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                                 UNITED STATES

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549




                                   FORM 8-K




                                CURRENT REPORT




                    PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934


                                 JULY 16, 1997
                            -----------------------
                       (Date of earliest event reported)



                        SINCLAIR BROADCAST GROUP, INC.
            (Exact name of Registrant as specified in its charter)


        MARYLAND                    33-69482                   52-1494660
(State of incorporation)     (Commission File Number)        (IRS Employer
                                                          Identification Number)

             2000 W. 41st Street, Baltimore, Maryland   21211-1420
      -------------------------------------------------------------------


             (Address of principal executive offices)   (Zip code)


      Registrant's telephone number, including area code: (410) 467-5005




================================================================================

<PAGE>




Item 5. Other Events

     As previously  reported,  Sinclair  Broadcast  Group,  Inc. (the "Company")
entered into acquisition  agreements on July 16, 1997 (the "Heritage Acquisition
Agreements")   with  certain   subsidiaries   of  Heritage   Media   Corporation
("Heritage")  pursuant to which the Company  will  acquire the assets of, or the
right to program pursuant to local marketing agreements, six television stations
in three  markets  and the assets of 24 radio  stations  in seven  markets  (the
"Heritage Acquisition").  The Company is filing with this report on Form 8-K the
audited  financial  statements of Heritage Media Services,  Inc. -- Broadcasting
Segment  ("HMSI"),  which  includes all the assets to be acquired by the Company
pursuant to the Heritage Acquisition Agreements. The Company is also filing with
this report on Form 8-K pro forma financial  information for the Company showing
the effect of the Heritage Acquisition and certain other transactions  completed
by the Company since January 1, 1996 (the "1996 Acquisitions").


ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS


(A) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED

     The financial  statements required by this item are submitted in a separate
section of this report.


HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT


     INDEPENDENT AUDITORS' REPORT

     Consolidated Balance Sheet as of December 31, 1996

     Consolidated Statement of Operations for the Year Ended December 31, 1996

     Consolidated  Statement of Stockholder's Equity for the Year Ended December
31, 1996

     Consolidated Statement of Cash Flows for the Year Ended December 31, 1996

     Notes to Consolidated Financial Statements


(b) PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

     The following Pro Forma  Consolidated  Financial Data include the unaudited
pro  forma  consolidated  balance  sheet as of June 30,  1997  (the  "Pro  Forma
Consolidated Balance Sheet") and the unaudited pro forma consolidated  statement
of operations for the year ended December 31, 1996 and the six months ended June
30, 1997 (the "Pro Forma Consolidated  Statement of Operations").  The unaudited
Pro Forma Consolidated  Balance Sheet is adjusted to give effect to the issuance
of  $200,000,000  in principal  amount of the  Company's 9% Senior  Subordinated
Notes due 2007 (the "1997 Notes") issued July 2, 1997 (the "Debt Issuance"), and
the Heritage Acquisition,  as if they occurred on June 30, 1997 and assuming the
net proceeds of the Debt Issuance were used to repay certain amounts outstanding
under the revolving  credit facility  governed by an Awarded and Restated Credit
Agreement  dated as of May 20, 1997 with the Chase  Manhattan Bank, as agent (as
amended  from time to time,  the "Bank  Credit  Agreement")  with the  remainder
retained for general corporate  purposes.  The unaudited Pro Forma  Consolidated
Statement of Operations for the year ended December 31, 1996 is adjusted to give
effect to the 1996  Acquisitions,  the issuance of  $200,000,000  in liquidation
amount of the  Company's  115/8% High Yield Trust Offered  Preferred  Securities
(the  "HYTOPS")  issued on March  14,  1997 (the  "HYTOPS  Issuance"),  the Debt
Issuance and the Heritage  Acquisition,  as if each occurred at the beginning of
such  period and  assuming  the the net  proceeds of the Debt  Issuance  and the
HYTOPS  Issuance  were  used to repay  certain  amounts  outstanding  under  the
revolving credit  facility,  with the remainder  returned for general  corporate
purposes.  The unaudited Pro Forma Consolidated  Statement of Operations for the
six  months  ended  June 30,  1997 is  adjusted  to give  effect  to the  HYTOPS
Issuance,  the Debt  Issuance  under the Bank Credit  Agreement and the Heritage
Acquisition as if each occurred at the beginning of such period and assuming the
net  proceeds of the Debt  Issuance and the HYTOPS  Issuance  were used to repay
certain amounts  outstanding  under the revolving credit facility under the Bank
Credit Agreement,  with the remainder  returned for general corporate  purposes.
The pro forma  adjustments  are based upon  available  information  and  certain
assumptions that the Company believes are reasonable. The Pro Forma Consolidated
Financial  Data should be read in  conjunction  with the Company's  Consolidated
Financial  Statements as of and for the year ended December 31, 1996 and related
notes thereto, the Company's unaudited consolidated financial statements for the
six  months  ended June 30,  1997 and  related  notes  thereto,  the  historical
financial data of Flint T.V.,  Inc.,  the historical  financial data of Superior
Communications,  Inc.,  the  historical  financial  data of KSMO and  WSTR,  the
historical  financial data of River City  Broadcasting,  L.P. and the historical
financial data of Heritage Media Services,  Inc. -- Broadcasting Segment, all of
which  have  been  filed  with  the  Commission  herewith  or as part of (i) the
Company's  Annual  Report on Form 10-K for the year ended  December 31, 1996 (as
amended), together with the report of Arthur Andersen LLP, independent certified
public  accountants;  (ii) the Company's  Quarterly  Report on Form 10-Q for the
quarter ended June 30, 1997; or (iii) the Company's  Current Reports on Form 8-K
and Form 8-K/A filed May 10,  1996,  May 13, 1996,  May 17, 1996,  May 29, 1996,
August 30, 1996,  and September 5, 1996.  The  unaudited Pro Forma  Consolidated
Financial  Data do not  purport  to  represent  what the  Company's  results  of
operations  or  financial  position  would have been had any of the above events
occurred  on  the  dates  specified  or to  project  the  Company's  results  of
operations or financial position for or at any future period or date.

<PAGE>
                        SINCLAIR BROADCAST GROUP, INC.
                      PRO FORMA CONSOLIDATED BALANCE SHEET
                              AS OF JUNE 30, 1997
                            (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                                                       DEBT
                                                                                                                     ISSUANCE
                                                                CONSOLIDATED         DEBT            HERITAGE      AND HERITAGE
                                                                 HISTORICAL       ISSUANCE(A)     ACQUISITION(B)   ACQUISITION
                                                                -------------- ------------------ ---------------- -------------
                            ASSETS
<S>                                                             <C>            <C>                <C>              <C>
CURRENT ASSETS:
 Cash and cash equivalents ....................................  $    2,740     $     33,000 (c)                    $   35,740
 Accounts receivable, net of allowance for doubtful accounts        102,093                                            102,093
 Current portion of program contract costs   ..................      34,768                       $        926          35,694
 Prepaid expenses and other current assets   ..................       4,054                                              4,054
 Deferred barter costs  .......................................       4,267                              2,218           6,485
 Deferred tax asset  ..........................................       8,188                                              8,188
                                                                 ----------                                         ----------
   Total current assets .......................................     156,110           33,000             3,144         192,254
PROGRAM CONTRACT COSTS, less current portion ..................      30,778                                712          31,490
LOANS TO OFFICERS AND AFFILIATES ..............................      11,241                                             11,241
PROPERTY AND EQUIPMENT, net   .................................     156,681                             22,022         178,703
NON-COMPETE AND CONSULTING AGREEMENTS, net   ..................       2,250                                              2,250
OTHER ASSETS   ................................................      71,970            4,500 (d)                        76,470
ACQUIRED INTANGIBLE BROADCASTING ASSETS, net ..................   1,333,475                            545,969       1,879,444
                                                                 ----------                       ------------      ----------
   Total Assets   .............................................  $1,762,505     $     37,500      $    571,847      $2,371,852
                                                                 ==========     ============      ============      ==========
LIABILITIES AND
          STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Accounts payable .............................................  $    5,310                                         $    5,310
 Accrued liabilities ..........................................      39,023                                             39,023
 Current portion of long-term liabilities-
  Notes payable and commercial bank financing   ...............      65,500                                             65,500
  Capital leases payable   ....................................          11                                                 11
  Notes and capital leases payable to affiliates   ............       1,370                                              1,370
  Program contracts payable   .................................      49,766                       $      1,096          50,862
 Deferred barter revenues  ....................................       4,458                                              4,458
                                                                 ----------                                         ----------
   Total current liabilities  .................................     165,438                              1,096         166,534
LONG-TERM LIABILITIES:
  Notes payable and commercial bank financing   ...............   1,097,000     $     37,500 (e)       570,000 (f)   1,704,500
  Capital leases payable   ....................................          30                                                 30
  Notes and capital leases payable to affiliates   ............      11,872                                             11,872
  Program contracts payable   .................................      46,670                                751          47,421
  Other long-term liabilities .................................       4,960                                              4,960
                                                                 ----------                                         ----------
   Total liabilities ..........................................   1,325,970           37,500           571,847       1,935,317
                                                                 ----------     ------------      ------------      ----------
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES  ...............       3,897                                              3,897
                                                                 ----------                                         ----------
COMPANY OBLIGATED MANDATORILY REDEEMABLE SE-
 CURITY OF SUBSIDIARY TRUST HOLDING SOLELY KDSM
 SENIOR DEBENTURES   ..........................................     200,000                                            200,000
                                                                 ----------                                         ----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
  Series B Preferred Stock    .................................          11                                                 11
  Series D Convertible Exchangeable Preferred Stock   .........          --                                                 --
  Class A Common Stock  .......................................          71                                                 71
  Class B Common Stock  .......................................         277                                                277
  Additional paid-in capital  .................................     234,812                                            234,812
  Additional paid-in capital - deferred compensation  .........        (896)                                              (896)
  Additional paid-in capital - equity put options  ............      23,117                                             23,117
  Accumulated deficit   .......................................     (24,754)                                           (24,754)
                                                                 ----------                                         ----------
   Total stockholders' equity .................................     232,638                                            232,638
                                                                 ----------                                         ----------
   Total Liabilities and Stockholders' Equity   ...............  $1,762,505     $     37,500      $    571,847      $2,371,852
                                                                 ==========     ============      ============      ==========
</TABLE>
                                                   (Continued on following page)

                                       1


<PAGE>


                 NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET


(a)  To reflect the proceeds of the Debt Issuance  consummated  on July 2, 1997,
     net of $4,500 of  underwriting  discounts  and  commissions  and  estimated
     expenses and the application of the proceeds therefrom.

(b)  The  Heritage  Acquisition  column  reflects  the  assets  and  liabilities
     acquired in  connection  with the  $630,000  purchase of Heritage  less the
     $60,000  divestiture  of the Heritage  television  station KOKH in Oklahoma
     City,  Oklahoma,  which is required  pursuant to the  Heritage  Acquisition
     Agreements  and with respect to which the Company has entered into a letter
     of intent.  The Heritage  Acquisition  is subject to a number of conditions
     customary for  acquisitions  of  broadcasting  properties.  Total  acquired
     intangibles are calculated as follows:


<TABLE>
<CAPTION>
                                                                                      HERITAGE
                                                            HERITAGE      KOKH        ACQUISITION
                                                            ----------   ----------   ------------
<S>                                                         <C>          <C>          <C>
Purchase Price ..........................................                               $630,000
 Add:
   Liabilities acquired--
   Current portion of program contracts payable .........     $ 1,552    $  (456)          1,096
   Long-term portion of program contracts payable  ......         860       (109)            751
 Less:
   Assets acquired--
   Current portion of program contract costs ............       1,603       (677)            926
   Deferred barter costs   ..............................       2,496       (278)          2,218
   Program contract costs, less current portion .........       1,266       (554)            712
   Property and equipment  ..............................      27,524     (5,502)         22,022
   Sale of KOKH   .......................................                                 60,000
                                                                                        ---------
   Acquired intangibles .................................                               $545,969
                                                                                        =========
</TABLE>


(c)  To record the increase in cash and cash equivalents  resulting from the net
     proceeds of the Debt  Issuance  after giving effect to the repayment of the
     revolving credit facility under the Bank Credit Agreement as follows:


Offering proceeds .......................................... $ 200,000
Underwriting discounts, commissions and estimated expenses      (4,500)
Repayment of revolving credit facility under the Bank Credit
Agreement   ................................................  (162,500)
                                                             ----------
Pro forma adjustment ....................................... $  33,000
                                                             ==========


(d)  To record underwriting  discounts and commissions and estimated expenses of
     $4,500.

(e) To reflect the increase in  indebtedness  resulting  from the Debt  Issuance
    after giving effect to the repayment of the revolving  credit facility under
    the Bank Credit Agreement as follows:




<TABLE>
<S>                                                          <C>
Indebtedness incurred   ....................................  $  200,000
Repayment of revolving credit facility under the Bank Credit
Agreement   ................................................    (162,500)
                                                              ----------
Pro forma adjustment .......................................  $   37,500
                                                              ==========
</TABLE>



(f)  To reflect the incurrence of $570,000 of bank financing in connection  with
     the Heritage Acquisition.


                                       2

<PAGE>


                        SINCLAIR BROADCAST GROUP, INC.
                 PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                     FOR THE YEAR ENDED DECEMBER 31, 1996
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)



<TABLE>
<CAPTION>
                                                                                      SUPERIOR
                                                      CONSOLIDATED      FLINT      COMMUNICATIONS
                                                       HISTORICAL    TV, INC.(A)   GROUP, INC.(B)    KSMO(C)
                                                      -------------- ------------- ---------------- ----------
<S>                                                   <C>            <C>           <C>              <C>
REVENUES:
 Station broadcast revenues, net of agency commis-
 sions ..............................................  $  346,459       $1,012         $4,431       $ 7,694
 Revenues realized from station barter arrange-
 ments                                                     32,029                                     2,321
                                                       ----------                                   --------
  Total revenues ....................................     378,488        1,012          4,431        10,015
                                                       ----------       -------        ------       --------
OPERATING EXPENSES:
 Program and production   ...........................      66,652          101            539         1,550
 Selling, general and administrative  ...............      75,924          345          2,002         2,194
 Expenses realized from barter arrangements .........      25,189                                     2,276
 Amortization of program contract costs and net
 realizable value adjustments   .....................      47,797          125            736           601
 Amortization of deferred compensation   ............         739
 Depreciation and amortization of property and
 equipment    .......................................      11,711            4            373           374
 Amortization of acquired intangible broadcasting
 assets, non-compete and consulting agreements
 and other assets   .................................      58,530                         529
 Amortization of excess syndicated programming ......       3,043
                                                       ----------
  Total operating expenses   ........................     289,585          575          4,179         6,995
                                                       ----------       -------        ------       --------
  Broadcast operating income (loss)   ...............      88,903          437            252         3,020
                                                       ----------       -------        ------       --------
OTHER INCOME (EXPENSE):
 Interest and amortization of debt discount expense..     (84,314)                       (457)         (823)
 Interest income ....................................       3,136
 Subsidiary trust minority interest expense .........
 Other income (expense)   ...........................         342           19              4             7
                                                       ----------       -------        ------       --------
  Income (loss) before provision (benefit) for
  income taxes   ....................................       8,067          456           (201)        2,204
PROVISION (BENEFIT) FOR INCOME
 TAXES  .............................................       6,936
                                                       ----------
NET INCOME (LOSS)   .................................  $    1,131       $  456         $ (201)      $ 2,204
                                                       ==========       =======        ======       ========
NET INCOME (LOSS) AVAILABLE TO COM-
 MON STOCKHOLDERS ...................................  $    1,131
                                                       ==========
NET INCOME (LOSS) PER COMMON AND
 COMMON EQUIVALENT SHARE  ...........................  $     0.03
                                                       ==========
WEIGHTED AVERAGE COMMON AND COM-
 MON EQUIVALENT SHARES OUTSTANDING ..................      37,381
                                                       ==========

<PAGE>
<CAPTION>
                                                                         RIVER CITY(E)                         1996
                                                                  ----------------------------              ACQUISITION
                                                       WSTR(D)    RIVER CITY        WSYX       WYZZ(F)      ADJUSTMENTS
                                                      ----------- ------------ --------------- --------- ------------------
<S>                                                   <C>         <C>          <C>             <C>       <C>
REVENUES:
 Station broadcast revenues, net of agency commis-
 sions .............................................. $  7,488    $  86,869     $ (10,783)       $1,838
 Revenues realized from station barter arrange-
 ments ..............................................    1,715
                                                      ---------
  Total revenues ....................................    9,203       86,869       (10,783)        1,838
                                                      ---------   ----------    ----------      -------
OPERATING EXPENSES:
 Program and production   ...........................      961       10,001          (736)          214
 Selling, general and administrative  ...............    2,173       39,786        (3,950)          702  $      (3,577)(h)
 Expenses realized from barter arrangements .........    1,715
 Amortization of program contract costs and net
 realizable value adjustments   .....................    1,011        9,721          (458)          123
 Amortization of deferred compensation   ............                                                              194 (j)
 Depreciation and amortization of property and
 equipment    .......................................      284        6,294        (1,174)            6           (943)(k)
 Amortization of acquired intangible broadcasting
 assets, non-compete and consulting agreements
 and other assets   .................................       39       14,041        (3,599)            3          4,034 (m)
 Amortization of excess syndicated programming.......
  Total operating expenses   ........................    6,183       79,843        (9,917)        1,048           (292)
                                                      ---------   ----------    ----------      -------  -------------
  Broadcast operating income (loss)   ...............    3,020        7,026          (866)          790            292
                                                      ---------   ----------    ----------      -------  -------------
OTHER INCOME (EXPENSE):
 Interest and amortization of debt discount expense..   (1,127)     (12,352)                                   (17,409)(q)
 Interest income ....................................       15          195                                     (1,636)(u)
 Subsidiary trust minority interest expense .........
 Other income (expense)   ...........................                  (149)             (8)
                                                                  ----------    ----------
  Income (loss) before provision (benefit) for
  income taxes   ....................................    1,908       (5,280)         (874)          790        (18,753)
PROVISION (BENEFIT) FOR INCOME
 TAXES  .............................................                                                           (7,900)(w)
                                                                                                         -------------
NET INCOME (LOSS)   ................................. $  1,908    $  (5,280)    $    (874)       $  790  $     (10,853)
                                                      =========   ==========    ==========      =======  =============
NET INCOME (LOSS) AVAILABLE TO COM-
 MON STOCKHOLDERS ...................................
NET INCOME (LOSS) PER COMMON AND
 COMMON EQUIVALENT SHARE  ...........................
WEIGHTED AVERAGE COMMON AND COM-
 MON EQUIVALENT SHARES OUTSTANDING ..................

