NBC is in advanced negotiations to run Young Broadcasting's
KRON San Francisco, according to bankruptcy court documents filed last week. A
brief filed by Sonnenschein Nath & Rosenthal, the law firm representing
Young in its bankruptcy, said the negotiation for such an arrangement "has
progressed with one party in particular."
The party appears to be NBC, which famously pulled its
affiliation from KRON following Young's acquisition of the station in 1999.
"The Prepetition Lenders' claim that a recent deal between
NBC and Comcast put KRON's shared services agreement ‘on the sidelines' is
unfounded, and wrong," the brief reads.
NBC owns KNTV in San
Jose. KRON would presumably operate out of KNTV headquarters
should the deal be worked out.
[[[NBC could not be
reached for comment.]]]
NBC Local Media apparently isn't the only network-owned
group interested in KRON. "The negotiations with NBC have progressed," reads
the brief, "and there is at least one other network interested."
CBS owns KPIX in San
Francisco, while ABC owns KGO.
That NBC and Young would sit at the negotiating table might
stun some industry watchers. Young acquired KRON, then an NBC affiliate, for
the mammoth sum of $823 in 1999 after outbidding NBC. NBC later yanked KRON's
affiliation after it acquired KNTV in neighboring San Jose
and gave it the NBC affiliation for the greater San Francisco market.
KRON is affiliated with MyNetworkTV today and its value is a
crumb of what it once was. Various briefs filed in bankruptcy court set KRON's
sticker value between $25 and $50 million.
Should the plan for a shared-services agreement regarding
KRON not come to fruition, Young plans to sell the KRON building in San
Francisco and move to a smaller facility in a less expensive part of town. "The
move would represent a substantial net positive to Young," reads the brief,
"because KRON's real estate has been appraised ‘in the ten million [dollar]
plus range,'" while the capital expenditure for a new facility would be $5
million or less.
Young filed for bankruptcy in February 2009. It has worked
out an agreement for Gray Television to manage seven of its 10 stations, not
including KRON, for an annual fee of $2.2 million and incentives. Both parties
are awaiting approval before the agreement commences.
Young called off an auction for its stations in July after
the preliminary bids failed to pass muster.
The brief says KRON is doing better than some might expect,
after restructuring its syndication expenses to save money. "Young now
anticipates that KRON will make a profit of approximately $2 million in 2010, a
projection that is based upon expenses that are already ‘a known number' from
the restructuring process and projected revenues that are ‘rather
conservative.'"
