The CW: Sinclair cautious on UPN, WB news

Sinclair Broadcast Group has cautiously welcomed the news that Warner Bros. and CBS are closing their WB and UPN networks and teaming up to launch a new fifth terrestrial network, The CW, in America.

"We are not surprised with the news of the WB and UPN network merger as both have struggled to achieve meaningful ratings success," said Sinclair Broadcast Group president and CEO David Smith. "We believe CBS's vested interest in the television station business bodes well for the long-term success of the venture. For Sinclair, this announcement will create greater programming opportunities in terms of serving the local viewer, in areas such as sports and locally produced events."

The company is exposed to potential difficulties in eight markets. In four (Tampa, Pittsburgh, Norfolk, and Oklahoma City), a Sinclair WB or UPN affiliate overlaps with an affiliate owned by either Tribune or CBS. Both companies have already announced the stations in those markets that will become affiliates of The CW. In a further four (Raleigh, Milwaukee, Birmingham, and Nashville), Sinclair owns both WB and UPN-affiliated stations. One of those stations will carry The CW, and the other will lose its networked programming.

"Some of our markets may benefit from the merger, while others may be negatively impacted," continued Smith. "After a cursory review of our WB and UPN markets, we believe that approximately 1% to 1.5% of our net broadcast revenues would be at risk."

Sinclair will make a further announcement regarding its plans for The CW on February 8, when the company is scheduled to report its full-year financial results.