<PAGE>


<CAPTION>
                                                                                                 DEBT ISSUANCE,
                                                           HYTOPS               DEBT             HYTOPS ISSUANCE
                                                          ISSUANCE            ISSUANCE        AND 1996 ACQUISITIONS
                                                      ------------------ -------------------- ----------------------
<S>                                                   <C>                <C>                  <C>
REVENUES:
 Station broadcast revenues, net of agency commis-
 sions ..............................................                                              $   445,008
 Revenues realized from station barter arrange-
 ments ..............................................                                                   36,065
                                                                                                   -----------
  Total revenues ....................................                                                  481,073
                                                                                                   -----------
OPERATING EXPENSES:
 Program and production   ...........................                                                   79,282
 Selling, general and administrative  ...............                                                  115,599
 Expenses realized from barter arrangements .........                                                   29,180
 Amortization of program contract costs and net
 realizable value adjustments   .....................                                                   59,656
 Amortization of deferred compensation   ............                                                      933
 Depreciation and amortization of property and
 equipment    .......................................                                                   16,929
 Amortization of acquired intangible broadcasting
 assets, non-compete and consulting agreements
 and other assets   ................................. $         500 (n)  $          450 (o)             74,527
 Amortization of excess syndicated programming.......                                                    3,043
                                                                                                   -----------
  Total operating expenses   ........................           500                 450                379,149
                                                      -------------      -------------             -----------
  Broadcast operating income (loss)   ...............          (500)               (450)               101,924
                                                      -------------      -------------             -----------
OTHER INCOME (EXPENSE):
 Interest and amortization of debt discount expense..        11,820 (r)         (18,000) (s)          (122,662)
 Interest income ....................................                                                    1,710
 Subsidiary trust minority interest expense .........       (23,250)(v)                                (23,250)
 Other income (expense)   ...........................                                                      215
                                                                                                   -----------
  Income (loss) before provision (benefit) for
  income taxes   ....................................       (11,930)            (18,450)               (42,063)
PROVISION (BENEFIT) FOR INCOME
 TAXES  .............................................        (4,772)(w)          (7,380)(w)            (13,116)
                                                      -------------      -------------             -----------
NET INCOME (LOSS)   ................................. $      (7,158)     $      (11,070)           $   (28,947)
                                                      =============      =============             ===========
NET INCOME (LOSS) AVAILABLE TO COM-
 MON STOCKHOLDERS ...................................
NET INCOME (LOSS) PER COMMON AND
 COMMON EQUIVALENT SHARE  ...........................
WEIGHTED AVERAGE COMMON AND COM-
 MON EQUIVALENT SHARES OUTSTANDING ..................
</TABLE>



                          (Continued on following page)



                                       3

<PAGE>


                        SINCLAIR BROADCAST GROUP, INC.
                 PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                     FOR THE YEAR ENDED DECEMBER 31, 1996
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)




<TABLE>
<CAPTION>
                                                                                               HERITAGE(G)
                                                                     DEBT ISSUANCE,      -----------------------
                                                                    HYTOPS ISSUANCE
                                                                 AND 1996 ACQUISITIONS    HERITAGE      KOKH
                                                                 ----------------------- ------------ ----------
<S>                                                              <C>                     <C>          <C>
REVENUES:
 Station broadcast revenues, net of agency commissions    ......      $   445,008        $  95,302    $(7,953)
 Revenues realized from station barter arrangements ............           36,065            4,292       (178)
                                                                      -----------        ----------   --------
   Total revenues  .............................................          481,073           99,594     (8,131)
                                                                      -----------        ----------   --------
OPERATING EXPENSES:
 Program and production  .......................................           79,282           20,089     (1,871)
 Selling, general and administrative    ........................          115,599           31,916     (1,722)
 Expenses realized from barter arrangements   ..................           29,180            3,478        (70)
 Amortization of program contract costs and net realizable
  value adjustments   ..........................................           59,656            3,165     (1,208)
 Amortization of deferred compensation  ........................              933
 Depreciation and amortization of property and equipment   .               16,929            5,472     (1,022)
 Amortization of acquired intangible broadcasting assets, non-
  compete and consulting agreements and other assets   .........           74,527            8,460       (367)
 Amortization of excess syndicated programming   ...............            3,043
                                                                      -----------
   Total operating expenses    .................................          379,149           72,580     (6,260)
                                                                      -----------        ----------   --------
   Broadcast operating income (loss) ...........................          101,924           27,014     (1,871)
                                                                      -----------        ----------   --------
OTHER INCOME (EXPENSE):
 Interest and amortization of debt discount expense ............         (122,662)         (17,949)     1,025
 Gain on sale of station .......................................                             6,031
 Interest income   .............................................            1,710
 Subsidiary trust minority interest expense   ..................          (23,250)
 Other income (expense)  .......................................              215             (203)
                                                                      -----------        ----------
   Income (loss) before provision (benefit) for income taxes              (42,063)          14,893       (846)
PROVISION (BENEFIT) FOR INCOME
 TAXES    ......................................................          (13,116)           7,853       (466)
                                                                      -----------        ----------   --------
NET INCOME (LOSS)  .............................................      $   (28,947)       $   7,040    $  (380)
                                                                      ===========        ==========   ========
NET INCOME (LOSS) AVAILABLE TO COMMON
 STOCKHOLDERS   ................................................
NET INCOME (LOSS) PER COMMON AND COMMON
 EQUIVALENT SHARE  .............................................
WEIGHTED AVERAGE COMMON AND COMMON
 EQUIVALENT SHARES OUTSTANDING    ..............................



<CAPTION>
                                                                                        DEBT ISSUANCE,
                                                                      HERITAGE         HYTOPS ISSUANCE,
                                                                    ACQUISITION      1996 ACQUISITIONS AND
                                                                    ADJUSTMENTS      HERITAGE ACQUISITION
                                                                 ------------------- ----------------------
<S>                                                              <C>                 <C>
REVENUES:
 Station broadcast revenues, net of agency commissions    ......                        $    532,357
 Revenues realized from station barter arrangements ............                              40,179
                                                                                        ------------
   Total revenues  .............................................                             572,536
                                                                                        ------------
OPERATING EXPENSES:
 Program and production  .......................................                              97,500
 Selling, general and administrative    ........................        (1,808) (i)          143,985
 Expenses realized from barter arrangements   ..................                              32,588
 Amortization of program contract costs and net realizable
  value adjustments   ..........................................                              61,613
 Amortization of deferred compensation  ........................                                 933
 Depreciation and amortization of property and equipment   .              (900)(l)            20,479
 Amortization of acquired intangible broadcasting assets, non-
  compete and consulting agreements and other assets   .........         9,531 (p)            92,151
 Amortization of excess syndicated programming   ...............                               3,043
                                                                                        ------------
   Total operating expenses    .................................         6,823               452,292
                                                                 ------------           ------------
   Broadcast operating income (loss) ...........................        (6,823)              120,244
                                                                 ------------           ------------
OTHER INCOME (EXPENSE):
 Interest and amortization of debt discount expense ............       (23,621)(t)          (163,207)
 Gain on sale of station .......................................                               6,031
 Interest income   .............................................                               1,710
 Subsidiary trust minority interest expense   ..................                             (23,250)
 Other income (expense)  .......................................                                  12
                                                                                        ------------
   Income (loss) before provision (benefit) for income taxes ...       (30,444)              (58,460)
PROVISION (BENEFIT) FOR INCOME
 TAXES    ......................................................       (12,178)(w)           (17,907)
                                                                 ------------           ------------
NET INCOME (LOSS)  ............................................. $     (18,266)         $    (40,553)
                                                                 ============           ============
NET INCOME (LOSS) AVAILABLE TO COMMON
 STOCKHOLDERS   ................................................                        $    (40,553)
                                                                                        ============
NET INCOME (LOSS) PER COMMON AND COMMON
 EQUIVALENT SHARE  .............................................                        $      (1.04)
                                                                                        ============
WEIGHTED AVERAGE COMMON AND COMMON
 EQUIVALENT SHARES OUTSTANDING    ..............................                              39,058 (x)
                                                                                        ============
</TABLE>


                                       4

<PAGE>

                         SINCLAIR BROADCAST GROUP, INC.
                 PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                 CONSOLIDATED         HYTOPS              DEBT
<S>                                              <C>            <C>                 <C>
                                                  HISTORICAL      ISSUANCE           ISSUANCE
                                                  -------------   -----------------  -----------------
REVENUES:
 Station broadcast revenues, net of agency
  commissions  .................................  $  219,701
 Revenues realized from station barter ar-
  rangements ...................................      19,870
                                                  ----------
   Total revenues ..............................     239,571
                                                  ----------
OPERATING EXPENSES:
 Program and production ........................      46,760
 Selling, general and administrative   .........      51,634
 Expenses realized from station barter ar-
  rangements ...................................      16,303
 Amortization of program contract costs and
  net realizable value adjustments  ............      30,918
 Amortization of deferred compensation .........         233
 Depreciation and amortization of property
  and equipment   ..............................       8,340
 Amortization of acquired intangible broad-
  casting assets, non-compete and consult-
  ing agreements and other assets ..............      37,392    $          88 (aa)  $         225 (bb)
                                                  ----------    ------------        ------------
   Total operating expenses   ..................     191,580               88                 225
                                                  ----------    ------------        ------------
   Broadcast operating income (loss)   .........      47,991              (88)               (225)
                                                  ----------    ------------        ------------
OTHER INCOME (EXPENSE):
 Interest and amortization of debt discount
  expense   ....................................     (51,993)           2,894 (dd)         (9,000)(ee)
 Gain of sale of station   .....................
 Interest income  ..............................       1,040
 Subsidiary trust minority interest expense ....      (7,007)          (4,618)(gg)
 Other income  .................................          47
                                                  ----------
   Income (loss) before provision (bene-
   fit) for income taxes .......................      (9,922)          (1,812)             (9,225)
PROVISION (BENEFIT) FOR INCOME
 TAXES   .......................................      (4,100)            (725)(w)          (3,690)(w)
                                                  ----------    ------------        ------------
NET INCOME (LOSS) ..............................  $   (5,822)   $      (1,087)      $      (5,535)
                                                  ==========    ============        ============
NET LOSS AVAILABLE TO COMMON
 STOCKHOLDERS  .................................  $   (5,822)
                                                  ==========
NET LOSS PER COMMON AND COM-
 MON EQUIVALENT SHARE ..........................  $    (0.17)
                                                  ==========
WEIGHTED AVERAGE COMMON
 SHARES OUTSTANDING  ...........................      34,746
                                                  ==========

<PAGE>


<CAPTION>
                                                       HERITAGE(G)              HERITAGE              DEBT ISSUANCE,
                                                 ------------------------      ACQUISITION           HYTOPS ISSUANCE
                                                  HERITAGE       KOKH          ADJUSTMENTS       AND HERITAGE ACQUISITION
                                                 ---------   --------     ---------------------- -------------------------
<S>                                              <C>         <C>          <C>                    <C>
REVENUES:
 Station broadcast revenues, net of agency
  commissions  ................................. $ 46,451     $ (3,706)                                 $ 262,446
 Revenues realized from station barter ar-
  rangements ...................................    2,430         (125)                                    22,175
                                                 ---------    --------                                  ---------
   Total revenues ..............................   48,881       (3,831)                                   284,621
                                                 ---------    --------                                  ---------
OPERATING EXPENSES:
 Program and production ........................   15,313       (1,150)                                    60,923
 Selling, general and administrative   .........    9,447         (784)   $          (883) (y)             59,414
 Expenses realized from station barter ar-
  rangements ...................................    1,849          (62)                                    18,090
 Amortization of program contract costs and
  net realizable value adjustments  ............      824         (297)                                    31,445
 Amortization of deferred compensation .........                                                              233
 Depreciation and amortization of property
  and equipment   ..............................    2,819         (445)              (450) (z)             10,264
 Amortization of acquired intangible broad-
  casting assets, non-compete and consult-
  ing agreements and other assets ..............    4,174         (184)             4,964 (cc)             46,659
                                                 ---------    --------    -------------                 ---------
   Total operating expenses   ..................   34,426       (2,922)             3,631                 227,028
                                                 ---------    --------    -------------                 ---------
   Broadcast operating income (loss)   .........   14,455         (909)            (3,631)                 57,593
                                                 ---------    --------    -------------                 ---------
OTHER INCOME (EXPENSE):
 Interest and amortization of debt discount
  expense   ....................................   (9,979)         425            (10,768) (ff)           (78,421)
 Gain of sale of station   .....................    9,401                                                   9,401
 Interest income  ..............................                                                            1,040
 Subsidiary trust minority interest expense ....                                                          (11,625)
 Other income  .................................      (98)                                                    (51)
                                                 ---------                                              ---------
   Income (loss) before provision (bene-
   fit) for income taxes .......................   13,779         (484)           (14,399)                (22,063)
PROVISION (BENEFIT) FOR INCOME
 TAXES   .......................................    7,262         (369)            (5,760) (w)             (7,382)
                                                 ---------    --------    -------------                 ---------
NET INCOME (LOSS) .............................. $  6,517     $   (115)   $        (8,639)              $ (14,681)
                                                 =========    ========    =============                 =========
NET LOSS AVAILABLE TO COMMON
 STOCKHOLDERS  .................................                                                        $ (14,681)
                                                                                                        =========
NET LOSS PER COMMON AND COM-
 MON EQUIVALENT SHARE ..........................                                                        $   (0.42)
                                                                                                        =========
WEIGHTED AVERAGE COMMON
 SHARES OUTSTANDING  ...........................                                                           34,769
                                                                                                        =========
</TABLE>


                                       5

<PAGE>


                        SINCLAIR BROADCAST GROUP, INC.
            NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                            (DOLLARS IN THOUSANDS)

(a)  The Flint T.V., Inc. ("Flint-TV") column reflects the results of operations
     for WSMH for the period from January 1, 1996 to February 28, 1996, the date
     the Flint Acquisition was consummated.

(b)  The Superior  Communications  Group,  Inc.  column  reflects the results of
     operations for Superior for the period from January 1, 1996 to May 7, 1996,
     the date the Superior Acquisition was consummated.

(c)  The KSMO  column  reflects  the results of  operations  for the period from
     January 1, 1996 to June 30, 1996 as the transaction was consummated in July
     1996.

(d)  The WSTR  column  reflects  the results of  operations  for the period from
     January 1, 1996 to July 31,  1996 as the  transaction  was  consummated  in
     August 1996.

(e)  The River City column  reflects  the results of  operations  for River City
     (including KRRT, Inc.) for the period from January 1, 1996 to May 31, 1996,
     the date the  River  City  Acquisition  was  consummated.  The WSYX  column
     removes  the  results of WSYX from the results of River City for the period
     as the Company has not yet acquired WSYX.

(f)  The WYZZ  column  reflects  the results of  operations  for the period from
     January  1,  1996  to  June  30,  1996  as  the  purchase  transaction  was
     consummated in July 1996.

(g)  The Heritage  column reflects the results of operations for the period from
     January 1, 1996 to December  31, 1996 for the year ended  December 31, 1996
     Pro  Forma  Consolidated   Statement  of  Operations  and  the  results  of
     operations for the period from January 1, 1997 to June 30, 1997 for the six
     months ended June 30, 1997 Pro Forma Consolidated  Statement of Operations.
     The KOKH  column  removes  the results of KOKH from the results of Heritage
     for both periods to reflect the sale of KOKH, which is required pursuant to
     the Heritage  Acquisition  Agreements and with respect to which the Company
     has entered into a letter of intent.

(h)  To adjust River City operating expenses for non-recurring LMA payments made
     to KRRT,  Inc.  for KRRT,  Inc.  debt  service and to adjust River City and
     Superior  operating  expenses for employment  contracts and other corporate
     overhead expenses not assumed at the time of the 1996 Acquisitions.


(i)  To adjust Heritage operating expenses for corporate overhead expenses which
     the Company does not expect to incur upon its  consummation of the Heritage
     Acquisition on a going-forward basis.

(j)  To  record  compensation  expense  related  to  options  granted  under the
     Company's Long-Term Incentive Plan:


                                                            YEAR ENDED
                                                           DECEMBER 31,
                                                              1996
                                                          -------------
Compensation expense related to the Long-Term Incentive
Plan on a pro forma basis  ..............................    $  933
Less: Compensation expense recorded by the Company re-
lated to the Long-Term Incentive Plan                          (739)
                                                             ------
                                                             $  194
                                                             ======


(k)  To record  depreciation  expense  related to acquired  tangible  assets and
     eliminate depreciation expense recorded by Flint-TV,  Superior, KSMO, WSTR,
     River City and WYZZ from the period of January 1, 1996  through the date of
     acquisition.  Tangible assets are to be depreciated over lives ranging from
     5 to 29.5 years, calculated as follows:



<TABLE>
<CAPTION>
                                                                      YEAR ENDED
                                                                   DECEMBER 31, 1996
                                                           ---------------------------------
                                                           FLINT-TV   SUPERIOR      KSMO
                                                           ---------- ---------- -----------
<S>                                                        <C>        <C>        <C>
   Depreciation expense on acquired tangible assets    ...  $ 32       $  315     $   240
   Less: Depreciation expense recorded by Flint-TV,
    Superior, KSMO, WSTR, River City and WYZZ    .........      (4)      (373)       (374)
                                                            -----      ------     -------
   Pro forma adjustment  .................................  $ 28       $  (58)    $  (134)
                                                            =====      ======     =======

<CAPTION>
                                                             WSTR    RIVER CITY      WYZZ       TOTAL
                                                           --------- ------------ ----------- -----------
<S>                                                        <C>       <C>          <C>         <C>
   Depreciation expense on acquired tangible assets    ... $  507     $   3,965    $ 159      $  5,218
   Less: Depreciation expense recorded by Flint-TV,
    Superior, KSMO, WSTR, River City and WYZZ    .........   (284)       (5,120)        (6)     (6,161)
                                                           -------    ---------    ------     ---------
   Pro forma adjustment  ................................. $  223     $  (1,155)   $ 153      $   (943)
                                                           =======    =========    ======     =========
</TABLE>



(l)  To record  depreciation  expense  related to  acquired  tangible  assets of
     $3,550 and eliminate  depreciation  expense of $4,450 recorded by Heritage.
     Tangible  assets are to be  depreciated  over lives  ranging from 5 to 29.5
     years.

(m)  To record  amortization  expense related to acquired  intangible assets and
     deferred  financing costs and eliminate  amortization  expense  recorded by
     Flint-TV,  Superior,  KSMO,  WSTR,  River  City and WYZZ from the period of
     January 1, 1996 through date of  acquisition.  Intangible  assets are to be
     amortized over lives ranging from 1 to 40 years, calculated as follows:



<TABLE>
<CAPTION>
                                                                   YEAR ENDED
                                                                DECEMBER 31, 1996
                                                          -----------------------------
                                                          FLINT-TV   SUPERIOR    KSMO
                                                          ---------- ---------- -------
<S>                                                       <C>        <C>        <C>
   Amortization expense on acquired intangible assets       $ 167     $   827     $ 180
   Deferred financing costs   ...........................
   Less: Amortization expense recorded by Flint-TV,
    Superior, KSMO, WSTR, River City and WYZZ   .........      --        (529)       --
                                                            ------    -------    ------
   Pro forma adjustment    ..............................   $ 167     $   298     $ 180
                                                            ======    =======    ======

<CAPTION>
                                                           WSTR   RIVER CITY     WYZZ        TOTAL
                                                          ------- ------------ ---------- ------------
<S>                                                       <C>     <C>          <C>        <C>
   Amortization expense on acquired intangible assets     $ 285   $  12,060     $ 99      $  13,618
   Deferred financing costs   ...........................             1,429                   1,429
   Less: Amortization expense recorded by Flint-TV,
    Superior, KSMO, WSTR, River City and WYZZ   .........  (39)     (10,442)        (3)     (11,013)
                                                          -----   ----------    -----     ----------
   Pro forma adjustment    .............................. $ 246   $   3,047     $ 96      $   4,034
                                                          =====   ==========    =====     ==========
</TABLE>



                                       6

<PAGE>


(n)  To record  amortization  expense on other  assets that relate to the HYTOPS
     Issuance for one year ($6,000 over 12 years).

(o)  To record amortization expense on other assets for one year ($4,500 over 10
     years). See note (f) of notes to Pro Forma Consolidated Balance Sheet.

(p)  To record  amortization  expense related to acquired  intangible  assets of
     $17,624 and eliminate  amortization expense of $8,093 recorded by Heritage.
     Intangible  assets  are to be  amortized  over lives  ranging  from 1 to 40
     years.

(q)  To  record  interest  expense  for the  year  ended  December  31,  1996 on
     acquisition  financing  relating  to  Superior  of $59,850  (under the Bank
     Credit  Agreement  at 8.0% for four  months),  KSMO and WSTR of $10,425 and
     $7,881,  respectively (both under the Bank Credit Agreement at 8.0% for six
     months),  River City  (including  KRRT) of $868,300  (under the Bank Credit
     Agreement  at 8.0% for five  months)  and of $851  for  hedging  agreements
     related to the River  City  financing  and WYZZ of $20,194  (under the Bank
     Credit  Agreement at 8.0% for six months) and  eliminate  interest  expense
     recorded. No interest expense has been recorded for Flint-TV as it has been
     assumed  that the  proceeds  from  the 1995  Notes  were  used to  purchase
     Flint-TV.



<TABLE>
<CAPTION>
                                                                                      YEAR ENDED
                                                                                   DECEMBER 31, 1996
                                                       -------------------------------------------------------------------------
                                                        SUPERIOR     KSMO       WSTR     RIVER CITY      WYZZ         TOTAL
                                                       ----------- --------- ----------- ------------ ----------- --------------
<S>                                                    <C>         <C>       <C>         <C>          <C>         <C>
   Interest expense adjustment as noted above   ...... $ (1,596)    $  (417)  $  (315)    $ (29,032)   $  (808)    $  (32,168)
   Less: Interest expense recorded by Superior, KSMO,
    WSTR, River City and WYZZ ........................      457         823     1,127        12,352         --         14,759
                                                       ---------    -------   -------     ---------    -------     ----------
   Pro forma adjustment    ........................... $ (1,139)    $   406   $   812     $ (16,680)   $  (808)    $  (17,409)
                                                       =========    =======   =======     =========    =======     ==========
</TABLE>


(r)  To  record  the  net  interest  expense   reduction  for  1996  related  to
     application  of the HYTOPS  Issuance  proceeds to the  outstanding  balance
     under the  revolving  credit  facility  offset by an increase in commitment
     fees for the available but unused portion of the revolving  credit facility
     for the year ended December 31, 1996.



