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Fresno's Fox, CW affiliates likely to go up for auction
[November 25, 2008]

Fresno's Fox, CW affiliates likely to go up for auction

(Fresno Bee (CA) Via Acquire Media NewsEdge) Nov. 25--Ten of the 27 television stations owned by Harry J. Pappas are one step closer to the auction block. The United States Bankruptcy Court for the District of Columbia has signed off on the procedures to sell the assets owned by Pappas Telecasting Companies. Fresno television stations KMPH (Channel 26) and KFRE (Channel 59) are part of the 10 television stations listed as assets to be sold.

The only way any of the stations would not go on the auction block is if at least two qualified buyers submit bids by Dec. 4. If no buyers come forward, the auction would be held Dec. 11. Approval of any auction sales would be Dec. 16 at a U.S. bankruptcy court in Delaware.

The move by the court dated Nov. 14 comes just over a year after Pappas announced it was putting most of its stations up for sale.

Steven E. Alfieris, vice president and special counsel for Pappas Telecasting Companies said, "The process is intended to determine the best outcome for all constituencies, lenders, unsecured creditors and the equity holders. With the financial markets and the media marketplace in their current volatile state, the outcome simply remains to be determined."

He added there would be no appeal of the ruling.

Pappas Telecasting filed for Chapter 11 protection in May. The filing stated Pappas Telecasting owed more than $5.8 million to its top 20 creditors. The biggest sum was the $1.4 million debt to Fox Broadcasting. KMPH is a Fox affiliate.

Also in May, Pappas was forced into a Chapter 7 bankruptcy filing. Lenders Fortress Credit Opportunities, Ableco Finance LLC and Silver Oak Capital LLC said Pappas personally owed them $15 million.

Pappas and his wife, Stella, personally guaranteed $30 million of a $284 million loan that Pappas Telecasting secured in March 2006.

The bankruptcy filings were supposed to give the company time to come up with a reorganization plan. A trustee, E. Roger Williams, was named in August to oversee the operations and financial affairs of Pappas Telecasting. He filed a motion Oct. 27 to start the auction proceedings.

Pappas Broadcasting hired Moelis & Co. Holdings LLC, a financial advisory and investment management firm with offices in Los Angeles, Boston and New York, in December to advise on the sale of certain stations. The bankruptcy filing stated Moelis representatives had contacted more than 110 potential buyers.

Marc Berman, senior television writer for Mediaweek, a national publication that covers the television industry, doesn't expect buyers to be standing in line to bid on the television stations. And if there are any buyers, they will be looking for a great deal.

"Because of the way the economy is, it will be bargain-basement offers. I don't think people will be throwing money at television stations right now," Berman said.

He added that if the stations go for bargain-basement prices, it would not be surprising if the programming dramatically changed for Fox affiliate KMPH and CW Network affiliate KFRE. New owners might not want to be network affiliates. Berman expects that at least the Fox Network would look around the Fresno market for another home for its programing.

The reporter can be reached at [email protected] or (559) 441-6355.

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