed

Three months after Chris-Craft lost its court bid to stop the Viacom-CBS merger, and four months after talks to sell the Chris-Craft station group to CBS abruptly ended, they're talking again, sources confirmed.

Chris-Craft, which has eight UPN affiliates in top 25 markets, was up $6, to almost $68, in mid-morning trading last Tuesday when word broke that the talks had resumed. The company's stock held the gain through Thursday.

Sources said that Viacom President Mel Karmazin met with Chris-Craft Chairman Herb Siegel and that talks were going on at lower executive levels as well.

The CBS station group has one year to divest stations covering 6% of the country to put it in compliance with the 35% ownership cap. CBS Stations Group President John Severino said he wants to build duopolies in as many markets as possible while paring down to 35%.

Chris-Craft would give CBS duopolies in six additional markets: New York, Los Angeles, San Francisco, Minneapolis/St. Paul, Baltimore and Salt Lake City. Earlier talks broke down over price; CBS had offered a per share price in the low $80s, while Chris-Craft was holding out for roughly $100 per share.

No comment from CBS or Chris-Craft at deadline. A Viacom spokesman declined to comment on any specific talks that might be ongoing, but did confirm CBS' interest in acquiring stations that add more duopoly markets to its portfolio-but only at prices that are "accretive" to the bottom line.

It wasn't clear who approached whom in this latest round, although one source noted that Chris-Craft, which had the opportunity to buy UPN for $5 million "shopped everything around to everybody for a long time," without striking a deal. Ultimately, it sold its half of UPN to Viacom.

While one insider said some progress was made in the talks, the source cautioned it was still early and talks could easily break off again without a deal.