<TABLE>
<S>                                                                                       <C>
     Interest on adjusted borrowing on the revolving credit facility ..................    $ 12,600
     Commitment fee on available but unused borrowings of $250,000 of revolving credit
      facility at 1/2 of 1% for 12 months .............................................      (1,250)
     Commitment fee on available borrowings recorded by the Company  ..................         470
                                                                                           --------
     Pro forma adjustment  ............................................................    $ 11,820
                                                                                           ========
</TABLE>



(s)  To record interest expense on the 1997 Notes for one year ($200,000 at 9%).

(t)  To record interest expense on acquisition  financing of $570,000 (under the
     Bank Credit  Agreement at 71/4%),  net of $780 of  commitment  fees for the
     available  but  unused  portion  of  the  revolving  credit  facility,  and
     eliminated interest expense of $16,924 recorded by Heritage.

(u)  To  eliminate  interest  income for the year  ended  December  31,  1996 on
     proceeds  from the sale of the 1995  Notes due to  assumed  utilization  of
     excess cash for the  following  acquisitions:  Flint-TV,  KSMO and WSTR and
     WYZZ of $34,400  (with a commercial  bank at 5.7% for two months),  $10,425
     and $7,881 (both with a commercial bank at 5.7% for six months) and $20,194
     (with a commercial bank at 5.7% for six months).



<TABLE>
<CAPTION>
                                                                                  YEAR ENDED
                                                                               DECEMBER 31, 1996
                                                      -------------------------------------------------------------------
                                                      FLINT-TV     KSMO      WSTR    RIVER CITY     WYZZ       TOTAL
                                                      ---------- --------- --------- ------------ --------- -------------
<S>                                                   <C>        <C>       <C>       <C>          <C>       <C>
   Interest income adjustment as noted above   ......  $  (327)  $ (297)   $ (226)     $    --    $ (576)    $  (1,426)
   Less: Interest income recorded by Flint-TV, KSMO,
    WSTR, River City and WYZZ   .....................       --       --       (15)        (195)       --          (210)
                                                       -------   -------   -------     -------    -------    ---------
   Pro forma adjustment   ...........................  $  (327)  $ (297)   $ (241)     $  (195)   $ (576)    $  (1,636)
                                                       =======   =======   =======     =======    =======    =========
</TABLE>



(v)  To record  subsidiary  trust minority  interest  expense for the year ended
     December 31, 1996 ($200,000 aggregate liquidation value of HYTOPS).

(w)  To record tax provision (benefit) at the applicable statutory tax rates.

(x)  Weighted  average shares  outstanding on a pro forma basis assumes that the
     1,150,000  shares of Series B Preferred  Stock were  converted to 4,181,818
     shares of Class A Common Stock and the  Company's  Incentive  Stock Options
     and Long-Term  Incentive Plan Options were  outstanding as of the beginning
     of the period.

(y)  To adjust Heritage operating expenses for corporate overhead expenses which
     the Company does not expect to incur upon its  consummation of the Heritage
     Acquisition on a going-forward basis.

(z)  To record  depreciation  expenses  related to acquired  tangible  assets of
     $1,775 and eliminate  depreciation  expense of $2,225 recorded by Heritage.
     Tangible  assets are to be  depreciated  over lives  ranging from 5 to 29.5
     years.



                                       7

<PAGE>


(aa) To record  amortization  expense on other  assets  that  resulted  from the
     HYTOPS Issuance for six months ($6,000 over 12 years).


     Amortization expense on other assets  ...............    $  250
     Amortization expense recorded by the Company   ......      (162)
                                                              ------
     Pro forma adjustment   ..............................    $   88
                                                              ======


(bb) To record amortization  expense on other assets for six months ($4,500 over
     10 years). See note (f) of notes to Pro Forma Consolidated Balance Sheet.

(cc) To record  amortization  expense related to acquired  intangible  assets of
     $8,954 and eliminate  amortization  expense of $3,990 recorded by Heritage.
     Intangible  assets  are to be  amortized  over lives  ranging  from 1 to 40
     years.

(dd) To  record  the  net  interest  expense   reduction  for  1997  related  to
     application  of the HYTOPS  Issuance  proceeds to the  outstanding  balance
     under the  revolving  credit  facility  offset by an increase in commitment
     fees for the available but unused portion of the revolving  credit facility
     for the quarter ended June 30, 1997.


<TABLE>
<S>                                                                                       <C>
     Interest on adjusted borrowing on the revolving credit facility    ...............    $3,235
     Commitment fee on available but unused borrowings of $250,000 of revolving credit
      facility at 1/2 of 1% for six months   ..........................................      (625)
     Commitment fee on available borrowings recorded by the Company  ..................       284
                                                                                           ------
     Pro forma adjustment  ............................................................    $2,894
                                                                                           ======
</TABLE>



(ee) To record  interest  expense on the 1997 Notes for six months  ($200,000 at
     9%).

(ff) To record interest expense on acquisition  financing of $570,000 (under the
     Bank Credit  Agreement at 71/4%),  net of $341 of  commitment  fees for the
     available  but  unused  portion  of  the  revolving  credit  facility,  and
     eliminate interest expense of $9,554 recorded by Heritage.

(gg) To record  subsidiary trust minority interest expense for the quarter ended
     June 30, 1997 ($200,000 aggregate liquidation value HYTOPS).



<TABLE>
<S>                                                                                         <C>
     Subsidiary trust minority interest expense for six months   ........................    $ (11,625)
     Subsidiary trust minority interest expense made by the Company during the quarter   .       7,007
                                                                                             ---------
     Pro forma adjustment ...............................................................    $  (4,618)
                                                                                             =========
</TABLE>


                                       8

<PAGE>
                         HERITAGE MEDIA SERVICES, INC.


                       CONSOLIDATED FINANCIAL STATEMENTS
                         YEAR ENDED DECEMBER 31, 1996


                                   CONTENTS

<TABLE>
<CAPTION>
                                                                                          PAGE
                                                                                          -----
<S>                                                                                       <C>
Report of Independent Public Accountants  .............................................   F-1
Consolidated Financial Statements
 Consolidated Balance Sheet   .........................................................   F-2
 Consolidated Statement of Operations  ................................................   F-3
 Consolidated Statement of Stockholders' Equity .......................................   F-4
 Consolidated Statement of Cash Flows  ................................................   F-5
 Notes to Consolidated Financial Statements  ..........................................   F-6
Unaudited Financial Statements
 Unaudited Consolidated Balance Sheets as of December 31, 1996 and June 30, 1997 ......   F-13
 Unaudited Consolidated Statements of Operations for the Six Months Ended June 30, 1996
   and 1997 ...........................................................................   F-14
 Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30,
   1996 and 1997  .....................................................................   F-15
 Notes to Financial Statements   ......................................................   F-16
</TABLE>



                                      F-1

<PAGE>





                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To the Stockholders of
Sinclair Broadcast Group, Inc. and Subsidiaries:


     We have audited the  accompanying  consolidated  balance  sheet of Heritage
Media Services,  Inc. --  Broadcasting  Segment as of December 31, 1996, and the
related  consolidated  statements of operations,  stockholder's  equity and cash
flows for the year then ended. These financial statements are the responsibility
of the  Company's  management.  Our  responsibility  is to express an opinion on
these financial statements based on our audit.

     We conducted  our audit in  accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

     In our opinion,  the consolidated  financial  statements  referred to above
present fairly,  in all material  respects,  the financial  position of Heritage
Media Services,  Inc. -- Broadcasting  Segment, as of December 31, 1996, and the
results  of its  operations  and its cash  flows  for the year  then  ended,  in
conformity with generally accepted accounting principles.

                                                  ARTHUR ANDERSEN LLP



Baltimore, Maryland,
July 30, 1997

                                      F-2

<PAGE>





             HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT
                          CONSOLIDATED BALANCE SHEET
                            AS OF DECEMBER 31, 1996
                                (IN THOUSANDS)




<TABLE>
<S>                                                                                 <C>
ASSETS
CURRENT ASSETS
 Cash and cash equivalents    ...................................................    $   2,151
 Accounts receivable, net of allowance for doubtful accounts of $1,348  .........       20,036
 Current portion of program contract costs   ....................................        1,006
 Prepaid expenses and other current assets   ....................................          138
 Deferred barter costs  .........................................................        1,911
 Deferred tax asset  ............................................................          215
                                                                                     ---------
 Total current assets   .........................................................       25,457
PROGRAM CONTRACT COSTS, less current portion    .................................        1,867
PROPERTY AND EQUIPMENT, net   ...................................................       30,005
ACQUIRED INTANGIBLE BROADCASTING ASSETS, net    .................................      163,626
OTHER ASSETS   ..................................................................          821
                                                                                     ---------
 Total Assets  ..................................................................    $ 221,776
                                                                                     =========
                               LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Accounts payable    ............................................................    $     148
 Accrued liabilities    .........................................................        5,251
 Deferred revenues   ............................................................          428
 Deferred barter revenues  ......................................................        1,746
 Current portion of program contracts payable   .................................        2,079
                                                                                     ---------
   Total current liabilities  ...................................................        9,652
PROGRAM CONTRACTS PAYABLE  ......................................................        1,534
DUE TO AFFILIATE  ...............................................................      178,393
DEFERRED TAX LIABILITY  .........................................................          563
OTHER LONG-TERM LIABILITIES   ...................................................          152
                                                                                     ---------
   Total Liabilities    .........................................................      190,294
                                                                                     ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
 Common stock, $1.00 par value, 3,576,000 shares authorized and 2,591,586 shares
   issued and outstanding  ......................................................        2,592
 Common stock, no par value, 300 shares authorized and 200 shares issued and out-
   standing                                                                                 --
 Additional paid-in capital   ...................................................       66,174
 Accumulated deficit    .........................................................      (37,284)
                                                                                     ---------
   Total Stockholders' Equity    ................................................       31,482
                                                                                     ---------
   Total Liabilities and Stockholders' Equity   .................................    $ 221,776
                                                                                     =========
</TABLE>


The accompanying notes are an integral part of this consolidated balance sheet.


                                      F-3

<PAGE>





             HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT
                     CONSOLIDATED STATEMENT OF OPERATIONS
                     FOR THE YEAR ENDED DECEMBER 31, 1996
                                (IN THOUSANDS)



<TABLE>
<S>                                                                                <C>
REVENUES:
 Station broadcast revenues, net of agency commissions of $16,727   ............    $  95,302
 Revenues realized from station barter arrangements  ...........................        4,292
                                                                                    ---------
   Total revenue    ............................................................       99,594
                                                                                    ---------
OPERATING EXPENSES:
 Programming and production  ...................................................       20,089
 Selling, general and administrative  ..........................................       31,916
 Expenses realized from station barter arrangements  ...........................        3,478
 Amortization of program contract costs and net realizable value adjustments            3,165
 Depreciation and amortization of property and equipment   .....................        5,472
 Amortization of acquired intangible broadcasting assets   .....................        8,460
                                                                                    ---------
   Total operating expenses  ...................................................       72,580
                                                                                    ---------
   Broadcast operating income   ................................................       27,014
                                                                                    ---------
OTHER INCOME (EXPENSE):
 Interest expense   ............................................................      (17,949)
 Gain on sale of assets   ......................................................        6,031
 Other expense   ...............................................................         (203)
                                                                                    ---------
   Income before income tax provision    .......................................       14,893
INCOME TAX PROVISION   .........................................................       (7,853)
                                                                                    ---------
 Net income   ..................................................................    $   7,040
                                                                                    =========
</TABLE>

  The accompanying notes are an integral part of this consolidated statement.

                                      F-4

<PAGE>





             HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT
                CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
                     FOR THE YEAR ENDED DECEMBER 31, 1996
                                (IN THOUSANDS)





<TABLE>
<CAPTION>
                                            COMMON STOCK       ADDITIONAL
                                         -------------------   PAID-IN       ACCUMULATED     STOCKHOLDER'S
                                          SHARES     AMOUNT    CAPITAL        DEFICIT          EQUITY
                                         --------   --------   -----------   -------------   --------------
<S>                                      <C>        <C>        <C>           <C>             <C>
BALANCE
 December 31, 1995  ..................     2,592      $2,592     $14,368      $ (13,804)       $   3,156
 Parent capital contributions   ......        --          --      43,024             --           43,024
 Parent non-cash contribution   ......        --          --       8,782             --            8,782
 Dividends to parent   ...............        --          --          --        (30,520)         (30,520)
 Net income   ........................        --          --          --          7,040            7,040
                                          ------     -------     --------     ---------        ---------
BALANCE,
 December 31, 1996  ..................     2,592      $2,592     $66,174      $ (37,284)       $  31,482
                                          ======     =======     ========     =========        =========
</TABLE>

  The accompanying notes are an integral part of this consolidated statement.

                                      F-5

<PAGE>





             HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT

                     CONSOLIDATED STATEMENT OF CASH FLOWS
                     FOR THE YEAR ENDED DECEMBER 31, 1996
                                (IN THOUSANDS)




<TABLE>
<S>                                                                                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income  .....................................................................   $  7,040
                                                                                     ---------
 Adjustments to reconcile net income to net cash flows from operating activities:
   Depreciation and amortization of property and equipment   .....................      5,472
   Amortization:
    Acquired intangible broadcasting assets   ....................................      8,460
    Program contract costs and net realizable adjustments ........................      3,165
    Deferred finance costs  ......................................................        316
   Gain on sale of assets   ......................................................     (6,031)
   Amortization of deferred compensation   .......................................        135
 Changes in assets and liabilities, net of effects of acquisitions:   ............
   Increase in accounts receivable, net    .......................................     (1,681)
   Increase in other assets    ...................................................       (147)
   Decrease in prepaid expenses   ................................................        810
   Increase in deferred tax asset    .............................................        (77)
   Decrease in accounts payable and accrued liabilities   ........................     (3,486)
   Net effect of change in deferred barter revenues and deferred barter costs  ...        (53)
   Increase in deferred revenues  ................................................        151
   Decrease in deferred tax liability   ..........................................        (24)
   Decrease in other long-term liabilities    ....................................        (44)
 Payments on program contracts payable  ..........................................     (2,565)
                                                                                     ---------
      Net cash flows from operating activities   .................................     11,441
                                                                                     ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Acquisition of property and equipment  ..........................................     (6,938)
 Proceeds from sale of assets  ...................................................     13,759
 Payments for acquisitions  ......................................................     (9,384)
                                                                                     ---------
      Net cash flows from investing activities   .................................     (2,563)
                                                                                     ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Dividends to parent  ............................................................    (30,520)
 Decrease in due to affiliate  ...................................................    (21,030)
 Capital contributions made by parent   ..........................................     43,024
                                                                                     ---------
      Net cash flows from financing activities   .................................     (8,526)
                                                                                     ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS  .......................................        352
CASH AND CASH EQUIVALENTS, beginning of period   .................................      1,799
                                                                                     ---------
CASH AND CASH EQUIVALENTS, end of period   .......................................   $  2,151
                                                                                     =========
SUPPLEMENTAL DISCLOSURE:
 Program rights acquired    ......................................................   $  3,674
                                                                                     =========
</TABLE>


  The accompanying notes are an integral part of this consolidated statement.


                                      F-6

<PAGE>





              HERITAGE MEDIA SERVICES, INC. BROADCASTING SEGMENT

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               DECEMBER 31, 1996


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:


Basis of Presentation


     Heritage Media Services,  Inc. ("HMSI") operates in two segments  Marketing
Services  and  Broadcasting.  The  parent  company  of  HMSI is  Heritage  Media
Corporation ("HMC"). The accompanying  consolidated financial statements include
the accounts of the  television  and radio  operations,  which are  collectively
referred  to  hereafter  as "the  Company,  the  Companies  or the  Broadcasting
Segment." The Company owns and operates television and radio stations throughout
the United  States.  Also included in the  accompanying  consolidated  financial
statements  are the results of  operations  of WFGX-TV  Channel 35 in Ft. Walton
Beach, Florida, pursuant to a local marketing agreement (LMA). 


Disclosure of Certain Significant Risks and Uncertainties

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

     In the opinion of management, credit risk with respect to trade receivables
is limited due to the large number of  diversified  customers and the geographic
diversification  of the Company's  customer base. The Company  performs  ongoing
credit  evaluations  of its customers and believes that adequate  allowances for
any  uncollectable  trade  receivables are maintained.  At December 31, 1996, no
receivable  from  any  customer  exceeded  5% of  stockholder's  equity,  and no
customer accounted for more than 10% of net revenues in 1996.


Acquired Intangible Broadcasting Assets


     Acquired intangible broadcasting assets are being amortized over periods of
4 to 40 years.  These amounts result from the acquisition of certain  television
and radio  station  license  and  nonlicense  assets  (see Note 9). The  Company
monitors  the  individual  financial  performance  of each of the  stations  and
continually  evaluates the  realizability  of intangible and tangible assets and
the  existence of any  impairment to its  recoverability  based on the projected
undiscounted cash flows of the respective stations.


     Intangible  assets,  at cost,  as of  December  31,  1996,  consist  of the
following (in thousands):





<TABLE>
<CAPTION>
                                                                    AMORTIZATION
                                                                       PERIOD          1996
                                                                    ---------------   ---------
<S>                                                                 <C>               <C>
   Goodwill, net of accumulated amortization of $48,077 .........       40 years      $135,925
   FCC licenses, net of accumulated amortization of $2,612 ......   14 - 25 years       26,754
   Other, net of accumulated amortization of $635 ...............   4 - 25 years           947
                                                                                      ---------
                                                                                      $163,626
                                                                                      =========
</TABLE>


                                      F-7

<PAGE>





              HERITAGE MEDIA SERVICES, INC. BROADCASTING SEGMENT

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED )

Property and Equipment

     Property and  equipment are stated at cost less  accumulated  depreciation.
Depreciation is recorded on the  straight-line  basis over the estimated  useful
lives of the assets. Property and equipment at December 31, 1996, are summarized
as follows (in thousands):





<TABLE>
<CAPTION>
                                             USEFUL LIFE         1996
                                             ---------------   ------------
<S>                                          <C>               <C>
   Land  .................................   --                 $   2,685
   Broadcasting equipment  ...............    5 - 25 years         41,268
   Buildings and improvements    .........   12 - 30 years          7,369
   Other equipment   .....................    4 -  8 years          9,904
                                                                ---------
                                                                   61,226
   Less: Accumulated depreciation   ......                        (31,221)
                                                                ---------
                                                                $  30,005
                                                                =========
</TABLE>

Programming

     The Company has agreements with  distributors  for the rights to television
programming  over contract  periods which generally run from one to seven years.
Contract payments are made in installments over terms that are generally shorter
than the contract period.  Each contract is recorded as an asset and a liability
when the  license  period  begins  and the  program is  available  for its first
showing.  The  portion  of the  program  contracts  payable  within  one year is
reflected  as a  current  liability  in the  accompanying  consolidated  balance
sheets.


     The  rights  to  program   materials  are  reflected  in  the  accompanying
consolidated  balance  sheet at the lower of  unamortized  cost or estimated net
realizable  value.  Estimated net realizable  values are based upon management's
expectation  of  future  advertising  revenues  net of sales  commissions  to be
generated by the program  material.  Amortization  of program  contract costs is
charged to operations by the  straight-line  method over the contract  period or
based on usage,  whichever  yields the greater  amortization  for each  program.
Program  contract  costs,  estimated  by  management  to  be  amortized  in  the
succeeding year, are classified as current assets.  Payments of program contract
liabilities  are  typically  paid on a scheduled  basis and are not  affected by
adjustments for amortization or estimated net realizable value.


Barter Transactions


     Certain program  contracts provide for the exchange of advertising air time
in lieu of cash payments for the rights to such programming. These contracts are
recorded  as  the  programs  are  aired  at  the  estimated  fair  value  of the
advertising  air  time  given  in  exchange  for  the  program  rights.  Network
programming is excluded from these calculations.


     The Company  broadcasts  certain  customers'  advertising  in exchange  for
equipment,  merchandise and services. The estimated fair value of the equipment,
merchandise  or services  received is recorded as deferred  barter costs and the
corresponding obligation to broadcast advertising is recorded as deferred barter
revenues.  The deferred  barter costs are  expensed or  capitalized  as they are
used,  consumed or received.  Deferred  barter  revenues are  recognized  as the
related advertising is aired.


