Pittsburgh Post-Gazette from Pittsburgh, Pennsylvania • Page 19

Pittsburgh I'ost-Gactte: Thursday, May 30, 1991 19 Probing the puzzling sale of two stations EDWARDS FROM PAGE 15 No losers on horizon in Edwards' deal for Ch. 22, consultants say steps up and makes a very strong statement about the value of a wonderfully performing Fox affiliate, a station that had been almost an orphan five years ago," analyst Bishop Cheen said, in a phone interview. Cheen credited Finkelstein of Renaissance with turning the station around and said the $55-million sales figure could look like a rock-bottom price several years from now if WPGH continues to perform well. In view of WPGH's success, might some group be trying to block Smith in hopes of getting the station for itself? Gary Cozen, general manager of WPGH, thinks that is unlikely. "Anybody who would want to buy Channel 53 would have to have significant resources or an exceptional ability to obtain financing at a time when financing is next to impossible to obtain," he said.

"The Smiths are in a good position to obtain financing because their Baltimore and Columbus stations are very profitable." The mystery opponent has made many people tense no one moreso than Edwards. "I just want this to be over," he said, sitting at his desk at WPTT. As to who is trying to block his deal, he said, "I'd like to know why. I'd like to see the person," he said. "This hurts the little guy.

Here's a guy who's been in broadcasting all his life, who has made the necessary arrangements to make this happen It's not fair." licensed to the people we serve. This is not a black station or a white station. It's a station for the people." Noting the station has lost $26 million since it went on the air in 1977, Edwards said, "We can't continue those kinds of losses." Edwards noted that he doesn't expect to be 'affiliated with Home Shopping forever. "I didn't go into ownership to sit back and take satellite feeds for the rest of my life," he said, referring to satellite transmission of the shopping network. "Maybe Home Shopping would be for a year, or two years.

It certainly wouldn't be forever." Brouhaha in Baltimore Not long ago, Smith was on the opposite end of the objection equation, in his headquarters city of Baltimore. That case concerned an effort by TV station magnate George Gillett to sell WMAR-TV. an NBC affiliate in Baltimore that competes with one of Smith's stations. Last August, Gillett agreed to sell, the station to Scripps Howard Broadcasting Co. for $154.7 million.

But Smith and a California-based cable company filed objections with the FCC, arguing that the "diversity" of media outlets in the city would be hurt if Scripps Howard added a TV station to the radio outlet it already owned there. Both objections eventually were withdrawn, but in the meantime. "I just want this to be over. Eddie Edwards Scripps Howard decided to back out of the deal, prompting Gillett to sue for breach of contract. The suit is still pending, but Scripps Howard has reportedly agreed to settle out of court by paying the reduced price of $125 million for WMAR-TV.

The delay, which coincided with a downturn in the economy, apparently contributed to the potential $30-million loss for Gillett. Despite this. Smith doesn't think Gillett is trying to block the deal in Pittsburgh out of revenge. "No. George is a class guy.

If he would do it, he'd put it right on the table as I did," Smith said. And an assistant to Gillett in his Vail, headquarters said Friday that the mystery objector in Pittsburgh was "positively not him." If the sales of the stations do go through, business experts say they would be good for the industry at a time when many stations are suffering from the recession. A senior analyst at the media and investment firm of Paul Kagan Associates Inc. in Carmel, said the deals are a "win-win situation for everyone." "At a time when TV values have been on the downtrend, David Smith "In a way, though," Barash added, "it will be a problem for those people who enjoyed the kind of programming WPTT aired the older, classic kind of product. Some people, I guess, will miss that.

Also, WPTT was an outlet that sometimes gave opportunities to new programs when there was no room available on the other stations." TCI, which controls most of the cable service in Pittsburgh and its suburbs, might face strong new competition to the QVC shopping channel, of which it owns about a third. Since TCI already carries Home Shopping on Channel 22 during late-night hours, though, the real question is whether the addition of daytime and prime-time Home Shopping broadcasts would be enough to have impelled TCI to secretly challenge the Channel 22 sale. Evan Pattak, TCI spokesman here, said no. "We're not involved in the objection in any way." There is one other aspect of the Home Shopping prospect that fewer people are talking about. If Edwards strikes a deal with Home Shopping, black viewers would not gain any particular advantage from his owning WPTT in terms of programming aimed especially at their needs and interests.

"I am an African-American," Edwards said, "but the bottom line is that lama broadcaster, and I will be ByChet Wade Business Editor, Post-Gazette For just $10 down, Eddie Edwards has struck a deal to buy a commercial television station in the nation's 17th largest television market. The station is WPTT-TV, Channel 22, and its current owner, Sinclair Broadcast Group Inc. of Baltimore, has agreed to finance the rest of Edwards' $7 million purchase price. Edwards would have to pay only interest for 10 years, and some of that interest is set at well below market rates. Why such an apparently sweet deal? Television station consultants and brokers say the sale which is linked to Sinclair buying WPGH-TV, Channel 53, for $55 million could turn out to be a coup both for Edwards and Sinclair.

