CBS, Warner Bros. Plan New Network

The WB and UPN are off to 7th Heaven.

CBS (CBS Quote) and Time Warner's (TWX Quote) Warner Bros. set up a new television network. The companies also said they'll fold their WB and UPN network startups this fall.

The companies said the new network will be called the CW. Tribune's (TRB Quote) Tribune Broadcasting and CBS's UPN affiliates set 10-year affiliation agreements.

"This new network will serve the public with high-quality programming and maintain our ongoing commitment to our diverse audience," said CEO Les Moonves. "It will clearly be greater than the sum of its parts, delivering excellent demographics to advertisers, and building a strong new affiliate body. Additionally, The CW will be able to draw from the creative talent and production resources from the top two television production studios in the business, while also seeking programming from all sources -- independent producers or other studios. With this move, we will be creating a viable entity, one well-equipped to compete, thrive and serve all our many publics in this multi-channel media universe."

Both WB and UPN have had brief periods of ratings success, with the younger-skewing WB in particular enjoying a period of rising fortune. But neither has achieved ongoing ability to establish itself as a network ratings leader. The result: high TV production and marketing costs and declining audiences for television have put pressure on both networks. Together they should be able to reduce costs and overhead. A merger also brings scale to the combined entity, allowing it to better compete in a world with a fragmented audience.

"This is a very exciting day for Time Warner and its shareholders in the creation of what we believe will be a very strong and viable fifth broadcast television network," said Time Warner operating chief Jeff Bewkes. "This new network will have all the strategic asset value as an outlet for our programming that The WB presented us, but with a much firmer and more secure financial present and future."