Other Assets


     Debt issuance  costs are amortized to interest  expense using the effective
interest method over the period of the related debt agreement.


                                      F-8

<PAGE>





              HERITAGE MEDIA SERVICES, INC. BROADCASTING SEGMENT

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED )

Revenues

     Broadcast revenues are derived primarily from local,  regional and national
advertising and network  compensation.  Advertising revenues are recognized upon
the airing of  commercials,  while network  revenues are  recognized  monthly as
earned.  Revenues are presented  net of  advertising  agency and national  sales
representatives' commissions.


Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of

     The Company  adopted the  provisions of SFAS No. 121,  "Accounting  for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of " on
January 1, 1996.  This  statement  requires that  long-lived  assets and certain
identifiable  intangibles be reviewed for impairment  whenever events or changes
in  circumstances  indicate  that the  carrying  amount  of an asset  may not be
recoverable.  Recoverability  of  assets  to be held and used is  measured  by a
comparison of the carrying  amount of an asset to future net cash flows expected
to be generated by the asset. If such assets are considered to be impaired,  the
impairment  to be  recognized  is measured  by the amount by which the  carrying
amount of the assets exceed the fair value of the assets.  Assets to be disposed
of are reported at the lower of the carrying  amount of fair value less costs to
sell. Initial adoption of this statement,  as of January 1, 1996, did not have a
material impact on the Company's financial position or results of operations.


Local Marketing Agreements

     The  Company  generally  enters into LMA's and  similar  arrangements  with
stations  located in markets in which the Company  already  owns and  operates a
station,  and in connection with acquisitions,  pending  regulatory  approval of
transfer of license  assets.  Under the terms of these  agreements,  the Company
makes  specified  periodic  payments to the  owner-operator  in exchange for the
grant to the Company of the right to program and sell advertising on a specified
portion of the  station's  inventory of  broadcast  time.  Nevertheless,  as the
holder  of  the  FCC  license,  the  owner-operator  retains  full  control  and
responsibility  for the  operation  of the station,  including  control over all
programming broadcast on the station.


2. ACCRUED EXPENSES:

     Accrued  expenses  consist of the  following  at  December  31,  1996,  (in
thousands):





<TABLE>
<CAPTION>
                                                   1996
                                                   -------
<S>                                                <C>
          Commissions   ........................   $1,449
          Payroll and employee benefits   ......      960
          Other   ..............................    2,842
                                                   -------
                                                   $5,251
                                                   =======
</TABLE>


3. DUE TO AFFILIATE:


     The Company has an arrangement  with HMSI whereby HMSI will provide certain
management  and other  services to the Company.  The services  provided  include
consultation  and direct  management  assistance  with respect to operations and
strategic planning.  The Broadcasting  Segment was allocated  approximately $2.0
million of corporate overhead expenses for these services.

     In order to fund  acquisitions and provide  operating  funds,  HMSI entered
into a Bank Credit  Agreement.  The debt used to finance  acquisitions  and fund
daily  operations of the  Broadcasting  Segment was recorded by the Broadcasting
Segment as affiliate borrowings in the accompanying  consolidated balance sheet.
HMSI allocates interest at a rate of approximately 10.0%, which approximates the
average rate


                                      F-9

<PAGE>





              HERITAGE MEDIA SERVICES, INC. BROADCASTING SEGMENT

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED )

paid on the borrowings.  Associated with the HMSI debt, the Broadcasting Segment
was  allocated  approximately  $.6  million of  deferred  financing  costs.  The
deferred  financing  costs are being  amortized over the term of the Bank Credit
Agreement.


4. PROGRAM CONTRACTS PAYABLE:

     FUTURE PAYMENTS REQUIRED UNDER PROGRAM CONTRACTS PAYABLE AS OF DECEMBER 31,
1996, ARE AS FOLLOWS (IN thousands):



<TABLE>
<S>                                                        <C>
          1997   .......................................    $  2,079
          1998   .......................................       1,151
          1999   .......................................         324
          2000   .......................................          59
                                                            --------
                                                               3,613
          Less: Current portion    .....................      (2,079)
                                                            --------
          Long-term portion of program contracts payable    $  1,534
                                                            ========
</TABLE>

     The Company has estimated the fair value of its program  contract  payables
and  noncancelable  commitments at approximately  $2.6 million and $0.4 million,
respectively, at December 31, 1996, based on future cash flows discounted at the
Company's current borrowing rate.


Broadcast Program Rights

     The Company has entered into  contracts for broadcast  program  rights that
expire  at  various  dates  during  the  next  four  years.  Contracts  totaling
approximately $0.5 million relate to programs which are not currently  available
for use and,  therefore,  are not  reflected  as  assets or  liabilities  in the
accompanying consolidated balance sheet at December 31, 1996.


5. INCOME TAXES:


     The Company's  Parent files a consolidated  federal tax return and separate
state tax returns for each of its subsidiaries in certain filing  jurisdictions.
It is the  Parent's  policy  to pay the  Federal  income  tax  provision  of the
Company. The accompanying  financial statements have been prepared in accordance
with the  separate  return  method of FASB 109,  whereby the  allocation  of the
federal  tax  provision  due to the  Parent  is based  on what the  subsidiary's
current and deferred  federal tax provision  would have been had the  subsidiary
filed a federal income tax return outside of its consolidated group. The Company
is not  required  to  reimburse  its  Parent  for  its  federal  tax  provision.
Accordingly,   this  amount  is  recorded  as  a  capital  contribution  in  the
accompanying  consolidated financial statements.  No federal deferred tax assets
or liabilities are recorded because those amounts are considered  currently paid
to or received by the Parent. The federal and state tax provision was calculated
based on pretax income, plus or minus permanent book-to-tax  differences,  times
the statutory tax rate of 40%. The Company had no alternative minimum tax credit
carryforwards as of December 31, 1996. The effective tax rate of 53% exceeds the
statutory tax rate of 40% due to the effects of non-deductible goodwill. 


                                      F-10

<PAGE>





              HERITAGE MEDIA SERVICES, INC. BROADCASTING SEGMENT

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED )

   The   provision for income taxes consists of the following as of December 31,
         1996 (in thousands):



<TABLE>
<S>                                             <C>
          Current:
Federal  ....................................    $6,762
State    ....................................     1,192
                                                 ------
                                                  7,954
                                                 ------
          Deferred:
Federal  ....................................        --
State    ....................................      (101)
                                                 ------
                                                   (101)
                                                 ------
          Provision for income taxes   ......    $7,853
                                                 ======
</TABLE>

     The following  table  summarizes  the state tax effects of the  significant
types of temporary  differences  between financial reporting basis and tax basis
which were generated during the year ended December 31, 1996.



<TABLE>
<S>                                 <C>
          Deferred Tax Assets:
Bad debt reserve  ...............   $ 80
Accruals    .....................    135
                                    -----
                                    $215
                                    =====
          Deferred Tax Liability:
Depreciation   ..................   $563
                                    -----
                                    $563
                                    =====
</TABLE>

6. EMPLOYEE BENEFIT PLAN:

     Company  employees are covered by HMC's Retirement  Savings Plan (the Plan)
whereby participants may contribute portions of their annual compensation to the
Plan and  certain  contributions  may be made at the  discretion  of the Company
based on criteria set forth in the Plan  Agreement.  Participants  are generally
100% vested in Company  contributions  after five years of  employment  with the
Company. Company expenses under the Plan were not material in 1996.


7. RELATED PARTY TRANSACTIONS:

     The  Company  regularly  receives  certain  advances  from  HMC  which  are
evidenced by a subordination  agreement.  These advances are noninterest-bearing
and subordinated to borrowings under the Credit  Agreements but may be repaid if
such repayment does not result in covenant violations under those agreements.


8. CONTINGENCIES AND OTHER COMMITMENTS:


Leases and Contracts

     The  Company   and  its   subsidiaries   lease   certain   real   property,
transportation  and  other  equipment  under  noncancellable   operating  leases
expiring  at  various  dates  through  2010.  The  Company  also  has  long-term
contractual  obligations  with two major  broadcast  ratings  firms that provide
monthly  ratings  services and guaranteed  store  contracts.  Rent expense under
theses leases for the year ended December 31, 1996 aggregated approximately $1.6
million.


                                      F-11

<PAGE>





              HERITAGE MEDIA SERVICES, INC. BROADCASTING SEGMENT

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED )

   Future minimum payments under the leases are as follows (in thousands):



<TABLE>
<S>                                      <C>
          1997   .....................   $1,287
          1998   .....................    1,167
          1999   .....................    1,097
          2000   .....................      973
          2001 and thereafter   ......    4,662
                                         -------
                                         $9,186
                                         =======
</TABLE>

Litigation

     The Company is a party to lawsuits  which are  generally  incidental to its
business.  Management  of the Company  does not believe the  resolution  of such
matters will have a significant  effect on its liquidity,  financial position or
results of operations.


9. ACQUISITIONS:

     In February  1996,  the  Company  acquired  WMYU and WWST-FM in  Knoxville,
Tennessee,  for $6.5 million.  Also in February 1996, the Company  completed the
sale of KEVN-TV, Rapid City, South Dakota. As a result of this sale, the Company
recognized a gain of $6.0 million.

     In March 1996, HMC contributed the stock of KIHT-FM to the Company for $7.2
million.  Because HMC and the Company are under common control, the transactions
were  accounted  for at  historical  cost in a manner  similar  to a pooling  of
interests. Accordingly, the consolidated financial statements include the assets
and liabilities and results of operations of the contributed subsidiary from the
dates of acquisition by HMC.

     The  acquisitions  discussed  above  were  recognized  in the  consolidated
financial statements as follows (in thousands):





<TABLE>
<CAPTION>
                                                                  1996
                                                                -----------
<S>                                                             <C>
          Purchase price - cash paid by Parent, net of cash
acquired  ...................................................    $  9,384
          Less: Assets acquired   ...........................      (3,388)
          Add: Liabilities assumed   ........................       1,176
                                                                 --------
Goodwill purchased    .......................................    $  7,172
                                                                 ========
</TABLE>

10. FINANCIAL INFORMATION BY SEGMENT:

     The  Company  operates in two  principal  business  segments --  television
broadcasting  and radio  broadcasting.  At December  31,  1996,  the  television
segment included five television  stations for which the Company is the licensee
and one station which is operated under a local marketing  agreement.  These six
stations operate in six different markets in the continental United States.

     The radio group currently operates 23 radio stations, including three under
an  LMA  pending   acquisition,   and  has  recently  announced  two  additional
transactions  involving trades of existing stations in like-kind exchanges.  The
radio group will own and  operate 24 stations  (seven AM, 17 FM) in seven of the
top 50 largest markets by population  after all pending  transactions  have been
completed. The holdings include at least three stations (and two FM stations) in
every market.


                                      F-12

<PAGE>





              HERITAGE MEDIA SERVICES, INC. BROADCASTING SEGMENT

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED )


<TABLE>
<CAPTION>
                                          1996
                                      ---------------
                                      (IN THOUSANDS)
<S>                                   <C>
          TELEVISION
Net broadcasting revenue  .........      $ 46,316
Station operating expenses   ......        30,982
Station operating income  .........        15,334
Total assets  .....................        83,848
Capital expenditures   ............         5,791
          RADIO
Net broadcasting revenue  .........        53,278
Station operating expenses   ......        41,598
Station operating income  .........        11,680
Total assets  .....................       137,928
Capital expenditures   ............         1,147
          CONSOLIDATED
Net broadcasting revenue  .........      $ 99,594
Station operating expenses   ......        72,580
Station operating income  .........        27,014
Total assets  .....................       221,776
Capital expenditures   ............         6,938
</TABLE>

11. SUBSEQUENT EVENTS:

     On January 7, 1997,  the Company  completed  the  purchase of the assets of
WHRR-FM, serving Rochester, New York, for $1.9 million. On January 24, 1997, the
Company  completed the purchase of the assets of KXTR-FM,  serving  Kansas City,
Missouri, for $9.7 million.

     On January 21, 1997,  the Company  announced  plans to trade its Knoxville,
Tennessee,  stations,  WMYU-FM and WWST-FM for KQRC-FM serving Kansas City, in a
like-kind  exchange.  On  February  18,  1997,  the Company  announced  plans to
exchange  WVAW-FM,  its station in Cincinnati,  for WGH-FM,  WVCL-FM and WGH-AM,
serving  Norfolk,  Virginia,  plus $5 million cash. The Company will operate the
Norfolk stations under a Local Management  Agreement ("LMA").  Both transactions
are subject to approval by the FCC.

     In July  1997,  Heritage  Media  Corporation  entered  into an  asset  sale
agreement with Sinclair Broadcast Group, Inc. to sell the Broadcasting  Segment.
The sale price is $630  million in cash,  contingent  upon the  closing of HMC's
merger agreement with The News Corporation Limited, which remains subject to FCC
approval. The sale is expected to occur in the first quarter of 1998.


                                      F-13

<PAGE>





             HERITAGE MEDIA SERVICES INC. -- BROADCASTING SEGMENT
                          CONSOLIDATED BALANCE SHEETS






<TABLE>
<CAPTION>
                                                                       DECEMBER 31,     JUNE 30,
                                                                          1996            1997
                                                                       --------------   ------------
<S>                                                                    <C>              <C>
 ASSETS
CURRENT ASSETS:
 Cash and cash equivalents   .......................................     $   2,151       $   2,133
 Accounts receivable, net of allowance for doubtful accounts  ......        20,036          19,883
 Deferred barter costs .............................................         1,911           2,496
 Prepaid expenses and other current assets  ........................           138             929
 Deferred tax asset ................................................           215             215
 Current portion of program contract costs  ........................         1,006           1,603
                                                                         ---------       ---------
   Total current assets   ..........................................        25,457          27,259
Property and equipment, net  .......................................        30,005          27,524
Acquired intangible broadcasting assets, net   .....................       163,626         171,794
Program contract costs, less current portion   .....................         1,867           1,266
Other assets  ......................................................           821             613
                                                                         ---------       ---------
   Total assets  ...................................................     $ 221,776       $ 228,456
                                                                         =========       =========
       LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
 Accounts payable   ................................................     $     148       $     185
 Deferred barter revenues ..........................................         1,746           1,698
 Accrued liabilities   .............................................         5,251           1,613
 Deferred revenues  ................................................           428              94
 Current portion of program contracts payable  .....................         2,079           1,552
                                                                         ---------       ---------
   Total current liabilities .......................................         9,652           5,142
Long-Term Liabilities:
 Due to affiliate   ................................................       178,393         183,545
 Deferred tax liability   ..........................................           563             563
 Program contracts payable   .......................................         1,534             860
 Other long-term liabilities .......................................           152             347
                                                                         ---------       ---------
   Total liabilities   .............................................       190,294         190,457
                                                                         ---------       ---------
Commitments and contingencies   ....................................
Stockholders' equity:
 Common stock, $1.00 par value, 3,576,000 shares authorized and
   2,591,586 issued and outstanding   ..............................         2,592           2,592
 Common stock, no par value, 300 shares authorized and 200 shares
   issued and outstanding ..........................................            --              --
 Additional paid-in capital  .......................................        66,174          66,174
 Accumulated deficit   .............................................       (37,284)        (30,767)
                                                                         ---------       ---------
   Total stockholders' equity   ....................................        31,482          37,999
                                                                                         ---------
   Total liability and stockholders'  ..............................     $ 221,776       $ 228,456
                                                                         =========       =========
</TABLE>


The  accompanying  notes are an integral  part of these  unaudited  consolidated
                                  statements.

                                      F-14

<PAGE>





             HERITAGE MEDIA SERVICES INC. -- BROADCASTING SEGMENT
                     CONSOLIDATED STATEMENTS OF OPERATIONS





<TABLE>
<CAPTION>
                                                                               JUNE 30,
                                                                       ------------------------
                                                                        1996          1997
                                                                       ----------   -----------
<S>                                                                    <C>          <C>
Revenues:
 Station broadcast revenues, net of agency commissions  ............   $43,259       $ 46,451
 Revenues realized from station barter arrangements  ...............     1,958          2,430
                                                                       --------      --------
   Total revenues   ................................................    45,217         48,881
Operating Expenses:
 Program and production   ..........................................    13,588         15,313
 Selling, general and administrative  ..............................     9,772          9,447
 Expenses realized from station barter arrangements  ...............     1,276          1,849
 Depreciation and amortization of property and equipment   .........     2,673          2,819
 Amortization of program contract costs and net realizable value ad-
   justments                                                               959            824
 Amortization of acquired intangible broadcasting assets   .........     4,101          4,174
                                                                       --------      --------
   Total operating expenses  .......................................    32,369         34,426
                                                                       --------      --------
   Broadcast operating income   ....................................    12,848         14,455
Other income (expense):
 Interest expense   ................................................    (9,484)        (9,979)
 Gain on sale of assets   ..........................................     6,031             --
 Gain on exchange of assets  .......................................        --          9,401
 Other expense   ...................................................      (102)           (98)
                                                                       --------      --------
 Income before income tax provision   ..............................     9,293         13,779
                                                                       --------      --------
Income tax provision   .............................................     4,898          7,262
                                                                       --------      --------
   Net income ......................................................   $ 4,395       $  6,517
                                                                       ========      ========
</TABLE>

The  accompanying  notes  are  an  integral part of these unaudited consolidated
                                   statements

                                      F-15

<PAGE>





             HERITAGE MEDIA SERVICES INC. -- BROADCASTING SEGMENT
                     CONSOLIDATED STATEMENTS OF CASH FLOWS






<TABLE>
<CAPTION>
                                                                                    SIX MONTHS ENDED JUNE 30,
                                                                                    -------------------------
                                                                                      1996          1997
                                                                                    -----------   -----------
<S>                                                                                 <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income    ..................................................................   $  4,395      $  6,517
 Adjustments to reconcile net income to net cash flows from operating activities:
   Depreciation and amortization of property and equipment  .....................      2,673         2,819
   Amortization:
    Acquired intangible broadcasting assets  ....................................      4,101         4,174
    Program contract costs and net realizable adjustments   .....................        959           824
    Deferred finance costs    ...................................................        134           166
   Gain on sale of assets  ......................................................     (6,031)           --
   Gain of exchange of assets ...................................................         --        (9,401)
 Changes in assets and liabilities, net of effects of acquisitions:
   Decrease (increase) in accounts receivable, net    ...........................        739           (62)
   Decrease in other assets   ...................................................        716            69
   Increase in prepaid expenses and other current assets    .....................       (761)       (1,572)
   Decrease in accounts payable and accrued liabilities  ........................     (1,910)       (2,235)
   Net effect of change in deferred barter revenues and deferred barter costs           (168)         (633)
   Increase (decrease) in deferred revenues  ....................................          5          (334)
   Increase in other long-term liabilities   ....................................          5           196
Payments on program contracts payable  ..........................................     (1,102)       (1,263)
                                                                                    ---------     ---------
     Net cash flows from operating activities   .................................      3,755          (735)
                                                                                    ---------     ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Payments for acquisitions ......................................................     (8,022)      (13,146)
 Acquisition of property and equipment    .......................................     (6,024)       (2,510)
 Proceeds from exchange of assets   .............................................         --        11,979
 Proceeds from sale of assets ...................................................     13,759            --
                                                                                    ---------     ---------
     Net cash flows used in investing activities   ..............................       (287)       (3,677)
                                                                                    ---------     ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Dividends paid   ...............................................................    (30,520)           --
 Capital contributions made by parent  ..........................................     43,024            --
 (Decrease) increase in due to affiliate  .......................................    (16,300)        4,395
                                                                                    ---------     ---------
     Net cash flows from financing activities   .................................     (3,796)        4,395
                                                                                    ---------     ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS    ....................................       (328)          (17)
CASH AND CASH EQUIVALENTS, beginning of period  .................................      1,799         2,151
                                                                                    ---------     ---------
CASH AND CASH EQUIVALENTS, end of period  .......................................   $  1,471      $  2,134
                                                                                    =========     =========
SUPPLEMENTAL DISCLOSURE:
 Program rights acquired   ......................................................   $     41      $     62
                                                                                    =========     =========
</TABLE>


  The accompanying notes are an integral part of these consolidated statement.

