Viacom joins UPN, CBS networks

LOS ANGELES -- CBS and UPN will be joined in one unit by owner Viacom Inc., a change viewers may not notice but which the company hopes will cut costs and improve ad sales.

It was announced separately Monday that Kerry McCluggage, who helped launch UPN, is resigning as chairman of the Paramount Television Group.

McCluggage will end his tenure in January, the same month UPN is to join CBS as part of Viacom's CBS Television Unit. UPN operations executives will report to Leslie Moonves, president and chief executive officer of CBS.

Details on Paramount Television Group management after McCluggage's departure will be announced later, the company said.

By integrating CBS and UPN, Moonves said, "We believe we can simultaneously realize significant efficiencies and increase advertising sales" while building the nearly 7-year-old UPN.

The move comes during a severe advertising slump affecting television and other media. Viacom did not announce how many jobs could be affected.

The step is a logical one following the CBS and Viacom merger in 2000 and could be a plus when it comes to ad sales, especially for UPN, said media analyst Gordon Hodge of Thomas Weisel Partners.

Despite ratings growth, UPN ad revenues have been lagging during the economic downturn, Hodge said. In contrast, he said, CBS has seen both higher ratings and relatively strong revenue growth.

"By pursuing more joint sales efforts (with CBS) ... there may be ways to better capitalize on the ratings strength of UPN," Hodge said. "Buffy the Vampire Slayer" and "Enterprise" are among its series.

Moonves, who helped bring more and younger viewers to CBS with such shows as "Survivor," will be the first executive to head two major broadcast networks, Hodge said.

CBS and UPN will maintain their "distinct voices," said Mel Karmazin, Viacom president and chief operating officer.

According to Viacom spokesman Carl Folta, "the practical effect for viewers is absolutely nil. They won't see any difference."

McCluggage, who joined Paramount Television Group as president in 1991 and was named chairman in 1992, helped conceive and launch the UPN network. He did not detail his post-Paramount plans.

Paramount Television Group produces and distributes programs for networks, cable channels and syndication.

"I've really enjoyed the past 10 years here at Paramount and I'm extremely proud of what we've been able to accomplish," McCluggage said in a statement Monday.

McCluggage, along with Viacom Entertainment Group Chairman Jonathan Dolgen, has done a "superb job in nurturing UPN," Karmazin said.

Besides CBS and UPN, Viacom includes Paramount Pictures, MTV, Showtime, Blockbuster and Simon & Schuster.

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