Sinclair Broadcast

(SBGI) - Get Report

said it believes 1% to 1.5% of its broadcast revenue will be "at risk" as a result of the shutdown of the WB and UPN broadcast networks.

The Baltimore-based company, which operates a number of WB and UPN affiliate stations, saw its shares fall 16% Tuesday in the wake of the

announcement that the two will be merged into a new network called the CW.

CBS

(CBS) - Get Report

and

Time Warner's

(TWX)

Warner Bros., which owned the failed networks, will operate the new one as a 50-50 joint venture that names

Tribune

( TRB) as a 10-year affiliate.

"We are not surprised with the news of the WB and UPN network merger as both have struggled to achieve meaningful ratings success," said 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.

"Some of our markets may benefit from the merger, while others may be negatively impacted," Smith added. "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. We look forward to having a more in-depth discussion on our Feb. 8 conference call when we report our year-end results."

Four markets overlap with Tribune or CBS affiliates: Tampa, Fla.; Pittsburgh; Norfolk, Va.; and Oklahoma City. Additionally, the company operates both the WB and UPN affiliate in four markets: Birmingham, Ala.; Milwaukee; Nashville, Tenn.; and Raleigh, N.C.

On Tuesday, Sinclair shares fell $1.40 to $7.51.