<PAGE>


                        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


                                   May 9, 1996
                          ----------------------------
                        (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 7.  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.


                                                                         
                                                                         

SUPERIOR COMMUNICATIONS GROUP, INC.
         Independent Auditors Report                                     
         Consolidated Balance Sheets as of December 31, 1995 and
                  December 31, 1994                                      
         Consolidated Statements of Operations for the Years Ended
                  December 31, 1995 and December 31, 1994                
         Consolidated Statements of Stockholder's Equity for the Years
                  Ended December 31, 1995 and December 31, 1994          
         Consolidated Statements of Cash Flows for the Years Ended
                  December 31, 1995 and December 31, 1994                
         Notes to Consolidated Financial Statements                      

(b)      Pro Forma Financial Information

         The pro forma financial  information required by this item is submitted
in the pages to follow.

(c)      Exhibits  

         Asset Purchase  Agreement  dated April 10, 1996 is by and between KRRT,
Inc. and Sinclair Broadcast Group, Inc.


Item 5.  Other Matters

(a)      Financial Statements of Probable Business Acquisitions

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




<PAGE>

PARAMOUNT STATIONS GROUP OF KERVILLE, INC.
         Report of Independent Public Accountants
         Consolidated Balance sheets as of August 3, 1995 and
                  December 31, 1994
         Consolidated  Statements  of  Operations for the period from January 1,
                  1995 through August 3, 1995 and the Year Ended December 31, 
                  1994
         Consolidated  Statements  of  Stockholders'  Equity for the Period from
                  January  1, 1995  through  August  3, 1995 and the
                  Year Ended December 31, 1994
         Consolidated  Statements  of Cash Flows for the Period from  January 1,
                  1995  through  August 3, 1995 and the Year Ended  December 31,
                  1994
         Notes to Consolidated Financial Statements

KRRT, Inc.
         Report of Independent Public Accountants
         Balance Sheet as of December 31, 1995
         Statement of Operations for the Period from July, 25 1995
                  through December 31, 1995
         Statements of Changes in  Stockholders' Equity for the Period from July
                  25, 1995 through December 31, 1995
         Statements of Cash  Flows  for the  Period  from  July 25, 1995 through
                  December 31, 1995
         Notes to Financial Statements

KANSAS CITY TV 62 LIMITED PARTNERSHIP
         Report of Independent Accountants
         Balance Sheets as of December 31, 1995 and December 31, 1994 Statements
                  of Operations for the Years Ended December 31, 1995 and
                  December 31, 1994
         Statements of Cash Flows for the Years Ended December 31, 1995
                  and December 31, 1994
         Statements of Changes is Partners' Capital for the Years Ended December
                  31, 1995 and December 31, 1994
         Notes to Financial Statements

CINCINNATI TV 64 LIMITED PARTNERSHIP
         Report of Independent Accountants
         Balance Sheets as of December 31, 1995 and December 31, 1994 Statements
                  of Operations for the Years Ended December 31, 1995 and 
                  December 31, 1994
         Statements of Changes in Partners' Capital for the Years Ended December
                  31, 1995 and December 31, 1994
         Statements of Cash Flows for the Years Ended December 31, 1995
                  and December 31, 1994
         Notes to Financial Statements
<PAGE>

RIVER CITY BROADCASTING L.P.
         Independent Auditors' Report
         Consolidated Balance Sheets as of December 31, 1994 and
                  December 31, 1995
         Consolidated Statements of Operations for the Years Ended
                  December 31, 1993, 1994 and 1995
         Consolidated  Statements of Partners'  Capital  (Deficit) for the Years
                  Ended December 31, 1993, 1994 and 1995
         Consolidated Statements of Cash Flows for the Years Ended
                  December 31, 1993, 1994 and 1995
         Notes to Consolidated Financial Statements
         Supplementary Information-Consolidating Balance Sheet as of
                  December 31, 1995
         Supplementary Information-Consolidating Schedule of Operations
                  for the Year Ended December 31, 1995

(b)      Pro Forma Financial Information

         The pro forma  information  required by this item is  submitted  in the
pages to follow.

(c)      PRO FORMA CONSOLIDATED FINANCIAL DATA

         The Pro Forma  Consolidated  Financial  Data includes the unaudited pro
forma  consolidated  balance  sheet of the Company as of December  31, 1995 (the
"Pro Forma Consolidated Balance Sheet") and the unaudited pro forma consolidated
statement  of  operations  for the year ended  December 31, 1995 (the "Pro Forma
Consolidated Statement of Operations").

         The unaudited Pro Forma Consolidated  Balance Sheet is adjusted to give
effect to (I) the  consummation of the acquisition of the assets and liabilities
of  Superior   Communications  Group,  Inc.   ("Superior"),   and  the  probable
acquisitions of (II) KRRT, Inc., Kansas City TV 62 Limited Partnership ("KSMO"),
Cincinnati TV 64 Limited  Partnership  ("WSTR") and River City Broadcasting L.P.
("RCB") and (III) cash on hand and  borrowings  under the  existing  Bank Credit
Agreement  and New Credit  Facilities  in amounts  sufficient  to  complete  the
transactions described in (I) and (II) above.

         The  unaudited  Pro  Forma  Consolidated  Statement  of  Operations  is
adjusted to give effect to (I) the  consummation of the acquisition of Superior,
(II) the probable  acquisitions of KRRT, Inc., KSMO, WSTR and RCB and (III) cash
on hand and borrowings  under the existing Bank Credit  Agreement and New Credit
Facilities in amounts  sufficient to complete the transactions  described in (I)
and (II) above. The WSYX-TV  information in the Pro Forma  Consolidated  Balance
Sheet  and  Pro  Forma  Consolidated   Statement  of  Operations   reflects  the
modification of the current acquisition documents eliminating Sinclair Broadcast
Group,  Inc's.  ("SBG")  option to acquire the assets of WSYX-TV.  This resulted
from the Department of Justice  ("DOJ")  expressing  preliminary  concerns about
SBG's  operation  of two  television  stations in  Columbus,  Ohio.  In order to
maintain the original schedule for the rest of the transaction, SBG and RCB have
entered into an agreement with the DOJ that will result in a modification of the
terms of the previously mentioned probable transaction.


<PAGE>
         The pro forma  adjustments  are based upon  available  information  and
certain  assumptions  the  Company  believes  are  reasonable.   The  Pro  Forma
Consolidated  Financial  Data should be read in  conjunction  with the Company's
Consolidated  Financial  Statements  and related  notes  thereto,  the Financial
Statements and related notes of Superior,  KRRT,  Inc.,  KSMO, WSTR and RCB. The
unaudited  Pro Forma  Consolidated  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>


                      PRO FORMA CONSOLIDATED BALANCE SHEET
                            AS OF DECEMBER 31, 1995
                             (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                   Superior                         
                                                        Consolidated   Flint     Commmunications  Pro Forma        Pro Forma 
                                                         Historical  TV, Inc.(a)  Group, Inc.(b)  Adjustments     Consummated

                                                        --------------------------------------------------------------------
<S>                                                       <C>        <C>               <C>         <C>             <C>          
                          ASSETS
CURRENT ASSETS:
        Cash, including cash equivalents................  $112,450   $     -         $     -       $(37,550)(c)    $ 74,900     
        Accounts receivable, net of allowance for 
                doubtful accounts.......................    50,022                     2,801                         52,823         
        Current portion of program contract costs.......    18,036       378           2,028                         20,442         
        Deferred barter costs...........................     1,268                                                    1,268     
        Prepaid expenses and other current assets.......     1,972                       106                          2,078         
        Deferred tax asset..............................     4,565                                                    4,565     
                                                        --------------------------------------------------------------------
                        Total current assets............   188,313       378           4,935        (37,550)        156,076
PROPERTY AND EQUIPMENT, net.............................    42,797     2,276           9,993                         55,066         
PROGRAM CONTRACT COSTS, less current portion............    19,277       744           3,131                         23,152         
LOANS TO OFFICERS AND AFFILIATES, net...................    11,900                                                   11,900     
NON-COMPETE AND CONSULTING AGREEMENTS, net..............    30,379                                                   30,379     
DEFERRED TAX ASSET......................................    16,462                                                   16,462     
OTHER ASSETS............................................    27,355                                   (1,000)(c)      26,355     
ACQUIRED INTANGIBLE BROADCASTING ASSETS, net............   268,789    33,905          57,522                        360,216
                                                        --------------------------------------------------------------------
                        Total assets....................  $605,272   $37,303         $75,581       $(38,550)       $679,606   
                                                        =====================================================================

               LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
        Accounts payable................................  $  2,187   $      -        $   366       $      -        $  2,553
        Income taxes payable............................     3,944                                                    3,944      
        Accrued Liabilities.............................    20,720                       362                         21,082
        Current portion of long-term liabilities-                                                                       
                Notes payable and commercial bank
                     financing..........................     1,133                                                    1,133      
                Capital leases payable..................       524                                                      524      
                Notes and capital leases payable to
                     affiliates.........................     1,867                                                    1,867      
                Program contracts payable...............    26,395       848           1,825                         29,068         
        Deferred barter revenues........................     1,752                                                    1,752
                                                        -------------------------------------------------------------------- 
                        Total current liabilities.......    58,522       848           2,553              -          61,923         
LONG-TERM LIABILITIES
        Notes payable and commercial bank financing.....   400,644                                   59,850 (c)     460,494
        Capital leases payable..........................        44                                                       44         
        Notes and capital leases payable to affiliates..    13,959                                                   13,959         
        Program contracts payable.......................    30,942     1,055           2,783                         34,780         
        Deferred tax liability..........................         -                     3,736                          3,736        
        Other long-term liabilites......................     2,442                     3,509                          5,951
                                                        --------------------------------------------------------------------
                        Total liabilities...............   506,553     1,903          12,581         59,850         580,887
                                                        --------------------------------------------------------------------
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY............     2,345         -               -              -           2,345
                                                        --------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES...........................
STOCKHOLDERS' EQUITY....................................
        Preferred stock, $.01 par value, 5,000,000 shares
                authorized and -0- outstanding..........         -                                                        -      
        Class A Common stock, $.01 par value, 35,000,000
                shares authorized and -0- and 5,750,000 
                shares issued and outstanding, 
                respectively............................        58                                                       58      
        Class B Common stock, $.01 par value, 35,000,000                                                                
                shares authorized and 29,000,000 shares 
                issued and outstanding..................       290                                                      290      
        Additional paid-in-capital......................   116,089                                                  116,089
        Accumulated deficit.............................   (20,063)                                                 (20,063)
                                                        --------------------------------------------------------------------
                        Total stockholders' equity......    96,374         -                -            -           96,374     
                                                        --------------------------------------------------------------------
                        Total Liabilities and Stock-
                              holders' Equity...........  $605,272   $ 1,903          $12,581     $ 59,850         $679,606  
                                                        =====================================================================
</TABLE>

<PAGE>
                 NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
                             (Dollars in thousands)

(a)   The Flint TV,  Inc.  (WSMH)  column  reflects  the assets and  liabilities
      acquired  in  connection  with  the  purchase  of  WSMH.   Total  acquired
      intangibles are calculated as follows:


                                                                 WSMH
                                                                 ----

      Purchase price........................................  $ 35,400
         Add:   Liabilities acquired -
                Current portion of program contract costs...       848
                Long-term portion of program contract costs.     1,055
         Less:  Assets acquired -
                Current portion of program contracts........      (378)
                Property and equipment......................    (2,276)
                Non-current portion of program contracts....      (744)
                                                                  ---- 

                Acquired intangibles........................  $ 33,905
                                                              ========


(b)   The Superior  Communications  Group,  Inc.  (Superior) column reflects the
      assets and  liabilities  acquired in  connection  with the purchase of the
      outstanding stock of Superior.  Total acquired  intangibles are calculated
      as follows:



                                                              Superior
                                                              --------

      Purchase price........................................  $63,000
           Add:  Liabilities acquired -
                 Accounts payable............................     366
                 Accrued expenses............................     362
                 Current portion of program contract costs...   1,825
                 Long-term portion of program contract costs.   2,783
                 Deferred tax liability......................   3,736
                 Other long-term liabilities.................   3,509
           Less: Assets acquired -
                 Accounts receivable.........................  (2,801)
                 Current portion of program contracts........  (2,028)
                 Prepaid expenses and other current assets...    (106)
                 Property and equipment......................  (9,993)
                 Non-current portion of program contracts....  (3,131)
                                                              ------ 

                 Acquired intangibles........................ $57,522
                                                             ========


(c)   In July 1995, the Company  exercised its option to purchase WSMH in Flint,
      Michigan for an option exercise price of $1 million. In February 1996, the
      Company  consummated the acquisition for a purchase price of $35.4 million
      at which time the balance due of $34.4 million was paid from the Company's
      existing cash balance.

      In March  1996,  the  Company  entered  into an  agreement  to acquire the
      outstanding  stock of Superior  and made a cash payment of $3.2 million to
      be applied  against cash  proceeds to the  stockholders  of Superior  upon
      closing.  The Company funded the remaining  cash proceeds to the seller of
      $59.8 million by utilizing available  indebtedness under Facility B of the
      Bank Credit Agreement.


  The pro forma cash adjustment is calculated as follows:

      Cash paid for WSMH acquisition........................ $34,400
      Cash paid for Superior acquisition....................   3,150
                                                               -----

      Total cash paid....................................... $37,550
                                                             =======
<PAGE>
                 PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
                             (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                         Superior
                                                       Consolidated      Flint        Commmunications      Pro Forma     Pro Forma
                                                        Historical     TV, Inc.(a)     Group, Inc.(b)     Adjustments   Consummated
                                                       --------------------------------------------------------------   -----------
<S>                                                     <C>           <C>            <C>                  <C>           <C>
REVENUES:
        Station broadcast revenues, net of agency
          commissions................................  $  187,934     $ 7,217        $  13,400             $            $   208,551 
        Revenues realized from station barter 
          arrangements...............................      18,200                                                            18,200
                                                       -----------------------------------------------------------------------------
                     Total revenues..................     206,134       7,217           13,400                     -        226,751
                                                       -----------------------------------------------------------------------------
OPERATING EXPENSES:
        Program and production.......................      22,563         511            1,461                               24,535
        Selling, general and administrative..........      41,763       2,114            4,188                               48,065
        Expenses realized from station barter 
                arrangements.........................      16,120                                                            16,120
        Amortization of program contract costs 
                and net realizable value 
                adjustments..........................      29,021         897            4,899                               34,817
        Depreciation and amortization of property
                and equipment........................       5,400          20            1,660                 (217)(c)       6,863
        Amortization of acquired intangible broad-
                casting assets, non-compete and 
                consulting agreements and other
                assets...............................      45,989          12             1,066               7,819 (d)      54,886
                                                       -----------------------------------------------------------------------------
                     Total operating expenses........     160,856       3,554            13,274               7,602         185,286
                                                       -----------------------------------------------------------------------------
                     Broadcast operating income 
                        (loss).......................      45,278       3,663               126              (7,602)         41,465
                                                       -----------------------------------------------------------------------------

OTHER INCOME (EXPENSE):
        Interest and amortization of debt 
          discount expense...........................     (39,253)                                                          (39,253)
        Interest (expense)...........................           -           -            (1,579)             (5,372)(e)      (6,951)
        Interest income..............................       3,942          81                                  (796)(f)       3,227
        Other income (expense).......................         221          41              (188)                                 74
                                                       -----------------------------------------------------------------------------
                     Income (loss) before (provision) 
                       benefit for income taxes and
                       extraordinary items...........      10,188       3,785            (1,641)            (13,770)         (1,438)

(PROVISION) BENEFIT FOR INCOME TAXES.................      (5,200)     (1,514)              461               6,610 (g)         357
                                                       -----------------------------------------------------------------------------
                     Net income (loss) before
                       extraordinary items...........       4,988       2,271            (1,180)             (7,160)         (1,081)

EXTRAORDINARY ITEM:
        Loss on early extinguishment of debt, 
               net of related income tax benefit.....      (4,912)                                                           (4,912)
                                                       -----------------------------------------------------------------------------

NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS...  $       76     $ 2,271         $  (1,180)          $  (7,160)    $    (5,993)
                                                       =============================================================================
          
EARNINGS PER COMMON SHARE
                     Net income before extraordinary
                       items........................   $     0.15                                                       $     (0.03)
                     Extraordinary items............   $    (0.15)                                                      $     (0.15)
                                                       -----------------------------------------------------------------------------
Net loss per common share...........................   $        -                                                       $     (0.19)
                                                       =============================================================================

WEIGHTED AVERAGE SHARES OUTSTANDING (in thousands)..       32,198                                                            32,198
                                                       =============================================================================

</TABLE>

<PAGE>
            NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                             (Dollars in thousands)

(a)   The Flint Inc.  column reflects the results of operations for WSMH for the
      year  ended  12/31/95  as the  purchase  transaction  was  consummated  in
      February 1996.



(b)   The Superior  Communications  Group,  Inc.  column reflects the results of
      operations  for  Superior  for the year  ended  12/31/95  as the  purchase
      transaction was consummated in May 1996.




(c)   To record  depreciation  expense  related to acquired  tangible assets and
      eliminate  depreciation  expense  recorded by WSMH and Superior.  Tangible
      assets are to be  depreciated over  lives  ranging  from 5 to 29.5  years,
      calculated as follows:

                                                  WSMH    Superior     Total
                                                  ----    --------     -----

  Depreciation expense on acquired assets..... $   191    $ 1,272     $1,463
  Less: Depreciation expense recorded by WSMH
     and Superior............................      (20)    (1,660)    (1,680)
                                                   ---     ------     ------ 

  Pro forma adjustment........................ $   171    $  (388)    $ (217)
                                               =======    =======     ====== 

(d)   To record  amortization  expense related to acquired intangible assets and
      eliminate  amortization expense recorded by WSMH and Superior.  Intangible
      assets  are  to be  amortized  over  lives  ranging  from  1 to 40  years,
      calculated as follows:

                                                   WSMH     Superior   Total
                                                   ----     --------   -----

  Amortization relating to acquired intangible
     assets...................................    $1,002    $ 7,895   $8,897

  Less: Intangible amortization recorded by 
     WSMH and Superior........................       (12)    (1,066)  (1,078)
                                                     ---     ------   ------ 

  Pro forma adjustment........................    $  990    $ 6,829   $7,819
                                                  ======    =======   ======


(e)   To record interest expense on acquisition  financing  relating to WSMH and
      Superior of $34,400 (in Credit Facility with commercial bank at 8.4% for 8
      months)  and  $59,850  (8.4% for 12 months),  respectively  and  eliminate
      interest expense recorded.

