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Chris Craft sells UPN stake
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March 20, 2000: 6:56 p.m. ET
Viacom buys 50 percent of TV network it did not already own for $5 million
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NEW YORK (CNNfn) - Media conglomerate Viacom Inc. on Monday said it has agreed to buy BHC Communications Inc.'s 50 percent stake in the UPN television network for $5 million, following a court order last week clearing the way for the transaction.
BHC is broadcast subsidiary of Chris-Craft Industries Inc. (CCN: Research, Estimates), the former boat builder that owns 10 television stations in major markets. The struggling UPN network was launched in 1995 as a joint venture of New York City-based Chris-Craft and Viacom (VIA: Research, Estimates), which owns MTV and the Paramount movie studio.
Last Thursday, New York State Supreme Court Justice Herman Cahn dismissed a breach-of-contract lawsuit brought by Chris-Craft against Viacom. The suit sought to block the merger, and alleged the agreement violated a partnership contract between BHC and Viacom for ownership of UPN.
The Manhattan court nixed Chris-Craft's request, and endorsed a provision of the partnership agreement under which Chris-Craft had until today to either take control of UPN for $5 million or sell to Viacom for the same price.
"While we were disappointed with the court's decision, we believe that UPN and our shareholders will now best be served by ending any further uncertainty through our sale to Viacom," said William Siegel, BHC president and chief operating officer, in a statement.
UPN has struggled since its inception, consistently ranking far behind leading networks NBC, CBS, ABC and Fox, while failing to turn a profit and ringing up losses of more than $800 million.
However it has enjoyed a recent surge in rating thanks to new professional wrestling programs.
Viacom's pending merger with CBS leaves the fate of UPN uncertain. FCC regulations prohibit the owner of one of the four major networks from merging with one of the emerging networks, which could force Viacom to sell UPN. Viacom has asked the FCC for a waiver to that provision and is awaiting a response.
Shareholders have already approved the Viacom-CBS merger, which the companies hope to close next month pending clearance from regulators. 
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Viacom
Chris Craft
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