Back in 1999 Young Broadcasting outbid NBC to acquire KRON-TV San Francisco for a record $823 million. Now, with Young trying to emerge from bankruptcy, NBC may finally be the winner after all.
Negotiations to enter KRON, now a MyNetworkTV affiliate, into a shared services agreement with NBC Local Media came to light in some of the latest court documents filed in the Chapter 11 case. Young’s senior lenders have been pushing for an alternative to the reorganization plan approved by a committee of the company’s unsecured creditors and endorsed by management. The senior lenders had claimed that the recently announced deal to have Comcast acquire a majority state in NBC Universal had scuttled the shared services deal negotiations – and thus made the talks public. Not so said Young’s bankruptcy attorneys in response, the negotiations continue unabated.
Such a deal would apparently combine many operations of KRON with KNTV-TV, which NBC bought in 2001 from Granite Broadcasting. That price tag was only $230 million, although NBC had to pay to upgrade the transmitter location. The NBC affiliation had moved to KNTV at the end of KRON’s contract. KRON was an independent for a while, before signing on for the startup MyNetworkTV.
KRON is one of three Young stations not being managed by Gray Television under a management agreement already approved by the court.
The latest wrangling in bankruptcy court actually has Young’s board and management pushing for the plan from the unsecured creditors committee over the original plan submitted by Young itself. The plan from the creditors committee would inject new capital into the company, rather than turn over all of the equity value to the senior lenders.