NEW YORK -- NBC and Granite Broadcasting Corporation announced today that NBC has signed a definitive agreement to acquire the San Francisco / Oakland / San Jose market-based KNTV television station from Granite. KNTV, which is located in the nation's 5th largest local television market, will join the 13 other stations already owned and operated by NBC's Television Stations Division and the 11 Telemundo stations slated to join the NBC stations group when the Telemundo acquisition closes in 2002.

Under terms of the agreement, NBC will pay Granite $230 MM in cash. The acquisition, which is subject to customary regulatory approvals, is expected to close in the first half of 2002. KNTV will become the San Francisco NBC affiliate on January 1, 2002, following an affiliation agreement reached between NBC and Granite in February, 2000. Granite will operate the station under this affiliation agreement until the acquisition closes. NBC's strong primetime schedule and the upcoming Olympics will be aggressively promoted in the San Francisco market to help NBC viewers make the switch to KNTV on January 1. KNTV's strong cable channel positioning in the San Francisco market will further support viewer adoption of the new NBC affiliation in this highly cable-penetrated market.

"Following closely on the heels of our announcement to acquire the Telemundo network last month, this is yet another example of NBC's continued commitment to growing our core broadcast business," said Bob Wright, Vice Chairman of GE and Chairman and CEO of NBC. "Our Owned & Operated stations have demonstrated tremendous success across the country, and the opportunity to enter the San Francisco market made this an attractive and timely deal for us," Andrew Lack, President and COO of NBC added.

"This agreement recognizes the tremendous job Granite has done in building KNTV into a first class NBC affiliate and the significant value we have created for Granite shareholders by turning our initial cash investment of $45 million into cash of $230 million," said W. Don Cornwell, Granite Chairman and Chief Executive Officer. "Over the past two years, our KNTV team secured cable carriage with AT&T on Ch.3 throughout the entire Bay Area, expanded the station's reach by increasing the authorized power of its transmitter, and dramatically upgraded KNTV's local news coverage. We also assembled dynamic sales, marketing and promotion teams poised to compete for market leadership with the benefit of the strong NBC3 brand.

"We are especially appreciative of the terrific support we have received from the Bay Area advertising community, and the first quarter of 2002 is shaping up to be spectacular for Granite and KNTV," continued Cornwell. "All of us at Granite are proud of the great work our team has done at KNTV, and we look forward to launching NBC programming on January 1st."

"We have had a great partnership with Granite preparing KNTV for the impending affiliation switch and are confident that NBC programming like the Olympics will help the station reach new heights," said Jay Ireland, President of NBC Television Stations. "We're delighted to add KNTV to the NBC station group and look forward to growing a strong local presence in the San Francisco / Oakland / San Jose market."

The acquisitions of KNTV and Telemundo's San Francisco market station, KSTS, will give NBC a duopoly in the San Francisco / Oakland / San Jose market, which is also home to the seventh largest Hispanic community in the country. NBC intends to maximize the advantages of this duopoly in many ways, including cross promotion, cooperative news gathering and joint sales efforts to reach a diverse marketplace.

Proceeds from the sale of KNTV will be used by Granite to reduce its debt and increase working capital. The transaction releases Granite from the obligation to pay an average of $37MM annually under the existing San Francisco affiliation agreement, which will be terminated. The 4.5 MM warrants to purchase Granite stock issued to NBC under that affiliation will be cancelled. The other NBC affiliations for Granite stations in Fresno, California; Peoria, Illinois; and Duluth, Minnesota, which involve no payment obligations, will remain in effect.

KNTV has a distinguished 46-year history of serving Northern California. After signing on the air in 1955 as an independent and the first television station serving San Jose, KNTV's growth has paralleled that of the area it serves. Over the last 25 years, San Jose has exploded to become the 11th largest city in the country and the third largest in California behind Los Angeles and San Diego. As part of the San Francisco television market, KNTV serves as a dominant source for news and information for a dynamic, influential and diverse part of the country.

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