After an uncertain auction period for Young Broadcasting, which filed for bankruptcy in mid February, Gray Television has been chosen to manage seven of group’s ten stations. According to bankruptcy court filings, Gray will receive an annual fee of $2.2 million for managing the Young stations, which include three ABC affiliates in Nashville, Albany, and Richmond, along with four other network affiliates in smaller markets. Vincent Young, who will remain Young Broadcasting’s chairman-CEO, is optimistic about the future, reports MediaPost, and believes Young can help Gray “get to where they need to be” through developing new sources of ad revenue.
Young will continue to operate its stations in San Francisco, Knoxville, and Lansing. Many speculate that the group’s San Francisco station, KRON, is to blame for much of Young’s financial troubles. “Ultimately, it was Young’s inability to sell KRON, coupled with the station’s estimated $15 million in negative cash flow, that dragged the company into bankruptcy in February.”
In this economic climate, no one is immune, especially groups such as Media General and Sinclair, who also own newspapers, “where staggering losses are even greater than among their broadcast properties.” According to TVNewsday, “analysts and industry insiders say a number of station groups have either violated loan covenants or will this year face a fate similar to Young’s. Among those mentioned: Freedom Communications, Univision, New Vision, Gray, Allbritton and Belo.” More…