At the very least, they say, it follows a nationwide pattern of consolidation and reorganization among UHF stations in middle-sized markets. Edwards would become one of a handful of blacks who own a television station. And with Edwards' plan to have WPTT become a Home Shopping Network Inc. affiliate, WPGH would face one less competitor for syndicated programming and advertising dollars. "Actually, what Sinclair is doing is of benefit to the Pittsburgh television market," said Jack Arvey, vice president of Blackburn a Washington, DC-based station broker.

"Two UHFJ competing stations are not doing as well as they should. Their programming isn't as good as it ought to be. The news operations aren't as good. "It's called cleaning up the market. It's good for the market." Similar deals, where one UHF station closes or affiliates itself with a special programming system, have occurred in several other cities close in size to Pittsburgh.

William Redpath, vice president of Broadcast Investment Analysts in Washington, noted that a survey of independent television stations in 10 second-tier markets, including Pittsburgh, showed the outlets as a group barely broke even last year. By linking WPTT with Home Shopping Network, Edwards could immediately make profitable a station that has lost $26 million over the last 14 years. Without the need to acquire programs and sell ads, Edwards could slash the station's overhead to little more than interest expense, salary for a handful of engineers and rent for office space and the transmitter tower. The annual interest on his $7 million in loans from Sinclair a $1 million debenture at 8.5 percent interest and a $6 million term note at the prime rate plus 4.5 percent would be about $835,000 at current interest levels. It is not known how much WPTT would receive from Home Shopping Network as an affiliate.

However, in documents filed with the Securities and Exchange Commission, HSN mentioned a 1989 deal to lend $3.8 million for the construction of station WHSL in St. Louis and to make annual affiliate payments of about $1.6 million for seven years in exchange for nonvoting stock in the station's parent firm. Frank Boyle, a station broker in Stamford, speculated that the $7 million sale price for WPTT may have been determined this way: WPTT would have annual revenue of $5 million based on its claim of a 4 percent share of the Pittsburgh-area television advertising market. The region's entire market totaled about $125 million, according to "Investing in Television 1991," published by Broadcast Investment Analysts. While WPTT has been a money-loser, a typical UHF independent station would have cash flow gross revenues, minus ad agency commissions, programming costs and certain other expenses of about 20 percent of revenues, or $1 million.

The going rate for television stations is eight times cash flow, making the price for WPTT $8 million. But because Edwards is black, Sinclair would receive a tax break from the federal government it could defer paying income taxes on the gain from the sale of WPTT. Therefore, Sinclair split some of the value of the tax break with Edwards and knocked $1 million off the price. WPGH claims to have 13 percent of the region's television ad revenue, or about $16 million. Using Boyle's formula minus the tax break that theoretically should make WPGH's sale price about $26 million.

But the brokers and analysts said WPGH may generate a higher level of cash flow than 20 percent and would sell for a premium because of the elimination of WPTT as competition and the growing strength of the Fox Television Network. Newspaper Capers Jewspaper Capers 1 MMfiitriiT -Mtir-1-" iiiiiiiin rr1) (7rr (2) 1 (3) Don't Miss These Bargains! fur PC Compatible (g) A-j I Cordless Phone Blowout! .3 With Ideal fOr StlldentS W4 wL iHl! O) ET.396. Save mem- llll lil I Personal CSS1 II CS1 1 I a-. ory. security code, privacy button.

Reg. Saves500 Isss r. Vl X'! ran I' Pffl I III (2) ET-421. Save S50. Speed-dials up I ri" a kiijlrt I I II a as to 30 numbers, security code.

Reg. hJ -H Was 69900 in Pni I rrH Hi I S. 119.95. 43-558, sale 69.95 HlOsfUl 1990 Catalog rgg In I II i -2? I iSL ll (3) ET-414. Save $50.

Security code, Mtr Monitor extra III 11 base-to-handset paging. Reg. 109.95. KStSS I fej I 43-559, Sa.e 59.95 Tandy-MOOO HX I I 'JJ TTl Toneputs. d.ai.ng Computer I 11 1 Sal.

End 61S91 Built-in MS-DOS' jJ Beeperless Remote Speed-Dialing 2-Line LCD r-r I fr 1 1 Phone Answerer LCD Display Phone Speakerphone I i VGA pililoT; g'at 1 20 on rur cut Pfi Save 5 '4' Remote 11 Konepulsediahng Low As $15 Per Month. U.m.intCKa II 43-399 Sr V- 43-536 Tonepulse dialing 43-631 PC for HomeOffice 286 AT Compatible If IftffeQR 1 40-Memory, Speed Ready-to-Use Data Organizer sqnn Di3'ing Telephone Phone Answerer Tone Speed-Dialer 5UU 999.95 SyQQ rTWIF SSVe Sfiil 33 HALF Low As $20 Per Month. Low As $25 Per Month i sOfl nft DDIPCI Tandy 1000 TL2 Tandy 2500 XL 1 gf, S30 UH ESifeSH tllbt! ms-pos- rm ggibs 3995 'm 2995 ujiyii Reg-59'95 i jsjg szzio I i fesiSES 'T LCD Display Built-in Voice Mgnd "4 t.jr Torrepulse Sal Ends 61591 43-393 43-144 VZfX WwrffMj Hands-Free French-Style 2-Station Wired I Speakerphone Decorative Phone Intercom JJ- Letter-Quality PrinterlJ. -v qJ" joa Cut LaPt0Ppc Sav8lQ095 QJm 25 1 Save $999 260 Bf 0228 X) 4995 995 T50U Was 2499.00 in 1990 Catalog Reg. 59.95 Sf Reg.

