Granite Sells Two Stations, Reports Narrowed Q1 Loss

May 2, 2006  •  Post A Comment

Cash-strapped station-group owner Granite Broadcasting said Tuesday that it has struck an agreement to sell its San Francisco and Detroit television stations for $150 million in cash.

The company posted a narrowed first-quarter loss of $15.7 million, as its television stations reported advertising revenue gains.

The sale of WB affiliates WDWB-TV in Detroit and KBWB-TV in San Francisco to a team of private-equity investors comes as Granite looks to shed what it described as noncore assets and use the proceeds to shore up its financial position ahead of a June interest payment on its $435 million debt load.

The company said the sale of the two stations should be completed in time to make that payment. The investment team buying the two stations includes Canyon Capital Advisors, D.B. Zwirn & Co., Fortress Investment Group and Ramius Capital Group.

Following the sale’s completion, Granite said it will devote $45 million to close on its acquisition of Binghamton, N.Y., CBS affiliate WBNG-TV, as well as make the interest payment.

Granite tried earlier this year to sell the two stations for $180 million, but ran into snags after the announcement that The WB Network was shutting down this summer to make way for The CW Television Network, and neither Granite station had a shot of snatching the CW affiliation. The potential buyer at that time, ACON Investments, wanted out of the deal after learning of the WB shutdown.

Granite said its narrowed first-quarter loss was due to strong advertising revenue at its television stations, which helped reduce the amount of red ink in the quarter from a year-earlier figure of $19.5 million. Revenue surged 18 percent to $21 million, fueled by strong import-car advertising, robust Olympic advertising at its NBC stations and the addition last year of TV stations in Duluth, Minn., and Fort Wayne, Ind.