                                      F-16

<PAGE>





              HERITAGE MEDIA SERVICES, INC. BROADCASTING SEGMENT

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 JUNE 30, 1997


1. ORGANIZATION


Basis of Presentation


     Heritage Media Services,  Inc. ("HMSI") operates in two segments  Marketing
Services  and  Broadcasting.  The  parent  company  of  HMSI is  Heritage  Media
Corporation ("HMC). The accompanying  consolidated  financial statements include
the accounts of the  television  and radio  operations,  which are  collectively
referred  to  hereafter  as "the  Company,  the  Companies  or the  Broadcasting
Segment." The Company owns and operates television and radio stations throughout
the United  States.  Also included in the  accompanying  consolidated  financial
statements  are the results of  operations  of WFGX-TV  Channel 35 in Ft. Walton
Beach, Florida, pursuant to a local marketing agreement (LMA).


2. DUE TO AFFILIATE


     The Company has an arrangement  with HMSI whereby HMSI will provide certain
management  and other  services to the Company.  The services  provided  include
consultation  and direct  management  assistance  with respect to operations and
strategic planning.  The Broadcasting  Segment was allocated  approximately $2.0
million of corporate overhead expenses for these services.

     In order to fund acquisitions and provide  operating funds,  entered into a
Bank  Credit  Agreement.  The debt used to finance  acquisitions  and fund daily
operations of the Broadcasting  Segment was recorded by the Broadcasting Segment
as affiliate  borrowings in the accompanying  consolidated  balance sheet.  HMSI
allocates  interest at a rate of  approximately  10.0%,  which  approximates the
average rate paid on the borrowings.


3. SUBSEQUENT EVENT

     In July  1997,  Heritage  Media  Corporation  entered  into an  asset  sale
agreement with Sinclair Broadcast Group, Inc. to sell the Broadcasting  Segment.
The sale price is $630  million in cash,  contingent  upon the  closing of HMC's
merger agreement with The News Corporation Limited, which remains subject to FCC
approval. The sale is expected to occur in the first quarter of 1998.


                                      F-17
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{"company-data": {"conformed-name": "SINCLAIR BROADCAST GROUP INC", "cik": "0000912752", "assigned-sic": "4833", "irs-number": "521494660", "state-of-incorporation": "MD", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-26076", "film-number": "97670044"}, "business-address": {"street1": "2000 WEST 41ST ST", "city": "BALTIMORE", "state": "MD", "zip": "21211", "phone": "4104675005"}, "mail-address": {"street1": "2000 W 41ST ST", "city": "BALTIMORE", "state": "MD", "zip": "21211"}}
================================================================================

                                 UNITED STATES

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 8-K

                                CURRENT REPORT

                    PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                                 JULY 16, 1997
                            -----------------------
                       (Date of earliest event reported)

                        SINCLAIR BROADCAST GROUP, INC.
            (Exact name of Registrant as specified in its charter)

        MARYLAND                    33-69482                   52-1494660
(State of incorporation)     (Commission File Number)        (IRS Employer
                                                          Identification Number)

             2000 W. 41st Street, Baltimore, Maryland   21211-1420
      -------------------------------------------------------------------

             (Address of principal executive offices)   (Zip code)

      Registrant's telephone number, including area code: (410) 467-5005

================================================================================
Item 5. Other Events

     As previously  reported,  Sinclair  Broadcast  Group,  Inc. (the "Company")
entered into acquisition  agreements on July 16, 1997 (the "Heritage Acquisition
Agreements")   with  certain   subsidiaries   of  Heritage   Media   Corporation
("Heritage")  pursuant to which the Company  will  acquire the assets of, or the
right to program pursuant to local marketing agreements, six television stations
in three  markets  and the assets of 24 radio  stations  in seven  markets  (the
"Heritage Acquisition").  The Company is filing with this report on Form 8-K the
audited  financial  statements of Heritage Media Services,  Inc. -- Broadcasting
Segment  ("HMSI"),  which  includes all the assets to be acquired by the Company
pursuant to the Heritage Acquisition Agreements. The Company is also filing with
this report on Form 8-K pro forma financial  information for the Company showing
the effect of the Heritage Acquisition and certain other transactions  completed
by the Company since January 1, 1996 (the "1996 Acquisitions").

ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS

(A) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED

     The financial  statements required by this item are submitted in a separate
section of this report.

HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT

     INDEPENDENT AUDITORS' REPORT

     Consolidated Balance Sheet as of December 31, 1996

     Consolidated Statement of Operations for the Year Ended December 31, 1996

     Consolidated  Statement of Stockholder's Equity for the Year Ended December
31, 1996

     Consolidated Statement of Cash Flows for the Year Ended December 31, 1996

     Notes to Consolidated Financial Statements

(b) PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

     The following Pro Forma  Consolidated  Financial Data include the unaudited
pro  forma  consolidated  balance  sheet as of June 30,  1997  (the  "Pro  Forma
Consolidated Balance Sheet") and the unaudited pro forma consolidated  statement
of operations for the year ended December 31, 1996 and the six months ended June
30, 1997 (the "Pro Forma Consolidated  Statement of Operations").  The unaudited
Pro Forma Consolidated  Balance Sheet is adjusted to give effect to the issuance
of  $200,000,000  in principal  amount of the  Company's 9% Senior  Subordinated
Notes due 2007 (the "1997 Notes") issued July 2, 1997 (the "Debt Issuance"), and
the Heritage Acquisition,  as if they occurred on June 30, 1997 and assuming the
net proceeds of the Debt Issuance were used to repay certain amounts outstanding
under the revolving  credit facility  governed by an Awarded and Restated Credit
Agreement  dated as of May 20, 1997 with the Chase  Manhattan Bank, as agent (as
amended  from time to time,  the "Bank  Credit  Agreement")  with the  remainder
retained for general corporate  purposes.  The unaudited Pro Forma  Consolidated
Statement of Operations for the year ended December 31, 1996 is adjusted to give
effect to the 1996  Acquisitions,  the issuance of  $200,000,000  in liquidation
amount of the  Company's  115/8% High Yield Trust Offered  Preferred  Securities
(the  "HYTOPS")  issued on March  14,  1997 (the  "HYTOPS  Issuance"),  the Debt
Issuance and the Heritage  Acquisition,  as if each occurred at the beginning of
such  period and  assuming  the the net  proceeds of the Debt  Issuance  and the
HYTOPS  Issuance  were  used to repay  certain  amounts  outstanding  under  the
revolving credit  facility,  with the remainder  returned for general  corporate
purposes.  The unaudited Pro Forma Consolidated  Statement of Operations for the
six  months  ended  June 30,  1997 is  adjusted  to give  effect  to the  HYTOPS
Issuance,  the Debt  Issuance  under the Bank Credit  Agreement and the Heritage
Acquisition as if each occurred at the beginning of such period and assuming the
net  proceeds of the Debt  Issuance and the HYTOPS  Issuance  were used to repay
certain amounts  outstanding  under the revolving credit facility under the Bank
Credit Agreement,  with the remainder  returned for general corporate  purposes.
The pro forma  adjustments  are based upon  available  information  and  certain
assumptions that the Company believes are reasonable. The Pro Forma Consolidated
Financial  Data should be read in  conjunction  with the Company's  Consolidated
Financial  Statements as of and for the year ended December 31, 1996 and related
notes thereto, the Company's unaudited consolidated financial statements for the
six  months  ended June 30,  1997 and  related  notes  thereto,  the  historical
financial data of Flint T.V.,  Inc.,  the historical  financial data of Superior
Communications,  Inc.,  the  historical  financial  data of KSMO and  WSTR,  the
historical  financial data of River City  Broadcasting,  L.P. and the historical
financial data of Heritage Media Services,  Inc. -- Broadcasting Segment, all of
which  have  been  filed  with  the  Commission  herewith  or as part of (i) the
Company's  Annual  Report on Form 10-K for the year ended  December 31, 1996 (as
amended), together with the report of Arthur Andersen LLP, independent certified
public  accountants;  (ii) the Company's  Quarterly  Report on Form 10-Q for the
quarter ended June 30, 1997; or (iii) the Company's  Current Reports on Form 8-K
and Form 8-K/A filed May 10,  1996,  May 13, 1996,  May 17, 1996,  May 29, 1996,
August 30, 1996,  and September 5, 1996.  The  unaudited Pro Forma  Consolidated
Financial  Data do not  purport  to  represent  what the  Company's  results  of
operations  or  financial  position  would have been had any of the above events
occurred  on  the  dates  specified  or to  project  the  Company's  results  of
operations or financial position for or at any future period or date.
SINCLAIR BROADCAST GROUP, INC.
                      PRO FORMA CONSOLIDATED BALANCE SHEET
                              AS OF JUNE 30, 1997
                            (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)
DEBT
                                                                                                                     ISSUANCE
                                                                CONSOLIDATED         DEBT            HERITAGE      AND HERITAGE
                                                                 HISTORICAL       ISSUANCE(A)     ACQUISITION(B)   ACQUISITION
                                                                -------------- ------------------ ---------------- -------------
                            ASSETS
CURRENT ASSETS:
 Cash and cash equivalents ....................................  $    2,740     $     33,000 (c)                    $   35,740
 Accounts receivable, net of allowance for doubtful accounts        102,093                                            102,093
 Current portion of program contract costs   ..................      34,768                       $        926          35,694
 Prepaid expenses and other current assets   ..................       4,054                                              4,054
 Deferred barter costs  .......................................       4,267                              2,218           6,485
 Deferred tax asset  ..........................................       8,188                                              8,188
                                                                 ----------                                         ----------
   Total current assets .......................................     156,110           33,000             3,144         192,254
PROGRAM CONTRACT COSTS, less current portion ..................      30,778                                712          31,490
LOANS TO OFFICERS AND AFFILIATES ..............................      11,241                                             11,241
PROPERTY AND EQUIPMENT, net   .................................     156,681                             22,022         178,703
NON-COMPETE AND CONSULTING AGREEMENTS, net   ..................       2,250                                              2,250
OTHER ASSETS   ................................................      71,970            4,500 (d)                        76,470
ACQUIRED INTANGIBLE BROADCASTING ASSETS, net ..................   1,333,475                            545,969       1,879,444
                                                                 ----------                       ------------      ----------
   Total Assets   .............................................  $1,762,505     $     37,500      $    571,847      $2,371,852
                                                                 ==========     ============      ============      ==========
LIABILITIES AND
          STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Accounts payable .............................................  $    5,310                                         $    5,310
 Accrued liabilities ..........................................      39,023                                             39,023
 Current portion of long-term liabilities-
  Notes payable and commercial bank financing   ...............      65,500                                             65,500
  Capital leases payable   ....................................          11                                                 11
  Notes and capital leases payable to affiliates   ............       1,370                                              1,370
  Program contracts payable   .................................      49,766                       $      1,096          50,862
 Deferred barter revenues  ....................................       4,458                                              4,458
                                                                 ----------                                         ----------
   Total current liabilities  .................................     165,438                              1,096         166,534
LONG-TERM LIABILITIES:
  Notes payable and commercial bank financing   ...............   1,097,000     $     37,500 (e)       570,000 (f)   1,704,500
  Capital leases payable   ....................................          30                                                 30
  Notes and capital leases payable to affiliates   ............      11,872                                             11,872
  Program contracts payable   .................................      46,670                                751          47,421
  Other long-term liabilities .................................       4,960                                              4,960
                                                                 ----------                                         ----------
   Total liabilities ..........................................   1,325,970           37,500           571,847       1,935,317
                                                                 ----------     ------------      ------------      ----------
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES  ...............       3,897                                              3,897
                                                                 ----------                                         ----------
COMPANY OBLIGATED MANDATORILY REDEEMABLE SE-
 CURITY OF SUBSIDIARY TRUST HOLDING SOLELY KDSM
 SENIOR DEBENTURES   ..........................................     200,000                                            200,000
                                                                 ----------                                         ----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
  Series B Preferred Stock    .................................          11                                                 11
  Series D Convertible Exchangeable Preferred Stock   .........          --                                                 --
  Class A Common Stock  .......................................          71                                                 71
  Class B Common Stock  .......................................         277                                                277
  Additional paid-in capital  .................................     234,812                                            234,812
  Additional paid-in capital - deferred compensation  .........        (896)                                              (896)
  Additional paid-in capital - equity put options  ............      23,117                                             23,117
  Accumulated deficit   .......................................     (24,754)                                           (24,754)
                                                                 ----------                                         ----------
   Total stockholders' equity .................................     232,638                                            232,638
                                                                 ----------                                         ----------
   Total Liabilities and Stockholders' Equity   ...............  $1,762,505     $     37,500      $    571,847      $2,371,852
                                                                 ==========     ============      ============      ==========
(Continued on following page)

                                       1
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET

(a)  To reflect the proceeds of the Debt Issuance  consummated  on July 2, 1997,
     net of $4,500 of  underwriting  discounts  and  commissions  and  estimated
     expenses and the application of the proceeds therefrom.

(b)  The  Heritage  Acquisition  column  reflects  the  assets  and  liabilities
     acquired in  connection  with the  $630,000  purchase of Heritage  less the
     $60,000  divestiture  of the Heritage  television  station KOKH in Oklahoma
     City,  Oklahoma,  which is required  pursuant to the  Heritage  Acquisition
     Agreements  and with respect to which the Company has entered into a letter
     of intent.  The Heritage  Acquisition  is subject to a number of conditions
     customary for  acquisitions  of  broadcasting  properties.  Total  acquired
     intangibles are calculated as follows:
HERITAGE
                                                            HERITAGE      KOKH        ACQUISITION
                                                            ----------   ----------   ------------
Purchase Price ..........................................                               $630,000
 Add:
   Liabilities acquired--
   Current portion of program contracts payable .........     $ 1,552    $  (456)          1,096
   Long-term portion of program contracts payable  ......         860       (109)            751
 Less:
   Assets acquired--
   Current portion of program contract costs ............       1,603       (677)            926
   Deferred barter costs   ..............................       2,496       (278)          2,218
   Program contract costs, less current portion .........       1,266       (554)            712
   Property and equipment  ..............................      27,524     (5,502)         22,022
   Sale of KOKH   .......................................                                 60,000
                                                                                        ---------
   Acquired intangibles .................................                               $545,969
                                                                                        =========
(c)  To record the increase in cash and cash equivalents  resulting from the net
     proceeds of the Debt  Issuance  after giving effect to the repayment of the
     revolving credit facility under the Bank Credit Agreement as follows:

Offering proceeds .......................................... $ 200,000
Underwriting discounts, commissions and estimated expenses      (4,500)
Repayment of revolving credit facility under the Bank Credit
Agreement   ................................................  (162,500)
                                                             ----------
Pro forma adjustment ....................................... $  33,000
                                                             ==========

(d)  To record underwriting  discounts and commissions and estimated expenses of
     $4,500.

(e) To reflect the increase in  indebtedness  resulting  from the Debt  Issuance
    after giving effect to the repayment of the revolving  credit facility under
    the Bank Credit Agreement as follows:
Indebtedness incurred   ....................................  $  200,000
Repayment of revolving credit facility under the Bank Credit
Agreement   ................................................    (162,500)
                                                              ----------
Pro forma adjustment .......................................  $   37,500
                                                              ==========
(f)  To reflect the incurrence of $570,000 of bank financing in connection  with
     the Heritage Acquisition.

                                       2
SINCLAIR BROADCAST GROUP, INC.
                 PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                     FOR THE YEAR ENDED DECEMBER 31, 1996
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)
SUPERIOR
                                                      CONSOLIDATED      FLINT      COMMUNICATIONS
                                                       HISTORICAL    TV, INC.(A)   GROUP, INC.(B)    KSMO(C)
                                                      -------------- ------------- ---------------- ----------
REVENUES:
 Station broadcast revenues, net of agency commis-
 sions ..............................................  $  346,459       $1,012         $4,431       $ 7,694
 Revenues realized from station barter arrange-
 ments                                                     32,029                                     2,321
                                                       ----------                                   --------
  Total revenues ....................................     378,488        1,012          4,431        10,015
                                                       ----------       -------        ------       --------
OPERATING EXPENSES:
 Program and production   ...........................      66,652          101            539         1,550
 Selling, general and administrative  ...............      75,924          345          2,002         2,194
 Expenses realized from barter arrangements .........      25,189                                     2,276
 Amortization of program contract costs and net
 realizable value adjustments   .....................      47,797          125            736           601
 Amortization of deferred compensation   ............         739
 Depreciation and amortization of property and
 equipment    .......................................      11,711            4            373           374
 Amortization of acquired intangible broadcasting
 assets, non-compete and consulting agreements
 and other assets   .................................      58,530                         529
 Amortization of excess syndicated programming ......       3,043
                                                       ----------
  Total operating expenses   ........................     289,585          575          4,179         6,995
                                                       ----------       -------        ------       --------
  Broadcast operating income (loss)   ...............      88,903          437            252         3,020
                                                       ----------       -------        ------       --------
OTHER INCOME (EXPENSE):
 Interest and amortization of debt discount expense..     (84,314)                       (457)         (823)
 Interest income ....................................       3,136
 Subsidiary trust minority interest expense .........
 Other income (expense)   ...........................         342           19              4             7
                                                       ----------       -------        ------       --------
  Income (loss) before provision (benefit) for
  income taxes   ....................................       8,067          456           (201)        2,204
PROVISION (BENEFIT) FOR INCOME
 TAXES  .............................................       6,936
                                                       ----------
NET INCOME (LOSS)   .................................  $    1,131       $  456         $ (201)      $ 2,204
                                                       ==========       =======        ======       ========
NET INCOME (LOSS) AVAILABLE TO COM-
 MON STOCKHOLDERS ...................................  $    1,131
                                                       ==========
NET INCOME (LOSS) PER COMMON AND
 COMMON EQUIVALENT SHARE  ...........................  $     0.03
                                                       ==========
WEIGHTED AVERAGE COMMON AND COM-
 MON EQUIVALENT SHARES OUTSTANDING ..................      37,381
                                                       ==========
RIVER CITY(E)                         1996
                                                                  ----------------------------              ACQUISITION
                                                       WSTR(D)    RIVER CITY        WSYX       WYZZ(F)      ADJUSTMENTS
                                                      ----------- ------------ --------------- --------- ------------------
REVENUES:
 Station broadcast revenues, net of agency commis-
 sions .............................................. $  7,488    $  86,869     $ (10,783)       $1,838
 Revenues realized from station barter arrange-
 ments ..............................................    1,715
                                                      ---------
  Total revenues ....................................    9,203       86,869       (10,783)        1,838
                                                      ---------   ----------    ----------      -------
OPERATING EXPENSES:
 Program and production   ...........................      961       10,001          (736)          214
 Selling, general and administrative  ...............    2,173       39,786        (3,950)          702  $      (3,577)(h)
 Expenses realized from barter arrangements .........    1,715
 Amortization of program contract costs and net
 realizable value adjustments   .....................    1,011        9,721          (458)          123
 Amortization of deferred compensation   ............                                                              194 (j)
 Depreciation and amortization of property and
 equipment    .......................................      284        6,294        (1,174)            6           (943)(k)
 Amortization of acquired intangible broadcasting
 assets, non-compete and consulting agreements
 and other assets   .................................       39       14,041        (3,599)            3          4,034 (m)
 Amortization of excess syndicated programming.......
  Total operating expenses   ........................    6,183       79,843        (9,917)        1,048           (292)
                                                      ---------   ----------    ----------      -------  -------------
  Broadcast operating income (loss)   ...............    3,020        7,026          (866)          790            292
                                                      ---------   ----------    ----------      -------  -------------
OTHER INCOME (EXPENSE):
 Interest and amortization of debt discount expense..   (1,127)     (12,352)                                   (17,409)(q)
 Interest income ....................................       15          195                                     (1,636)(u)
 Subsidiary trust minority interest expense .........
 Other income (expense)   ...........................                  (149)             (8)
                                                                  ----------    ----------
  Income (loss) before provision (benefit) for
  income taxes   ....................................    1,908       (5,280)         (874)          790        (18,753)
PROVISION (BENEFIT) FOR INCOME
 TAXES  .............................................                                                           (7,900)(w)
                                                                                                         -------------
NET INCOME (LOSS)   ................................. $  1,908    $  (5,280)    $    (874)       $  790  $     (10,853)
                                                      =========   ==========    ==========      =======  =============
NET INCOME (LOSS) AVAILABLE TO COM-
 MON STOCKHOLDERS ...................................
NET INCOME (LOSS) PER COMMON AND
 COMMON EQUIVALENT SHARE  ...........................
WEIGHTED AVERAGE COMMON AND COM-
 MON EQUIVALENT SHARES OUTSTANDING ..................
DEBT ISSUANCE,
                                                           HYTOPS               DEBT             HYTOPS ISSUANCE
                                                          ISSUANCE            ISSUANCE        AND 1996 ACQUISITIONS
                                                      ------------------ -------------------- ----------------------
REVENUES:
 Station broadcast revenues, net of agency commis-
 sions ..............................................                                              $   445,008
 Revenues realized from station barter arrange-
 ments ..............................................                                                   36,065
                                                                                                   -----------
  Total revenues ....................................                                                  481,073
                                                                                                   -----------
OPERATING EXPENSES:
 Program and production   ...........................                                                   79,282
 Selling, general and administrative  ...............                                                  115,599
 Expenses realized from barter arrangements .........                                                   29,180
 Amortization of program contract costs and net
 realizable value adjustments   .....................                                                   59,656
 Amortization of deferred compensation   ............                                                      933
 Depreciation and amortization of property and
 equipment    .......................................                                                   16,929
 Amortization of acquired intangible broadcasting
 assets, non-compete and consulting agreements
 and other assets   ................................. $         500 (n)  $          450 (o)             74,527
 Amortization of excess syndicated programming.......                                                    3,043
                                                                                                   -----------
  Total operating expenses   ........................           500                 450                379,149
                                                      -------------      -------------             -----------
  Broadcast operating income (loss)   ...............          (500)               (450)               101,924
                                                      -------------      -------------             -----------
OTHER INCOME (EXPENSE):
 Interest and amortization of debt discount expense..        11,820 (r)         (18,000) (s)          (122,662)
 Interest income ....................................                                                    1,710
 Subsidiary trust minority interest expense .........       (23,250)(v)                                (23,250)
 Other income (expense)   ...........................                                                      215
                                                                                                   -----------
  Income (loss) before provision (benefit) for
  income taxes   ....................................       (11,930)            (18,450)               (42,063)
PROVISION (BENEFIT) FOR INCOME
 TAXES  .............................................        (4,772)(w)          (7,380)(w)            (13,116)
                                                      -------------      -------------             -----------
NET INCOME (LOSS)   ................................. $      (7,158)     $      (11,070)           $   (28,947)
                                                      =============      =============             ===========
NET INCOME (LOSS) AVAILABLE TO COM-
 MON STOCKHOLDERS ...................................
NET INCOME (LOSS) PER COMMON AND
 COMMON EQUIVALENT SHARE  ...........................
WEIGHTED AVERAGE COMMON AND COM-
 MON EQUIVALENT SHARES OUTSTANDING ..................
(Continued on following page)

