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Granite and Barrington Create Cooperative Duopolies

(March 2, 2009) NEW YORK: Granite and Barrington have struck up mutual operation agreements in two markets. The TV groups will jointly operate TV stations in Syracuse, N.Y. and Peoria, Ill., starting today. The agreements comprise sales and shared services. In Syracuse, Granite’s CBS-affiliated WTVH-TV will be run from the studios of WSTM-TV, Barrington’s NBC affiliate in the market.

In Peoria, the Barrington’s CW-affiliated WHOI-TV, will be operated from the studios of Granite’s WEEK-TV, the NBC affiliate. Under deal terms, the operating station will provide advertising, sales, promotion, administrative services and selected programming to the other station.

“This arrangement… provides opportunities for substantial operating efficiencies by allowing us to use our existing infrastructure to expand the breadth of local news and services… while enhancing the revenue and profitability of both stations,” said Granite chief Don Cornwell.

Linking up will allow the stations to offer expanded news coverage and more public-interest programming “in new and varied time periods,” the companies said. “Specifically, the stations will provide newscasts in time periods not currently programmed with local news and extend local news to other time periods.”

The agreement also means layoffs. The companies said they expected to reduce staff, providing “a generous severance package and extensive job placement assistance”

Barrington, headquartered in Hoffman Estates, Ill., recently announced preliminary results for 2008 and for its fourth quarter of last year, with the expectations of posting net revenues at $32.5 million, up from $30.4 million in 2007. TVB said the results “would have looked pretty good” if not for a $50 million write-down, based on so few companies reported increased revenue.

A reader gave us a subsequent smackdown, noting that Barrington’s cash position was around $28.8 million, with long-term debt of more than $303 million. Barrington will issue a report tomorrow on its 10 ½ percent seniors notes due 2014.