13 Pappas Stations File Chapter 11
Pappas Telecasting Stations File for Bankruptcy Protection
By John Eggerton -- Broadcasting & Cable, 5/12/2008 6:55:00 AM
An unlucky 13 Pappas Telecasting TV stations, including Fox, CBS and The CW affiliates, filed for bankruptcy protection, the company said Saturday after the largest privately held group in the country could not come to terms with what it described as mostly non-bank lenders.
Pappas, which said the move did not affect its other stations, blamed the Chapter 11 filings on tough financial markets and an inability to get new or replacement financing, although it maintained that many of the stations' revenue and ratings have outperformed the industry.
Chief operating officer Dennis Davis explained in an announcement of the filing that ad revenues were hit hard by the "extraordinary downturn in the housing market (affecting advertising budgets in the furniture, appliance, real estate and other related sectors) and increased energy costs, leading to reduced automotive advertising."
The company said station employees would continue to be paid and it would be "business as usual."
In a statement, chairman Harry Pappas said the company was "compelled" to make the move "as the conflicts with the mostly non-bank lenders allowed no other sensible option. We negotiated in good faith for several months and, when talks permanently broke down, we made the filing to protect our ability to serve our viewers, our advertisers and assure the interests of our employees, and, as important, the interests of our lenders.”
He continued, "The Chapter 11 filing allows time for a so-called plan of reorganization to be adopted and implemented to lead to resolution of the financing issues as it applies to the stations financed by the mostly non-bank lenders."
The stations filing for bankruptcy were KMPH-TV (Fox) and KFRE-TV (CW), both Fresno-Visalia, Calif.; KPTM-TV (Fox) and KXVO-TV (CW), both Omaha, Neb.; WCWG-TV (CW) Greensboro-Winston-Salem-Highpoint, N.C.; KPTH-TV (Fox) and KMEG-TV (CBS), both Sioux City, Iowa; KTNC-TV (TuVisión) San Francisco-Oakland-San Jose, Calif.; KAZH-TV (TuVisión) Houston; KDBC-TV (CBS) El Paso, Texas; KREN-TV (CW) and KAZR-TV (TuVisión), both Reno, Nev.; and KCWK-TV (CW) Yakima-Pasco-Richland-Kennewick, Wash.
Pappas has been shopping some of its stations, with Harry Pappas saying he wanted to spend more time with his family.
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