                                       3
SINCLAIR BROADCAST GROUP, INC.
                 PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                     FOR THE YEAR ENDED DECEMBER 31, 1996
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)
HERITAGE(G)
                                                                     DEBT ISSUANCE,      -----------------------
                                                                    HYTOPS ISSUANCE
                                                                 AND 1996 ACQUISITIONS    HERITAGE      KOKH
                                                                 ----------------------- ------------ ----------
REVENUES:
 Station broadcast revenues, net of agency commissions    ......      $   445,008        $  95,302    $(7,953)
 Revenues realized from station barter arrangements ............           36,065            4,292       (178)
                                                                      -----------        ----------   --------
   Total revenues  .............................................          481,073           99,594     (8,131)
                                                                      -----------        ----------   --------
OPERATING EXPENSES:
 Program and production  .......................................           79,282           20,089     (1,871)
 Selling, general and administrative    ........................          115,599           31,916     (1,722)
 Expenses realized from barter arrangements   ..................           29,180            3,478        (70)
 Amortization of program contract costs and net realizable
  value adjustments   ..........................................           59,656            3,165     (1,208)
 Amortization of deferred compensation  ........................              933
 Depreciation and amortization of property and equipment   .               16,929            5,472     (1,022)
 Amortization of acquired intangible broadcasting assets, non-
  compete and consulting agreements and other assets   .........           74,527            8,460       (367)
 Amortization of excess syndicated programming   ...............            3,043
                                                                      -----------
   Total operating expenses    .................................          379,149           72,580     (6,260)
                                                                      -----------        ----------   --------
   Broadcast operating income (loss) ...........................          101,924           27,014     (1,871)
                                                                      -----------        ----------   --------
OTHER INCOME (EXPENSE):
 Interest and amortization of debt discount expense ............         (122,662)         (17,949)     1,025
 Gain on sale of station .......................................                             6,031
 Interest income   .............................................            1,710
 Subsidiary trust minority interest expense   ..................          (23,250)
 Other income (expense)  .......................................              215             (203)
                                                                      -----------        ----------
   Income (loss) before provision (benefit) for income taxes              (42,063)          14,893       (846)
PROVISION (BENEFIT) FOR INCOME
 TAXES    ......................................................          (13,116)           7,853       (466)
                                                                      -----------        ----------   --------
NET INCOME (LOSS)  .............................................      $   (28,947)       $   7,040    $  (380)
                                                                      ===========        ==========   ========
NET INCOME (LOSS) AVAILABLE TO COMMON
 STOCKHOLDERS   ................................................
NET INCOME (LOSS) PER COMMON AND COMMON
 EQUIVALENT SHARE  .............................................
WEIGHTED AVERAGE COMMON AND COMMON
 EQUIVALENT SHARES OUTSTANDING    ..............................
DEBT ISSUANCE,
                                                                      HERITAGE         HYTOPS ISSUANCE,
                                                                    ACQUISITION      1996 ACQUISITIONS AND
                                                                    ADJUSTMENTS      HERITAGE ACQUISITION
                                                                 ------------------- ----------------------
REVENUES:
 Station broadcast revenues, net of agency commissions    ......                        $    532,357
 Revenues realized from station barter arrangements ............                              40,179
                                                                                        ------------
   Total revenues  .............................................                             572,536
                                                                                        ------------
OPERATING EXPENSES:
 Program and production  .......................................                              97,500
 Selling, general and administrative    ........................        (1,808) (i)          143,985
 Expenses realized from barter arrangements   ..................                              32,588
 Amortization of program contract costs and net realizable
  value adjustments   ..........................................                              61,613
 Amortization of deferred compensation  ........................                                 933
 Depreciation and amortization of property and equipment   .              (900)(l)            20,479
 Amortization of acquired intangible broadcasting assets, non-
  compete and consulting agreements and other assets   .........         9,531 (p)            92,151
 Amortization of excess syndicated programming   ...............                               3,043
                                                                                        ------------
   Total operating expenses    .................................         6,823               452,292
                                                                 ------------           ------------
   Broadcast operating income (loss) ...........................        (6,823)              120,244
                                                                 ------------           ------------
OTHER INCOME (EXPENSE):
 Interest and amortization of debt discount expense ............       (23,621)(t)          (163,207)
 Gain on sale of station .......................................                               6,031
 Interest income   .............................................                               1,710
 Subsidiary trust minority interest expense   ..................                             (23,250)
 Other income (expense)  .......................................                                  12
                                                                                        ------------
   Income (loss) before provision (benefit) for income taxes ...       (30,444)              (58,460)
PROVISION (BENEFIT) FOR INCOME
 TAXES    ......................................................       (12,178)(w)           (17,907)
                                                                 ------------           ------------
NET INCOME (LOSS)  ............................................. $     (18,266)         $    (40,553)
                                                                 ============           ============
NET INCOME (LOSS) AVAILABLE TO COMMON
 STOCKHOLDERS   ................................................                        $    (40,553)
                                                                                        ============
NET INCOME (LOSS) PER COMMON AND COMMON
 EQUIVALENT SHARE  .............................................                        $      (1.04)
                                                                                        ============
WEIGHTED AVERAGE COMMON AND COMMON
 EQUIVALENT SHARES OUTSTANDING    ..............................                              39,058 (x)
                                                                                        ============
4
SINCLAIR BROADCAST GROUP, INC.
                 PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)
CONSOLIDATED         HYTOPS              DEBT
HISTORICAL      ISSUANCE           ISSUANCE
                                                  -------------   -----------------  -----------------
REVENUES:
 Station broadcast revenues, net of agency
  commissions  .................................  $  219,701
 Revenues realized from station barter ar-
  rangements ...................................      19,870
                                                  ----------
   Total revenues ..............................     239,571
                                                  ----------
OPERATING EXPENSES:
 Program and production ........................      46,760
 Selling, general and administrative   .........      51,634
 Expenses realized from station barter ar-
  rangements ...................................      16,303
 Amortization of program contract costs and
  net realizable value adjustments  ............      30,918
 Amortization of deferred compensation .........         233
 Depreciation and amortization of property
  and equipment   ..............................       8,340
 Amortization of acquired intangible broad-
  casting assets, non-compete and consult-
  ing agreements and other assets ..............      37,392    $          88 (aa)  $         225 (bb)
                                                  ----------    ------------        ------------
   Total operating expenses   ..................     191,580               88                 225
                                                  ----------    ------------        ------------
   Broadcast operating income (loss)   .........      47,991              (88)               (225)
                                                  ----------    ------------        ------------
OTHER INCOME (EXPENSE):
 Interest and amortization of debt discount
  expense   ....................................     (51,993)           2,894 (dd)         (9,000)(ee)
 Gain of sale of station   .....................
 Interest income  ..............................       1,040
 Subsidiary trust minority interest expense ....      (7,007)          (4,618)(gg)
 Other income  .................................          47
                                                  ----------
   Income (loss) before provision (bene-
   fit) for income taxes .......................      (9,922)          (1,812)             (9,225)
PROVISION (BENEFIT) FOR INCOME
 TAXES   .......................................      (4,100)            (725)(w)          (3,690)(w)
                                                  ----------    ------------        ------------
NET INCOME (LOSS) ..............................  $   (5,822)   $      (1,087)      $      (5,535)
                                                  ==========    ============        ============
NET LOSS AVAILABLE TO COMMON
 STOCKHOLDERS  .................................  $   (5,822)
                                                  ==========
NET LOSS PER COMMON AND COM-
 MON EQUIVALENT SHARE ..........................  $    (0.17)
                                                  ==========
WEIGHTED AVERAGE COMMON
 SHARES OUTSTANDING  ...........................      34,746
                                                  ==========
HERITAGE(G)              HERITAGE              DEBT ISSUANCE,
                                                 ------------------------      ACQUISITION           HYTOPS ISSUANCE
                                                  HERITAGE       KOKH          ADJUSTMENTS       AND HERITAGE ACQUISITION
                                                 ---------   --------     ---------------------- -------------------------
REVENUES:
 Station broadcast revenues, net of agency
  commissions  ................................. $ 46,451     $ (3,706)                                 $ 262,446
 Revenues realized from station barter ar-
  rangements ...................................    2,430         (125)                                    22,175
                                                 ---------    --------                                  ---------
   Total revenues ..............................   48,881       (3,831)                                   284,621
                                                 ---------    --------                                  ---------
OPERATING EXPENSES:
 Program and production ........................   15,313       (1,150)                                    60,923
 Selling, general and administrative   .........    9,447         (784)   $          (883) (y)             59,414
 Expenses realized from station barter ar-
  rangements ...................................    1,849          (62)                                    18,090
 Amortization of program contract costs and
  net realizable value adjustments  ............      824         (297)                                    31,445
 Amortization of deferred compensation .........                                                              233
 Depreciation and amortization of property
  and equipment   ..............................    2,819         (445)              (450) (z)             10,264
 Amortization of acquired intangible broad-
  casting assets, non-compete and consult-
  ing agreements and other assets ..............    4,174         (184)             4,964 (cc)             46,659
                                                 ---------    --------    -------------                 ---------
   Total operating expenses   ..................   34,426       (2,922)             3,631                 227,028
                                                 ---------    --------    -------------                 ---------
   Broadcast operating income (loss)   .........   14,455         (909)            (3,631)                 57,593
                                                 ---------    --------    -------------                 ---------
OTHER INCOME (EXPENSE):
 Interest and amortization of debt discount
  expense   ....................................   (9,979)         425            (10,768) (ff)           (78,421)
 Gain of sale of station   .....................    9,401                                                   9,401
 Interest income  ..............................                                                            1,040
 Subsidiary trust minority interest expense ....                                                          (11,625)
 Other income  .................................      (98)                                                    (51)
                                                 ---------                                              ---------
   Income (loss) before provision (bene-
   fit) for income taxes .......................   13,779         (484)           (14,399)                (22,063)
PROVISION (BENEFIT) FOR INCOME
 TAXES   .......................................    7,262         (369)            (5,760) (w)             (7,382)
                                                 ---------    --------    -------------                 ---------
NET INCOME (LOSS) .............................. $  6,517     $   (115)   $        (8,639)              $ (14,681)
                                                 =========    ========    =============                 =========
NET LOSS AVAILABLE TO COMMON
 STOCKHOLDERS  .................................                                                        $ (14,681)
                                                                                                        =========
NET LOSS PER COMMON AND COM-
 MON EQUIVALENT SHARE ..........................                                                        $   (0.42)
                                                                                                        =========
WEIGHTED AVERAGE COMMON
 SHARES OUTSTANDING  ...........................                                                           34,769
                                                                                                        =========
5
SINCLAIR BROADCAST GROUP, INC.
            NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                            (DOLLARS IN THOUSANDS)

(a)  The Flint T.V., Inc. ("Flint-TV") column reflects the results of operations
     for WSMH for the period from January 1, 1996 to February 28, 1996, the date
     the Flint Acquisition was consummated.

(b)  The Superior  Communications  Group,  Inc.  column  reflects the results of
     operations for Superior for the period from January 1, 1996 to May 7, 1996,
     the date the Superior Acquisition was consummated.

(c)  The KSMO  column  reflects  the results of  operations  for the period from
     January 1, 1996 to June 30, 1996 as the transaction was consummated in July
     1996.

(d)  The WSTR  column  reflects  the results of  operations  for the period from
     January 1, 1996 to July 31,  1996 as the  transaction  was  consummated  in
     August 1996.

(e)  The River City column  reflects  the results of  operations  for River City
     (including KRRT, Inc.) for the period from January 1, 1996 to May 31, 1996,
     the date the  River  City  Acquisition  was  consummated.  The WSYX  column
     removes  the  results of WSYX from the results of River City for the period
     as the Company has not yet acquired WSYX.

(f)  The WYZZ  column  reflects  the results of  operations  for the period from
     January  1,  1996  to  June  30,  1996  as  the  purchase  transaction  was
     consummated in July 1996.

(g)  The Heritage  column reflects the results of operations for the period from
     January 1, 1996 to December  31, 1996 for the year ended  December 31, 1996
     Pro  Forma  Consolidated   Statement  of  Operations  and  the  results  of
     operations for the period from January 1, 1997 to June 30, 1997 for the six
     months ended June 30, 1997 Pro Forma Consolidated  Statement of Operations.
     The KOKH  column  removes  the results of KOKH from the results of Heritage
     for both periods to reflect the sale of KOKH, which is required pursuant to
     the Heritage  Acquisition  Agreements and with respect to which the Company
     has entered into a letter of intent.

(h)  To adjust River City operating expenses for non-recurring LMA payments made
     to KRRT,  Inc.  for KRRT,  Inc.  debt  service and to adjust River City and
     Superior  operating  expenses for employment  contracts and other corporate
     overhead expenses not assumed at the time of the 1996 Acquisitions.

(i)  To adjust Heritage operating expenses for corporate overhead expenses which
     the Company does not expect to incur upon its  consummation of the Heritage
     Acquisition on a going-forward basis.

(j)  To  record  compensation  expense  related  to  options  granted  under the
     Company's Long-Term Incentive Plan:

                                                            YEAR ENDED
                                                           DECEMBER 31,
                                                              1996
                                                          -------------
Compensation expense related to the Long-Term Incentive
Plan on a pro forma basis  ..............................    $  933
Less: Compensation expense recorded by the Company re-
lated to the Long-Term Incentive Plan                          (739)
                                                             ------
                                                             $  194
                                                             ======

(k)  To record  depreciation  expense  related to acquired  tangible  assets and
     eliminate depreciation expense recorded by Flint-TV,  Superior, KSMO, WSTR,
     River City and WYZZ from the period of January 1, 1996  through the date of
     acquisition.  Tangible assets are to be depreciated over lives ranging from
     5 to 29.5 years, calculated as follows:
YEAR ENDED
                                                                   DECEMBER 31, 1996
                                                           ---------------------------------
                                                           FLINT-TV   SUPERIOR      KSMO
                                                           ---------- ---------- -----------
Depreciation expense on acquired tangible assets    ...  $ 32       $  315     $   240
   Less: Depreciation expense recorded by Flint-TV,
    Superior, KSMO, WSTR, River City and WYZZ    .........      (4)      (373)       (374)
                                                            -----      ------     -------
   Pro forma adjustment  .................................  $ 28       $  (58)    $  (134)
                                                            =====      ======     =======
WSTR    RIVER CITY      WYZZ       TOTAL
                                                           --------- ------------ ----------- -----------
Depreciation expense on acquired tangible assets    ... $  507     $   3,965    $ 159      $  5,218
   Less: Depreciation expense recorded by Flint-TV,
    Superior, KSMO, WSTR, River City and WYZZ    .........   (284)       (5,120)        (6)     (6,161)
                                                           -------    ---------    ------     ---------
   Pro forma adjustment  ................................. $  223     $  (1,155)   $ 153      $   (943)
                                                           =======    =========    ======     =========
(l)  To record  depreciation  expense  related to  acquired  tangible  assets of
     $3,550 and eliminate  depreciation  expense of $4,450 recorded by Heritage.
     Tangible  assets are to be  depreciated  over lives  ranging from 5 to 29.5
     years.

(m)  To record  amortization  expense related to acquired  intangible assets and
     deferred  financing costs and eliminate  amortization  expense  recorded by
     Flint-TV,  Superior,  KSMO,  WSTR,  River  City and WYZZ from the period of
     January 1, 1996 through date of  acquisition.  Intangible  assets are to be
     amortized over lives ranging from 1 to 40 years, calculated as follows:
YEAR ENDED
                                                                DECEMBER 31, 1996
                                                          -----------------------------
                                                          FLINT-TV   SUPERIOR    KSMO
                                                          ---------- ---------- -------
Amortization expense on acquired intangible assets       $ 167     $   827     $ 180
   Deferred financing costs   ...........................
   Less: Amortization expense recorded by Flint-TV,
    Superior, KSMO, WSTR, River City and WYZZ   .........      --        (529)       --
                                                            ------    -------    ------
   Pro forma adjustment    ..............................   $ 167     $   298     $ 180
                                                            ======    =======    ======
WSTR   RIVER CITY     WYZZ        TOTAL
                                                          ------- ------------ ---------- ------------
Amortization expense on acquired intangible assets     $ 285   $  12,060     $ 99      $  13,618
   Deferred financing costs   ...........................             1,429                   1,429
   Less: Amortization expense recorded by Flint-TV,
    Superior, KSMO, WSTR, River City and WYZZ   .........  (39)     (10,442)        (3)     (11,013)
                                                          -----   ----------    -----     ----------
   Pro forma adjustment    .............................. $ 246   $   3,047     $ 96      $   4,034
                                                          =====   ==========    =====     ==========
6
(n)  To record  amortization  expense on other  assets that relate to the HYTOPS
     Issuance for one year ($6,000 over 12 years).

(o)  To record amortization expense on other assets for one year ($4,500 over 10
     years). See note (f) of notes to Pro Forma Consolidated Balance Sheet.

(p)  To record  amortization  expense related to acquired  intangible  assets of
     $17,624 and eliminate  amortization expense of $8,093 recorded by Heritage.
     Intangible  assets  are to be  amortized  over lives  ranging  from 1 to 40
     years.

