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Young Plans to Sell KRON-TV

Jan 10, 2008  •  Post A Comment

Young Broadcasting plans to sell San Francisco’s KRON-TV, the largest of its 10 stations.
Young said Thursday that it has retained financial advisors Moelis & Co. to head up the process leading to a sale, which the group hopes to conclude in the first quarter of this year.
“Our decision to sell is based on the high level of interest in the property that we have received,” Young Chairman Vincent Young said in a statement. “It is purely a strategic economic decision, allowing us to benefit from the proceeds of the sale to further our future corporate initiatives.”
Young, which saw its revenue drop more than 11% in the third quarter of 2007, bought KRON in 2000 for a record $823 million and then saw the value of the then-powerful station plummet after it lost its NBC affiliation. The station now is affiliated with the struggling MyNetworkTV.
(Editor: Baumann)

13 Comments

  1. Let’s find out who is responsible for KRON’s losing NBC? I suspect he is some executive who retired with a golden parachute, leaving KRON to
    be hoist on it’s own petard…

  2. Red, NBC wanted KRON to fork over several million dollars over several years for the privilege of carrying NBC programs.
    Young Broadcasting did suffer for not taking the NBC deal but should have sold the station instead of owning a money-losing independent/MY TV station.
    I’m surprised they didn’t try to take FOX from KTVU.
    I’m sure KTVU’s owners would have gladly paid the price for NBC programs. though not worth as much as the network wanted.

  3. It’d be ironic if NBC buys the station (LOL)

  4. It was Granite Broadcasting that had the dishonor of accepting NBC’s reverse-compensation deal. Not only did they get ridiculed by the entire industry for accepting the deal, they ended up over-leveraging the company to boost their San Jose station, KNTV, to reach the San Francisco market and snag the NBC affiliation. But soon after the deal was in place, NBC decided they wanted a San Fran O&O, forcing Granite to either sell KNTV at a loss -OR- lose their network affiliation, making it almost impossible to get a return on their considerable investment in the market. This debacle set the ball in motion that led to Granite’s bankruptcy last year…

  5. NBC always wanted KRON from the start. Then when they could not get it, imposed O&O style conditions that Young did not want to follow. They split the affiliation. Granite however had gotten cash from ABC in 99′ to drop ABC affiliation and then turned around and offered NBC affiliation to pay NBC $37M. Then a year later NBC bought out Granite for $230M. How is it possible that they lost so much to go into bankruptcy? Was the deal so bad, it took six years before the bankruptcy showed up? I remember Granite was a fairly middle market owner, and this was a big deal for them to get NBC. If it was so bad, they should have gone back to being independent, or WB. Then NBC would have had no affiliation. Now with technology, master control and programming is fed from Burbank. Only a studio control room, no real master control. With satellite and cable penetration, why were they so worried about moving the transmitter site from it’s old Loma Prieta Peak location? They could have simply modified the pattern not to put much into Monterey Bay Area and be done with it. In the end they had a fire at their old Loma Prieta Peak location after they moved to transmitter to San Bruno Mountain.

  6. It wasn’t the sole reason for Granite’s bankruptcy, it was more the start of a chain reaction. They needed to borrow money for their upgrades in SF, above and beyond the debt they were already carrying. The sale of KNTV meant they never saw the advertising revenue they were expecting in the SF market to help make the loan payments. Add to that the sagging performance of their WB properties in SF and Detroit, some syndication deals that cost more money than they made back in ad sales, and the general advertising downturn when the internet bubble burst. Plus, Wall Street seemed to be punishing them for hastening the end of network compensation by being the first company to make a reverse-compensation deal (driving their stock price from $15 to 10 cents by the end). It kept snowballing until they weren’t generating enough revenue to make the interest payments on their debt and had to declare bankruptcy.

  7. NBC had coveted the (KRON) channel 4 frequency going back to ’48 (or thereabouts) when it was awarded to Chronicle Publishing. There were strained relationships between the network and KRON during the period when Fred Silverman ran NBC as the station was pre-empting NBC prime for paid programming. KRON had planned to bump 13 hours of NBC prime in one month and had to reduce that somewhat when Silverman called the station manager. NBC was really displeased when the Loma Prieta earthquake hit and KRON had no backup generator–in other words a long history of animosity precipitated the separation of these partners. If GE purchased KRON they could use their current outlet (KNTV-11) to upgrade their Telemundo station.

  8. Very good conversations here. I think KRON’s downfall started when the station (under Chronicle ownership) refused to renew “Wheel of Fortune” and “Jeopardy!” back in 1990, letting those powerful shows go to KGO in early 1992. The station continued strong, but never achieved those same numbers in access with “ET” and “Hard Copy” (someone correct me if I’m wrong on that.) Then came the sale to Young and the subsequent loss of NBC.
    KRON was once the Bay Area’s dominant station and one of NBC’s strongest affiliates. Now it’s a My Network TV affiliate also-ran. How sad.
    By the way, when Fred Silverman ran NBC, he had that problem from other affiliates as well, as the Peacock Network was mired in a distant third-place position in prime-time. KRON’s relationship with NBC was always strained – in the 1990’s, KRON didn’t carry much of the network’s daytime lineup, including “Another World”.
    Also, I read on the Giants’ website that the team left KTVU and jumped to NBC-owned KNTV (but remains on FSN Bay Area.) Footprint for things to come?

  9. Whatever led to KRON’s fall, the common connection here is NBC, or should I say one of the big four (or five).
    How long will the FCC continue to award these mega-corp’s with the possibility of unlimited ownership, etc…
    Newspaper cross-ownership, such as the case of KRON and the Chronicle, can be a good thing. The bad thing is the big four wanting to control all of broadcasting… or at least the top 20 markets.
    Anyway, everyone in the business knows, the best stations in any market ARE NOT the O&O’s!

  10. NBC will purchase KRON, restore it to it’s 1960’s
    greatness, hire EVERYONE back at better salaries, and all will be wonderful again. BLAH, BLAH, BLAH.
    Look for either an investment company or someone
    like HEARST to pick up the property. The last
    major TV buys have come from investment companies
    who like to come in, cut staff to the bone,then
    suck the marrow out of the bones. Or a cash-flush
    company like HEARST which already has property
    in Sacto and could run KRON from there.
    KRON still can be a profitable indie if it’s run
    right.

  11. Randy Jr, you’re right. It will be a private equity company. An old line broadcaster could never afford KRON. With all the pressure from Wall Street (i.e. CEO getting his huge bonuses) they’ll cut KRON to the bone.
    A true broadcaster could make KRON, KRON again.
    But then again, I haven’t seen one of those guys in many years.
    Why doesn’t Sinclear buy it. At least everyone would know it’s going down the tubes.

  12. Anyone think Hearst possibly trading its Orlando properties to young for KRON would be a good idea?

  13. From what I’ve heard, Vincent Young himself is responsible for the pickle that KRON is in today. NBC clearly wanted this station years before the Chronicle put it up. Young should have done the smart thing, got the hell out of the way, and let NBC have it. Instead, the Young and NBC got into a bidding war, which was nothing more than a clash of egos. Apparently, several executives inside Young Broadcasting tried to talk Vince Young out of bidding on KRON, but he had his mind made up – he wanted that station at any cost…even the highest cost ever paid for a U.S. television station. Big mistake! NBC imposed their reverse compensation requirements on Young as retaliation for Young taking away the prize they waited so long to obtain. NBC was just as stubborn as Young, and probably didn’t expect Young to balk as they did.
    Moral of the story – NEVER bid against a major network, ESPECIALLY if you’re bidding on one of their affiliates. In this case, both parties lost in the end.

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