Granite Sells WB Stations in San Francisco, Detroit

Sep 8, 2005  •  Post A Comment

Granite Broadcasting said Thursday that it reached definitive agreements to sell its two large-market WB-affiliates to private-equity firm ACON Investments for $180 million, a move designed to allow Granite to focus on its Big 3-network-affiliated stations and to pare down debt.

As part of the sale, Granite will sell WDWB-TV in Detroit and KBWB-TV in San Francisco to wholly owned subsidiaries of AM Media Holdings, an affiliate of ACON, a Washington-based private-equity firm. AM Media will pay $177.5 million in cash to Granite, plus another $2.5 million of equity in AM Media.

Proceeds from the sale, which is expected to be completed by the fourth quarter pending regulatory approval, will largely go toward paying debt, the company said.

The sale piggybacks on a string of station sales in the past three weeks, which seem to have awakened a largely moribund mergers-and-acquisitions market in the station-group sector, and allows Granite to follow through on its commitment to shift its strategy toward focusing on its ABC, CBS and NBC stations.

Specifically, Granite for months has made clear its interest in selling its San Francisco and Detroit WB affiliates, which have faced challenges. The picture for the Detroit station improved significantly last year after the company struck an agreement to carry Detroit Pistons professional basketball games on the station, but the San Francisco station has continued to struggle.

The company has two more WB affiliates remaining, one in Fort Wayne, Ind., and another in Duluth, Minn., both in duopoly markets.