The new network would be built on a nationwide foundation of local broadcast and cable systems, sources said yesterday. It would be the first to take advantage of the convergence of broadcast and cable television, which until recently have been in fierce competition.
Warner Bros. has recruited former Fox Broadcasting Co. President Jamie Kellner to head the project, which could cost as much as $2 billion. Mr. Kellner was instrumental in the successful launch of the Fox network until he resigned earlier this year to start his own business.
Warner's move comes at a time when broadcasters and entertainment companies are grappling with ways to compete in the coming 500-channel TV universe, which threatens to erode even further the already shrinking audience of the traditional networks. Rapid changes in technology and programming economics are bringing together movie studios, cable operators and broadcasters to form new so-called "hybrid" networks that would appear on both cable and over-the-air TV.
In the last several months, companies as wide ranging as Paramount Communications, Chris-Craft Industries and QVC Networks have discussed similar plans. Some see the Warner move as a preemptive strike against those companies.
Mr. Kellner and Warner declined comment yesterday.