                                                    WSMH    Superior    Total
                                                    ----    --------    -----

  Interest expense adjustment as noted above..     $1,924   $ 5,027     $6,951

  Less: Interest expense recorded by WSMH and
     Superior................................           -    (1,579)    (1,579)
                                                    ------    ------     ------ 

  Pro forma adjustment........................     $1,924    $ 3,448    $5,372
                                                   ======    =======    ======


(f)   To eliminate  interest income on public debt proceeds relating to WSMH and
      Superior  of  $34,400  and  $3,150  (with  commercial  bank at 5.7%  for 4
      months), respectively and eliminate interest income recorded.


                                                   WSMH    Superior     Total
                                                   ----    --------     -----

  Interest income adjustment as noted above...    $ (655)   $  (60)   $  (715)

  Less: Interest income recorded by WSMH and 
     Superior.................................       (81)        -        (81)
                                                     ---        ---       --- 

  Pro forma adjustment........................    $  (736   $  (60)   $  (796)
                                                  =======   ======    ======= 

(g)   To record tax benefit of pro forma adjustments.



<PAGE>
                      PRO FORMA CONSOLIDATED BALANCE SHEET
                            AS OF DECEMBER 31, 1995
                             (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)
<TABLE>
<CAPTION>


                                                                           KRRT Inc. (a)
                                                                      -------------------------
                                                                        Paramount   
                                                       Pro Forma      Stations Group    KRRT                                
                                                      Consummated    of Kerville, Inc.  Inc.            KSMO(b)     WSTR(c) 
                                                      ----------------------------------------------------------------------
<S>                                                    <C>               <C>          <C>            <C>           <C>
                    ASSETS
CURRENT ASSETS:
    
   Cash, including cash equivalents................    $ 74,900          $            $              $      590     $   641 
   Accounts receivable, net of allowance 
         for doubtful accounts.....................      52,823                                           3,953       3,091 
   Current portion of program contract costs ......      20,442                          1,452            3,380       4,461 
   Deferred barter costs...........................       1,268                                                             
   Prepaid expenses and other current assets.......       2,078                                              21          15 
   Deferred tax asset..............................       4,565                                                             
                                                      ----------------------------------------------------------------------
                 Total current assets..............     156,076                 -        1,452            7,944       8,208 
PROPERTY AND EQUIPMENT, net........................      55,066                          3,068            3,286       8,357 
PROGRAM CONTRACT COSTS, less current portion.......      23,152                            869            3,754       4,339 
LOANS TO OFFICERS AND AFFILIATES, net..............      11,900                                                             
NON-COMPETE AND CONSULTING AGREEMENTS, net.........      30,379                                                             
DEFERRED TAX ASSET.................................      16,462                                                             
OTHER ASSETS.......................................      26,355                                                             
ACQUIRED INTANGIBLE BROADCASTING ASSETS, net.......     360,216                         26,532           10,014       8,807 
                                                       ---------------------------------------------------------------------
                 Total assets......................    $679,606          $            $ 31,921       $   24,998     $29,711 
                                                       =====================================================================

                                                      River City                       Pro Forma          Pro Forma
                                                   Broadcasting L.P.(d)    WSYX(e)    Adjustments    Consummated/Probable
                                                   ---------------------------------------------     ----------------------
                  ASSETS
CURRENT ASSETS:
   Cash, including cash equivalents................    $                 $            $ (72,882)(f)  $       3,249   
   Accounts receivable, net of allowance 
         for doubtful accounts.....................       10,000                                            69,867
   Current portion of program contract costs ......       23,276           (1,432)                          51,579
   Deferred barter costs...........................                                                          1,268 
   Prepaid expenses and other current assets.......                                                          2,114
   Deferred tax asset..............................                                                          4,565
                                                       -----------------------------------------     -------------------- 
                 Total current assets..............       33,276           (1,432)      (72,882)           132,642 
PROPERTY AND EQUIPMENT, net........................      134,879          (18,200)                         186,456
PROGRAM CONTRACT COSTS, less current portion.......       19,650             (917)                          50,847
LOANS TO OFFICERS AND AFFILIATES, net..............                                                         11,900
NON-COMPETE AND CONSULTING AGREEMENTS, net.........                                                         30,379
DEFERRED TAX ASSET.................................                                                         16,462 
OTHER ASSETS.......................................                                      14,725 (g)         41,080
ACQUIRED INTANGIBLE BROADCASTING ASSETS, net.......      795,695                                         1,201,264
                                                       -----------------------------------------     --------------------
                 Total assets......................    $ 983,500         $(20,549)    $ (58,157)     $   1,671,030
                                                       =========================================     ====================

<PAGE>


                                                                          KRRT Inc. (a)                                 
                                                                    -------------------------                            
                                                                       Paramount
                                                       Pro Forma     Stations Group    KRRT                                
                                                      Consummated   of Kerville, Inc.   Inc.            KSMO(b)     WSTR(c) 
                                                     ----------------------------------------------------------------------        
     LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts Payable................................    $  2,553          $            $              $    1,578     $ 1,127       
   Income Taxes Payable............................       3,944
   Accrued Liabilities.............................      21,082
   Current portion of long-term liabilities-
         Notes payable and commercial bank
                financing...........................      1,133
         Capital leases payable.....................        524
         Notes and capital leases payable to
                affiliates..........................      1,867
         Program contracts payable..................     29,068                          1,452            4,020       5,221
   Deferred barter revenues.........................      1,752
                                                       ---------------------------------------------------------------------
                 Total current liabilities..........     61,923                 -        1,452            5,598       6,348
LONG-TERM LIABILITIES
   Notes payable and commercial bank financing.....     460,494                              
   Capital leases payable...........................         44
   Notes and capital leases payable to affiliates...     13,959
   Program contracts payable........................     34,780                            869            3,107       4,262
   Deferred Tax Liability...........................      3,736
   Other long-term liabilites.......................      5,951                                           8,737
                                                       ---------------------------------------------------------------------
                 Total liabilities..................    580,887                 -        2,321           17,442      10,610
                                                       ---------------------------------------------------------------------
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY              2,345                 -            -                            -
                                                       ---------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES.......................
STOCKHOLDERS' EQUITY................................
   Preferred stock, $.01 par value, 5,000,000 shares
         authorized and -0- outstanding.............          -                               
   Class A Common stock, $.01 par value, 35,000,000
         shares authorized and -0- and 5,750,000
         shares issued and outstanding, respectively         58
   Class B Common stock, $.01 par value, 35,000,000
         shares authorized and 29,000,000 shares 
         issued and outstanding.....................        290
   Additional paid-in-capital.......................    116,089                  
   Accumulated deficit..............................    (20,063)
                                                       -----------------------------------------------------------------------
                 Total stockholders' equity.........     96,374                 -            -                -           -
                                                       -----------------------------------------------------------------------
                 Total Liabilities and Stockholders'
                          Equity.................... $  679,606          $      -     $  2,321       $   17,442     $10,610
                                                       ======================================================================= 

<PAGE>

 
                                                       River City                     Pro Forma            Pro Forma
                                                   Broadcasting L.P.(d)  WSYX(e)      Adjustment      Consummated/Probable
                                                      ------------------------------------------     ----------------------

       LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts Payable................................    $                 $            $              $    5,258
   Income Taxes Payable............................                                                       3,944
   Accrued Liabilities.............................                                                      21,082
   Current portion of long-term liabilities                                                                   
         Notes payable and commercial bank                
                financing...........................                                                      1,133
         Capital leases payable.....................                                                        524
         Notes and capital leases payable to
                affiliates..........................                                                      1,867
         Program contracts payable..................    21,585             (1,727)                       59,619
   Deferred barter revenues.........................                                                      1,752
                                                       -----------------------------------------     ----------------------
                 Total current liabilities..........    21,585             (1,727)           -           95,179
LONG-TERM LIABILITIES                   
   Notes payable and commercial bank financing......                                   799,787 (h)    1,260,281
   Capital leases payable...........................                                                         44
   Notes and capital leases payable to affiliates...                                                     13,959
   Program contracts payable........................    27,580             (1,174)                       69,424
   Deferred Tax Liability...........................                                                      3,736
   Other long-term liabilites.......................                                                     14,688
                                                       -----------------------------------------     ----------------------
                 Total liabilities..................    49,165             (2,901)     799,787        1,457,311
                                                       -----------------------------------------     ----------------------
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY........         -                  -            -            2,345
                                                       -----------------------------------------     ----------------------
COMMITMENTS AND CONTINGENCIES.......................
STOCKHOLDERS' EQUITY................................
   Preferred stock, $.01 par value, 5,000,000 shares
         authorized and -0- outstanding.............                                                           
   Class A Common stock, $.01 par value, 35,000,000
         shares authorized and -0- and 5,750,000
         shares issued and outstanding, respectively                                        42 (i)          100
   Class B Common stock, $.01 par value, 35,000,000                                                           -
         shares authorized and 29,000,000 shares                                                              -
         issued and outstanding.....................                                                        290
   Additional paid-in-capital.......................                                   114,958 (j)      231,047
   Accumulated deficit..............................                                                    (20,063)
                                                       -----------------------------------------     -----------------------
                 Total stockholders' equity.........         -                  -      115,000          211,374
                                                       -----------------------------------------     -----------------------
                 Total Liabilities and Stockholders'
                          Equity.................... $  49,165           $ (2,901)    $914,787       $1,671,030              
                                                     ===========================================     =======================

</TABLE>

<PAGE>
                  NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
                             (Dollars in thousands)

(a)   The KRRT Inc. (KRRT) column  reflects the assets and liabilities  acquired
      in connection  with the purchase of KRRT.  Total acquired  intangibles are
      calculated as follows:




          Purchase price ............................................ $29,600
                  Add:    Liabilities acquired -
                          Current portion of program contracts.......   1,452
                          Long - term portion of program contracts...     869
                  Less:   Assets acquired
                          Current portion of program contracts ......  (1,452)
                          Non-current portion of program contracts ..    (869)
                          Property and equipment ....................  (3,068)
                                                                       ------ 
                          Acquired intangibles ...................... $26,532
                                                                      =======

      The KSMO and WSTR columns reflect the assets and  liabilities  acquired in
      connection with the purchase of KSMO and WSTR. Total acquired  intangibles
      are calculated as follows:



(b)   KSMO:
          Purchase price ............................................ $  7,556
                  Add:    Liabilities acquired -
                          Accounts Payable...........................    1,578
                          Current portion of program contracts.......    4,020
                          Long - term portion of program contracts...    3,107
                          Subordinated debt .........................    8,737
                  Less:   Assets acquired
                          Current portion of program contracts ......   (3,380)
                          Non-current portion of program contracts ..   (3,286)
                          Cash.......................................     (590)
                          Accounts Receivable........................   (3,953)
                          Prepaid expenses...........................      (21)
                          Property and equipment ....................   (3,754)
                                                                        ------ 
                          Acquired intangibles ...................... $ 10,014
                                                                      ========

(c)   WSTR:
          Purchase price ............................................  $19,101
                  Add:    Liabilities acquired -
                          Accounts Payable...........................    1,127
                          Current portion of program contracts.......    5,221
                          Long - term ...............................    4,262
                  Less:   Assets acquired
                          Current portion of program contracts ......   (4,461)
                          Non-current portion of program contracts ..   (4,339)
                          Cash.......................................     (641)
                          Accounts Receivable........................   (3,091)
                          Prepaid expenses...........................      (15)
                          Property and equipment ....................   (8,357)
                                                                        ------ 
                          Acquired intangibles ...................... $  8,807
                                                                      ========



<PAGE>
(d)   The River City Broadcasting L.P. (RCB)  column  reflects  the  assets  and
      liabilities  acquired in connection  with the purchase RCB. Total acquired
      intangibles are calculated as follows:



          Purchase price ............................................ $916,687
                  Add:    Liabilities acquired -
                          Current portion of program contracts.......   19,858
                          Long - term portion of program contracts...   26,406
                  Less:   Assets acquired-
                          Accounts receivable........................  (10,000)
                          Current portion of program contracts ......  (21,844)
                          Non-current portion of program contracts ..  (18,733)
                          Property and equipment .................... (116,679)
                                                                      -------- 
                          Acquired intangibles ...................... $795,695
                                                                      ========

(e)   To  reflect  the  modification  of  the  current   acquisition  documents
      eliminating the Company's option to acquire WSYX-TV.



(f)   To reflect  the  pay-off by the Company of KSMO and WSTR's debt of $12,882
      which was  purchased  by Chase Bank,  and to reflect  the cash  payment of
      $60.0 million made in conjunction with the purchase  agreement between the
      Company and River City Broadcasting L.P. which will be applied against the
      cash proceeds upon closing.


(g)   To record debt  acquisition  costs incurred in conjunction with the Senior
      Secured  Credit  Facilities  of $28.5  million,  and  removal  of the $9.0
      million  purchase  option  to  acquire  KSMO & WSTR  and the  $4,775  note
      receivable from WSTR.


(h)   In April 1996, the Company entered into separate agreements to acquire the
      assets of River City Broadcasting L.P. and KRRT Inc. The cash proceeds due
      the seller at closing of $847,456, $29,600, and $28,500 (transaction costs
      due to the lender) will be made utilizing available indebtedness under the
      Senior  Secured  Credit  Facilities  less the amount  attributable  to the
      purchase of WSYX-TV.


(i)   In conjunction with the River City Broadcasting L.P. agreement, the seller
      will  receive  $115  million  of Series A  Exchangeable  Preferred  Stock.
      Pending shareholder  approval,  the Series A Exchangeable  Preferred Stock
      will be exchangeable for 4,181,818 shares of $.01 par value Class A Common
      Stock.


<PAGE>
                 PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
                             (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)



<TABLE>
<CAPTION>

                                                                          KRRT Inc. (a)  
                                                                    -------------------------                            
                                                                       Paramount
                                                       Pro Forma     Stations Group    KRRT                                      
                                                      Consummated   of Kerville, Inc.  Inc.            KSMO(b)       WSTR(c)     
                                                     ---------------------------------------------------------------------------- 
<S>                                                    <C>               <C>          <C>            <C>            <C>          
REVENUES:
   Station broadcast revenues, net of agency
          commissions...............................   $ 208,551         $ 7,567      $ 1,437        $  17,484      $ 15,529     
   Revenues realized from station barter
          arrangements..............................      18,200                                                                 
                                                       --------------------------------------------------------------------------
                   Total revenues...................     226,751           7,567        1,437           17,484        15,529     
                                                       --------------------------------------------------------------------------
                                                                                                                                 
OPERATING EXPENSES:                                                                                                              
   Program and production...........................      24,535             833          193            3,347         1,002     
   Selling, general and administrative..............      48,065           1,958          688            4,374         4,023     
   Expenses realized from station barter 
          arrangements..............................      16,120             876                                                 
Amortization of program contract costs and net 
          realizable value adjustments..............      34,817             921           70            4,007         4,971     
   Depreciation and amortization of property
          and equipment.............................       6,863             194          328              632           585     
   Amortization of acquired intangible broad-
          casting assets, non-compete and 
          consulting agreements and other 
          assets....................................      54,886             253          493              210            77     
                                                       --------------------------------------------------------------------------
                   Total operating expenses.........     185,286           5,035        1,772           12,570        10,658     
                   Broadcast operating income 
                    (loss)..........................      41,465           2,532         (335)           4,914         4,871     
                                                       --------------------------------------------------------------------------
OTHER INCOME (EXPENSE):
   Interest and amortization of debt discount 
     expense........................................     (39,253)                                                    
   Interest (expense)...............................      (6,951)                        (880)          (2,039)       (2,506)    
   Interest income..................................       3,227                           11                                    
   Other income (expense)...........................          74              63                           630                   
                                                       --------------------------------------------------------------------------
                   Income (loss) before (provision) 
                       benefit for income taxes and        
                       extraordinary items..........      (1,438)          2,595       (1,204)           3,505         2,365     
                                                                                                                                 
(PROVISION) BENEFIT FOR INCOME TAXES................         357          (1,076)           -           (1,682)       (1,135)    
                                                       --------------------------------------------------------------------------
                   Net income (loss) before                      
                       extraordinary items..........      (1,081)          1,519       (1,204)           1,823         1,230     
                                                                                                                                 
EXTRAORDINARY ITEM:                                                                                                              
   Loss on early extinguishment of debt, net of 
          related income tax benefit................      (4,912)                                                                
                                                       --------------------------------------------------------------------------
                                                                                                                                 
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREOLDERS...   $  (5,993)        $ 1,519      $(1,204)       $   1,823      $ 1,230      
                                                       ==========================================================================

EARNINGS PER COMMON SHARE
                   Net income before extraordinary
                       items........................   $   (0.03)                                                                
                   Extraordinary items..............   $   (0.15)                                                                
                                                       --------------------------------------------------------------------------
Net loss per common share...........................   $   (0.19)                                                                
                                                       ==========================================================================

WEIGHTED AVERAGE SHARES OUTSTANDING (in thousands)..      32,198                                                                 
                                                       ==========================================================================

