NBC gets Bay Area owned-and-operated station with KNTV purchase

By Michael Warren The Associated Press
Tuesday December 18, 2001

SAN FRANCISCO — NBC announced Monday it is buying San Jose-based KNTV for $230 million from Granite Broadcasting Corp., giving the network an owned-and-operated station in the San Francisco Bay area. 

NBC programming has been broadcast in the area by San Francisco-based KRON, which was acquired by Young Broadcasting for $737 million in July 2000. Young later turned KRON, Channel 4, into an independent channel after balking at NBC’s terms for continued network affiliation. 

NBC’s purchase comes after weeks of negotiations between the network, Young and Granite, and puts to rest speculation that NBC would buy KRON back from Young. Instead, NBC gets its own station in the nation’s fifth-largest market for a fraction of what Young paid. 

“I think NBC got an affiliate in a top-five market for a very good price,” said Kagan World Media analyst Robin Flynn. She compared the deal to the 1999 CBS purchase of a Dallas station for $485 million, pointing out that the Texas hub is a smaller market than San Francisco. 

“It really is practically a steal for NBC,” Flynn said. 

KNTV takes over NBC programming on Jan. 1, reaching viewers on AT&T cable channel 3 and broadcast channel 11. This may frustrate about 118,000 non-cable viewers in parts of San Francisco and other areas, since KNTV broadcasts from farther south and its signal doesn’t match the footprint of KRON’s antenna, on the highest point in the city. 

“Obviously, NBC is aggressively looking for ways to improve the signal, including possibly relocating the transmitter farther north,” Cory Shields, an NBC spokesman, said Monday. 

According to NBC research, there are 2.4 million television households in the San Francisco-Oakland-San Jose market; 1.9 million have cable, and 200,000 have satellite dishes. 

About 400,000 get only the over-the-air signal, and about 100,000 of these households couldn’t get NBC on KRON either because of the Bay Area’s coastal mountains and other impediments. 

Whenever networks change stations, some viewers have trouble finding their favorite shows, but NBC is counting on a big boost from the Winter Olympics in February, which should encourage people to seek out the network’s new home. 

Granite will operate the station as an NBC affiliate until the deal closes and gets government approval, expected in the first half of 2002. NBC is also in the process of acquiring 11 Telemundo stations, including San Francisco’s KSTS. 

Deborah McDermott, executive vice president of operations for Young Broadcasting, says KRON would use expanded news broadcasts to keep its current viewers tuned in. She predicted NBC will have a tough time earning new viewers at the expense of KRON. 

“For the San Francisco market, this is a new television station. Whenever you introduce something new in the market it takes a long time,” McDermott said. 

“People are going to tune in (to NBC) for ‘Friends’ but they’re not going to tune in for the news. 

“I think they’ve got a tough job ahead of them and we’re totally prepared to be an independent.” 

Shares of NBC’s parent company, General Electric, rose 65 cents to close at $38.30 on the New York Stock Exchange, while Granite shares rose 48 cents to close at $2.55 on the Nasdaq Stock Market. Shares of Young Broadcasting fell 82 cents, closing at $16.55 on the Nasdaq Stock Market. 


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