UPN was this close to finalizing a new affiliate agreements with eight Chris-Craft stations, soon to be owned by News Corp, at press time.
After months of talks the deal came down to the wire on Friday with executives from both media companies meeting in California. Sources suggested an agreement was close. "It's not inches, it's centimeters," from being done, was how one network source characterized the situation last week.
It's a vitally important deal for UPN, because the Chris-Craft stations represent the top-25 markets and without them, UPN would have a tough time continuing.
Others outside the company wondered what was taking so long. Then they remembered with whom UPN was dealing-Herb Siegel, known to be one of the orneriest negotiators in the media business, and although he's selling out, he's still in charge. News Corp. officially has no role.
Siegel's reputation, coupled with the existing bad blood between Siegel and Viacom, doesn't make for a great negotiating atmosphere. During 1999 and much of last year, the two sides had protracted and ultimately unsuccessful talks concerning a Viacom buyout of Chris-Craft. Viacom then forced Chris-Craft to sell its 50% stake in UPN, in which it had invested hundreds of millions, for a mere $5 million.
"Those guys really don't like each other," said one observer of Siegel and Viacom chairman Sumner Redstone.
There was speculation last week that when the two sides do finally complete a deal-barring a last-minute blow up of the talks-it will include an 18-month extension through the 2001-02 season. One insider confirmed that the 18-month term was likely.
As affiliate deals go, that's a very short term at a time when many such agreements extend between five and ten years. But questions about UPN's long-term future remain unresolved and the shorter deal will give UPN-owner Viacom and Chris-Craft acquirer News Corp. some breathing room to figure out strategies for their respective properties. News Corp. executives have said they'd consider becoming a partner in the network with Viacom.
News Corp. head Rupert Murdoch has strongly encouraged Chris-Craft to renew its UPN deal. "The last thing Murdoch wants is to be perceived as the guy who killed UPN," says one source familiar with the situation. That's because of all the broadcast networks, UPN is seen as the one that best serves the viewing interests of minority audiences for whom programming choices are seen as limited.
Murdoch already has the FCC sharply scrutinizing the ownership structure of the proposed Chris-Craft deal for foreign ownership violations. And he will need approval from various regulatory bodies including the FCC if his bid to acquire DirecTV is successful. "He really wants to avoid creating any unnecessary political ripples," the source said.