<PAGE>
                                                                                                                       
                                                                                                                       
                                                        River City                      Pro Forma         Pro Forma   
                                                     Broadcasting L.P.    WSYX (e)      Adjustments   Consummated/Probable
                                                     ----------------------------------------------    ---------------- 
<S>                                                       <C>            <C>            <C>             <C>            
REVENUES:                                                                                                              
   Station broadcast revenues, net of agency                                                                           
          commissions..............................       188,190        (28,767)       $ (1,437)       $  408,554 
   Revenues realized from station barter 
          arrangements.............................                                                         18,200 
                                                     ----------------------------------------------    ----------------
                   Total revenues..................       188,190        (28,767)         (1,437)          426,754 
                                                     ----------------------------------------------    ----------------
                                                                                                                 - 
OPERATING EXPENSES:                                                                                              - 
   Program and production..........................        62,041         (8,133)         (1,437) (g)       82,381 
   Selling, general and administrative.............        30,456         (3,153)           (620) (h)       85,791 
   Expenses realized from station barter 
          arrangements.............................                                                         16,996 
Amortization of program contract costs and net                                                                     
          realizable value adjustments.............        33,452         (2,624)                           75,614 
   Depreciation and amortization of property
          and equipment............................        11,524         (2,107)          3,433  (i)       21,452 
   Amortization of acquired intangible broadcasting                                                                
          assets, non-compete and consulting agreement                                                             
          and other assets.........................        27,649         (9,780)         41,136           114,924 
                                                     ----------------------------------------------    ----------------
                   Total operating expenses........       165,122        (25,797)         42,512           397,158 
                                                     ----------------------------------------------    ----------------
                   Broadcast operating income 
                    (loss).........................        23,068         (2,970)        (43,949)           29,596 
                                                     ----------------------------------------------    ----------------
OTHER INCOME (EXPENSE):                                                                                            
   Interest and amortization of debt discount expense.                                                     (39,253)        
   Interest expense................................       (34,523)                       (39,371) (k)      (86,270)
   Interest income.................................         1,715                         (3,673) (k)        1,280 
   Other income expense............................           (22)            57                               802 
                                                     ----------------------------------------------    ----------------
                   Income (loss) before (provision)                                                                
                       benefit for income taxes and                                                                
                       extraordinary items.........        (9,762)         (2,913)       (86,993)          (93,845)
                                                                                                                 - 
(PROVISION) BENEFIT FOR INCOME TAXES...............         4,686           1,398         41,756 (i)        44,304
                                                     ----------------------------------------------    ----------------
                   Net income (loss) before                                                                        
                       extraordinary items.........        (5,076)         (1,515)       (45,237)          (49,541)
                                                                                                                 - 
EXTRAORDINARY ITEM:                                                                                              - 
   Loss on early extinguishment of debt, net of                                                                    
          related income tax benefit...............                                                         (4,912)
                                                     ----------------------------------------------    ----------------
                                                                                                                 - 
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREOLDERS..      $ (5,076)       $  1,515       $(45,237)       $  (54,453)
                                                     ==============================================    =================
                                                                                                                   
EARNINGS PER COMMON SHARE                                                                                          
                   Net income before extraordinary                                                                 
                       items.......................                                                     $   (1.43)
                   Extraordinary items.............                                                     $   (0.14)
                                                     ----------------------------------------------    ----------------
Net loss per common share..........................                                                     $   (1.57)
                                                     ==============================================    =================
                                                                                                                   
WEIGHTED AVERAGE SHARES OUTSTANDING (in thousands).                                                         34,687 (m) 
                                                     ==============================================    =================
</TABLE>
<PAGE>
            NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                             (Dollars in thousands)



(a)   The KRRT Inc.  column  reflects the results of  operations  for  Paramount
      Stations  Group for the seven  months and three days ended 8/3/95 and KRRT
      for the five months ended December 31, 1995.



(b)   The KSMO  column  reflects  the results of  operations  for the year ended
      12/31/95.


(c)   The WSTR  column  reflects  the results of  operations  for the year ended
      12/31/95.


(d)   The River City  Broadcasting  L.P.  (RCB)  column  reflects the results of
      operations for RCB for the year ended 12/31/95.



(e)   To  reflect  the  modification  of  the  current   acquisition   documents
      eliminating the Company's option to acquire WSYX-TV.



(f)   To eliminate LMA fees from RCB.


(g)   To eliminate LMA and license fees paid by RCB to KRRT and JJK.


(h)   To  eliminate  management  fees paid  during 1995 by River City and record
      additional corporate expenses as follows:


      Corporate expenses on a pro forma basis........................... $9,236

      Less: Corporate expenses recorded by Company...................... (5,374)

      Less: Management fees paid during 1995 by RCB..................... (4,482)
                                                                         -------
      Pro forma adjustment.............................................. $ (620)


(i)   To record  depreciation  expense  related to acquired  tangible assets and
      eliminate depreciation expense recorded by Paramount and KRRT, KSMO, WSTR,
      and RCB.  Tangible assets are to be depreciated  over lives ranging from 5
      to 29.5 years, calculated as follows:



      Depreciation expense on acquired assets.......................... $14,589

      Less: Depreciation expenses recorded by Paramount and KRRT,
            KSMO, WSTR and RCB ........................................ (11,156)
                                                                        ------- 

      Pro forma adjustment............................................. $ 3,433
                                                                        =======



<PAGE>


(j)   To record  amortization  expense related to acquired intangible assets and
      deferred financing costs, and eliminate  amortization  expense recorded by
      Paramount  and  KRRT,  KSMO,  WSTR,  and  RCB.  Intangible  assets  are to
      amortized over lives ranging from 1 to 40 years, calculated as follows:



     FCC  License.....................................................  $ 9,434
     Affiliation Agreements...........................................   19,854
     Goodwill.........................................................    5,963
     Goodwill  (LMA)..................................................   20,577
                                                                        -------
                                                                         55,828
     Deferred financing costs.........................................    3,718

     Less: Intangible  amortization recorded by Paramount and KRRT, KSMO 
          WSTR, and RCB...............................................  (18,410)
                                                                         -------

     Pro forma adjustment.............................................  $41,136
                                                                        ========




(k)   To record  interest  expense on  acquisition  financing of $875,956 for 12
      months on the Senior Secured Credit  Facilities for RCB and on acquisition
      financing of $60,000, $12,882, $29,600 (in Credit Facility with commercial
      bank at 8.4% for 8 months),  respectively,  for RCB, KSMO, WSTR, and KRRT.
      To  eliminate  interest  income on public  debt  proceeds  of $60,000  and
      $12,882 (with  commercial bank at 5.7% for 4 months),  for KSMO, WSTR, and
      RCB,  respectively,  and to eliminate interest expense and interest income
      recorded by KSMO, WSTR, Paramount, KRRT, and RCB.


<TABLE>
<CAPTION>

                                                                       Interest      Interest
                                                                        Expense       Income
                                                                        -------       ------

<S>                                                                     <C>          <C>      
     Interest expense and interest income adjustment as noted above..   $79,319)     $ (1,947)

     Less: Interest expense and interest income recorded by RCB, KSMO 
          and WSTR and Paramount and KRRT............................   (39,948)       (1,726)
                                                                         ------       -------

     Pro forma adjustment............................................   $39,371      $ (3,673)
                                                                        ========      =======
</TABLE>


(l)   To record tax benefit of pro forma adjustments


(m)   Weighted  average shares  outstanding on a Pro Forma  Consummated/Probable
      basis  assumes  that the $115 million of Series A  Exchangeable  Preferred
      Stock was exchanged for 4,181,818  shares of $.01 par value Class A Common
      Stock as of the IPO date (June 13, 1995).

<PAGE>
                        Consolidated Financial Statements
                         and Other Financial Information

                       Superior Communications Group, Inc.

                     Years ended December 31, 1995 and 1994
                       with Report of Independent Auditors

<PAGE>

                       Superior Communications Group, Inc.

                        Consolidated Financial Statements
                         and Other Financial Information

                     Years ended December 31, 1995 and 1994




                                    Contents

Report of Independent Auditors ..............................................1

Consolidated Financial Statements

Consolidated Balance Sheets .................................................2
Consolidated Statements of Operations .......................................4
Consolidated Statements of Stockholders' Equity .............................5
Consolidated Statements of Cash Flows .......................................6
Notes to Consolidated Financial Statements ..................................7


Other Financial Information

Report of Independent Auditors on Other Financial Information ..............17
Details of Consolidated Balance Sheet ......................................18
Details of Consolidated Statement of Operations.............................19

<PAGE>





                         Report of Independent Auditors


To the Board of Directors and Stockholders of
  Superior Communications Group, Inc.


We have  audited  the  accompanying  consolidated  balance  sheets  of  Superior
Communications  Group,  Inc. (the Company) as of December 31, 1995 and 1994, and
the related  consolidated  statements of operations,  stockholders'  equity, and
cash  flows  for the  years  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 audits.

We  conducted  our  audits  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 audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,   the  consolidated   financial  position  of  Superior
Communications   Group,  Inc.  as  of  December  31,  1995  and  1994,  and  the
consolidated results of their operations and their cash flows for the years then
ended in conformity with generally accepted accounting principles.


                                   Ernst & Young LLP

February 23, 1996






<PAGE>

                       Superior Communications Group, Inc.

                           Consolidated Balance Sheets

<TABLE>
<CAPTION>


                                                                      December 31
                                                               1995                1994
                                                        ----------------------------------
<S>                                                     <C>                   <C>         
Assets
Current assets:
Cash and cash equivalents                               $     272,218         $  1,088,527
Accounts receivable, less allowance
for doubtful accounts of $200,000 and $150,000              2,800,531            2,608,609
Deferred film costs                                         2,028,478            2,474,170
Prepaid expenses and other                                    106,344              165,053
                                                        ----------------------------------
Total current assets                                        5,207,571            6,336,359

Property and equipment:
Land                                                          538,144              535,347
Building                                                      723,186              723,186
Equipment and fixtures                                      8,731,303            8,482,329
                                                        ----------------------------------
                                                            9,992,633            9,740,862
Accumulated depreciation                                   (2,604,504)          (1,618,864)
                                                        ----------------------------------
                                                            7,388,129            8,121,998
Other assets:
Deferred film costs, net                                    3,131,340            3,533,338
Intangible assets, net                                      8,778,246           10,413,781
Other assets                                                    4,408               20,156
                                                        ----------------------------------
                                                           11,913,994           13,967,275








                                                        ----------------------------------
Total assets                                              $24,509,694          $28,425,632
                                                        ==================================

</TABLE>

                                      -2-


<PAGE>

<TABLE>
<CAPTION>

                                                                                      December 31
                                                                               1995                 1994
                                                                           --------------------------------

<S>                                                                      <C>                  <C>          
Liabilities and stockholders' equity 
Current liabilities:
  Current portion of long-term debt                                      $   1,805,532        $   1,617,089
  Current portion of film contract commitments                               1,824,891            1,559,914
  Accounts payable                                                             365,615              257,770
  Accrued expenses                                                             362,315              416,379
  Due to related parties                                                        58,760               62,482
                                                                           --------------------------------
Total current liabilities                                                    4,417,113            3,913,634

Long-term debt                                                              12,185,454           12,469,015
Film contract commitments                                                    2,783,220            2,298,625
Due to related parties                                                          35,000              100,000
Deferred income taxes                                                        3,383,907            3,899,249
Deferred income                                                                 31,341               37,341

Stockholders' equity:
  Preferred stock, $.001 par value, 20,000 shares authorized,  
    10,190.84 shares issued, 8,147.97 and  10,190.84 shares  
    outstanding at cost in 1995 and 1994. (Liquidation  
    preference at December 31, 1995 and 1994 of $10,043,731  
    and $11,323,291, respectively)                                           9,365,801            9,365,801
  Class B common stock, $.001 par value, 100,000 shares 
    authorized, 10,190.84 shares issued, 9,169.405 and 
    10,190.84 shares outstanding in 1995 and 1994.                                  10                   10
  Class A common stock, $.001 par value, 10,000 shares 
    authorized, 1,870.7 shares issued and outstanding                                2                    2
  Additional paid-in capital                                                    36,210               16,053
  Retained deficit                                                          (4,853,864)          (3,674,098)
  Treasury stock                                                            (2,874,500)                   -
                                                                           --------------------------------
Total stockholders' equity                                                   1,673,659            5,707,768
                                                                           --------------------------------
Total liabilities and stockholders' equity                                 $24,509,694          $28,425,632
                                                                           ================================
</TABLE>


See accompanying notes.

                                       -3-

<PAGE>
                       Superior Communications Group, Inc.

                      Consolidated Statements of Operations

<TABLE>
<CAPTION>

 
                                                                                      Year ended December 31
                                                                                      1995                1994
                                                                                  --------------------------------

<S>                                                                               <C>                  <C>        
Gross sales                                                                       $15,837,243          $13,974,224
Less agency commissions                                                             2,437,582            2,032,429
                                                                                  --------------------------------
Net sales                                                                          13,399,661           11,941,795

Operating expenses:
 Sales and promotion                                                                2,127,911            2,015,648
 Broadcast operations                                                               1,460,716            1,065,579
 General and administrative                                                         2,059,805            2,013,921
                                                                                  --------------------------------
                                                                                    5,648,432            5,095,148
                                                                                  --------------------------------
Operating income                                                                    7,751,229            6,846,647

Other expenses:
Amortization--deferred film costs and barter programming                             4,899,093            4,382,047
Depreciation and amortization                                                       2,725,654            3,064,864
Interest expense, net                                                               1,578,898            1,324,130
Other expense, net                                                                    188,111                    -
                                                                                  --------------------------------
                                                                                    9,391,756            8,771,041
                                                                                  --------------------------------
Loss before income tax benefit                                                     (1,640,527)          (1,924,394)

Income tax benefit                                                                   (460,761)             (89,202)
                                                                                  --------------------------------

Net loss                                                                         $ (1,179,766)        $ (1,835,192)
                                                                                  ================================

Undeclared preferred stock dividend requirement, inception to date
                                                                                 $  1,895,761         $  1,132,451
                                                                                  ================================
</TABLE>


See accompanying notes.

                                       -4-

<PAGE>
                                        Superior Communications Group, Inc.

                                 Consolidated Statements of Stockholders' Equity

<TABLE>
<CAPTION>

                                                                                                              Additional
                                                Partners'      Preferred       Class B        Class A          Paid-In       
                                                 Capital         Stock      Common Stock    Common Stock       Capital       
                                               ---------------------------------------------------------------------------
                                              
<S>                                            <C>           <C>                <C>             <C>          <C>             
Balance at January 1, 1994                     $5,950,100    $        -         $  -            $  -         $         -     
 Conversion of Superior Communication 
  of Kentucky, L.P. interest into 
  preferred and common stock of 
  Company, January 28, 1994                    (5,950,100)     5,950,091           7               2                   -     
 Equity contribution, January 28, 1994                  -      3,099,997           3               -                   -     
 Conversion of stockholder note into
  preferred and common stock of 
  Company, January 28, 1994                             -        172,713           -               -                   -     
 Contribution of net assets by former 
  general partner including cash of 
  $17,052, January 28, 1994                             -        143,000           -               -                   -     
 Vesting of 120.7 shares of common stock
  from stock grant                                      -              -           -               -              16,053     
 Net loss                                               -              -           -               -                   -     
                                              -----------------------------------------------------------------------------
Balance at December 31, 1994                            -      9,365,801          10               2              16,053     
 Purchase of 2,042.87 shares of preferred
  stock and 1,021.435 of Class B 
  common stock by the Company                           -              -           -               -                   -     
 Vesting of shares of common stock from
  stock grant                                           -              -           -               -              20,157     
 Net loss                                               -              -           -               -                   -     
                                              -----------------------------------------------------------------------------
Balance at December 31, 1995                  $         -     $9,365,801         $10            $  2          $   36,210     
                                              ===============================================================================
See accompanying notes.
</TABLE>

<TABLE>
<CAPTION>
                                             
                                                 Retained         Treasury          Total
                                                  Deficit           Stock           Equity
                                               ----------------------------------------------

<S>                                            <C>              <C>                <C>       
Balance at January 1, 1994                     $(1,838,906)     $          -       $4,111,194
 Conversion of Superior Communication 
  of Kentucky, L.P. interest into 
  preferred and common stock of 
  Company, January 28, 1994                               -                 -               -
 Equity contribution, January 28, 1994                    -                 -       3,100,000
 Conversion of stockholder note into
  preferred and common stock of Company,
  January 28, 1994                                        -                 -         172,713
 Contribution of net assets by former 
  general partner including cash of 
  $17,052, January 28, 1994                               -                 -         143,000
 Vesting of 120.7 shares of common stock
  from stock grant                                        -                 -          16,053
 Net loss                                        (1,835,192)                -      (1,835,192)
                                             --------------------------------------------------                         
Balance at December 31, 1994                     (3,674,098)                -       5,707,768
 Purchase of 2,042.87 shares of preferred
  stock and 1,021.435 of Class B 
  common stock by the Company                             -        (2,874,500)     (2,874,500)
 Vesting of shares of common stock from
  stock grant                                             -                 -          20,157
 Net loss                                        (1,179,766)                -      (1,179,766)
                                             --------------------------------------------------
Balance at December 31, 1995                    $(4,853,864)      $(2,874,500)     $1,673,659
                                             ==================================================
</TABLE>

See accompanying notes.

                                       -5-

<PAGE>
<TABLE>
<CAPTION>

                                        Superior Communications Group, Inc.

                                       Consolidated Statements of Cash Flows



                                                                                      Year ended December 31
                                                                                     1995                1994
                                                                             ---------------------------------------
<S>                                                                              <C>                  <C>         
Operating activities
Net loss                                                                         $(1,179,766)         $(1,835,192)
Adjustments to reconcile net loss to net cash
 provided by operating activities:
  Barter program revenue                                                          (1,565,295)          (1,310,618)
  Deferred income                                                                     (6,000)              (6,000)
  Stock grant expense                                                                 20,157               16,053
  Provision for bad debts                                                             50,000               99,750
  Amortization--deferred film costs and barter programming                         4,899,093            4,382,047
  Depreciation and amortization                                                    2,725,654            3,064,864
  Loss on disposal of assets                                                         193,415               36,769
  Deferred taxes                                                                    (515,342)            (118,720)
  Changes in operating assets and liabilities:
   Accounts receivable                                                              (241,922)            (744,505)
   Prepaid expenses and other                                                         58,709              (50,585)
   Accounts payable                                                                  107,845             (323,086)
   Accrued expenses                                                                  (54,064)             290,929
                                                                             ---------------------------------------
Net cash provided by operating activities                                          4,492,484            3,501,706

Investing activities
Capital expenditures                                                                (558,385)            (240,453)
Other assets                                                                          15,748                    -
Intangible assets acquired                                                                 -             (873,369)
Acquisition of Oklahoma City Broadcasting Company,
 less cash acquired                                                                        -          (10,696,379)
                                                                             ---------------------------------------
Net cash used in investing activities                                               (542,637)         (11,810,201)

Financing activities
Proceeds from long-term debt                                                          25,500           14,200,000
Payments on long-term debt                                                        (2,995,118)          (6,865,178)
Payments on film contract commitments                                             (1,727,816)          (1,545,099)
Net activity on related party liability                                              (68,722)              37,557
Proceeds from capital contribution                                                         -            3,117,052
                                                                             ---------------------------------------
Net cash (used) provided by financing activities                                  (4,766,156)           8,944,332
                                                                             ---------------------------------------
Net (decrease) increase in cash and cash equivalents                                (816,309)             635,837
Cash and cash equivalents at beginning of year                                     1,088,527              452,690
                                                                             ---------------------------------------
Cash and cash equivalents at end of year                                        $    272,218         $  1,088,527
                                                                             =======================================
</TABLE>


See accompanying notes.