(q)  To  record  interest  expense  for the  year  ended  December  31,  1996 on
     acquisition  financing  relating  to  Superior  of $59,850  (under the Bank
     Credit  Agreement  at 8.0% for four  months),  KSMO and WSTR of $10,425 and
     $7,881,  respectively (both under the Bank Credit Agreement at 8.0% for six
     months),  River City  (including  KRRT) of $868,300  (under the Bank Credit
     Agreement  at 8.0% for five  months)  and of $851  for  hedging  agreements
     related to the River  City  financing  and WYZZ of $20,194  (under the Bank
     Credit  Agreement at 8.0% for six months) and  eliminate  interest  expense
     recorded. No interest expense has been recorded for Flint-TV as it has been
     assumed  that the  proceeds  from  the 1995  Notes  were  used to  purchase
     Flint-TV.
YEAR ENDED
                                                                                   DECEMBER 31, 1996
                                                       -------------------------------------------------------------------------
                                                        SUPERIOR     KSMO       WSTR     RIVER CITY      WYZZ         TOTAL
                                                       ----------- --------- ----------- ------------ ----------- --------------
Interest expense adjustment as noted above   ...... $ (1,596)    $  (417)  $  (315)    $ (29,032)   $  (808)    $  (32,168)
   Less: Interest expense recorded by Superior, KSMO,
    WSTR, River City and WYZZ ........................      457         823     1,127        12,352         --         14,759
                                                       ---------    -------   -------     ---------    -------     ----------
   Pro forma adjustment    ........................... $ (1,139)    $   406   $   812     $ (16,680)   $  (808)    $  (17,409)
                                                       =========    =======   =======     =========    =======     ==========
(r)  To  record  the  net  interest  expense   reduction  for  1996  related  to
     application  of the HYTOPS  Issuance  proceeds to the  outstanding  balance
     under the  revolving  credit  facility  offset by an increase in commitment
     fees for the available but unused portion of the revolving  credit facility
     for the year ended December 31, 1996.
Interest on adjusted borrowing on the revolving credit facility ..................    $ 12,600
     Commitment fee on available but unused borrowings of $250,000 of revolving credit
      facility at 1/2 of 1% for 12 months .............................................      (1,250)
     Commitment fee on available borrowings recorded by the Company  ..................         470
                                                                                           --------
     Pro forma adjustment  ............................................................    $ 11,820
                                                                                           ========
(s)  To record interest expense on the 1997 Notes for one year ($200,000 at 9%).

(t)  To record interest expense on acquisition  financing of $570,000 (under the
     Bank Credit  Agreement at 71/4%),  net of $780 of  commitment  fees for the
     available  but  unused  portion  of  the  revolving  credit  facility,  and
     eliminated interest expense of $16,924 recorded by Heritage.

(u)  To  eliminate  interest  income for the year  ended  December  31,  1996 on
     proceeds  from the sale of the 1995  Notes due to  assumed  utilization  of
     excess cash for the  following  acquisitions:  Flint-TV,  KSMO and WSTR and
     WYZZ of $34,400  (with a commercial  bank at 5.7% for two months),  $10,425
     and $7,881 (both with a commercial bank at 5.7% for six months) and $20,194
     (with a commercial bank at 5.7% for six months).
YEAR ENDED
                                                                               DECEMBER 31, 1996
                                                      -------------------------------------------------------------------
                                                      FLINT-TV     KSMO      WSTR    RIVER CITY     WYZZ       TOTAL
                                                      ---------- --------- --------- ------------ --------- -------------
Interest income adjustment as noted above   ......  $  (327)  $ (297)   $ (226)     $    --    $ (576)    $  (1,426)
   Less: Interest income recorded by Flint-TV, KSMO,
    WSTR, River City and WYZZ   .....................       --       --       (15)        (195)       --          (210)
                                                       -------   -------   -------     -------    -------    ---------
   Pro forma adjustment   ...........................  $  (327)  $ (297)   $ (241)     $  (195)   $ (576)    $  (1,636)
                                                       =======   =======   =======     =======    =======    =========
(v)  To record  subsidiary  trust minority  interest  expense for the year ended
     December 31, 1996 ($200,000 aggregate liquidation value of HYTOPS).

(w)  To record tax provision (benefit) at the applicable statutory tax rates.

(x)  Weighted  average shares  outstanding on a pro forma basis assumes that the
     1,150,000  shares of Series B Preferred  Stock were  converted to 4,181,818
     shares of Class A Common Stock and the  Company's  Incentive  Stock Options
     and Long-Term  Incentive Plan Options were  outstanding as of the beginning
     of the period.

(y)  To adjust Heritage operating expenses for corporate overhead expenses which
     the Company does not expect to incur upon its  consummation of the Heritage
     Acquisition on a going-forward basis.

(z)  To record  depreciation  expenses  related to acquired  tangible  assets of
     $1,775 and eliminate  depreciation  expense of $2,225 recorded by Heritage.
     Tangible  assets are to be  depreciated  over lives  ranging from 5 to 29.5
     years.

                                       7
(aa) To record  amortization  expense on other  assets  that  resulted  from the
     HYTOPS Issuance for six months ($6,000 over 12 years).

     Amortization expense on other assets  ...............    $  250
     Amortization expense recorded by the Company   ......      (162)
                                                              ------
     Pro forma adjustment   ..............................    $   88
                                                              ======

(bb) To record amortization  expense on other assets for six months ($4,500 over
     10 years). See note (f) of notes to Pro Forma Consolidated Balance Sheet.

(cc) To record  amortization  expense related to acquired  intangible  assets of
     $8,954 and eliminate  amortization  expense of $3,990 recorded by Heritage.
     Intangible  assets  are to be  amortized  over lives  ranging  from 1 to 40
     years.

(dd) To  record  the  net  interest  expense   reduction  for  1997  related  to
     application  of the HYTOPS  Issuance  proceeds to the  outstanding  balance
     under the  revolving  credit  facility  offset by an increase in commitment
     fees for the available but unused portion of the revolving  credit facility
     for the quarter ended June 30, 1997.
Interest on adjusted borrowing on the revolving credit facility    ...............    $3,235
     Commitment fee on available but unused borrowings of $250,000 of revolving credit
      facility at 1/2 of 1% for six months   ..........................................      (625)
     Commitment fee on available borrowings recorded by the Company  ..................       284
                                                                                           ------
     Pro forma adjustment  ............................................................    $2,894
                                                                                           ======
(ee) To record  interest  expense on the 1997 Notes for six months  ($200,000 at
     9%).

(ff) To record interest expense on acquisition  financing of $570,000 (under the
     Bank Credit  Agreement at 71/4%),  net of $341 of  commitment  fees for the
     available  but  unused  portion  of  the  revolving  credit  facility,  and
     eliminate interest expense of $9,554 recorded by Heritage.

(gg) To record  subsidiary trust minority interest expense for the quarter ended
     June 30, 1997 ($200,000 aggregate liquidation value HYTOPS).
Subsidiary trust minority interest expense for six months   ........................    $ (11,625)
     Subsidiary trust minority interest expense made by the Company during the quarter   .       7,007
                                                                                             ---------
     Pro forma adjustment ...............................................................    $  (4,618)
                                                                                             =========
8
HERITAGE MEDIA SERVICES, INC.

                       CONSOLIDATED FINANCIAL STATEMENTS
                         YEAR ENDED DECEMBER 31, 1996

                                   CONTENTS
PAGE
                                                                                          -----
Report of Independent Public Accountants  .............................................   F-1
Consolidated Financial Statements
 Consolidated Balance Sheet   .........................................................   F-2
 Consolidated Statement of Operations  ................................................   F-3
 Consolidated Statement of Stockholders' Equity .......................................   F-4
 Consolidated Statement of Cash Flows  ................................................   F-5
 Notes to Consolidated Financial Statements  ..........................................   F-6
Unaudited Financial Statements
 Unaudited Consolidated Balance Sheets as of December 31, 1996 and June 30, 1997 ......   F-13
 Unaudited Consolidated Statements of Operations for the Six Months Ended June 30, 1996
   and 1997 ...........................................................................   F-14
 Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30,
   1996 and 1997  .....................................................................   F-15
 Notes to Financial Statements   ......................................................   F-16
F-1
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of
Sinclair Broadcast Group, Inc. and Subsidiaries:

     We have audited the  accompanying  consolidated  balance  sheet of Heritage
Media Services,  Inc. --  Broadcasting  Segment as of December 31, 1996, and the
related  consolidated  statements of operations,  stockholder's  equity and cash
flows for the year then ended. These financial statements are the responsibility
of the  Company's  management.  Our  responsibility  is to express an opinion on
these financial statements based on our audit.

     We conducted  our audit in  accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

     In our opinion,  the consolidated  financial  statements  referred to above
present fairly,  in all material  respects,  the financial  position of Heritage
Media Services,  Inc. -- Broadcasting  Segment, as of December 31, 1996, and the
results  of its  operations  and its cash  flows  for the year  then  ended,  in
conformity with generally accepted accounting principles.

                                                  ARTHUR ANDERSEN LLP

Baltimore, Maryland,
July 30, 1997

                                      F-2
HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT
                          CONSOLIDATED BALANCE SHEET
                            AS OF DECEMBER 31, 1996
                                (IN THOUSANDS)
ASSETS
CURRENT ASSETS
 Cash and cash equivalents    ...................................................    $   2,151
 Accounts receivable, net of allowance for doubtful accounts of $1,348  .........       20,036
 Current portion of program contract costs   ....................................        1,006
 Prepaid expenses and other current assets   ....................................          138
 Deferred barter costs  .........................................................        1,911
 Deferred tax asset  ............................................................          215
                                                                                     ---------
 Total current assets   .........................................................       25,457
PROGRAM CONTRACT COSTS, less current portion    .................................        1,867
PROPERTY AND EQUIPMENT, net   ...................................................       30,005
ACQUIRED INTANGIBLE BROADCASTING ASSETS, net    .................................      163,626
OTHER ASSETS   ..................................................................          821
                                                                                     ---------
 Total Assets  ..................................................................    $ 221,776
                                                                                     =========
                               LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Accounts payable    ............................................................    $     148
 Accrued liabilities    .........................................................        5,251
 Deferred revenues   ............................................................          428
 Deferred barter revenues  ......................................................        1,746
 Current portion of program contracts payable   .................................        2,079
                                                                                     ---------
   Total current liabilities  ...................................................        9,652
PROGRAM CONTRACTS PAYABLE  ......................................................        1,534
DUE TO AFFILIATE  ...............................................................      178,393
DEFERRED TAX LIABILITY  .........................................................          563
OTHER LONG-TERM LIABILITIES   ...................................................          152
                                                                                     ---------
   Total Liabilities    .........................................................      190,294
                                                                                     ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
 Common stock, $1.00 par value, 3,576,000 shares authorized and 2,591,586 shares
   issued and outstanding  ......................................................        2,592
 Common stock, no par value, 300 shares authorized and 200 shares issued and out-
   standing                                                                                 --
 Additional paid-in capital   ...................................................       66,174
 Accumulated deficit    .........................................................      (37,284)
                                                                                     ---------
   Total Stockholders' Equity    ................................................       31,482
                                                                                     ---------
   Total Liabilities and Stockholders' Equity   .................................    $ 221,776
                                                                                     =========
The accompanying notes are an integral part of this consolidated balance sheet.

                                      F-3
HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT
                     CONSOLIDATED STATEMENT OF OPERATIONS
                     FOR THE YEAR ENDED DECEMBER 31, 1996
                                (IN THOUSANDS)
REVENUES:
 Station broadcast revenues, net of agency commissions of $16,727   ............    $  95,302
 Revenues realized from station barter arrangements  ...........................        4,292
                                                                                    ---------
   Total revenue    ............................................................       99,594
                                                                                    ---------
OPERATING EXPENSES:
 Programming and production  ...................................................       20,089
 Selling, general and administrative  ..........................................       31,916
 Expenses realized from station barter arrangements  ...........................        3,478
 Amortization of program contract costs and net realizable value adjustments            3,165
 Depreciation and amortization of property and equipment   .....................        5,472
 Amortization of acquired intangible broadcasting assets   .....................        8,460
                                                                                    ---------
   Total operating expenses  ...................................................       72,580
                                                                                    ---------
   Broadcast operating income   ................................................       27,014
                                                                                    ---------
OTHER INCOME (EXPENSE):
 Interest expense   ............................................................      (17,949)
 Gain on sale of assets   ......................................................        6,031
 Other expense   ...............................................................         (203)
                                                                                    ---------
   Income before income tax provision    .......................................       14,893
INCOME TAX PROVISION   .........................................................       (7,853)
                                                                                    ---------
 Net income   ..................................................................    $   7,040
                                                                                    =========
The accompanying notes are an integral part of this consolidated statement.

                                      F-4
HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT
                CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
                     FOR THE YEAR ENDED DECEMBER 31, 1996
                                (IN THOUSANDS)
COMMON STOCK       ADDITIONAL
                                         -------------------   PAID-IN       ACCUMULATED     STOCKHOLDER'S
                                          SHARES     AMOUNT    CAPITAL        DEFICIT          EQUITY
                                         --------   --------   -----------   -------------   --------------
BALANCE
 December 31, 1995  ..................     2,592      $2,592     $14,368      $ (13,804)       $   3,156
 Parent capital contributions   ......        --          --      43,024             --           43,024
 Parent non-cash contribution   ......        --          --       8,782             --            8,782
 Dividends to parent   ...............        --          --          --        (30,520)         (30,520)
 Net income   ........................        --          --          --          7,040            7,040
                                          ------     -------     --------     ---------        ---------
BALANCE,
 December 31, 1996  ..................     2,592      $2,592     $66,174      $ (37,284)       $  31,482
                                          ======     =======     ========     =========        =========
The accompanying notes are an integral part of this consolidated statement.

                                      F-5
HERITAGE MEDIA SERVICES, INC. -- BROADCASTING SEGMENT

                     CONSOLIDATED STATEMENT OF CASH FLOWS
                     FOR THE YEAR ENDED DECEMBER 31, 1996
                                (IN THOUSANDS)
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income  .....................................................................   $  7,040
                                                                                     ---------
 Adjustments to reconcile net income to net cash flows from operating activities:
   Depreciation and amortization of property and equipment   .....................      5,472
   Amortization:
    Acquired intangible broadcasting assets   ....................................      8,460
    Program contract costs and net realizable adjustments ........................      3,165
    Deferred finance costs  ......................................................        316
   Gain on sale of assets   ......................................................     (6,031)
   Amortization of deferred compensation   .......................................        135
 Changes in assets and liabilities, net of effects of acquisitions:   ............
   Increase in accounts receivable, net    .......................................     (1,681)
   Increase in other assets    ...................................................       (147)
   Decrease in prepaid expenses   ................................................        810
   Increase in deferred tax asset    .............................................        (77)
   Decrease in accounts payable and accrued liabilities   ........................     (3,486)
   Net effect of change in deferred barter revenues and deferred barter costs  ...        (53)
   Increase in deferred revenues  ................................................        151
   Decrease in deferred tax liability   ..........................................        (24)
   Decrease in other long-term liabilities    ....................................        (44)
 Payments on program contracts payable  ..........................................     (2,565)
                                                                                     ---------
      Net cash flows from operating activities   .................................     11,441
                                                                                     ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Acquisition of property and equipment  ..........................................     (6,938)
 Proceeds from sale of assets  ...................................................     13,759
 Payments for acquisitions  ......................................................     (9,384)
                                                                                     ---------
      Net cash flows from investing activities   .................................     (2,563)
                                                                                     ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Dividends to parent  ............................................................    (30,520)
 Decrease in due to affiliate  ...................................................    (21,030)
 Capital contributions made by parent   ..........................................     43,024
                                                                                     ---------
      Net cash flows from financing activities   .................................     (8,526)
                                                                                     ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS  .......................................        352
CASH AND CASH EQUIVALENTS, beginning of period   .................................      1,799
                                                                                     ---------
CASH AND CASH EQUIVALENTS, end of period   .......................................   $  2,151
                                                                                     =========
SUPPLEMENTAL DISCLOSURE:
 Program rights acquired    ......................................................   $  3,674
                                                                                     =========
The accompanying notes are an integral part of this consolidated statement.

                                      F-6
HERITAGE MEDIA SERVICES, INC. BROADCASTING SEGMENT

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               DECEMBER 31, 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Presentation

     Heritage Media Services,  Inc. ("HMSI") operates in two segments  Marketing
Services  and  Broadcasting.  The  parent  company  of  HMSI is  Heritage  Media
Corporation ("HMC"). The accompanying  consolidated financial statements include
the accounts of the  television  and radio  operations,  which are  collectively
referred  to  hereafter  as "the  Company,  the  Companies  or the  Broadcasting
Segment." The Company owns and operates television and radio stations throughout
the United  States.  Also included in the  accompanying  consolidated  financial
statements  are the results of  operations  of WFGX-TV  Channel 35 in Ft. Walton
Beach, Florida, pursuant to a local marketing agreement (LMA). 

Disclosure of Certain Significant Risks and Uncertainties

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

     In the opinion of management, credit risk with respect to trade receivables
is limited due to the large number of  diversified  customers and the geographic
diversification  of the Company's  customer base. The Company  performs  ongoing
credit  evaluations  of its customers and believes that adequate  allowances for
any  uncollectable  trade  receivables are maintained.  At December 31, 1996, no
receivable  from  any  customer  exceeded  5% of  stockholder's  equity,  and no
customer accounted for more than 10% of net revenues in 1996.

Acquired Intangible Broadcasting Assets

     Acquired intangible broadcasting assets are being amortized over periods of
4 to 40 years.  These amounts result from the acquisition of certain  television
and radio  station  license  and  nonlicense  assets  (see Note 9). The  Company
monitors  the  individual  financial  performance  of each of the  stations  and
continually  evaluates the  realizability  of intangible and tangible assets and
the  existence of any  impairment to its  recoverability  based on the projected
undiscounted cash flows of the respective stations.

     Intangible  assets,  at cost,  as of  December  31,  1996,  consist  of the
following (in thousands):
AMORTIZATION
                                                                       PERIOD          1996
                                                                    ---------------   ---------
Goodwill, net of accumulated amortization of $48,077 .........       40 years      $135,925
   FCC licenses, net of accumulated amortization of $2,612 ......   14 - 25 years       26,754
   Other, net of accumulated amortization of $635 ...............   4 - 25 years           947
                                                                                      ---------
                                                                                      $163,626
                                                                                      =========
F-7
HERITAGE MEDIA SERVICES, INC. BROADCASTING SEGMENT

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED )

Property and Equipment

     Property and  equipment are stated at cost less  accumulated  depreciation.
Depreciation is recorded on the  straight-line  basis over the estimated  useful
lives of the assets. Property and equipment at December 31, 1996, are summarized
as follows (in thousands):
USEFUL LIFE         1996
                                             ---------------   ------------
Land  .................................   --                 $   2,685
   Broadcasting equipment  ...............    5 - 25 years         41,268
   Buildings and improvements    .........   12 - 30 years          7,369
   Other equipment   .....................    4 -  8 years          9,904
                                                                ---------
                                                                   61,226
   Less: Accumulated depreciation   ......                        (31,221)
                                                                ---------
                                                                $  30,005
                                                                =========
Programming

     The Company has agreements with  distributors  for the rights to television
programming  over contract  periods which generally run from one to seven years.
Contract payments are made in installments over terms that are generally shorter
than the contract period.  Each contract is recorded as an asset and a liability
when the  license  period  begins  and the  program is  available  for its first
showing.  The  portion  of the  program  contracts  payable  within  one year is
reflected  as a  current  liability  in the  accompanying  consolidated  balance
sheets.

     The  rights  to  program   materials  are  reflected  in  the  accompanying
consolidated  balance  sheet at the lower of  unamortized  cost or estimated net
realizable  value.  Estimated net realizable  values are based upon management's
expectation  of  future  advertising  revenues  net of sales  commissions  to be
generated by the program  material.  Amortization  of program  contract costs is
charged to operations by the  straight-line  method over the contract  period or
based on usage,  whichever  yields the greater  amortization  for each  program.
Program  contract  costs,  estimated  by  management  to  be  amortized  in  the
succeeding year, are classified as current assets.  Payments of program contract
liabilities  are  typically  paid on a scheduled  basis and are not  affected by
adjustments for amortization or estimated net realizable value.

Barter Transactions

     Certain program  contracts provide for the exchange of advertising air time
in lieu of cash payments for the rights to such programming. These contracts are
recorded  as  the  programs  are  aired  at  the  estimated  fair  value  of the
advertising  air  time  given  in  exchange  for  the  program  rights.  Network
programming is excluded from these calculations.

     The Company  broadcasts  certain  customers'  advertising  in exchange  for
equipment,  merchandise and services. The estimated fair value of the equipment,
merchandise  or services  received is recorded as deferred  barter costs and the
corresponding obligation to broadcast advertising is recorded as deferred barter
revenues.  The deferred  barter costs are  expensed or  capitalized  as they are
used,  consumed or received.  Deferred  barter  revenues are  recognized  as the
related advertising is aired.

Other Assets

     Debt issuance  costs are amortized to interest  expense using the effective
interest method over the period of the related debt agreement.

                                      F-8
HERITAGE MEDIA SERVICES, INC. BROADCASTING SEGMENT

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED )

Revenues

     Broadcast revenues are derived primarily from local,  regional and national
advertising and network  compensation.  Advertising revenues are recognized upon
the airing of  commercials,  while network  revenues are  recognized  monthly as
earned.  Revenues are presented  net of  advertising  agency and national  sales
representatives' commissions.

Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of

     The Company  adopted the  provisions of SFAS No. 121,  "Accounting  for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of " on
January 1, 1996.  This  statement  requires that  long-lived  assets and certain
identifiable  intangibles be reviewed for impairment  whenever events or changes
in  circumstances  indicate  that the  carrying  amount  of an asset  may not be
recoverable.  Recoverability  of  assets  to be held and used is  measured  by a
comparison of the carrying  amount of an asset to future net cash flows expected
to be generated by the asset. If such assets are considered to be impaired,  the
impairment  to be  recognized  is measured  by the amount by which the  carrying
amount of the assets exceed the fair value of the assets.  Assets to be disposed
of are reported at the lower of the carrying  amount of fair value less costs to
sell. Initial adoption of this statement,  as of January 1, 1996, did not have a
material impact on the Company's financial position or results of operations.

Local Marketing Agreements

     The  Company  generally  enters into LMA's and  similar  arrangements  with
stations  located in markets in which the Company  already  owns and  operates a
station,  and in connection with acquisitions,  pending  regulatory  approval of
transfer of license  assets.  Under the terms of these  agreements,  the Company
makes  specified  periodic  payments to the  owner-operator  in exchange for the
grant to the Company of the right to program and sell advertising on a specified
portion of the  station's  inventory of  broadcast  time.  Nevertheless,  as the
holder  of  the  FCC  license,  the  owner-operator  retains  full  control  and
responsibility  for the  operation  of the station,  including  control over all
programming broadcast on the station.

2. ACCRUED EXPENSES:

     Accrued  expenses  consist of the  following  at  December  31,  1996,  (in
thousands):
1996
                                                   -------
Commissions   ........................   $1,449
          Payroll and employee benefits   ......      960
          Other   ..............................    2,842
                                                   -------
                                                   $5,251
                                                   =======
3. DUE TO AFFILIATE:

     The Company has an arrangement  with HMSI whereby HMSI will provide certain
management  and other  services to the Company.  The services  provided  include
consultation  and direct  management  assistance  with respect to operations and
strategic planning.  The Broadcasting  Segment was allocated  approximately $2.0
million of corporate overhead expenses for these services.

     In order to fund  acquisitions and provide  operating  funds,  HMSI entered
into a Bank Credit  Agreement.  The debt used to finance  acquisitions  and fund
daily  operations of the  Broadcasting  Segment was recorded by the Broadcasting
Segment as affiliate borrowings in the accompanying  consolidated balance sheet.
HMSI allocates interest at a rate of approximately 10.0%, which approximates the
average rate

                                      F-9
HERITAGE MEDIA SERVICES, INC. BROADCASTING SEGMENT

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED )

paid on the borrowings.  Associated with the HMSI debt, the Broadcasting Segment
was  allocated  approximately  $.6  million of  deferred  financing  costs.  The
deferred  financing  costs are being  amortized over the term of the Bank Credit
Agreement.

4. PROGRAM CONTRACTS PAYABLE:

     FUTURE PAYMENTS REQUIRED UNDER PROGRAM CONTRACTS PAYABLE AS OF DECEMBER 31,
1996, ARE AS FOLLOWS (IN thousands):
1997   .......................................    $  2,079
          1998   .......................................       1,151
          1999   .......................................         324
          2000   .......................................          59
                                                            --------
                                                               3,613
          Less: Current portion    .....................      (2,079)
                                                            --------
          Long-term portion of program contracts payable    $  1,534
                                                            ========
The Company has estimated the fair value of its program  contract  payables
and  noncancelable  commitments at approximately  $2.6 million and $0.4 million,
respectively, at December 31, 1996, based on future cash flows discounted at the
Company's current borrowing rate.

Broadcast Program Rights

     The Company has entered into  contracts for broadcast  program  rights that
expire  at  various  dates  during  the  next  four  years.  Contracts  totaling
approximately $0.5 million relate to programs which are not currently  available
for use and,  therefore,  are not  reflected  as  assets or  liabilities  in the
accompanying consolidated balance sheet at December 31, 1996.

5. INCOME TAXES:

     The Company's  Parent files a consolidated  federal tax return and separate
state tax returns for each of its subsidiaries in certain filing  jurisdictions.
It is the  Parent's  policy  to pay the  Federal  income  tax  provision  of the
Company. The accompanying  financial statements have been prepared in accordance
with the  separate  return  method of FASB 109,  whereby the  allocation  of the
federal  tax  provision  due to the  Parent  is based  on what the  subsidiary's
current and deferred  federal tax provision  would have been had the  subsidiary
filed a federal income tax return outside of its consolidated group. The Company
is not  required  to  reimburse  its  Parent  for  its  federal  tax  provision.
Accordingly,   this  amount  is  recorded  as  a  capital  contribution  in  the
accompanying  consolidated financial statements.  No federal deferred tax assets
or liabilities are recorded because those amounts are considered  currently paid
to or received by the Parent. The federal and state tax provision was calculated
based on pretax income, plus or minus permanent book-to-tax  differences,  times
the statutory tax rate of 40%. The Company had no alternative minimum tax credit
carryforwards as of December 31, 1996. The effective tax rate of 53% exceeds the
statutory tax rate of 40% due to the effects of non-deductible goodwill. 

                                      F-10
HERITAGE MEDIA SERVICES, INC. BROADCASTING SEGMENT

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED )

   The   provision for income taxes consists of the following as of December 31,
         1996 (in thousands):
Current:
Federal  ....................................    $6,762
State    ....................................     1,192
                                                 ------
                                                  7,954
                                                 ------
          Deferred:
Federal  ....................................        --
State    ....................................      (101)
                                                 ------
                                                   (101)
                                                 ------
          Provision for income taxes   ......    $7,853
                                                 ======
The following  table  summarizes  the state tax effects of the  significant
types of temporary  differences  between financial reporting basis and tax basis
which were generated during the year ended December 31, 1996.
Deferred Tax Assets:
Bad debt reserve  ...............   $ 80
Accruals    .....................    135
                                    -----
                                    $215
                                    =====
          Deferred Tax Liability:
Depreciation   ..................   $563
                                    -----
                                    $563
                                    =====
6. EMPLOYEE BENEFIT PLAN:

     Company  employees are covered by HMC's Retirement  Savings Plan (the Plan)
whereby participants may contribute portions of their annual compensation to the
Plan and  certain  contributions  may be made at the  discretion  of the Company
based on criteria set forth in the Plan  Agreement.  Participants  are generally
100% vested in Company  contributions  after five years of  employment  with the
Company. Company expenses under the Plan were not material in 1996.

7. RELATED PARTY TRANSACTIONS:

     The  Company  regularly  receives  certain  advances  from  HMC  which  are
evidenced by a subordination  agreement.  These advances are noninterest-bearing
and subordinated to borrowings under the Credit  Agreements but may be repaid if
such repayment does not result in covenant violations under those agreements.

8. CONTINGENCIES AND OTHER COMMITMENTS:

Leases and Contracts

     The  Company   and  its   subsidiaries   lease   certain   real   property,
transportation  and  other  equipment  under  noncancellable   operating  leases
expiring  at  various  dates  through  2010.  The  Company  also  has  long-term
contractual  obligations  with two major  broadcast  ratings  firms that provide
monthly  ratings  services and guaranteed  store  contracts.  Rent expense under
theses leases for the year ended December 31, 1996 aggregated approximately $1.6
million.

                                      F-11
HERITAGE MEDIA SERVICES, INC. BROADCASTING SEGMENT

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED )

   Future minimum payments under the leases are as follows (in thousands):
1997   .....................   $1,287
          1998   .....................    1,167
          1999   .....................    1,097
          2000   .....................      973
          2001 and thereafter   ......    4,662
                                         -------
                                         $9,186
                                         =======
Litigation

     The Company is a party to lawsuits  which are  generally  incidental to its
business.  Management  of the Company  does not believe the  resolution  of such
matters will have a significant  effect on its liquidity,  financial position or
results of operations.

9. ACQUISITIONS:

     In February  1996,  the  Company  acquired  WMYU and WWST-FM in  Knoxville,
Tennessee,  for $6.5 million.  Also in February 1996, the Company  completed the
sale of KEVN-TV, Rapid City, South Dakota. As a result of this sale, the Company
recognized a gain of $6.0 million.

     In March 1996, HMC contributed the stock of KIHT-FM to the Company for $7.2
million.  Because HMC and the Company are under common control, the transactions
were  accounted  for at  historical  cost in a manner  similar  to a pooling  of
interests. Accordingly, the consolidated financial statements include the assets
and liabilities and results of operations of the contributed subsidiary from the
dates of acquisition by HMC.

     The  acquisitions  discussed  above  were  recognized  in the  consolidated
financial statements as follows (in thousands):
1996
                                                                -----------
Purchase price - cash paid by Parent, net of cash
acquired  ...................................................    $  9,384
          Less: Assets acquired   ...........................      (3,388)
          Add: Liabilities assumed   ........................       1,176
                                                                 --------
Goodwill purchased    .......................................    $  7,172
                                                                 ========
10. FINANCIAL INFORMATION BY SEGMENT:

     The  Company  operates in two  principal  business  segments --  television
broadcasting  and radio  broadcasting.  At December  31,  1996,  the  television
segment included five television  stations for which the Company is the licensee
and one station which is operated under a local marketing  agreement.  These six
stations operate in six different markets in the continental United States.

     The radio group currently operates 23 radio stations, including three under
an  LMA  pending   acquisition,   and  has  recently  announced  two  additional
transactions  involving trades of existing stations in like-kind exchanges.  The
radio group will own and  operate 24 stations  (seven AM, 17 FM) in seven of the
top 50 largest markets by population  after all pending  transactions  have been
completed. The holdings include at least three stations (and two FM stations) in
every market.

                                      F-12
HERITAGE MEDIA SERVICES, INC. BROADCASTING SEGMENT

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED )
1996
                                      ---------------
                                      (IN THOUSANDS)
TELEVISION
Net broadcasting revenue  .........      $ 46,316
Station operating expenses   ......        30,982
Station operating income  .........        15,334
Total assets  .....................        83,848
Capital expenditures   ............         5,791
          RADIO
Net broadcasting revenue  .........        53,278
Station operating expenses   ......        41,598
Station operating income  .........        11,680
Total assets  .....................       137,928
Capital expenditures   ............         1,147
          CONSOLIDATED
Net broadcasting revenue  .........      $ 99,594
Station operating expenses   ......        72,580
Station operating income  .........        27,014
Total assets  .....................       221,776
Capital expenditures   ............         6,938
11. SUBSEQUENT EVENTS:

     On January 7, 1997,  the Company  completed  the  purchase of the assets of
WHRR-FM, serving Rochester, New York, for $1.9 million. On January 24, 1997, the
Company  completed the purchase of the assets of KXTR-FM,  serving  Kansas City,
Missouri, for $9.7 million.

     On January 21, 1997,  the Company  announced  plans to trade its Knoxville,
Tennessee,  stations,  WMYU-FM and WWST-FM for KQRC-FM serving Kansas City, in a
like-kind  exchange.  On  February  18,  1997,  the Company  announced  plans to
exchange  WVAW-FM,  its station in Cincinnati,  for WGH-FM,  WVCL-FM and WGH-AM,
serving  Norfolk,  Virginia,  plus $5 million cash. The Company will operate the
Norfolk stations under a Local Management  Agreement ("LMA").  Both transactions
are subject to approval by the FCC.

     In July  1997,  Heritage  Media  Corporation  entered  into an  asset  sale
agreement with Sinclair Broadcast Group, Inc. to sell the Broadcasting  Segment.
The sale price is $630  million in cash,  contingent  upon the  closing of HMC's
merger agreement with The News Corporation Limited, which remains subject to FCC
approval. The sale is expected to occur in the first quarter of 1998.

                                      F-13
HERITAGE MEDIA SERVICES INC. -- BROADCASTING SEGMENT
                          CONSOLIDATED BALANCE SHEETS
DECEMBER 31,     JUNE 30,
                                                                          1996            1997
                                                                       --------------   ------------
ASSETS
CURRENT ASSETS:
 Cash and cash equivalents   .......................................     $   2,151       $   2,133
 Accounts receivable, net of allowance for doubtful accounts  ......        20,036          19,883
 Deferred barter costs .............................................         1,911           2,496
 Prepaid expenses and other current assets  ........................           138             929
 Deferred tax asset ................................................           215             215
 Current portion of program contract costs  ........................         1,006           1,603
                                                                         ---------       ---------
   Total current assets   ..........................................        25,457          27,259
Property and equipment, net  .......................................        30,005          27,524
Acquired intangible broadcasting assets, net   .....................       163,626         171,794
Program contract costs, less current portion   .....................         1,867           1,266
Other assets  ......................................................           821             613
                                                                         ---------       ---------
   Total assets  ...................................................     $ 221,776       $ 228,456
                                                                         =========       =========
       LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
 Accounts payable   ................................................     $     148       $     185
 Deferred barter revenues ..........................................         1,746           1,698
 Accrued liabilities   .............................................         5,251           1,613
 Deferred revenues  ................................................           428              94
 Current portion of program contracts payable  .....................         2,079           1,552
                                                                         ---------       ---------
   Total current liabilities .......................................         9,652           5,142
Long-Term Liabilities:
 Due to affiliate   ................................................       178,393         183,545
 Deferred tax liability   ..........................................           563             563
 Program contracts payable   .......................................         1,534             860
 Other long-term liabilities .......................................           152             347
                                                                         ---------       ---------
   Total liabilities   .............................................       190,294         190,457
                                                                         ---------       ---------
Commitments and contingencies   ....................................
Stockholders' equity:
 Common stock, $1.00 par value, 3,576,000 shares authorized and
   2,591,586 issued and outstanding   ..............................         2,592           2,592
 Common stock, no par value, 300 shares authorized and 200 shares
   issued and outstanding ..........................................            --              --
 Additional paid-in capital  .......................................        66,174          66,174
 Accumulated deficit   .............................................       (37,284)        (30,767)
                                                                         ---------       ---------
   Total stockholders' equity   ....................................        31,482          37,999
                                                                                         ---------
   Total liability and stockholders'  ..............................     $ 221,776       $ 228,456
                                                                         =========       =========
The  accompanying  notes are an integral  part of these  unaudited  consolidated
                                  statements.

                                      F-14
HERITAGE MEDIA SERVICES INC. -- BROADCASTING SEGMENT
                     CONSOLIDATED STATEMENTS OF OPERATIONS
JUNE 30,
                                                                       ------------------------
                                                                        1996          1997
                                                                       ----------   -----------
Revenues:
 Station broadcast revenues, net of agency commissions  ............   $43,259       $ 46,451
 Revenues realized from station barter arrangements  ...............     1,958          2,430
                                                                       --------      --------
   Total revenues   ................................................    45,217         48,881
Operating Expenses:
 Program and production   ..........................................    13,588         15,313
 Selling, general and administrative  ..............................     9,772          9,447
 Expenses realized from station barter arrangements  ...............     1,276          1,849
 Depreciation and amortization of property and equipment   .........     2,673          2,819
 Amortization of program contract costs and net realizable value ad-
   justments                                                               959            824
 Amortization of acquired intangible broadcasting assets   .........     4,101          4,174
                                                                       --------      --------
   Total operating expenses  .......................................    32,369         34,426
                                                                       --------      --------
   Broadcast operating income   ....................................    12,848         14,455
Other income (expense):
 Interest expense   ................................................    (9,484)        (9,979)
 Gain on sale of assets   ..........................................     6,031             --
 Gain on exchange of assets  .......................................        --          9,401
 Other expense   ...................................................      (102)           (98)
                                                                       --------      --------
 Income before income tax provision   ..............................     9,293         13,779
                                                                       --------      --------
Income tax provision   .............................................     4,898          7,262
                                                                       --------      --------
   Net income ......................................................   $ 4,395       $  6,517
                                                                       ========      ========
The  accompanying  notes  are  an  integral part of these unaudited consolidated
                                   statements

                                      F-15
HERITAGE MEDIA SERVICES INC. -- BROADCASTING SEGMENT
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30,
                                                                                    -------------------------
                                                                                      1996          1997
                                                                                    -----------   -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income    ..................................................................   $  4,395      $  6,517
 Adjustments to reconcile net income to net cash flows from operating activities:
   Depreciation and amortization of property and equipment  .....................      2,673         2,819
   Amortization:
    Acquired intangible broadcasting assets  ....................................      4,101         4,174
    Program contract costs and net realizable adjustments   .....................        959           824
    Deferred finance costs    ...................................................        134           166
   Gain on sale of assets  ......................................................     (6,031)           --
   Gain of exchange of assets ...................................................         --        (9,401)
 Changes in assets and liabilities, net of effects of acquisitions:
   Decrease (increase) in accounts receivable, net    ...........................        739           (62)
   Decrease in other assets   ...................................................        716            69
   Increase in prepaid expenses and other current assets    .....................       (761)       (1,572)
   Decrease in accounts payable and accrued liabilities  ........................     (1,910)       (2,235)
   Net effect of change in deferred barter revenues and deferred barter costs           (168)         (633)
   Increase (decrease) in deferred revenues  ....................................          5          (334)
   Increase in other long-term liabilities   ....................................          5           196
Payments on program contracts payable  ..........................................     (1,102)       (1,263)
                                                                                    ---------     ---------
     Net cash flows from operating activities   .................................      3,755          (735)
                                                                                    ---------     ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Payments for acquisitions ......................................................     (8,022)      (13,146)
 Acquisition of property and equipment    .......................................     (6,024)       (2,510)
 Proceeds from exchange of assets   .............................................         --        11,979
 Proceeds from sale of assets ...................................................     13,759            --
                                                                                    ---------     ---------
     Net cash flows used in investing activities   ..............................       (287)       (3,677)
                                                                                    ---------     ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Dividends paid   ...............................................................    (30,520)           --
 Capital contributions made by parent  ..........................................     43,024            --
 (Decrease) increase in due to affiliate  .......................................    (16,300)        4,395
                                                                                    ---------     ---------
     Net cash flows from financing activities   .................................     (3,796)        4,395
                                                                                    ---------     ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS    ....................................       (328)          (17)
CASH AND CASH EQUIVALENTS, beginning of period  .................................      1,799         2,151
                                                                                    ---------     ---------
CASH AND CASH EQUIVALENTS, end of period  .......................................   $  1,471      $  2,134
                                                                                    =========     =========
SUPPLEMENTAL DISCLOSURE:
 Program rights acquired   ......................................................   $     41      $     62
                                                                                    =========     =========
The accompanying notes are an integral part of these consolidated statement.

                                      F-16
HERITAGE MEDIA SERVICES, INC. BROADCASTING SEGMENT

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 JUNE 30, 1997

1. ORGANIZATION

Basis of Presentation

     Heritage Media Services,  Inc. ("HMSI") operates in two segments  Marketing
Services  and  Broadcasting.  The  parent  company  of  HMSI is  Heritage  Media
Corporation ("HMC). The accompanying  consolidated  financial statements include
the accounts of the  television  and radio  operations,  which are  collectively
referred  to  hereafter  as "the  Company,  the  Companies  or the  Broadcasting
Segment." The Company owns and operates television and radio stations throughout
the United  States.  Also included in the  accompanying  consolidated  financial
statements  are the results of  operations  of WFGX-TV  Channel 35 in Ft. Walton
Beach, Florida, pursuant to a local marketing agreement (LMA).

2. DUE TO AFFILIATE

     The Company has an arrangement  with HMSI whereby HMSI will provide certain
management  and other  services to the Company.  The services  provided  include
consultation  and direct  management  assistance  with respect to operations and
strategic planning.  The Broadcasting  Segment was allocated  approximately $2.0
million of corporate overhead expenses for these services.

     In order to fund acquisitions and provide  operating funds,  entered into a
Bank  Credit  Agreement.  The debt used to finance  acquisitions  and fund daily
operations of the Broadcasting  Segment was recorded by the Broadcasting Segment
as affiliate  borrowings in the accompanying  consolidated  balance sheet.  HMSI
allocates  interest at a rate of  approximately  10.0%,  which  approximates the
average rate paid on the borrowings.

3. SUBSEQUENT EVENT

     In July  1997,  Heritage  Media  Corporation  entered  into an  asset  sale
agreement with Sinclair Broadcast Group, Inc. to sell the Broadcasting  Segment.
The sale price is $630  million in cash,  contingent  upon the  closing of HMC's
merger agreement with The News Corporation Limited, which remains subject to FCC
approval. The sale is expected to occur in the first quarter of 1998.

                                      F-17