14.95 I 1990 Catalog Low As $15 Per Month. Pearl-White Batterv PowprPd Low As $30 Per Month. Peari-wntie Metmlj Bauery powerea Tandy 1400 HD 25-3505 Up to 200 Words Minute 43-292 wpuiiaimg 43-370 1 ran 43-222 720K, vh" Drive 26-2612 (JS Cellular Car Phone I pi Portable Handheld Hurry In! HardwareSoftware Buys fe4 For Driving Safety Cellular Phone Many Other Bargains Available lgl Save $100 -JS Save s285 DMP-133. Save S230. Beg.

379 95. 25-2815 Now 149.95 ViaTBCa! IU K1591 r3C3 61591 DMP-300. Save S350. Reg. 649.00.

25-2818 Now 299.00 R.ajoooo f3 Reg. Separate '1 rvl Items 584.90 'i Hard Drives Low As $15 Per Month. Low As $15 Per Month. 20MB HD. Save S200.

Reg. 499 95. 25-1032 Now 299.95 Handsfree Includes Charging 20MB SO. Save S100. Reg.

399 95. 25-1045 Now 299.95 gps wtr Speakerphone fel Stand AC Adapter 40MB SO. Save S100. Reg. 499.95 25-1046 Now 399.95 CrwnW.

17-1076 I 4 17-1050602273-1653 40MB HD. Save S250. Reg. 699.95 25-4059 Now 449.95 3 40MB SCSI and Controller. Save S449.

Reg. 1048.95. -Mgy 25-41594161 Now 599.00 lj software l'ii I Cords, Plugs, Jacks for Instant Pages. Cut 56o. Reg.

44 95 25-1262 Now 19.95 jisLJI Phones, Answerers, Fax SL2 Bonus Pack. Save S124. Reg. 174 85. PJSJ 7, i 25-1331 Now 49.95 plT, We have more than 100 items First Publisher.

Cut 25M. Reg .79 95. 25-1279 Now 59.95 nj) Jr. tn held VOU connect 'most anv Memory Mate. Cut 20.

Reg 49 95 25-1247 39.95 Jlfzl rfrtirallJ anw outlet Hero's Quest 2. Cut 20. Reg 49 95 25-1389 Now 39.95 I I I to practically any Outlet, USA Today Sports Center. Cut 33. Reg S29 95 VJ 4 TJBtr.

plus tools and installation help- 25-1258 Now 19.95 yi ffLa ers, even "How-To" booklets. Light Speed. Cut 20. Reg 49 95. 25-1385 Now 39.95 1 is a special feature for students and teachers in Grades K-4.

Participating classes have been provided with materials to use with the Post-Gazette today and next Thursday. Teachers can obtain additional information about Newspaper Capers and other Newspaper in Education programs by calling educational services at 263-1551. Directions: Work with your teacher or on your own to finish these activities. 1 Find odd and even numbers in the Post-Gazette. Use worksheet No.

19. Cut and paste even numbers in the eight-of-clubs and odd numbers in the five-of-clubs. 2. You and a friend pick the same page of the Post-Gazette. Take a crayon and circle words that begin with "wh" or 'th" combinations.

See who can circle the most correct combinations in two minutes. 3. Gardens grow in May and June. Use the Post-Gazette to cut out products that are grown on a farm or in a garden. Paste them on worksheet No.

1 and color it. 4. Cut 10 numbers from the Post-Gazette and paste them anywhere in the boxes in column one or two of the chart on worksheet No. 1 7. After the numbers are in place, read the chart from left to right and fill in with the correct symbol: less than ().

greater than () or equal to). 5. Clip words or pictures of things that have the short sound that you hear in hat. Paste them on worksheet No. 11.

Color the picture. NEWSPAPER IN EDUCATION Most Major Credit Cards Welcome HHI SMci Vt'tttflirt n' wancc OfK tio'e'-ii-s! com? ti-51 servM Mb-UUb mnsto TOT LOP Mt -wr-ru wv wvok tttM SWlTCHABiE TOUCH-TONE PULSE ohones on Doti lone and mi st "f5 TVte'ot rtss ov O'-se Mtry-c voi, can use se-vces wng tones -iem ana ccnw.wcta spates fa n- M'tv or Mm We nai se.i -sues nf act'vai-on ana mnmim s--ce renmt-nent Raaci snar -non? ecep; p-oti tefl tv state $499itHout acmat'On U-10M $3 rt'l'ioni 0f vu'tJ CA bee stcre maniae- lot oetd.o PRICES APPLY AT PARTICIPATING STORES AND DEALERS.