                                       -6-

<PAGE>
                       Superior Communications Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 1995


1. Significant Accounting Policies

Description of Business

The consolidated  financial  statements of Superior  Communications  Group, Inc.
(SCGI) include the accounts of SCGI and its wholly owned subsidiaries,  Superior
Communications of Kentucky, Inc. (SCKI) and Superior Communications of Oklahoma,
Inc. (SCOI), which are collectively referred to as the Company. All intercompany
balances  have  been  eliminated.  The  Company  owns  and  operates  television
broadcasting stations in Lexington, Kentucky and Oklahoma City, Oklahoma.

Organization

The Company,  previously known as Superior Communications of Kentucky, L.P. (the
Partnership),  was  incorporated  in  its  current  form  on  January  28,  1994
concurrent with the acquisition of SCOI (Note 2). Effective on January 28, 1994,
the  former  partners  of the  Partnership  exchanged  all of their  partnership
interests  for shares of preferred  and common stock of the newly formed  parent
company,  SCGI,  under a Security  Purchase  and  Exchange  Agreement  (Exchange
Agreement) and the  Partnership  was then  dissolved.  Additionally,  the former
corporate  general  partner  of the  Partnership  was  also  dissolved  and  the
shareholders of the general partner  exchanged certain operating assets with the
Company  for  preferred  and  common  stock.  Furthermore,  under  the  Exchange
Agreement,  SCGI then contributed the operating assets of the former partnership
to the newly formed SCKI in exchange for all of the outstanding  common stock of
SCKI.

Operations and Credit Risk

The Company's accounts receivable are from the sale of advertising, primarily to
businesses  which are local to the  broadcast  area or to  national  advertising
agencies.  The Company performs credit  evaluations of its customers'  financial
condition and generally does not require collateral.  Receivables are due within
30 days. Credit losses have been within management's expectations.  The carrying
amount reported in the balance sheet for accounts  receivable  approximates  its
fair value.

Cash and Cash Equivalents

The Company considers all demand deposits and short-term  investments  purchased
with a maturity of 90 days or less to be cash  equivalents.  The carrying amount
reported in the balance  sheet for cash and cash  equivalents  approximates  its
fair value.

                                      -7-
<PAGE>



                       Superior Communications Group, Inc.

             Notes to Consolidated Financial Statements (continued)




1. Significant Accounting Policies (continued)

Deferred Film Costs and Film Contract Commitments

The Company has contracts  with various film  distributors  from which films are
licensed for television  transmission  over various contract periods  (generally
one to five years) and for a specified  number of broadcasts.  Net deferred film
costs represent the lower of unamortized  cost or estimated net realizable value
of the film  contracts  available for use.  Deferred film costs are amortized on
the straight-line  method over the contract periods.  Film contract  commitments
represent the total  obligations due under these contracts,  which are generally
payable in equal installments over periods that are 12 to 18 months shorter than
the lives of the contracts, and do not bear interest.

The portion of the deferred film cost to be amortized  within one year and after
one  year is  reported  in the  balance  sheet  as  current  and  other  assets,
respectively,  and the payments under the film contract  commitments  due within
one year and after one year are  similarly  classified  as current and long-term
liabilities, respectively.

Property and Equipment

Property and equipment are stated at cost.  Depreciation for financial reporting
purposes  is based on the  straight-line  method  over  estimated  useful  lives
ranging from 5 to 12 years for  equipment and 15 years for  buildings.  Costs of
repairs and maintenance are charged to expense as incurred.

Intangible Assets

Intangible  assets as reflected in Note 3 are being amortized on a straight-line
basis over their useful lives ranging from one to fifteen years.

Barter Transactions

Revenue  from  barter  transactions   (advertising   provided  in  exchange  for
programming  or goods and services) is recognized as income when  advertisements
are  broadcast,  and goods or services  received are  capitalized  or charged to
operations  when received or used.  Included in the  statements of operations is
broadcasting  net revenue from barter  transactions of $1,940,989 and $1,593,330
during 1995 and 1994,  respectively,  and station  operating  costs and expenses
from barter  transactions  of $1,871,077  and  $1,632,184,  respectively.  As of
December 31, 1995 and 1994,  the Company has recorded  accrued  liabilities  for
deferred barter revenue of $86,586 and $149,434, respectively.

                                       -8-
<PAGE>


                       Superior Communications Group, Inc.

             Notes to Consolidated Financial Statements (continued)




1. Significant Accounting Policies (continued)

Deferred Income

Deferred  income  relates  to  prepaid  rental  income  for use of SCKI's  tower
facility.  The amount is being recognized on a straight-line  basis through 2001
(term of agreement).

Use of Estimates

The  preparation  of the  financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the amounts  reported in the financial  statements  and
accompanying notes. Actual results could differ from those estimates.

Income Taxes

Deferred  income taxes  recorded on the Company's  consolidated  balance  sheets
reflect  the net tax  effects of  temporary  differences  between  the  carrying
amounts of assets and  liabilities  for  financial  reporting  purposes  and the
amounts used for income tax purposes.

Reclassifications

Certain  amounts in the 1994  financial  statements  have been  reclassified  or
restated to conform to the current year presentation.

2. Acquisition of Station

On January 28, 1994, SBI, a newly formed corporation and wholly owned subsidiary
of the  Company,  purchased  all of  the  outstanding  stock  of  Oklahoma  City
Broadcasting  Company (OCBC) for $10,973,241.  The acquisition was accounted for
as a purchase  transaction with the purchase price being allocated to the assets
and  liabilities  acquired  based upon their fair  market  values at the date of
acquisition.  In  connection  with  the  transaction,  SBI also  entered  into a
noncompete  agreement with the seller of OCBC valued at $1,500,000,  for which a
note  payable  was  issued to the seller  (Note 4).  The cost of the  noncompete
agreement is being  amortized  over the  five-year  term of the  agreement.  The
acquisition was financed from the issuance of stock for $3,100,000 and from bank
debt in the amount of $7,873,241.  Concurrent with the acquisition, SBI and OCBC
merged, forming SCOI.

                                       -9-
<PAGE>


                       Superior Communications Group, Inc.

             Notes to Consolidated Financial Statements (continued)




3. Intangible Assets

The components of intangible  assets consist of the following as of December 31,
1995 and 1994:


                                                    1995              1994
                                             ---------------------------------

Advertising contracts acquired                 $          -        $   441,075
Loan origination costs and other                    617,410            624,064
Organization and syndication costs                1,634,828          1,634,828
Covenant not-to-compete                           2,500,000          2,500,000
FCC license and FOX affiliation agreement         4,269,819          4,391,223
Goodwill                                          3,546,186          3,546,186
                                             ---------------------------------
                                                 12,568,243         13,137,376
Less accumulated amortization                    (3,789,997)        (2,723,595)
                                             ---------------------------------
Intangible assets, net                         $  8,778,246        $10,413,781
                                             ==================================

4. Long-Term Debt

Long-term debt at December 31, 1995 consists of bank and seller debt as follows:

Bank Debt

On January  28,  1994,  the  Company  entered  into a senior  secured  term loan
agreement and revolving credit  agreement  (collectively  the Credit  Agreement)
with a bank in the amount of $12,700,000 and $2,000,000,  respectively. The term
loan is due in quarterly  installments  through  January 2000, and the revolving
credit  agreement is due January 2000. The outstanding  balance on the revolving
credit  agreement  was  $1,500,000  at December  31,  1994,  and no amounts were
outstanding at December 31, 1995. The Credit Agreement  provides for interest at
the bank's Base Rate (8.5% at December 31,  1995) plus 1.75%,  and is secured by
the  stock of SCGI  and its  subsidiaries.  Covenants  contained  in the  Credit
Agreement  limit capital  expenditures,  define  required levels of earnings and
cash flows and limit additional indebtedness and film contract commitments.

The  proceeds  of these  loans were  utilized  by the  Company  to  finance  the
acquisition  of SCOI,  and to repay  amounts  owed to a former bank under a term
note payable of $5,260,589.


                                      -10-

<PAGE>


                       Superior Communications Group, Inc.

             Notes to Consolidated Financial Statements (continued)






4. Long-Term Debt (continued)

Bank Debt (continued)

On February 13, 1995, the Company repurchased 1,021.435 shares of Class B common
stock and 2,042.87 shares of preferred stock of the Company for $2,874,500.  The
repurchase  was  financed  through  an  additional  term  loan  with a bank  for
$2,900,000. The term loan is due in quarterly installments of $290,000 beginning
October 1997 through  January  2000,  plus interest at the bank's Base Rate plus
1.75%.  A mandatory  prepayment per the terms of the loan agreement was required
in 1995 and was applied to this loan. The outstanding  balance on this term loan
was $2,610,000 at December 31, 1995.

Seller Debt

In  connection   with  the  acquisition  of  OCBC,  the  Company  also  incurred
indebtedness to the former owner of OCBC for $1,500,000.  The note is secured by
a lien on SCOI's assets and is subordinated to that of the bank debt. The seller
debt bears interest at a rate of 7.5% and is payable in annual  installments  of
$300,000, plus interest,  beginning January 28, 1995. The outstanding balance on
this note was $1,200,000 at December 31, 1995.

The  following is a schedule of  aggregate  maturities  of long-term  debt as of
December 31, 1995:


         1996                                                   $  1,805,532
         1997                                                      2,820,973
         1998                                                      3,990,045
         1999                                                      4,322,500
         2000                                                      1,051,936
                                                              --------------
                                                                 $13,990,986
                                                              ==============

Fair Value

The carrying amounts of the Company's  borrowings under its bank and seller debt
arrangements approximate their fair value. The fair values of the Company's debt
are  estimated  using  discounted  cash flow  analyses,  based on the  Company's
current incremental borrowing rates for similar types of borrowing arrangements.

                                      -11-
<PAGE>



                       Superior Communications Group, Inc.

             Notes to Consolidated Financial Statements (continued)






5. Film Contract Commitments

The Company has  acquired  certain  film rights under  long-term  film  contract
commitments.  These commitments are generally payable in equal installments over
periods that are twelve to eighteen months shorter than the lives of the related
film  rights and do not bear  interest.  Annual  payments  required  under these
commitments are as follows:


         1996                                                      $1,824,891
         1997                                                       1,514,859
         1998                                                         978,063
         1999                                                         287,637
         2000                                                           2,661
                                                                ---------------
                                                                   $4,608,111
                                                                ===============

The values of the film rights acquired under these contracts are included as net
deferred film costs in the accompanying  consolidated balance sheet and have the
following balances at December 31, 1995:


         Deferred film costs                                      $11,202,089
         Less accumulated amortization                             (6,042,271)
                                                               ----------------
                                                                    5,159,818
         Less current portion                                      (2,028,478)
                                                               ----------------
         Deferred film costs, net                                $  3,131,340
                                                               ================

As  discussed  in Note 1, the Company  enters into  contracts  with various film
distributors which allow limited showings of films and syndicated  programs.  At
December 31, 1995, the Company has entered into contracts totaling approximately
$1,063,943 for which the license period and program availability for telecasting
begins  after  December  31,  1995.  These  contracts  are not  recorded  in the
accompanying consolidated balance sheet.

6. Due to Related Parties

Amounts due to related  parties  consist of fees charged by  shareholders of the
Company  in  connection  with the  acquisition  of the  Partnership  (Note 1) in
November 1992 and includes accrued interest at 7.75%.

                                      -12-
<PAGE>


                       Superior Communications Group, Inc.

             Notes to Consolidated Financial Statements (continued)






7. Income Taxes

Significant  components of the Company's  deferred tax assets and liabilities as
of December 31 are as follows:


                                                1995                1994
                                         -----------------------------------

Deferred tax assets:
Allowance for doubtful accounts            $     76,456         $     56,178
Net operating loss carryforwards                351,981              181,081
Other                                                 -               23,200
                                         -----------------------------------
Total deferred tax assets                       428,437              260,459
Deferred tax liabilities:
Properties and broadcast rights               2,500,911            2,234,846
Intangible assets                             1,311,433            1,924,862
                                         -----------------------------------
Total deferred tax liabilities                3,812,344            4,159,708
                                         -----------------------------------
Net deferred tax liabilities                 $3,383,907           $3,899,249
                                         =====================================

Significant components of the provision for income tax expense (benefit) for the
year ended December 31 are as follows:


                                                  1995                1994
                                            ----------------------------------

Current:
State                                         $   54,581          $    29,518
Deferred:
Federal                                         (461,231)            (127,337)
State                                            (54,111)               8,617
                                            ----------------------------------
Total deferred                                  (515,342)            (118,720)
                                            ----------------------------------
                                               $(460,761)          $  (89,202)
                                            ===================================

The Company's  effective  income tax rates differ from federal  statutory income
tax rates due primarily to the  amortization of goodwill and state income taxes.
Additionally,  in 1994 the  Company  recorded  deferred  income  tax  expense of
$507,673 upon the contribution of the partnership  interests and general partner
operating assets (Note 1).

At December  31,  1995,  the Company  has federal and state net  operating  loss
carryforwards of $666,000 and $2,090,000, respectively, which begin to expire in
2009.

                                      -13-
<PAGE>

                       Superior Communications Group, Inc.

             Notes to Consolidated Financial Statements (continued)






8. Stockholders' Equity

As discussed in Note 1, the Company reorganized effective January 28, 1994 under
the terms of the Exchange Agreement.  Pursuant to the terms of the agreement the
former owners of the Partnership  were given 7,090.84 shares of preferred stock,
7,090.84 shares of Class B common stock and 1,750 shares of Class A common stock
of the Company.  Also on January 28, 1994, certain  stockholders  contributed an
additional  $3,100,000 in exchange for 3,100 shares each of preferred  stock and
Class B common stock of the Company.

On February 13, 1995, the Company repurchased 1,021.435 shares of Class B common
stock and 2,042.87 shares of preferred stock of the Company for $2,874,500.

The  preferred  stock,  which has a stated  liquidation  preference  of $1,000 a
share, has no voting rights.  Dividends accumulate at 12% based upon the stock's
stated  liquidation  value and are  payable  at the  discretion  of the Board of
Directors and subject to  restriction  within the Credit  Agreement.  Unless all
accumulated  dividends on the preferred stock have been paid, no dividend may be
paid,  and no  other  distributions  may be made  upon the  common  stock of the
Company.  Upon  liquidation of the Company,  any proceeds to be distributed  are
first  utilized to pay the preferred  stockholders  at an amount equal to $1,000
per share  (liquidation  preference)  plus any  accrued  but  unpaid  dividends,
inception to date ($1,895,761 at December 31, 1995). If amounts remain available
for distribution in excess of the preferred liquidation, those amounts are to be
allocated 80% to the Class B common  stockholders  and 20% to the Class A common
stockholders.  The  Class A common  stock is  subject  to  restriction  on sale,
transfer and also contain forfeiture provisions.

9. Stock Grants

The Company has granted  120.7  shares of Class A common  stock to an officer of
the Company.  The Class A common stock has  significant  restrictions  including
forfeiture obligations if the officer were no longer an employee of the Company.
Pursuant  to the terms of the stock grant  agreement,  all shares will vest upon
the  completion  of the sale of the  Company's  shares of  outstanding  stock as
discussed in Note 11.  Accordingly,  the Company recorded a charge to operations
of $20,157 in 1995  ($16,053 in 1994) to reflect  the  vesting of the  remaining
stock granted.

                                      -14-
<PAGE>

                       Superior Communications Group, Inc.

             Notes to Consolidated Financial Statements (continued)




10. Operating Leases and Other Commitments

The Company has entered into various noncancelable lease arrangements for office
space rental,  ratings and research services,  broadcast accounting software and
other  licensing  agreements.  Total expense  charged to operations  under these
agreements was approximately $283,000 in 1995. The minimum future payments under
these agreements are as follows:


         1996                                                     $   252,088
         1997                                                         267,059
         1998                                                         281,039
         1999                                                         150,247
         2000                                                         139,323
                                                                 --------------
                                                                   $1,089,756
                                                                 ==============

11. Subsequent Event

On March 4, 1996, the shareholders of the Company entered into an agreement with
an unrelated entity to sell all of the Company's outstanding shares of preferred
and common stock.  Pursuant to the terms of the stock  purchase  agreement,  the
buyer will cause the Company to pay in full all of the  outstanding  debt of the
Company  plus  accrued  interest and  prepayment  penalties.  The balance of the
proceeds will be distributed to the selling shareholders.

12. Supplemental Cash Flow Disclosures

The Company entered into the following noncash transactions:

     o   As  discussed  in  Note 4, on  February  13,  1995,  the  Company  paid
         $2,874,500 for stock placed in treasury, which was financed through the
         issuance of long-term debt.

     o   Deferred film costs in the amount of  $2,548,375  and  $1,820,606  were
         recorded  through the  assumption of film contract  commitments  in the
         same amounts during 1995 and 1994, respectively.

     o   The Company recorded a $1,500,000  noncompete agreement from the seller
         of KOCB in exchange for the issuance of a note payable to the seller in
         the same amount during 1994.

     o   The Company  received  $125,948 of net assets in exchange  for stock in
         connection with the January 28, 1994 restructuring.


