NEW YORK: Gray Television will run the 10 TV stations that went to senior lenders in the Young Broadcasting bankruptcy, pending court approval. Documents made public today by the U.S. Bankruptcy Court for the Southern District of New York indicate that Gray tentatively was named the third-party operator acceptable to the new owners Terms of the management agreement were negotiated by Young “at arm’s length,” the document said.
Young filed for bankruptcy in February after missing two interest payments totaling $10.6 million. An auction of the company’s assets was set for July 14, but no competition emerged for the $220 million credit bid from Young’s senior lenders, including Credit Suisse, Oppenheimer, Highland Capital and Eaton Vance. The reorganized company will be “New Young Broadcasting Holding Co.”
“At the initial sale hearing, the debtors reported… contact with 66 potential buyers,” court documents stated. “Qualified bids each offered $120 million for substantially all of the debtors’ assets.”
The lenders bid of $200 million in secured obligations plus around $20 million in assumed debt, which other bidders did not challenge. The assets include, among other stations, KRON-TV in San Francisco, for which Young paid a record $823 million dollars nine years ago. The station was affiliated with NBC at the time, but the network opted to buy its own O&O in the market and left KRON an indie with radically reduced cash flow.
Gray is based in Atlanta and owns 36 TV stations. The company posted a first-quarter net loss of $8.9 million on revenues of $61.4 million.
-- Deborah D. McAdams
More TVB coverage of Young’s Chapter 11 odyssey:
July 14, 2009: “Lenders to Take Over Young TV Stations”
Senior lenders will take over the 10 TV stations in the Young Broadcasting bankruptcy, according to insiders at attending a related hearing today. An asset auction had been scheduled for yesterday but was cancelled when it appeared to be moot.
July 14, 2009: “Young Broadcasting Auction Cancelled”
“The Debtors, pursuant to the terms of the Bidding Procedures Order, have determined that the Auction is not necessary and hereby provide notice that the Auction is cancelled.”
July 2, 2009: “Young Broadcasting Auction Date Set”
The assets of Young Broadcasting will be put on auction July 14 in New York. Sonnenschein, Nath & Rosenthal, the law firm representing Young, told the media outlet there was a “healthy amount of interest” in the auction. Young owns 10 TV stations, including WKRN-TV, the ABC affiliate in Nashville, Tenn.
March 4, 2009: “Young Files for Chapter 11”
“Our decision to restructure through a Chapter 11 filing will allow the company to bring its debt in line with current economic realities so that we can emerge a stronger and more financially secure company. It is important to note that we are restructuring our debt, not our operations,” said Vincent Young, YBTVA chairman.