The announcement of a complex ownership swap shook Seattle television yesterday and promised more viewer confusion this spring when CBS returns to KIRO-TV and UPN programming moves to KSTW-TV.
Two concurrent deals involve three companies, a station in St. Louis and $70 million cash.
Depending on the approval of the Federal Communications Commission, which is expected in a few months, there will be three ownership changes in Seattle, the nation's 12th-biggest TV market.
Sometime late this spring:
-- UPN affiliate KIRO, which carried CBS until 1995, will rejoin the CBS network and will be owned by Cox Communications of Atlanta, a major TV group owner.
-- KSTW will be the new UPN affiliate, owned by the Paramount Station Group of Los Angeles, a subsidiary of media conglomerate Viacom.
-- And top-rated KING, the NBC affiliate, will be owned by A.H. Belo of Dallas, KIRO's present owner.
Seattle's television tempest began about two years ago, when CBS moved from KIRO to KSTW and KIRO picked up then-new UPN.
The CBS switch was the result of national TV-industry jockeying and was confusing for Seattle viewers who had known KIRO as the CBS station for 36 years. KSTW had a tough time drawing the CBS audience KIRO once did.
Now that will be undone:
-- Belo will trade KIRO to Paramount for KMOV-TV (CBS) in St. Louis. No cash will change hands, which is a tax advantage. St. Louis is a much smaller market, but KMOV's cash flow is greater than KIRO's.
-- Giving up KIRO will clear the way for Belo's acquisition of KING-TV through a $1.5 billion purchase of Providence Journal, a Rhode Island media company that owns KING and NorthWest Cable News, among other television outlets in the Northwest and elsewhere. That deal was announced last September.
Federal law prohibits ownership of more than one broadcast TV station per market, which is why Belo had been seeking to unload the lower-rated KIRO.
-- Cox is in the process of acquiring KSTW from Gaylord Entertainment of Nashville for $160 million.
After that deal, Cox will give KSTW and $70 million in cash to Paramount in a trade for KIRO.
-- In addition to the Paramount Station Group, Viacom owns half of the United Paramount Network. So the company will move UPN programming from KIRO to its new acquisition, KSTW.
-- CBS programming will return to KIRO under Cox.
At KSTW, `they're just shocked'
The station swap will essentially quash the purchase of KSTW by Cox, announced Jan. 20.
Cox has been aggressively making plans to promote KSTW and had plans for capital improvements, including a new transmitter tower. The announcement yesterday that Cox would abandon KSTW for KIRO came out of the blue.
"They're just shocked," KSTW spokesman Dean Greve said of employees, "because you have one company that's taking over, and then to have that company change . . ."
For one thing, staffers wonder what Paramount's commitment will be to news. KMOV in St. Louis has had a strong news department - that was one factor that attracted Belo - but Paramount's station group is young, and its primary mission is to be a platform for UPN and Paramount Television shows.
"There are Paramount stations that do news and compete well," said KSTW news director Dan Acklen. "I would anticipate that they would want to do that here. As to how much and to what extent, we'll find out when they come and visit us."
Paramount executives could not be reached for comment.
One thing is almost certain: Freed of prime-time network programming during that hour, KSTW will return to a 10 o'clock newscast.
Uncertainty's over at KIRO
With the announcement of the pending deals, uncertainty ceases over the ownership of KIRO. Reaction there was generally positive, if not ecstatic.
"If we had to lose the Belo ownership, we couldn't have done better than to pick up Cox," said KIRO general manager Glenn Wright.
Belo and Cox are highly regarded in the television business, particularly in news. Both companies own major and minor newspapers.
If there is a downside for KIRO, it might be the loss of its strong 10 p.m. newscast to make way for CBS' prime-time programming, as well as loss of at least part of "7 Live," the increasingly popular local morning show that competes well opposite network fare, including "CBS This Morning."
"CBS This Morning" is designed to be used in fragments, and it's likely "7 Live" can co-exist with it when KIRO resumes airing CBS, said news director Ilene Engel.
Otherwise, CBS affiliation should boost KIRO's news ratings overall. "We've always felt very good about what we do," Engel said, "but we've not been able to compete in the (ratings) numbers head to head without (major-network) lead-ins."
Meanwhile, changes at the station are uncertain. "We have only been studying KIRO for 11 days," said Andy Fisher, executive vice president of television affiliates for Cox.
Key executives of Belo and Cox are longtime friends who say they look forward to a spirited competition between KIRO and KING.
"There is irony in that Belo helped restore the capacity of the very newsroom with which it will compete," said Fisher. "Ward Huey and I have known each other for decades."
Said Huey, Belo's broadcast-division president: "I have enormous regard for Cox. I've known their executives all my professional life. I think competing with them only raises the jump bar for all of us. I think the winner's the community."
Deal took less than two weeks
That close relationship is what made it possible to conceive and consummate the deal in less than two weeks, the executives said.
The swap of KIRO by Belo for Paramount's St. Louis station had long been rumored. The trade of KIRO for KSTW, however, is a new twist.
"I had no idea two weeks ago that what began as purchase of KSTW would end up as the purchase of KIRO," Fisher said.
As Belo and Paramount talked - it was just one of half a dozen prospective deals Belo had been considering - it became clear that a third party would be necessary to satisfy the needs and desires of both Belo and Paramount.
Inviting Cox to participate, Huey said, was a way to "divest KIRO in a very advantageous way from a financial standpoint and at the same time feel good about the new owners and operators of a television station we have invested in emotionally as well as financially over the last two years."
For Paramount, the second swap with cash clearly lowers the cost of entering the Seattle market.
The station swaps announced yesterday put the value of KIRO at about $230 million - the total of KSTW's $160 million sale price and the $70 million cash differential offered in the trade.
That's a big increase in two years. Belo bought KIRO from Bonneville International of Salt Lake City, a holding company of the Mormon Church, for $162 million. Then KIRO was about to lose its CBS affiliation. Now it's about to regain it. Those no doubt are factors in the appreciation.
Although the KIRO-KSTW deal clears up a lot of uncertainty about the future of the Seattle market - for viewers and advertisers - there remains one loose end.
WB affiliate KTZZ is still on the auction block. Owner Dudley Communications of Wausau, Wis., reportedly has been narrowing a field of potential buyers but will reassess the situation in light of the KIRO-KSTW deal.