                                      -15-


<PAGE>


                       Superior Communications Group, Inc.

             Notes to Consolidated Financial Statements (continued)






12. Supplemental Cash Flow Disclosures (continued)

Additionally, cash paid for interest and income taxes was as follows:


                                                 1995                1994
                                             ---------------------------------

Interest                                       $1,523,785         $1,262,553
                                             =================================
Income taxes                                   $   16,448         $   50,000
                                             =================================



                                      -16-
<PAGE>
                   PARAMOUNT STATIONS GROUP OF KERVILLE, INC.

                   FINANCIAL STATEMENTS AS OF AUGUST 3, 1995 AND FOR THE
                   PERIOD FROM  JANUARY 1, 1995  THROUGH  AUGUST 3, 1995
                   AND AS OF DECEMBER 31, 1994  TOGETHER  WITH REPORT OF
                   INDEPENDENT PUBLIC ACCOUNTANTS


<PAGE>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



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

We have audited the accompanying  balance sheets of Paramount  Stations Group of
Kerville,  Inc. (a Virginia  corporation)  as of August 3, 1995 and December 31,
1994, and the related  statements of operations,  stockholders'  equity and cash
flows for the period from January 1, 1995 through  August 3, 1995,  and the year
ended December 31, 1994. 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 audits.

We  conducted  our  audits  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 audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Paramount  Stations Group of
Kerville,  Inc. as of August 3, 1995 and December  31, 1994,  and the results of
its  operations  and its cash flows for the period from  January 1, 1995 through
August 3,  1995,  and the year ended  December  31,  1994,  in  conformity  with
generally accepted accounting principles.



                                        Arthur Andersen LLP


Baltimore, Maryland,
    April 26, 1996
<PAGE>
                   PARAMOUNT STATIONS GROUP OF KERVILLE, INC.
                   ------------------------------------------


                                 BALANCE SHEETS
                                 --------------

                   AS OF AUGUST 3, 1995 AND DECEMBER 31, 1994
                   ------------------------------------------

<TABLE>
<CAPTION>

                                                                  August 3,      December 31,
                                                                    1995               1994
                                                              -------------      --------------
<S>                                                             <C>                <C>         
                        ASSETS
                        ------
CURRENT ASSETS:
    Cash                                                        $      1,122       $        400
    Accounts receivable, net of allowance for doubtful
        accounts of $190,610 and $148,755, respectively            2,543,148          2,961,824
    Current portion of program contract costs                      1,144,236          1,130,513
    Deferred barter costs                                                 -              41,274
    Other current assets                                             340,302            123,132
                                                              --------------     --------------

           Total current assets                                    4,028,808          4,257,143
                                                              --------------     --------------

    Property and equipment, net                                      825,967            986,880

    Program contract costs, noncurrent portion                       504,701          1,430,927

    Due from affiliate                                             4,795,220          2,567,935

    Goodwill, net                                                 15,305,080         15,558,387

    Other assets                                                          -               5,092
                                                              --------------     --------------

           Total Assets                                         $ 25,459,776       $ 24,806,364
                                                                ============       ============

             LIABILITIES AND STOCKHOLDERS' EQUITY
             ------------------------------------
CURRENT LIABILITIES:
    Accounts payable                                            $      1,869       $    189,547
    Accrued liabilities                                               48,308            385,512
    Current portion of program contracts payable                   1,202,739          1,961,803
    Deferred barter revenues                                              -              13,674
                                                              --------------     --------------

           Total current liabilities                               1,252,916          2,550,536

LONG-TERM LIABILITIES:
    Program contracts payable, noncurrent portion                    932,591          1,576,134
                                                              --------------     --------------

           Total Liabilities                                       2,185,507          4,126,670
                                                              --------------     --------------

STOCKHOLDERS' EQUITY:
    Common stock, Class A, $1 par value; 1,000 shares
        authorized, 800 shares issued and outstanding                    800                800
    Common stock, Class B, $1 par value; 8,800 shares
        authorized; 7,040 issued and outstanding                       7,040              7,040
    Additional paid-in capital                                    16,954,952         15,879,113
    Retained earnings                                              6,311,477          4,792,741
                                                              --------------     --------------

           Total Stockholders' Equity                             23,274,269         20,679,694
                                                              --------------     --------------

           Total Liabilities and Stockholders' Equity           $ 25,459,776       $ 24,806,364
                                                                ============       ============
</TABLE>
         
      The accompanying notes are an integral part of these balance sheets.

<PAGE>

                   PARAMOUNT STATIONS GROUP OF KERVILLE, INC.
                   ------------------------------------------


                            STATEMENTS OF OPERATIONS
                            ------------------------

           FOR THE PERIOD FROM JANUARY 1, 1995 THROUGH AUGUST 3, 1995
           ----------------------------------------------------------

                      AND THE YEAR ENDED DECEMBER 31, 1994
                      ------------------------------------

<TABLE>
<CAPTION>


                                                                 August 3,      December 31,
                                                                   1995               1994
                                                             --------------     --------------
<S>                                                            <C>                <C>         
REVENUES:
    Advertising revenues, net of agency commissions
        of $1,159,012 and $1,950,484, respectively             $  6,665,863       $ 11,499,302
    Revenues realized from station barter arrangements              900,743          1,300,904
                                                             --------------     --------------
           Total revenue                                          7,566,606         12,800,206
                                                             --------------     --------------

OPERATING EXPENSES:
    Programming                                                     288,704            427,316
    Selling                                                       1,459,894          2,700,025
    Administration                                                  497,671          1,003,846
    Promotion                                                       247,686            468,837
    Engineering                                                     296,677            571,813
    Amortization of program contract rights                         921,053          1,912,677
    Depreciation of property and equipment                          194,337            379,232
    Amortization of intangible assets                               253,307            426,495
    Barter expense                                                  875,950          1,255,799
                                                             --------------     --------------
           Total operating expenses                               5,035,279          9,146,040
                                                             --------------     --------------
           Broadcast operating income                             2,531,327          3,654,166

OTHER INCOME                                                         63,248              2,884
                                                             --------------     --------------

           Income before taxes                                    2,594,575          3,657,050

INCOME TAX PROVISION                                              1,075,839          1,541,215
                                                             --------------     --------------

           Net income                                          $  1,518,736       $  2,115,835
                                                               ============       ============
</TABLE>




              
        The accompanying notes are an integral part of these statements.

<PAGE>

<TABLE>
<CAPTION>

                                        PARAMOUNT STATIONS GROUP OF KERVILLE, INC.


                                      STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
          
                FOR THE PERIOD FROM JANUARY 1, 1995 THROUGH AUGUST 3, 1995 AND THE YEAR ENDED DECEMBER 31, 1994




                                                 Common Stock      Common Stock
                                                    Class A           Class B         Additional                        Total
                                            -------------------  -----------------     Paid-In         Retained      Stockholders'
                                             Shares     Value     Shares    Value      Capital         Earnings         Equity
                                            -------  ----------  -------   -------   --------------  -------------  -------------

<S>                                            <C>     <C>        <C>      <C>       <C>             <C>             <C>         
BALANCE, December 31, 1993                     800     $   800    7,040    $ 7,040   $ 14,337,898    $  2,676,906    $ 17,022,644

    Forgiveness of income taxes by Parent       -           -        -          -       1,541,215              -        1,541,215

    Net income                                  -           -        -          -              -        2,115,835       2,115,835
                                            ------   ---------   ------    -------    -----------    ------------   -------------

BALANCE, December 31, 1994                     800         800    7,040      7,040     15,879,113       4,792,741      20,679,694

    Forgiveness of income taxes by Parent       -           -        -          -       1,075,839              -        1,075,839

    Net income                                  -           -        -          -              -        1,518,736       1,518,736
                                            ------   ---------   ------    -------   ------------    ------------   -------------

BALANCE, August 3, 1995                        800     $   800    7,040    $ 7,040   $ 16,954,952     $ 6,311,477    $ 23,274,269
                                            ======   =========   ======    =======   ============    ============   =============
</TABLE>




        The accompanying notes are an integral part of these statements.

<PAGE>
                   PARAMOUNT STATIONS GROUP OF KERVILLE, INC.
                   ------------------------------------------


                            STATEMENTS OF CASH FLOWS
                            ------------------------

           FOR THE PERIOD FROM JANUARY 1, 1995 THROUGH AUGUST 3, 1995
           ----------------------------------------------------------

                      AND THE YEAR ENDED DECEMBER 31, 1994
                      ------------------------------------

<TABLE>
<CAPTION>

                                                               August 3,        December 31,
                                                                 1995               1994
                                                           --------------     --------------
<S>                                                          <C>                <C>         
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                               $  1,518,736       $  2,115,835
    Adjustments to reconcile net income to net cash
        provided by operating activities:
        Amortization of program contract rights                   921,053          1,912,677
        Depreciation of property and equipment                    194,337            379,232
        Amortization of goodwill                                  253,307            426,495
        Forgiveness of income tax expense by Parent             1,075,839          1,541,215
    Changes in assets and liabilities:
        Increase in due from affiliate                         (2,227,285)        (2,567,935)
        Decrease (increase) in accounts receivable                418,676           (567,548)
        Decrease in deferred charges                               41,274             32,141
        (Increase) decrease in other current assets              (217,170)            62,407
        Decrease in other assets                                    5,092                 -
        (Decrease) increase in accounts payable                  (187,678)           119,639
        Decrease in due to related parties                             -          (1,553,444)
        (Decrease) increase in accrued liabilities               (337,204)           177,183
        Decrease in deferred barter revenue                       (13,674)           (50,660)
        Film rights payments                                   (1,411,157)        (1,975,061)
                                                           --------------     --------------

           Net cash provided by operating activities               34,146             52,176

CASH FLOWS FROM INVESTING ACTIVITIES:
    Additions to property and equipment                           (33,424)           (52,176)
                                                           --------------     --------------

           Net increase in cash                                       722                 -

CASH, beginning of year                                               400                400
                                                           --------------     --------------

CASH, end of year                                            $      1,122       $        400
                                                             ============       ============


SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
    AND FINANCING ACTIVITIES:

    Film contracts acquired                                  $      8,550       $    981,351
                                                             ============       ============

    Film contract liability additions                        $      8,550       $    981,351
                                                             ============       ============

</TABLE>

  
        The accompanying notes are an integral part of these statements.

<PAGE>
                   PARAMOUNT STATIONS GROUP OF KERVILLE, INC.
                   ------------------------------------------


                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------

                      AUGUST 3, 1995 AND DECEMBER 31, 1994
                      ------------------------------------



1.     ORGANIZATION:
       ------------

Paramount  Stations  Group of Kerville,  Inc.  (the  Company) is a  wholly-owned
subsidiary of Paramount Stations Group Holding Company,  Inc. (the Parent).  The
Company was organized under the laws of Virginia on August 21, 1984. The Company
is a television  broadcaster serving the San Antonio, Texas area through station
KRRT on Channel 35. The Company was affiliated  with UPN and FOX during 1995 and
1994, respectively.

During 1994, the Company entered into an agreement to sell  substantially all of
its  assets  to KRRT,  Inc.  This  sale  was  consummated  on  August  4,  1995.
Accordingly,  the accompanying financial statements for 1995 are presented as of
August 3, 1995 (Note 9).

2.     SUMMARY OF ACCOUNTING POLICIES:
       ------------------------------

Cash
- - ----

All  cash  from  customers  is  deposited  directly  into a lock box held by the
Company's Parent (Note 4).

Revenue Recognition
- - -------------------

Revenue  from  the  sale of air  time to  advertisers  is  recognized  when  the
advertisement is broadcast.

Program Contract Costs
- - ----------------------

The Company has entered into  agreements with program  distributors  granting it
the right to broadcast  programs over contract  periods which generally run from
three  to seven  years.  Program  contract  costs  are  stated  at the  lower of
amortized cost or estimated net realizable value.  Broadcast  contract costs and
the related  liabilities  are  recorded at the  contract  value when the license
period begins and the program is available for use.  Program  contract costs are
amortized  using the greater of the  straight-line  by months over the  contract
term or straight-line over the number of showings on an aggregate basis.

Program  contract costs  expected to be used in the succeeding  year and program
contract rights due within one year are classified as current assets and current
liabilities, respectively.

Property and Equipment
- - ----------------------

Property and equipment are recorded at cost and  depreciated  over the estimated
useful  lives  of the  assets  on a  straight-line  basis.  Major  renewals  and
betterments are capitalized and ordinary  repairs and maintenance are charged to
expense in the period incurred.

                                      -2-
<PAGE>
Goodwill
- - --------

In a series of transactions  completed in 1991, the Company's  Parent  purchased
all of the  outstanding  stock of TVX,  Inc.,  who  owned and  operated  several
television  stations,  including the Company.  Goodwill was allocated to each of
the stations based on specific  identification  and  allocation of  unidentified
goodwill  based on cash flow  multiples  used to calculate the purchase price of
each station.  Management monitors the financial  performance of the station and
continually  evaluates  the  realizability  of goodwill and the existence of any
impairment to its recoverability.

Goodwill in the amount of $17,370,000  was allocated to the Company and is being
amortized over 40 years using the  straight-line  method.  At August 3, 1995 and
December 31, 1994,  accumulated  amortization of goodwill aggregated  $2,064,920
and $1,811,613, respectively.

Barter Transactions
- - -------------------

Certain program contract rights provide for the exchange of advertising air time
in lieu of cash  payments for the  programming.  As the program is aired,  equal
amounts of revenue and program amortization  expense are recorded,  at estimated
fair market value, in results of operations.

In addition,  the Company provides  advertising air time to certain customers in
exchange  for  merchandise  or  services.   The  estimated  fair  value  of  the
merchandise  or  services  to be  received  is  recorded  as an  asset,  and the
corresponding  obligation  to  broadcast  advertising  is  recorded  as deferred
revenue.  Services  and other  assets are charged to expense as they are used or
consumed.   Deferred   revenue  is  recognized  in  operations  as  the  related
advertising is broadcast.

3.     INCOME TAXES:
       -------------

In February  1992,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement of Financial  Accounting  Standards  No. 109,  "Accounting  for Income
Taxes." The Company  adopted the new accounting and disclosure  rules  effective
December 31, 1994.

The provision for income taxes consists of the following:

                                              August 3,       December 31,
                                                1995              1994
                                          --------------    --------------

              Federal                      $     920,164     $   1,318,150
              State                              155,675           223,065
                                          --------------    --------------

                                           $   1,075,839     $   1,541,215
                                           =============     =============

                                      -3-
<PAGE>

The following is a reconciliation  of the statutory  federal income taxes to the
recorded provision:

                                                    August 3,       December 31,
                                                      1995              1994
                                                 ------------     -------------
 
          Statutory federal income taxes         $    882,156      $  1,243,397

          Adjustments:
              State tax, net of federal effect        102,745           147,223
              Goodwill amortization                    86,125           145,008
              Others                                    4,813             5,587
                                                -------------     -------------

                  Provision for income taxes     $  1,075,839      $  1,541,215
                                                 ============      ============


The Company's Parent files a consolidated federal tax return, and separate state
tax  returns  for each of its  subsidiaries.  It is the  Parent's  policy not to
allocate  income tax expense to its  subsidiaries.  The  accompanying  financial
statements  have been prepared in accordance  with the separate return method of
FASB  109,  whereby  the  allocation  of  tax  expense  is  based  on  what  the
subsidiary's current and deferred tax expense would have been had the subsidiary
filed a federal income tax return outside its consolidated group. The difference
between the computed tax expense and the amounts paid to the Parent for taxes is
recorded as additional  paid-in-capital.  Under this method,  the Company has no
deferred tax assets or liabilities  because those amounts are considered paid to
or received from the Parent.  The Company had no alternative  minimum tax credit
carryforwards as of August 3, 1995.

The  temporary  differences  between  book basis and tax basis  generated by the
Company and recorded on the Parent's financial statements are as follows:

<TABLE>
<CAPTION>
                                                                       August 3,      December 31,
                                                                         1995              1994
                                                                  --------------     --------------

<S>                                                                <C>                <C>          
          Program contract net realizable value adjustments        $     159,819      $      12,428
          Depreciation and amortization                                  (33,318)             5,550
          Bad debt reserves                                               16,362             24,047
                                                                  --------------     --------------

                                                                   $     142,863      $      42,025
                                                                   =============      =============
</TABLE>


4.     RELATED PARTY TRANSACTIONS:
       --------------------------

The Parent pays the income taxes of the Company.  It is the Parent's  policy not
to charge this expense to its subsidiaries.  Therefore, the provision for income
tax  expense is  recorded  as  additional  paid-in  capital in the  accompanying
balance sheets.  The Parent also provides and receives  short-term cash advances
to and from the Company through a central cash management system. No interest is
charged or received for these advances.

                                      -4-
<PAGE>
5.     PROPERTY AND EQUIPMENT:
       ----------------------

Property and equipment consists of the following:

<TABLE>
<CAPTION>
                                             Estimated
                                            Useful Life           August 3,      December 31,
                                              (Years)               1995               1994
                                           -------------      ----------------   ----------

<S>                                             <C>             <C>                <C>         
        Studio equipment                        5               $  2,931,607       $  2,898,183
        Leasehold improvements                 4-11                  358,472            358,472
        Furniture and fixtures                  5                     59,671             59,671
        Autos and trucks                        5                     32,700             32,700
                                                              --------------     --------------

                                                                   3,382,450          3,349,026

        Less-   Accumulated depreciation                           2,556,483          2,362,146
                                                              --------------     --------------

                                                                $    825,967       $    986,880
</TABLE>

6.     PROGRAM CONTRACTS:
       -----------------

The Company purchases the right to broadcast programs through fixed term license
agreements.  Broadcast  rights consist of the following as of August 3, 1995 and
December 31, 1994:

                                                 August 3,        December 31,
                                                   1995               1994
                                             --------------     --------------

         Aggregate cost                       $  16,469,625      $  16,461,076

         Less-   Accumulated amortization        14,820,688         13,899,636
                                             --------------     --------------

                                                  1,648,937          2,561,440
         Less-   Current portion                  1,144,236          1,130,513
                                             --------------     --------------
                                              $     504,701      $   1,430,927
                                              =============      =============

Contractual obligations incurred in connection with the acquisition of broadcast
rights  are  $2,135,330  as of August 3, 1995.  Future  payments,  by year,  for
program contract rights payable as of August 3, 1995, are as follows:

             1995                                    $     580,830
             1996                                          941,200
             1997                                          459,900
             1998                                           97,300
             1999                                           30,500
             Thereafter                                     25,600
                                                     -------------
                                                     $   2,135,330
                                                     =============

The fair value of program  contracts  payable is the present value of the future
obligations  based on the  current  rates  available  to the Company for debt of
similar  maturity.  The carrying amount and the fair value of program  contracts
payable at August 3, 1995, were $2,135,300 and $1,521,665, respectively.

