Each has since lost its owners close to $1 billion.
Now, in a surprise move that's a sign of the struggles in network television, Warner Bros. Entertainment and CBS are shutting down their also-ran networks, WB and UPN, this September.
Instead, they are jointly forming a new network, dubbed CW, to replace both. CW will inherit the assets — and most of the top shows — from WB and UPN.
The outlook for both networks was grim. Both targeted the same audience of women ages 18 to 34.
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"Neither one of these businesses looked like it had a great future," says CBS Chief Executive Leslie Moonves. By creating a single entity, "We get a better network, and the stations become immensely more valuable."
Warner and CBS each will own 50% of the venture, to be run by UPN president Dawn Ostroff, overseeing programming, and WB COO John Maatta, handling business operations.
No cash will change hands. Tribune Co., which owns 22.5% of WB, will trade the stake for a 10-year deal to have CW programming for its stations in New York, Chicago, Los Angeles and 10 other cities, but it will pay for the privilege.
"At this point we felt that being an affiliate was the best option," said Tribune Co. CEO Dennis FitzSimons. "Our TV stations will have a stronger prime-time lineup."
CBS will own CW affiliates in eight markets, including Philadelphia, San Francisco and Atlanta.
Despite public proclamations of support, parent Time Warner's interest in sustaining WB's losses has cooled. Last November, the company approached Walt Disney Co., offering to sell the network or partner with ABC on it, senior executives at both companies said. Disney rebuffed the offer, and Warner Bros. began discussions with CBS just after Thanksgiving.
"We recognized a while ago that the economic model of a stand-alone broadcast network that doesn't own its stations is not a good model," says Bruce Rosenblum, president of Warner Bros. Television Group.
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