Getting ready for NBCCash infusion moves Granite toward Bay Area network affiliation 3/11/2001 07:00:00 PM Eastern
Thanks to the much needed financial relief it got last week, Granite Broadcasting has taken some giant steps toward owning and operating the San Francisco Bay Area's NBC affiliate next year, and further dealings with NBC, the station group says, demonstrate the network's commitment to their continuing relationship.
Granite has been pounded by Wall Street since last year's extraordinary reverse-compensation deal under which its KNTV San Jose, Calif., station will become an NBC affiliate.
It also faced a difficult period for cash flow between the end of KNTV's ABC affiliation last summer and the one scheduled to begin with NBC on Jan. 1.
But last week, Granite CEO Don Cornwell announced that his company had received financing and renegotiated its payment schedule with NBC.
The network agreed to modify the payment terms, deferring half the $61 million until 2005, three years after the station is scheduled to become the San Francisco-Oakland-San Jose NBC affiliate, Granite said.
Granite noted that it will immediately pay the other half from a new $205 million senior credit facility led by Goldman, Sachs & Co.
The remaining proceeds, combined with other cash, will be used to "provide the necessary resources to finance a transition period during which Granite will continue to prepare KNTV to become the San Francisco NBC affiliate on Jan. 1, 2002, and develop its two top-10-market WB stations."
"We are now in a position," said Cornwell, "to cruise through what most people expect to be a rough year to get to 2002."
In addition, Granite and NBC have commenced a secondary affiliation for KNTV , which immediately gains first rights to NBC programming preempted by current local affiliate KRON-TV .
Granite said the deal "serves as a head start to the formal launch and signifies NBC's commitment to make the transition a success."
"I think that's one of the reasons NBC said they wanted us to have a secondary affiliation right now," stated Cornwell. "They are particularly interested in having the issue of where their affiliate is going to be put to bed. They want us to start putting their brand on our station as soon as possible and put to bed.a continuous undercurrent of rumor and innuendo."
NBC and longtime Bay Area affiliate KRON scheduled a parting of the ways beginning next year, after a contentious bidding process in which Young Broadcasting outbid NBC for the station.
But some in the Bay Area community as well as on Wall Street have continued to believe that Young and NBC would come to an agreement that would keep KRON as an NBC affiliate or owned station.