                                      -5-
<PAGE>
7.     RETIREMENT SAVINGS PLAN:
       -----------------------

The Company  participates in the Parent company's  retirement savings plan under
Section 401(k) of the Internal Revenue Code. This plan covers  substantially all
employees of the Company who meet minimum age or service requirements and allows
participants to defer a portion of their annual compensation on a pre-tax basis.
Contributions from the Company are made on a monthly basis in an amount equal to
50%  of  the   participating   employee   contributions,   to  the  extent  such
contributions do not exceed 6% of the employees'  eligible  compensation  during
the month.

8.     COMMITMENTS AND CONTINGENCIES:
       -----------------------------

Broadcast rights acquired under license  agreements are recorded as an asset and
a corresponding liability at the inception of the license period. In addition to
these  rights  payable  at  August  3,  1995,  the  Company  had  $1,060,900  of
commitments  to acquire  broadcast  rights for which the license  period has not
commenced and,  accordingly,  for which no liability has been  recorded.  Future
payments  arising from such  commitments  outstanding  at August 3, 1995, are as
follows:

             1995                                        $      29,400
             1996                                              140,600
             1997                                              214,200
             1998                                              319,500
             1999                                              273,200
             Thereafter                                         84,000
                                                         -------------
                                                         $   1,060,900
                                                         =============

The Company has entered into operating  leases for building space and equipment.
Rental  expense  was $76,700 and  $129,268  for the period from  January 1, 1995
through  August 3, 1995 and year ended  December 31, 1994,  respectively.  As of
August 3, 1995,  future minimum lease payments under these operating leases were
as follows:

             1995                                        $      43,569
             1996                                               79,996
             1997                                                9,000
             1998                                                9,000
             1999                                                9,000
             Thereafter                                        491,250
                                                         -------------
                                                         $     641,815
                                                         =============

The  Company  has also  entered  into  several  contracts  for  data  processing
equipment  and  service.  Rental  expense was $36,425 and $61,341 for the period
from  January 1, 1995  through  August 3, 1995 and the year ended  December  31,
1994,  respectively.  As of August 3, 1995,  future minimum payments under these
contracts are as follows:

             1995                                        $      25,565
             1996                                               61,248
             1997                                               59,858
                                                         -------------

                                                         $     146,671
                                                         =============

                                      -6-
<PAGE>
Litigation
- - ----------

Lawsuits  and  claims are filed  against  the  Company  from time to time in the
ordinary course of business.  These actions are in various  preliminary  stages,
and no judgments or decisions  have been  rendered by hearing  boards or courts.
Management,  after reviewing  developments to date with legal counsel, is of the
opinion that the outcome of such matters will not have a material adverse effect
on the Companies' financial position, results of operations or cash flows.

9.     SALES AGREEMENT:
       ----------------

During 1994,  the Company  entered into an agreement  with KRRT,  Inc.,  to sell
virtually  all tangible and  intangible  assets of the Company for  $30,000,000.
This sale was completed on August 4, 1995.





                                      -7-
<PAGE>
                           KRRT, INC.

                           FINANCIAL STATEMENTS
                           AS OF DECEMBER 31, 1995 AND
                           FOR THE PERIOD FROM JULY 25, 1995
                           THROUGH DECEMBER 31, 1995
                           TOGETHER WITH REPORT OF
                           INDEPENDENT PUBLIC ACCOUNTANTS



<PAGE>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



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

We  have  audited  the  accompanying  balance  sheet  of  KRRT,  Inc.  (a  Texas
corporation) as of December 31, 1995, and the related  statements of operations,
stockholders'  equity and cash flows for the period from July 25,  1995  through
December 31, 1995.  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 financial  statements  referred to above present fairly, in
all material  respects,  the financial position of KRRT, Inc. as of December 31,
1995,  and the results of its  operations and its cash flows for the period from
July 25, 1995 through  December 31, 1995, in conformity with generally  accepted
accounting principles.




                                        Arthur Andersen LLP

Baltimore, Maryland,
    May 7, 1995


<PAGE>
                                   KRRT, INC.
                                   ----------



                                  BALANCE SHEET
                                  -------------

                             AS OF DECEMBER 31, 1995
                             -----------------------


                         ASSETS
                         ------
CURRENT ASSETS:
    Cash                                                          $      8,459
    Short-term investments                                             500,000
    Current portion of program contracts                             1,451,959
    Other receivable                                                    61,666
                                                                  ------------

           Total current assets                                      2,022,084

    Property and equipment, net                                      5,367,799

    Noncurrent portion of program contracts                            869,006

    FCC license, net of accumulated amortization of $397,075        23,427,401

    Goodwill, net of accumulated amortization of $6,095                579,067

    Other assets, net                                                  648,359
                                                                  ------------
           Total assets                                           $ 32,913,716
                                                                  ============

           LIABILITIES AND STOCKHOLDERS' EQUITY
           ------------------------------------
CURRENT LIABILITIES:
    Bank overdraft                                                $      7,108
    Accrued liabilities                                                  2,833
    LMA advance                                                        132,990
    Current portion of program contracts payable                     1,451,959
    Current portion of long-term debt                                2,000,000
    Accrued interest expense                                           152,578
                                                                  ------------

           Total current liabilities                                 3,747,468

LONG-TERM LIABILITIES:
    Noncurrent portion of program contracts                            869,006
    Note payable                                                       500,000
    Long-term debt, net of current portion                          19,000,000
                                                                  ------------

           Total liabilities                                        24,116,474
                                                                  ------------
STOCKHOLDERS' EQUITY:
    Common stock, no par value; 1,000 shares authorized, issued
        and outstanding                                                     -
    Additional paid-in capital                                      10,001,000
    Accumulated deficit                                             (1,203,758)
                                                                  ------------

           Total stockholders' equity                                8,797,242
                                                                  ------------
           Total liabilities and stockholders' equity             $ 32,913,716
                                                                  ============

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

<PAGE>
                                   KRRT, INC.
                                   ----------


                             STATEMENT OF OPERATIONS
                             -----------------------

           FOR THE PERIOD FROM JULY 25, 1995 THROUGH DECEMBER 31, 1995
           -----------------------------------------------------------



REVENUES                                                     $    1,437,039
                                                             --------------

OPERATING EXPENSES:
    Management fees                                                 277,775
    Rating services                                                 193,100
    Legal and professional fees                                     159,126
    Depreciation expense                                            328,125
    Amortization expense                                            492,811
    Film amortization expenses                                       69,674
    Miscellaneous expenses                                          251,748
                                                             --------------
           Total operating expenses                               1,772,359
                                                             --------------
           Operating loss                                          (335,320)

OTHER INCOME (EXPENSE):
    Interest income                                                  11,556
    Interest expense                                               (879,994)
                                                             --------------
           Net loss before benefit for income taxes              (1,203,758)

BENEFIT FOR INCOME TAXES                                                 -
                                                             --------------
           Net loss                                          $   (1,203,758)
                                                             ==============




         The accompanying notes are an integral part of this statement.

<PAGE>
<TABLE>
<CAPTION>

                                                    KRRT, INC.
                                                    ----------


                                   STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                   --------------------------------------------

                            FOR THE PERIOD FROM JULY 25, 1995 THROUGH DECEMBER 31, 1995
                            -----------------------------------------------------------



                                             Common Stock               Additional                              Total
                                   -------------------------------------  Paid-In      Accumulated          Stockholders'
                                         Shares            Value          Capital        Deficit                Equity
                                         ------            -----          -------        -------                ------

<S>                                         <C>       <C>               <C>              <C>                 <C>
BALANCE, July 25,
    1995                                       -      $         -       $         -      $         -         $         -

    Capital contributions                   1,000               -         10,001,000               -           10,001,000

    Net loss                                   -                -                 -        (1,203,758)         (1,203,758)
                                   --------------   --------------    --------------   --------------      --------------

BALANCE, December 31,
    1995                                    1,000     $         -       $ 10,001,000     $ (1,203,758)       $  8,797,242
                                   ==============     ============      ============     ============        ============

</TABLE>



         The accompanying notes are an integral part of this statement.

<PAGE>

                                   KRRT, INC.
                                   ----------


                             STATEMENT OF CASH FLOWS
                             -----------------------

           FOR THE PERIOD FROM JULY 25, 1995 THROUGH DECEMBER 31, 1995
           -----------------------------------------------------------



CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                                     $  (1,203,758)
    Adjustments to reconcile net income to net cash
        used in operating activities:
        Depreciation expense                                           328,125
        Amortization expense                                           492,811
        Film amortization expense                                       69,674
    Changes in assets and liabilities:
        Increase in short-term investments                            (500,000)
        Increase in other receivables                                  (61,666)
        Increase in bank overdraft                                       7,108
        Increase in accrued liabilities                                  2,833
        Increase in LMA advance                                        132,990
        Increase in accrued interest expense                           152,578
    Program payments                                                   (69,674)
                                                                  ------------
           Net cash used in operating activities                      (648,979)
                                                                  ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Assets acquired, net of debt financing of $21,000,000           (9,843,562)
                                                                  ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from note payable                                         500,000
    Contributed capital                                             10,001,000
                                                                  ------------
           Net cash flows provided by financing activities          10,501,000
                                                                  ------------

           Net increase in cash                                          8,459

CASH, beginning of period                                                   -
                                                                  ------------
CASH, end of period                                               $      8,459
                                                                  ============


SUPPLEMENTAL CASHFLOW DISCLOSURE:
    Cash paid for interest                                        $    727,416
                                                                  ============




         The accompanying notes are an integral part of this statement.

<PAGE>

                                   KRRT, INC.
                                   ----------


                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------

                                DECEMBER 31, 1995
                                -----------------



1.   ORGANIZATION

KRRT, Inc., a Texas  corporation (the Company) was organized and incorporated on
July 25,  1995 and on August 4, 1995,  purchased  the  license  and  non-license
assets of Paramount Stations Group of Kerville,  Inc., the owner and operator of
television KRRT-TV, San Antonio, Texas. The Company is a wholly-owned subsidiary
of JJK Broadcasting,  Inc. (the "Parent").  The Company  simultaneously  entered
into a local marketing  agreement  (LMA) with River City  Broadcasting LP (River
City) (Note 2). The Company is a television  broadcaster serving the San Antonio
area through station KRRT on Channel 35, a UPN affiliate.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition
- - -------------------

The Company's  primary  source of revenue is monthly fees received in accordance
with the LMA with River  City.  Under the terms of this  agreement,  the Company
receives  monthly fees and is reimbursed for all operating  expenses,  scheduled
principal and interest  payments on the long-term  debt  discussed in Note 8 and
scheduled  program  rights  payments  in  exchange  for  the  right  to  provide
programming and general advertising receivables.
Revenue is recorded as payments are scheduled to be received.

Short-Term Investments
- - ----------------------

Short-term investments represent repurchase agreements which mature within three
months. This investment is stated at cost plus accrued income which approximates
market value.

Property and Equipment
- - ----------------------

Property and equipment are stated at cost. The Company depreciates and amortizes
property and equipment over the estimated useful lives of the assets,  generally
using the straight-line method over six to forty years.

Intangible Assets
- - -----------------

Intangible  assets include value  attributable to licenses issued by the Federal
Communications Commission (FCC) and goodwill representing the excess of the cost
over the fair market value of the assets purchased and the liabilities  assumed.
These assets are amortized using the straight-line method over twenty-five years
and forty years,  respectively.  The Company monitors the financial  performance
and continually evaluates the realizability of goodwill and the existence of any
impairment to its recoverability based on the projected future cash flows.

                                      -2-
<PAGE>

Program Contract Rights
- - -----------------------

The station has entered into  agreements with program  distributors  granting it
the right to broadcast  programs over contract  periods which generally run from
one to seven years.  An asset and  liability  are booked equal to the  liability
assumed on the purchase date. The asset is recorded at its net realizable  value
based on expected future revenues.  Accordingly, given that the Company's future
revenues are based on program  payments  (Note 2),  amortization  is recorded in
amounts equal to program payments as they are scheduled to be made.

Use of Estimates
- - ----------------

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  requires  management to make estimates and  assumptions.
These  estimates  and  assumptions  affect  the  reported  amounts of assets and
liabilities and disclosures of contingent  assets and liabilities at the date of
the financial  statements and the reported amounts of revenue,  expenses,  gains
and losses during the reporting periods.  Actual results could differ from these
estimates.

3.   PROPERTY AND EQUIPMENT

Property and equipment consist of the following at December 31, 1995:

          Studio equipment                                       $    2,416,651
          Transmitting equipment                                      1,423,283
          Office equipment                                              139,337
          Furniture and fixtures                                        162,894
          Vehicles                                                       31,482
          Buildings                                                     111,574
          Leasehold improvements                                         64,534
          Towers                                                      1,204,827
          Tools and test equipment                                       69,828
          Spare parts                                                    71,514
                                                                 --------------

                                                                      5,695,924

          Less:  Accumulated depreciation and amortization             (328,125)
                                                                 ---------------
          Property and equipment, net                            $   5,367,799
                                                                 ===============

4.   ACQUISITION

In  August  1995,  the  Company  acquired  substantially  all of the  assets  of
Paramount Stations Group of Kerville, Inc. for $30 million. This acquisition was
accounted  for as a purchase  under  Accounting  Principles  Board  Opinion  16,
whereby the purchase  price was allocated to property,  FCC license and goodwill
for $5.7  million,  $23.8 million and $.5 million,  respectively,  based upon an
independent appraisal.

                                      -3-
<PAGE>
5.   OTHER ASSETS

Other assets consist of the following at December 31, 1995:

                                                  Amortization
                                                    Period
                                                    ------

             Loan origination fee                   5 years     $      420,000
             Organization costs                     5 years            318,000
                                                                --------------

                                                                       738,000
             Less:  accumulated amortization                           (89,641)
                                                                --------------
             Other assets, net                                  $      648,359
                                                                ==============

6.   COMMITMENTS AND CONTINGENCIES

The Company has entered into operating  leases for building space and equipment.
Rental  expense was $76,913 for the period from July 25, 1995  through  December
31, 1995. As of December 31, 1995,  future  minimum lease  payments  under these
operating leases were as follows:

             1996                                                $     133,864
             1997                                                       61,478
             1998                                                       45,000
             1999                                                       45,000
             2000                                                       45,000
             Thereafter                                                482,250
                                                                --------------

                                                                 $     812,592
                                                                ==============

The  Company  has also  entered  into  several  contracts  for  data  processing
equipment and service.  Rental expense was $240,030 for the period from July 25,
1995 through December 31, 1995. As of December 31, 1995, future minimum payments
under these contracts are as follows:

             1996                                                $     592,443
             1997                                                      581,929
                                                                --------------

                                                                 $   1,174,372
                                                                 =============

Litigation
- - ----------

Lawsuits  and  claims are filed  against  the  Company  from time to time in the
ordinary course of business.  These actions are in various  preliminary  stages,
and no judgments or decisions  have been  rendered by hearing  boards or courts.
Management,  after reviewing  developments to date with legal counsel, is of the
opinion that the outcome of such matters will not have a material adverse effect
on the Company's financial position, results of operations or net cash flows.

7.   INCOME TAXES

In February  1992,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement of Financial  Accounting  Standards  No. 109,  "Accounting  for Income
Taxes."


                                      -4-
<PAGE>
The following is a reconciliation  of the statutory  federal income taxes to the
recorded provision:
                                                                  December 31,
                                                                      1995
                                                                 -------------

          Statutory federal income taxes                         $   (409,278)

          Adjustments:
              State income taxes, net of federal effect               (40,706)
              Valuation allowance                                     449,984
                                                                 -------------
                  (Benefit) for income taxes                     $       -
                                                                 =============


Temporary  differences  between the financial reporting carrying amounts and tax
basis of assets and  liabilities  give rise to  deferred  taxes.  The  principal
sources of temporary differences and their effects on the provision for deferred
income taxes are as follows:

                                                                  December 31,
                                                                      1995
                                                                 -------------

          Depreciation and amortization                          $     126,154
          Valuation allowance                                         (126,154)
                                                                --------------

                  Deferred income tax provision                  $        -
                                                                 =============

Total deferred tax assets and deferred tax  liabilities as of December 31, 1995,
and the sources of the difference between financial  accounting and tax bases of
the Company's assets and liabilities  which give rise to the deferred tax assets
and deferred tax liabilities and the tax effects of each are as follows:

                                                                 December 31,
                                                                      1995
                                                                 -------------

          Deferred tax assets:
              Depreciation and amortization                     $     126,154
              Valuation allowance                                    (126,154)
                                                               --------------

                                                                $        -
                                                                =============

During the year ended December 31, 1995,  the Company  recorded a full valuation
allowance  on the  deferred  tax  assets to reduce  the total to an amount  that
management  believes will  ultimately be realized.  Realization  of deferred tax
assets is dependent upon  sufficient  future total income during the period that
temporary  differences and  carryforwards are expected to be available to reduce
taxable income.

8.   LONG-TERM DEBT

In connection  with the acquisition of the Station,  KRRT,  Inc.  entered into a
Bank Credit Agreement with a principal of $21,000,000 and interest at LIBOR plus
2.5%.  Payments are scheduled to begin

                                      -5-
<PAGE>
on January  31,  1996.  The debt is  secured  by all the  assets of KRRT,  Inc.,
including their rights under the LMA agreement and the assets of their Parent.

