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The Young and the netless - Broadcasting & Cable

The Young and the netless

Deal closing prods KRON-TV to prep for life post-NBC
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KRON-TV San Francisco will soon escape NBC's house rules now that Young Broadcasting has officially acquired the station with the intent to turn it into an independent starting in 2002. But without NBC's safety net, kron-tv has some important choices to make.

Going solo means "you lose a lot of supportive elements-like your daily electronic news feed from the network [and] the promotional support," says Kevin O'Brien, vice president/general manager of Fox's San Francisco affiliate, KTVU(TV). "You're going from a large family into being kind of an orphan. It will be a daunting task."

It's arguably too early to predict how kron-tv's programming will shape up. "It is so premature, honest injun," says the station's newly appointed vice president/general manager, Paul "Dino" Dinovitz. Dinovitz has been president and general manager of both NBC affiliate KCRA-TV and WB affiliate KQCA-TV in Sacramento, Calif. (owned by Hearst-Argyle Television). Dinovitz replaces Amy McCombs.

But Young has a lot of money sunk into KRON-TV and only a year-and-a-half to transform the station into an independent. Young in November agreed to pay a record $823.6 million for the station along with Chronicle Publishing Co.'s Bay TV cable assets. The value of the deal when it closed last Monday was $737 million, adjusted because some of the payment is in Young stock. Investors had been jittery about Young's ability to finance the deal, driving the New York-based company's stock price to a 52-week low of $18.375 on May 24. That was despite repeated assurances by Chairman Vincent Young that the deal was fully funded.

But Wall Street settled down last week; Young was trading at about $23.11 last Wednesday. Just in case Young's new shareholders from Chronicle had decided to sell off their stock en masse, Young last Monday also announced a $30 million stock buyback.

Young's stock price also may have perked up because, with KRON-TV under its wing, possible buyers of the 12-station group are even more likely to flock to Young Broadcasting's door. "The phone is more likely to ring now," particularly since "Young now has actual access to the smashing cash-flow growth at kron," says Victor B. Miller IV, a media analyst with Bear, Stearns & Co. (Vince Young has said that his line is always open.)

One of the most logical possible buyers? While a combined Viacom-Chris-Craft-United Television would be his first choice, NBC, ironically, "would be ideal," Miller says.

Ironic because NBC and Young officials haven't spoken since Vince Young declined to accept the network's high-priced offer of $10 million a year for KRON-TV to maintain its NBC affiliation, Miller says. Now that the sale is closed, contact must ensue, at least until 2002.

Or Young may decide to keep going it alone. In that case, it is well positioned to buy second stations in three of its markets: San Francisco, Los Angeles and Nashville, according to Miller.

Speculation about kron-tv's future as an independent is rife.

"Kcal will probably be their model," ktvu's O'Brien says.

Like KRON-TV, Young's kcal Los Angeles is an independent in a top competitive market and "has had some success there," O'Brien says.

During the last May sweeps period (sign-on to sign-off), the ABC (5.2 rating/14 share), NBC (5.0/13) and WB (2.9/8) stations all topped kcal (2.2/6), but the independent respectably tied with CBS O & O kcbs and beat UPN station kcop (1.9/5).

Kcal primarily programs prime time local news and sports mixed with some syndicated series. In the fall, those shows will include Pearson's new game-show entry To Tell the Truth, starring Seinfeld alum John O'Hurley.

"We know about being independent from kcal, but we still have a year and a half [to firm up programming plans]," says Deborah McDermott, Young's executive vice president of operations. "We've learned from L.A. that local news is an effective way to go."

KRON-TV first will look to beef up its internal content and then look to syndicated choices, but "we have no idea yet" if filling one obvious void left by NBC's Today Show will mean plugging in local news, sports or a series, McDermott says.

"I am viewing this as an opportunity, just as I'm sure everyone else is," says Matt Cooperstein, Universal Worldwide Television's senior vice president of domestic television. "As we bring in new product, KRON-TV will be one of our first stops."

At this point, Young Broadcasting isn't too worried.

"We're not concerned about losing viewers to kntv," McDermott says, referring to the Granite Broadcasting station in San Jose, Calif., that scooped up the Bay Area NBC affiliation. "Kron is the No 1-rated station for news in San Francisco, and we'll continue that tradition."

-Elizabeth A. Rathbun contributed to this report.

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