Granite Files Chapter 11
By John Eggerton -- Broadcasting & Cable, 12/12/2006 3:02:00 AM
TV station owner Granite Broadcasting has filed for chapter 11 bankruptcy protection.
The company has been trying to stave off the move for months as it worked to make interest payments on its debt. An interest payment on its $400 million-plus in debt was due Dec. 1. Granite did not make the payment, deciding instead to roll it into the restructuring.
Granite spokeswoman Sandy Novotny said that current management would remain in place.
She also said that Granite "did not see any problem" in continuing to program its stations and "everyone seems to be content." She said that program payment issues with Warner Bros. had been resolved and would have been part of the filing except that they had just been resolved. She also said that discussions were ongoing with Twentieth, but that Granite was confident of a resolution there. She would not discuss terms of the Warner Bros. settlement.
Ritch Colbert, whose Program Partners has sold the syndicated DeGrassi High: the Next Generation for fall 2007, says he does not foresee any problems. He said he had spoken with Granite's San Francisco station (see below) Tuesday, and that it sounded as though "Granite has the full cooperation of bondholders and debt-holders in the restructuring. The show is sold on a barter basis, rather than for cash, so Program Partner's isn't standing in a line of creditors, but instead gets paid in commercial inventory in the show. "We don't see any significant change in station operations that will affect our programming," said Raphaelson.Granite tried to sell stations in Detroit and San Francisco last summer to pay down the debt, but that deal unwound in July, impacted, said Granite, by the meld of the WB network into The CW. Last fall, AM Media, a unit of Washington-based private equity firm Acon Investments, agreed to pay $180 million for Granite’s WB stations, WDWB Detroit and KBWB San Francisco. But Acon balked when Time Warner announced it would shut down the WB then team with CBS to create a separate network, The CW.
That left Granite’s WB affiliates between a rock and a hard place because CBS owns UPN stations in San Francisco and Detroit and will get the CW affiliations there.
Granite was able to pay off its June interest payment on the debt anyway after lining up a new line of credit and proceeded with its purchase of WBNG Binghamton/Elmira, N.Y.
The company says it is still open for business. "Under the reorganization process Granite will continue to operate its businesses in the ordinary course, and its stations will continue to serve their local communities, including their viewers and advertisers," the company said in a statement.
Granite owns or operates 23 stations in 11 markets: San Francisco; Detroit; Buffalo, New York; Fresno, California; Syracuse, New York; Utica, New York; Binghamton, New York; Elmira, New York; Fort Wayne, Indiana; Peoria, Illinois; and Duluth, Minnesota-Superior, Wisconsin.
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