Annual maturities of long-term debt as of December 31, 1995, are as follows:

             1996                                         $   2,000,000
             1997                                             4,000,000
             1998                                             5,000,000
             1999                                             5,800,000
             2000                                             4,200,000
                                                          -------------
                                                          $  21,000,000
                                                          =============

The carrying amount the Company's  long-term debt  approximates  Fair value. The
Fair value was  determined  by  reference  to quoted  values  obtained  from the
lender.

9.   RELATED PARTY TRANSACTIONS

The Company's  Parent  receives a management fee equal to the portion of the LMA
fees designated as management fees for management services provided.  During the
period from July 25, 1995 through  December 31, 1995,  the Company paid $277,775
to their Parent.

During  1995,  the Parent  contributed  $10,001,000  to the Company to partially
finance  the  acquisition  of the  Station  from  Paramount  Stations  Group  of
Kerville, Inc. (Note 4).

In connection  with the  financing of the  acquisition,  the Parent  contributed
$500,000  to satisfy a covenant  with the Bank of  Montreal.  This  $500,000  is
recorded as a long-term note payable.

10.  PROGRAM CONTRACTS

The Company purchases the right to broadcast programs through fixed term license
agreements. Broadcast rights consist of the following as of December 31, 1995:

                                                               December 31,
                                                                   1995
                                                              -------------

             Aggregate cost                                 $   2,390,639

             Less-  Accumulated amortization                       69,674
                                                              -------------
                                                                2,320,965

             Less-  Current portion                             1,451,959
                                                              -------------
                                                            $     869,006
                                                              =============

                                      -6-
<PAGE>
Contractual obligations incurred in connection with the acquisition of broadcast
rights are $2,320,965 as of December 31, 1995, respectively. Future payments, by
year,  for program  contract  rights  payable as of December  31,  1995,  are as
follows:

             1996                                             $   1,521,663
             1997                                                   525,399
             1998                                                   162,764
             1999                                                    77,007
             Thereafter                                              34,132
                                                              -------------
                                                              $   2,320,965
                                                              =============

The Fair  value of film  contracts  payable is the  present  value of the future
obligations  based on the  current  rates  available  to the Company for debt of
similar maturity.  The carrying amount and fair value of program rights, payable
at December 31, 1995, were 2,320,965 and 1,653,975 respectively.

11.  SUBSEQUENT EVENT

In April 1996,  Sinclair  Broadcast  Group,  Inc.  (SBG)  entered  into an asset
purchase  agreement with the Company  whereby the Company has agreed to sell the
non-license  assets for approximately  $29.6 million.  The Company estimates the
transaction will be consummated in May 1996.



                                      -7-
<PAGE>
Kansas City TV 62
Limited Partnership
Financial Statements
December 31, 1995


<PAGE>
                        Report of Independent Accountants


March 22, 1996

To the Partners of Kansas City TV 62 Limited Partnership

In our opinion,  the  accompanying  balance sheet and the related  statements of
operations, of changes in partners' capital and of cash flows present fairly, in
all  material  respects,  the  financial  position  of Kansas City TV 62 Limited
Partnership at December 31, 1995 and 1994, and the results of its operations and
its cash flows for the years then ended in conformity  with  generally  accepted
accounting principles.  These financial statements are the responsibility of the
Partnership's  management;  our responsibility is to express an opinion on these
financial  statements  based on our  audits.  We  conducted  our audits of these
statements  in accordance  with  generally  accepted  auditing  standards  which
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,  assessing the  accounting  principles
used and  significant  estimates made by management,  and evaluating the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for the opinion expressed above.


                                        Price Waterhouse LLP


<PAGE>

Kansas City TV 62 Limited Partnership
Balance Sheet
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                                                                    December 31,
                                                                               1995             1994
                                                                                   (in thousands)
<S>                                                                      <C>             <C>   
Assets

Current assets:
  Cash and cash equivalents                                              $       590     $       978
  Accounts receivable, less allowance for doubtful accounts
    of $236 and $122 in 1995 and in 1994                                       3,953           3,052
  Broadcast rights                                                             3,380           2,864
  Prepaid expenses                                                                21              16
                                                                               -----           -----

    Total current assets                                                       7,944           6,910

  Property and equipment - net                                                   734           1,305

  Broadcast rights                                                             3,286           3,305

  Goodwill and other intangible assets                                         3,817           4,027
                                                                               -----           -----
                                                                         $    15,781     $    15,547
                                                                              ======          ======
Liabilities and Partners' Capital

Current liabilities:
  Current portion of long-term debt                                      $     6,998     $       338
  Subordinated note payable to Seller                                          7,816             -
  Accounts payable and accrued expenses                                        1,578           1,714
  Interest payable                                                               733           1,943
  Due to related parties                                                          -               40
  Broadcast rights payable                                                     4,020           3,837
                                                                               -----           -----

    Total current liabilities                                                 21,145           7,872

Broadcast rights payable                                                       3,107           3,569

Long-term debt                                                                     -           9,273

Subordinated note payable to Seller                                              921           7,730

Partners' capital                                                             (9,392)        (12,897)

Commitments and contingencies (Note 8)                                        ------          ------

                                                                            $ 15,781        $ 15,547
                                                                            ========        ========
</TABLE>

                 The accompanying notes are an integral part of
                           these financial statements.
<PAGE>

Kansas City TV 62 Limited Partnership
Statement of Operations
- - -------------------------------------------------------------------------------


                                                            Year ended
                                                            December 31,
                                                       1995             1994
                                                          (in thousands)

Revenues - net of agency and national
  representative commissions                     $    17,484     $    14,052

Costs and expenses:
  Programming, production and engineering              3,347           4,533
  Amortization of broadcast rights                     4,007           4,581
  Sales, promotion and marketing                       2,476           2,716
  General and administrative                           1,898           1,834
  Depreciation and amortization                          842             805
  Interest expense, net                                2,039           1,983
  Other income                                          (630)          -
                                                 ------------    ------------


Net income (loss)                                $     3,505     $    (2,400)
                                                 ===========      ===========



                 The accompanying notes are an integral part of
                           these financial statements.

<PAGE>


Kansas City TV 62 Limited Partnership
Statement of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
- - --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                                   Year ended
                                                                                   December 31,
                                                                               1995          1994
                                                                                  (in thousands)
<S>                                                                      <C>             <C>   

Cash flows from operating activities:
  Net income (loss)                                                      $     3,505     $    (2,400)
  Adjustments to reconcile net income (loss) to net cash
   provided (used) for operating activities:
    Depreciation                                                                 632             595
    Amortization of goodwill and other intangible assets                         210             210
    Amortization of broadcast rights, net of barter                            1,206           2,122
    Accretion of subordinated debt principal                                     210             197
    Gain on forgiveness of debt                                                 (398)           -
    Increase in accounts receivable                                             (901)           (655)
    Increase in prepaid expenses                                                  (5)             (6)
    Decrease in accounts payable and accrued expenses                            262            (396)
    (Decrease) increase in interest payable                                     (413)          1,806
    Decrease in due to related parties                                           (40)           (236)
    Decrease in broadcast rights payable, net of barter                       (1,982)         (1,745)
                                                                         ------------    ------------



     Net cash provided (used) for operating activities                         2,286            (508)
                                                                         ------------    ------------

Cash flows from investing activities:
  Additions to property and equipment                                            (61)            (35)
                                                                         ------------    ------------



Cash flows from financing activities:
  Repayment of long-term debt                                                 (2,613)             -
  Partner's contribution of capital                                              -             1,400
                                                                         ------------     -----------



     Net cash (used) provided by financing activities                         (2,613)          1,400
                                                                         ------------     ----------



Net (decrease) increase in cash                                                 (388)            857

Cash and cash equivalents at beginning of year                                   978             121
                                                                         ------------     ----------



Cash and cash equivalents at end of year                                 $       590     $       978
                                                                         ============    ===========



Supplemental schedule of noncash activities:
  Film contracts acquired                                                $     4,055     $     2,834
                                                                         ===========     ===========



  Film contract liability additions                                      $     4,055     $     2,834
                                                                         ===========     ===========



  Capitalized subordinated debt interest                                 $       797     $       884
                                                                         ===========     ===========
</TABLE>

                 The accompanying notes are an integral part of
                           these financial statements.

<PAGE>


Kansas City TV 62 Limited Partnership
Statement of Changes in Partners' Capital
For the Years Ended December 31, 1995 and 1994
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                                       General           Limited
                                                       Partner           Partner           Total
                                                                      (in thousands)

<S>                                                    <C>                <C>            <C>                         
Balance at December 31, 1993                           $ (11,897)            -           $ (11,897)

Capital contribution                                       1,400             -               1,400

Net loss for the year ended December 31, 1994             (2,400)            -              (2,400)
                                                       ----------         ---------      ----------

Balance at December 31, 1994                           $ (12,897)         $  -           $ (12,897)

Net income for the year ended December 31, 1995            3,505             -               3,505
                                                       -------------      ---------       ---------


Balance at December 31, 1995                           $  (9,392)         $  -           $  (9,392)
                                                       =========          =========      ==========



</TABLE>

                 The accompanying notes are an integral part of
                           these financial statements.

<PAGE>


Kansas City TV 62 Limited Partnership
Notes to Financial Statements (in thousands)
- - -------------------------------------------------------------------------------


1.       Organization

         Kansas City TV 62 Limited  Partnership (the  "Partnership")  is a joint
         venture of ABRY  Communications  III,  L.P., the general  partner,  and
         Copley Place Capital Group,  the limited  partner.  The Partnership was
         organized under the laws of the State of Delaware on April 18, 1990. On
         September  21, 1990 the  Partnership  acquired the business and certain
         assets of Kansas City Television,  Inc. (the "Seller"). The Partnership
         is a  television  broadcaster  serving  the  Kansas  City area  through
         station KSMO on UHF Channel 62.


2.       Summary of Significant  Accounting  Policies  

         Allocation of  Partnership  Results to Partners'  Capital  Accounts 
         Net losses of the Partnership are allocated among the capital  accounts
         of the partners based on their relative partnership interests until the
         limited  partner's capital has been exhausted.  Thereafter,  net losses
         are allocated solely to the general partner. Net income is allocated in
         proportion to previously allocated net losses in reverse  chronological
         order.  Thereafter,  net income is allocated to partners based on their
         relative partnership interests, as defined in the agreement.

         Broadcast   Rights
         Broadcast  rights  are  stated  at the  lower  of  unamortized  cost or
         estimated  net  realizable  value.  Broadcast  rights  and the  related
         liabilities  are recorded at the contract value when the license period
         begins  and the  right is  available  for  use.  Broadcast  rights  are
         amortized using the straight-line method over the number of showings or
         license period.  The net realizable value of broadcast rights for which
         the  Partnership is  contractually  committed is reviewed  annually and
         revisions to amortization  rates or write-downs to net realizable value
         may occur.  The current portion of broadcast  rights  represents  those
         rights   available  for  broadcast  which  will  be  amortized  in  the
         succeeding year.

         Property and Equipment
         Property and  equipment are recorded at cost and  depreciated  over the
         estimated  useful lives of the assets on a straight-line  basis.  Major
         renewals and  betterments  are  capitalized  and  ordinary  repairs and
         maintenance are charged to expense in the period incurred.

         Goodwill and Other Intangible Assets
         Goodwill  aggregating  $4,144  is  amortized  over 40 years  using  the
         straight-line  method.  Legal and accounting  fees  associated with the
         acquisition  of  loans,   aggregating  $555  and  organization  of  the
         Partnership,  aggregating  $59 are  capitalized  and amortized over the
         term of the related debt and five years, respectively. Other intangible
         assets,  aggregating  $119 are amortized  over their  estimated  useful
         life.  At  December  31,  1995  and  1994,   accumulated   amortization
         aggregated $1,060 and $850, respectively.

         Barter Transactions
<PAGE>
Kansas City TV 62 Limited Partnership
Notes to Financial Statements (in thousands)
- - -------------------------------------------------------------------------------

         Revenue from barter  transactions is recognized when advertisements are
         broadcast and services or  merchandise  received are charged to expense
         when  received  or  used.   Revenues  arising  from  barter  and  trade
         transactions   aggregated   $2,907   and   $2,654  in  1995  and  1994,
         respectively.

         Income Taxes
         The  financial  statements  of  the  Partnership  do  not  include  any
         provision for federal or state income taxes.  All  Partnership  income,
         losses,  tax credits and deductions  are allocated  among the partners.
         Each  partner  is  responsible  to  report  its  distributed  share  of
         Partnership results in its federal and state income tax returns.


         Cash and Cash Equivalents
         The  Partnership  considers  all highly liquid  investment  instruments
         purchased  with  a  maturity  of  three  months  or  less  to  be  cash
         equivalents. The Partnership invests its cash in money market funds and
         in short-term  government securities that are subject to minimal market
         and  credit  risk.  At  December  31,  1995,  the  Partnership's   cash
         equivalents include $544 of money market funds.

         Effective  January  1,  1994,  the  Partnership  adopted  Statement  of
         Financial  Accounting  Standards  No.  115 (FAS 115),  "Accounting  for
         Certain  Investments  in  Debt  and  Equity  Securities".   Under  this
         standard,  the  Partnership is required to classify its  investments in
         debt  and  equity   securities  into  one  or  more  of  the  following
         categories:  held-to-maturity,  trading or available for sale. Adoption
         of this standard had no impact on the Partnership's  financial position
         or results of operations at the date of adoption.

         Concentration of Credit Risk
         Financial  instruments  which  potentially  expose the Partnership to a
         concentration  of  credit  risk  include  cash,  cash  equivalents  and
         accounts receivable. A significant amount of the Partnership's cash and
         cash equivalents are held by one financial  institution at December 31,
         1995. The  Partnership  does not believe that such deposits are subject
         to any unusual  credit risk  beyond the normal  credit risk  associated
         with operating its business.  The  Partnership  maintains  reserves for
         potential  credit losses and such losses,  in the  aggregate,  have not
         historically exceeded management's expectations.

         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.


3.       Related Party Transactions

                                       2
<PAGE>
Kansas City TV 62 Limited Partnership
Notes to Financial Statements (in thousands)
- - -------------------------------------------------------------------------------



         Prior  to  1995,  ABRY   Communications  III,  L.P.,  provided  certain
         administrative and support services to the Partnership for which it was
         paid a management fee. Management fees charged to operations aggregated
         $276 in 1994. No management fees were charged during 1995.








                                       3
<PAGE>
Kansas City TV 62 Limited Partnership
Notes to Financial Statements (in thousands)
- - --------------------------------------------------------------------------------

4.       Property and Equipment

         Property and equipment consists of the following:
<TABLE>
<CAPTION>

                                                              Estimated
                                                             useful life                     December 31,
                                                               (years)                   1995            1994

<S>                                                              <C>                 <C>                <C>    
         Studio equipment                                        2-7                 $ 1,855            $ 1,824
         Transmission  equipment                                 7-8                   1,206              1,184
         Vehicles,  office  equipment and
          furniture                                              5-7                     396                388
         Leasehold improvements                                   8                      297                297
                                                                                     ------------   ------------

                                                                                       3,754              3,693
         Less -  accumulated  depreciation  and
          amortization                                                                 3,020              2,388
                                                                                     ------------   ------------


                                                                                     $   734            $ 1,305
                                                                                     ============   ============



5.       Broadcast Rights

         The Partnership purchases the right to broadcast programs through fixed
         term license agreements. Broadcast rights consist of the following:

                                                                                             December 31,
                                                                                           1995          1994

         Aggregate cost                                                              $  16,564          $14,350
         Less - accumulated amortization                                                 9,898            8,181
                                                                                    ------------    -----------


                                                                                         6,666            6,169

         Less - current portion                                                          3,380            2,864
                                                                                     ------------   -----------


                                                                                     $   3,286          $ 3,305
                                                                                     ============   ===========



</TABLE>


                                        4

<PAGE>


Kansas City TV 62 Limited Partnership
Notes to Financial Statements (in thousands)
- - --------------------------------------------------------------------------------


         Contractual  obligations incurred in connection with the acquisition of
         broadcast  rights are $7,127  including  $3,742 of barter  obligations.
         Future payments in connection with these contractual obligations are as
         follows at December 31, 1995:

                  1996               $   4,058
                  1997                   1,776
                  1998                   1,064
                  1999                     169
                  2000                      23
                  Thereafter                37
                                   ------------

                                     $   7,127
                                    ==========


         The  Partnership  has  estimated  the fair  value of these  contractual
         obligations at approximately $6,800 and $6,776 at December 31, 1995 and
         1994,  respectively,  based on  future  cash  flows  discounted  at the
         Partnership's current borrowing rate.

6.       Debt

         Debt consists of the following:
                                                          December 31,
                                                      1995            1994

         Term loan                                $   1,455      $  2,133
         Revolving credit facility                    5,543         7,478
                                                  ----------     --------


                                                      6,998         9,611

         Less - current portion                       6,998           338
                                                  ---------      --------
                                                  $     -        $  9,273 
                                                  =========      ========



         The term loan and  revolving  credit  facility  (the  "revolver")  bear
         interest,  payable  monthly,  at the base rate,  computed by taking the
         higher of the  Federal  Funds  rate plus 1% or prime,  plus a  computed
         margin  rate which  ranges  from  1.75% to 2.25%.  The  Partnership  is
         charged a fee for the  average  daily  unused  portion of the  revolver
         commitment  at a  rate  of  1/2%  per  annum,  payable  quarterly.  The
         borrowings  are  secured  by  substantially  all of  the  Partnership's
         assets.

         The credit  agreement was amended on April 21, 1995. Under the terms of
         the amended credit agreement,  the principle amount of the term loan is
         payable in quarterly installments of varying amounts commencing October
         1, 1995.  The revolver was increased to $8,500 and will be reduced on a
         quarterly basis  commencing  April 1, 1997, until no credit facility is
         available at October 1, 1998.


