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Granite Halts Station Sales

Jul 18, 2006  •  Post A Comment

Granite Broadcasting has called off the sales of Detroit station WDWB-TV and San Francisco station KBWB-TV.

The financially troubled group announced Tuesday that it will keep the Detroit station, which is changing its call letters to WMYD-TV and will become an affiliate of MyNetworkTV when the new network launches Sept. 5. However, Granite still intends to seek a buyer for the San Francisco station.

Granite was within days of closing a deal to sell the stations when it had to scramble for $70 million in new credit at the end of June to make an interest payment of $19.7 million on an earlier loan.

Granite said at the time that the new loans, which mature in December, would enable it to proceed with the acquisition of CBS affiliate WBNG-TV in Binghamton-Elmira, N.Y., should the Detroit and San Francisco station sales not close.

The group also said that even if it sold the two stations and completed the purchase of WBNG, which it expects to do at the end of the month, its new financing requires it to consider restructuring alternatives including filing for protection under Chapter 11 of the U.S. Bankruptcy Code.

In May, Granite filed suit against CBS Corp., Warner Bros. Entertainment and The WB’s owners claiming that the shutdown of The WB had hurt the value of the stations, which it had hoped to sell for $180 million. When that sale deal fell through, Granite said it found another buyer willing to pay a reduced price of $150 million.