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Providence Journal

By The Providence Journal, R.I.

Jan. 10--WJAR-TV, Channel 10, Rhode Island's first television station and still the local ratings leader, has been put up for sale by its network owner.

A spokeswoman for NBC Universal confirmed yesterday that the station is on the market, but declined to address any additional questions.

Officials at Channel 10 referred all inquiries about a sale to the network. Employees at the station's Cranston studios learned of the possible sale Sunday.

The trade publication Broadcasting & Cable reported that WJAR is one of four local affiliates that NBC has put up for sale in hopes of raising more than $600 million.

The others are WNCN-TV in Raleigh, N.C.; WCMH-TV in Columbus, Ohio; and WVTM-TV in Birmingham, Ala., according to Broadcasting & Cable.

It reported that the sales process has just begun, with NBC hiring investment banker UBS Warburg to shop the stations around to other station owners and private-equity groups.

NBC Universal is a division of General Electric that owns 29 local stations, 14 NBC affiliates and 15 others affiliated with Telemundo, the Spanish-language broadcast network.

John M. Higgins, business editor for Broadcasting & Cable, said in a phone interview yesterday that NBC is "pruning" its network-owned affiliates in an effort to realize greater efficiencies.

Higgins said TV stations are fetching high prices. "One of the great mysteries to me is why so many people are paying so much for TV stations," he said."

He estimated that Channel 10 could fetch more than $175 million, although he emphasized that as much as a year could pass before a new owner is in place.

The auction of the four NBC-owned station comes at a time of flux in the broadcasting industry.

Last year, Emmis Communications of Indianapolis sold 13 of its 16 TV stations as it decided to concentrate on radio.

The buyers included LIN TV Corp. of Providence, which agreed to pay $260 million for five Emmis stations -- in Alabama, Wisconsin, Florida, Indiana and New Mexico.

The purchase price amounted to about 14 times annual cash flow, according to a Legg Mason research report on the deal.

Jay Howell, general manager of Channel 12, which is owned by LIN TV, said that viewers noticing immediate changes after Channel 10 is sold is unlikely.

"Channel 10 is not a station that needs to be turned around; it's a strong, well-run station," Howell said. "It's not likely you're going to turn on the TV one day and suddenly see all new faces."

WJAR was Rhode Island's first radio station, going on the air in 1922. Then, in 1949, WJAR-TV became Rhode Island's first television station. The TV station was originally affiliated with the Outlet Department Store, in downtown Providence.

In 1980, the department store was sold and Outlet Communications, which had acquired additional stations, became strictly a broadcasting company.

In 1996, NBC acquired Outlet Communications -- which owned a station in Columbus, Ohio, and one in Raleigh-Durham, N.C., as well as Channel 10 -- in a deal valued at $396 million.

Rhode Island's third major network affiliate, Channel 6 (WLNE), is owned by Freedom Communications, which is owned in part by a locally based private equity firm, Providence Equity Partners.

By David McPherson and Andy Smith

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