The merger of also-ran TV networks UPN and The WB contributed to the Chapter 11 bankruptcy filing of Granite Broadcasting Corp. Although Granite owns 23 stations in 11 markets, its two biggest, which were affiliated with The WB, caused a great deal of trouble for the company.
When the CBS Corp.-owned network and Time Warner Inc.-owned rival merged to create The CW, Granite's biggest markets, Detroit and San Francisco, were left in the cold without a network affiliation because CBS-owned stations ended up receiving network affiliation rights in those markets. When the merger was announced in January, Granite already had an agreement on the table to sell the two stations to AM Media Holdings LLC for $180 million. However, AM Media backed out in February because of The CW merger. The company again negotiated a new deal with Acon Investments LLC for $150 million, but that deal fell apart in July. In May, Granite filed a law suit against CBS and Time Warner seeking damages.
Of course, even before the CW merger, Granite was saddled with a lot of debt, which is why it was selling the stations in the first place, so clearly the CW merger wasn't the only reason for the filing. However, it could be assumed that it expedited the filing. —Matthew Wurtzel
See story about Chapter 11 filing from The Deal
See story about lawsuit from The Deal
See earlier post about The CW
Continue reading below
