LONDON (Brand Republic) – Speculation is mounting that Viacom will shut its television network, United Paramount Network, in the wake of News Corp’s acquisition of Chris-Craft Industries’ 10 regional US TV stations yesterday for $5.3bn.
NewsCorp’s Fox Network, a rival to UPN, will own the stations, eight of which carry the UPN network. The UPN contracts expire in January. However, at the time Chris-Craft will still be in control, as the deal with NewsCorp will not have been finalised.
The deal with News Corp is not the only headache for Viacom. UPN has lost more than $800m since 1995 and is one of Viacom’s more vulnerable operations.
Observers are predicting that the network, which carries shows such as Star Trek: Voyager could close within the next 12 to 18 months. Closure of the network would save Viacom $180m this year alone.
Chris-Craft shares rose $17 to $79 at closing on the New York Stock Exchange on announcement of NewsCorp’s takeover. Viacom shares fell 56 cents to $71.38.
UPN was jointly operated by the Paramount Television Group -- part of Viacom’s entertainment group -– and BHC, a subsidiary of Chris-Craft. Chris-Craft was forced to sell its share to Viacom for just $5m earlier this year after relations between the two turned sour.