NEW YORK — Granite Broadcasting has rejiggered payment terms with NBC over San Francisco station KNTV after receiving commitments from a banking group for a new $205 million credit facility.
Shares of the company’s battered stock surged in active trading Monday, closing up 24% at $3.56. Granite, a perpetual target for takeover speculation, and other broadcasters have been hit by ad jitters and fears of a slowing economy.
Gotham-based Granite will use part of the proceeds to fully repay $114 million in senior bank debt. The remaining $91 million, plus other cash generated internally by the ailing broadcaster, will help transition KNTV to become the Peacock’s San Francisco NBC affiliate starting in January. The funds also will help to develop Granite’s two big WB stations, in San Francisco and Detroit.
Granite’s original deal, when it acquired NBC’s San Francisco-Oakland-San Jose affiliation for KNTV, called for it to pay $61 million at the start of next year. Instead, Granite will pay $30.5 million upon closing its new credit facility — which is expected to happen today. The other tranche won’t be due until January 2005.
Meanwhile, Granite and NBC have launched a new secondary affiliation for KNTV, branding it NBC3, and giving it first rights on in-market preempted programming and other non-network programs. The secondary affiliation serves as a head start to KNTV’s formal launch “and signifies NBC’s commitment to make the transition a success,” according to Granite CEO Don Cornwell.