‘Strategically Brilliant’
Chris-Craft earlier this year sold its 50 percent stake in the UPN television network to Viacom, which owns the other half.
     News Corp. outbid media rival Viacom Inc., which abruptly announced on Friday it had ended takeover talks with Chris-Craft, sending Chris-Craft shares down 8, or about 11 percent, to close at 62.
     “It’s strategically brilliant,” Merrill Lynch analyst Jessica Reif-Cohen said of the News Corp. deal on Sunday. “It’s a great fit,” she said, describing Chris-Craft as “beachfront property.”
     “It’s very, very positive. It will strengthen Fox considerably in television,” she said.
     With the acquisition of Chris-Craft, News Corp would own two stations in New York, Los Angeles, Phoenix and Salt Lake City. In New York, News Corp. already owns WNYW and would acquire WWOR, a UPN affiliate as well.
     “Obviously, they won’t be allowed to keep it all,” Reif-Cohen said. “My guess is they will try to swap some of the stations if they can.”
     Until last year, the Federal Communications Commission (FCC) did not permit the ownership of two stations in a single market, according to a New York Times report on Saturday.
     The FCC still limits station groups to ownership of stations that cover no more than 35 percent of the nation’s households, the newspaper said.
     The FCC allows dual ownership in cities where there are a sufficient number of “media voices,” which include all radio and television stations, large daily newspapers and cable systems, the New York Times said.
     “Television stations are looked at in local markets,” said Steve Sunshine, an antitrust lawyer with Shearman and Sterling and former head of merger enforcement for the U.S. Department of Justice.
     “The number of stations a company has across the country isn’t really all that relevant,” he said.
     News Corp. said it expects the deal to immediately add to earnings and be completed by the fiscal year ending June 30, 2001.

Picture Gets Cloudy for UPN Just one month ago, the outlook for UPN seemed a lot better. The 5-year-old network, while still struggling to achieve profitability, had pulled out of a ratings slump, chalked up gains in ad sales and announced a new name and logo to highlight its association with the Paramount entertainment brand.      Corporate parent Viacom, which already owns CBS and had recently taken full control of UPN, was lobbying federal regulators to ease regulations barring one company from owning two networks.      But now that News Corp. has outbid Viacom in acquiring Chris-Craft Industries, the owner of eight major UPN-affiliated stations, the future of the fledgling network is far more cloudy.      While UPN is affiliated with more than 100 stations, the eight being sold to News Corp. — owner of the rival Fox network — cover some of the biggest cities in the country. If all eight drop UPN, it would cut the network’s national reach from an average of 87 percent to 67 percent and leave it out of the crucial markets of Los Angeles and New York.      Peter Chernin, the president of News Corp., made it clear in a conference call with investors that the company had little interest in the future of UPN or whether the Chris-Craft stations remained affiliated with the network.      News Corp.’s main motive for buying the stations is to take advantage of recently relaxed federal rules allowing one company to own two stations in the same city, which allows for major cost savings in combining sales forces, news and programming operations. News Corp. already has a profitable two-station combo in Dallas.      News Corp. will have to dispose of several stations in order to comply with a cap on total station ownership, but chief finance officer David DeVoe said the company hoped to use station swaps with other companies to achieve at least five other two-station arrangements, known in the broadcasting industry as duopolies. — The Associated Press

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