                                        5

<PAGE>

Kansas City TV 62 Limited Partnership
Notes to Financial Statements (in thousands)
- - --------------------------------------------------------------------------------


         In addition to the  scheduled  principal  and  interest  payments,  the
         lender  may be  entitled  to  contingent  interest  payable  upon early
         repayment of the term loan, a change in control of the  Partnership  or
         upon  the  occurrence  of  certain  other  events  as  defined  in  the
         agreement.  The  amount of  contingent  interest  which  will be due is
         determined by a formula which  considers  appreciation  in the value of
         the Partnership.  Based upon  management's  estimate of appreciation in
         the value of the  Partnership,  no accrual for contingent  interest has
         been recorded at December 31, 1995 and 1994.

         The  subordinated  note  payable  to  Seller  is  subordinated  to  the
         Partnership's term loan and revolver  borrowings.  The principal amount
         of the subordinated  note payable to Seller is payable in a lump sum on
         September 21, 1998.  Interest on the outstanding  principal  accrues at
         the  rate of 10%  and is  payable  annually.  For  financial  reporting
         purposes,  however, interest on the note accrues at an implicit rate of
         14% per annum,  and the note's original stated  principal of $8 million
         has been discounted to reflect this yield.

         In January  1996, a  third-party  exercised  its option to purchase the
         station  (Note 9).  Accordingly,  all  long-term  debt is classified as
         current at December 31, 1995. In March 1996, certain  subordinated note
         holders  agreed to extend the term of their notes through  October 1999
         and forgave interest for the five-year period then ended.  Accordingly,
         all subordinated debt, excluding the extended portion, is classified as
         current at December 31, 1995.

         In  1994,  certain  subordinated  note  holders  forgave  $680  of  the
         subordinated  note,  $157 of  capitalized  interest  and $62 of accrued
         interest. In consideration of the debt forgiveness, the Partnership and
         a related party signed a network  affiliation  agreement  with one note
         holder and licensed certain programs from the other note holder.  Under
         the terms of the affiliation agreement, the Partnership and the related
         party must broadcast  network  programming  over the three-year term of
         the  network  affiliation  agreement.  Under the  terms of the  license
         agreement,  the related party must broadcast  certain programs over the
         one-year term of the license agreement.  Accordingly,  the $899 gain on
         the forgiveness of debt and related  interest  thereon was deferred and
         is being amortized over the term of the affiliation and program license
         agreements.  The  Partnership  amortized  $398 of the gain to income in
         1995.  The gain on  forgiveness  of debt is included in other income in
         the statement of operations.  The deferred gain is included in accounts
         payable and accrued expenses at December 31, 1995 and 1994.

         Interest  payments of $2,301  were made during the year ended  December
         31, 1995. No interest payments were made during the year ended December
         31, 1994.



                                        6

<PAGE>


Kansas City TV 62 Limited Partnership
Notes to Financial Statements (in thousands)
- - --------------------------------------------------------------------------------


7.       Retirement Savings Plan

         The  Partnership  has adopted a retirement  savings plan under  Section
         401(K) of the Internal Revenue Code. This plan covers substantially all
         employees of the  Partnership  and  affiliated  partnerships,  who meet
         minimum age and service requirements,  and allows participants to defer
         a portion of their annual compensation on a pre-tax basis.  Partnership
         contributions to the plan may be made at the discretion of the Board of
         Directors.  No Partnership  contributions were authorized for the years
         ended December 31, 1995 and 1994.


8.       Commitments and Contingencies

         Employment Agreements 
         As a result of the  Partnership's  execution  of the  Option  Agreement
         (Note  9) in  1994,  the  Partnership  and the  general  partner,  ABRY
         Communications III, L.P., amended employment  agreements which entitled
         certain key  employees  to  appreciation  rights  payable upon either a
         change in control of the  Partnership or the payment of certain partner
         cash distributions. Previously, the employees vested in these rights at
         the rate of 20% per year from the date the rights were granted,  except
         that they vested fully if they were employees of the Partnership at the
         time  the  rights  became  payable.  Amounts  due to the  employees  in
         connection  with  those  rights  were  determined  by a  formula  which
         considers  appreciation  in the  value of the  Partnership.  Under  the
         amendments,  in the event  that  certain  key  employees  meet  certain
         employment  criteria,  such employees will receive a payment in lieu of
         the  appreciation  rights  discussed above. An accrual for compensation
         related to these  rights for $162 was  included in accrued  expenses at
         December 31, 1994.  These  obligations  were satisfied during 1995 and,
         accordingly,  no accrual has been made related to these  agreements  at
         December 31, 1995.

         Broadcast License Agreements
         Broadcast  rights acquired under license  agreements are recorded as an
         asset and a  corresponding  liability  at the  inception of the license
         period.  In addition to these broadcast  rights payable at December 31,
         1995, the  Partnership  has $1,417 of commitments to acquire  broadcast
         rights for which the license period has not commenced and, accordingly,
         for which no  liability  has been  recorded.  Future  minimum  payments
         arising from such  commitments  outstanding  at December  31, 1995,  of
         which $729 represents barter commitments, are as follows:

               1996            $     133
               1997                  356
               1998                  347
               1999                  187
               2000                   79
               Thereafter            315
                              ----------
                              $    1,417
           



                                        7

<PAGE>

Kansas City TV 62 Limited Partnership
Notes to Financial Statements (in thousands)
- - --------------------------------------------------------------------------------


         Sports Rights Agreement 
         The Partnership  broadcasts  certain baseball games for the Kansas City
         Royals  Baseball  Corporation  (the  "Royals").  Under the terms of the
         broadcast   agreement  as  amended  during  1995,  the  Partnership  is
         obligated  to  pay  broadcast  fees  and  to  provide  advertising  and
         promotions  to the Royals  through  October 1, 1998.  In addition,  the
         Partnership  is obligated  to pay the Royals 75% of  operating  profits
         less than $500 and 50% of operating profits exceeding $500,  related to
         such broadcasts. Future minimum annual broadcast fee payments under the
         agreement, as amended, are as follows:

                   1996                 $     1,080
                   1997                       1,080
                   1998                       1,080
                                        -----------
                                        $     3,240
                                              


         Broadcast  fees are payable  quarterly  on July 1, October 1, January 1
         and April 1 of each year. In the event the  Partnership  terminates the
         agreement  before  October  1, 1996 or 1997,  the  Partnership  will be
         required  to pay  the  Royals  a  cancellation  fee of  $500  or  $250,
         respectively.  The payment of all  amounts due to the Royals  under the
         agreement have been guaranteed by the Partnership's general partner and
         BVC   Communications,   III,   Inc.,   the  general   partner  of  ABRY
         Communications  III, L.P. Charges to operations for such broadcast fees
         aggregated $1,350 and $2,728 in 1995 and 1994, respectively.

         Operating Leases             
         The  Partnership  leases its antenna site,  studio and other  operating
         equipment under  noncancellable  operating lease arrangements  expiring
         through 2010. Charges to operations for such leases aggregated $154 and
         $146 in 1995 and 1994,  respectively.  Future  minimum  lease  payments
         under these leases are as follows at December 31, 1995:

                   1996                 $       166
                   1997                         160
                   1998                         161
                   1999                         124
                   2000                         123
                   Thereafter                   237
                                       


           Total minimum lease payments $       971
                                        ===========



         During 1995, the antenna site was damaged and the Partnership  received
         an insurance settlement of $248 for the related business  interruption.
         The insurance  settlement net of amounts  relating to the repair of the
         antenna, are included in other income in the statement of operations.




                                        8

<PAGE>


         Kansas City TV 62 Limited Partnership Notes to Financial Statements (in
         thousands)
         -----------------------------------------------------------------------

9.       Option Agreement


         On May 24, 1994, the Partnership  entered into an agreement whereby the
         Partnership  granted a  third-party  an option to acquire the assets of
         the station for an amount equal to the lesser of outstanding debt as of
         the exercise date,  including accrued interest thereon,  or $9,000. The
         acquiring entity will assume all other  liabilities of the station.  In
         conjunction with the option agreement,  the Partnership entered into an
         agreement with the third-party  whereby the  Partnership  would pay the
         third-party a consulting  fee of $250 per year as long as the option is
         outstanding.  Charges to operations related to this agreement were $250
         in 1995 and $147 in 1994.  The  third-party  exercised  this  option in
         January  1996.  Accordingly,  all debt of the station is  classified as
         current at December 31, 1995, excluding debt for which an extension was
         granted, in accordance with the Partnership's loan agreements (Note 6).
         The transaction is subject to regulatory approval.




                                       10

<PAGE>

Cincinnati TV 64
Limited Partnership
Financial Statements
December 31, 1995


<PAGE>




                        Report of Independent Accountants


March 22, 1996

To the Partners of Cincinnati TV 64 Limited Partnership

In our opinion,  the  accompanying  balance sheet and the related  statements of
operations, of changes in partners' capital and of cash flows present fairly, in
all  material  respects,  the  financial  position of  Cincinnati  TV 64 Limited
Partnership at December 31, 1995 and 1994, and the results of its operations and
its cash flows for the years then ended in conformity  with  generally  accepted
accounting principles.  These financial statements are the responsibility of the
Partnership's  management;  our responsibility is to express an opinion on these
financial  statements  based on our  audits.  We  conducted  our audits of these
statements  in accordance  with  generally  accepted  auditing  standards  which
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,  assessing the  accounting  principles
used and  significant  estimates made by management,  and evaluating the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for the opinion expressed above.


                                       Price Waterhouse LLP



<PAGE>

Cincinnati TV 64 Limited Partnership
Balance Sheet
- - --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                                 December 31,
                                                                           1995               1994
                                                                                (in thousands)
<S>                                                                      <C>             <C>        
Assets

Current assets:
  Cash and cash equivalents                                              $       641     $       482
  Accounts receivable, less allowance for doubtful
   accounts of $86 and $64 in 1995 in 1994, respectively                       3,091           2,773
  Broadcast rights                                                             4,461           3,461
  Prepaid expenses                                                                15              21
                                                                         -----------      ---------- 

    Total current assets                                                       8,208           6,737

Property and equipment - net                                                   5,238           5,670

Broadcast rights                                                               4,339           3,061

Goodwill and other intangible assets                                           1,746           1,823
                                                                         -----------      ---------- 
                                                                         $    19,531     $    17,291
                                                                         ===========      ==========
Liabilities and Partners' Capital

Current liabilities:
  Current portion of long-term debt                                      $    11,883     $       700
  Subordinated note payable to Seller                                          7,446               -
  Accounts payable and accrued expenses                                        1,127           1,082
  Interest payable                                                               718             650
  Broadcast rights payable                                                     5,221           3,957
                                                                         -----------      ---------- 

    Total current liabilities                                                 26,395           6,389

Broadcast rights payable                                                       4,262           3,221

Long-term debt                                                                     -          14,083 

Subordinated note payable to Seller                                                -           7,089

Partners' capital                                                            (11,126)        (13,491)

Commitments and contingencies (Note 8) 
                                                                          -----------      ---------- 
                                                                         $    19,531     $    17,291
                                                                          ===========      ==========
</TABLE>



                     The accompanying notes are an integral
                       part of these financial statements.

<PAGE>
Cincinnati TV 64 Limited Partnership
Statement of Operations
- - --------------------------------------------------------------------------------


                                                               Year ended
                                                              December 31,
                                                         1995             1994
                                                             (in thousands)

 Revenues - net of agency and national
   representative commissions                       $    15,529     $    13,727

 Costs and expenses:
   Programming, production and engineering                1,002             954
   Amortization of broadcast rights                       4,971           5,416
   Sales, promotion and marketing                         2,394           2,813
   General and administrative                             1,629           2,059
   Depreciation and amortization                            662             841
   Interest expense, net                                  2,506           2,375
                                                    -----------     -----------
                                                                      
 Net income (loss)                                  $     2,365     $      (731)
                                                    ===========     ===========




                     The accompanying notes are an integral
                       part of these financial statements.
<PAGE>
Cincinnati TV 64 Limited Partnership
Statement of Changes in Partners' Capital
For the Years Ended December 31, 1995 and 1994
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                       General            Limited
                                       Partner            Partner            Total
                                                      (in thousands)

<S>                                  <C>                  <C>             <C>         
Balance at December 31, 1993         $   (12,760)         $     -         $   (12,760)

Net loss for the year ended
  December 31, 1994                         (731)               -                (731)
                                      ----------          -------           ---------                                     
Balance at December 31, 1994             (13,491)               -             (13,491)

Net income for the year ended
  December 31, 1995                        2,365                -               2,365
                                      ----------          -------           ---------                                     

Balance at December 31, 1995         $   (11,126)         $     -         $   (11,126)
                                      ==========          =======           =========
</TABLE>


                     The accompanying notes are an integral
                       part of these financial statements.
<PAGE>
Cincinnati TV 64 Limited Partnership
Statement of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                                                                  Year ended
                                                                                  December 31,
                                                                               1995          1994
                                                                                 (in thousands)

Cash flows from operating activities:
<S>                                                                      <C>             <C>         
  Net income (loss)                                                      $     2,365     $      (731)
  Adjustments to reconcile net income (loss) to net cash
    provided by operating activities:
    Depreciation                                                                 585             759
    Amortization of goodwill and other intangible assets                          77              82
    Amortization of broadcast rights, net of barter                            1,621           2,294
    Loss on disposal of property and equipment                                    37               -
    Accretion of subordinated debt principal                                     357             312
    Deferred interest expense on subordinated note payable                         -              87
    Increase in accounts receivable                                             (318)           (516)
    (Increase) decrease in prepaid expenses                                        6              (6)
    Increase (decrease) in accounts payable and accrued expenses                  45             (80)
    Increase in interest payable                                                  68             650
    Decrease in due to related parties                                             -             (72)
    Decrease in broadcast rights payable, net of barter                       (1,594)         (1,676)
                                                                          ----------      ----------

        Net cash provided by operating activities                              3,249           1,103
                                                                          ----------      ----------

Cash flows from investing activities:
  Additions to property and equipment                                           (190)            (18)
                                                                          ----------      ----------

Cash flows from financing activities:
  Net repayments under revolving credit facility                              (2,200)           (750)
  Repayments of long-term debt                                                  (700)              -
                                                                          ----------      ----------

        Net cash used for financing activities                                (2,900)           (750)
                                                                          ----------      ----------

Net increase in cash and cash equivalents                                        159             335

Cash and cash equivalents at beginning of year                                   482             147
                                                                          ----------      ----------

Cash and cash equivalents at end of year                                 $       641     $       482
                                                                          ==========      ==========

Supplemental schedule of noncash activities:
  Film contracts acquired/obligations assumed                            $     2,961     $     2,026
                                                                          ==========      ==========
</TABLE>


                     The accompanying notes are an integral
                       part of these financial statements.

<PAGE>
Cincinnati TV 64 Limited Partnership
Notes to Financial Statements (in thousands)
- - --------------------------------------------------------------------------------


1.       Organization

         Cincinnati TV 64 Limited  Partnership  (the  "Partnership")  is a joint
         venture of ABRY  Communications II, L.P., the general partner (Note 3),
         and Copley Place Capital Group,  the limited  partner.  The Partnership
         was  organized  under  the laws of the State of  Delaware  on August 1,
         1989.  The  Partnership  is  a  television   broadcaster   serving  the
         Cincinnati, Ohio area through station WSTR on UHF Channel 64.


2.       Summary of Significant Accounting Policies

         Allocation of  Partnership  Results to Partners'  Capital  Accounts 
         Net losses of the Partnership are allocated among the capital  accounts
         of the partners based on their relative partnership interests until the
         limited  partner's capital has been exhausted.  Thereafter,  net losses
         are allocated solely to the general partner. Net income is allocated in
         proportion to previously allocated net losses in reverse  chronological
         order.  Thereafter,  net income is allocated to partners based on their
         relative partnership interests, as defined in the agreement.

         Broadcast   Rights   
         Broadcast  rights  are  stated  at the  lower  of  unamortized  cost or
         estimated  net  realizable  value.  Broadcast  rights  and the  related
         liabilities  are recorded at the contract value when the license period
         begins  and the  right is  available  for  use.  Broadcast  rights  are
         amortized using the straight-line method over the number of showings or
         license period.  The net realizable value of broadcast rights for which
         the  Partnership is  contractually  committed is reviewed  annually and
         revisions to amortization  rates or write-downs to net realizable value
         may occur.  The current portion of broadcast  rights  represents  those
         rights  available  for broadcast  which  management  estimates  will be
         amortized in the succeeding year.

         Property and Equipment
         Property and  equipment are recorded at cost and  depreciated  over the
         estimated  useful lives of the assets on a straight-line  basis.  Major
         renewals and  betterments  are  capitalized  and  ordinary  repairs and
         maintenance are charged to expense in the period incurred.

         Goodwill and Other Intangible Assets
         Goodwill  aggregating  $1,991  is  amortized  over 40 years  using  the
         straight-line  method.  Legal and accounting  fees  associated with the
         acquisition of loans  aggregating  $240 are  capitalized  and amortized
         over the term of the related debt.  Organization  costs aggregating $28
         were fully  amortized at December 31,  1995.  Accumulated  amortization
         aggregated $485 and $436 at December 31, 1995 and 1994, respectively.

         Barter Transactions
         Revenue from barter  transactions is recognized when advertisements are
         broadcast and services or  merchandise  received are charged to expense
         when  received  or  used.   Revenues  arising  from  barter  and  trade
         transactions   aggregated   $3,578   and   $3,410  in  1995  and  1994,
         respectively.

                                        1
<PAGE>
Cincinnati TV 64 Limited Partnership
Notes to Financial Statements (in thousands)
- - -------------------------------------------------------------------------------


         Income Taxes
         The  financial  statements  of  the  Partnership  do  not  include  any
         provision for federal or state income taxes.  All  Partnership  income,
         losses,  tax credits and deductions  are allocated  among the partners.
         Each  partner  is  responsible  to  report  its  distributed  share  of
         Partnership results in its federal and state income tax returns.

         Cash and Cash Equivalents
         The  Partnership  considers  all highly liquid  investment  instruments
         purchased  with  a  maturity  of  three  months  or  less  to  be  cash
         equivalents.  The  Partnership  invests its excess  cash in  short-term
         government  securities  that are  subject to minimal  market and credit
         risk. At December 31, 1995 and 1994, the Partnership's cash equivalents
         include  $500  and  $400,   respectively,   of  short-term   government
         securities.    These    securities,    which    are    classified    as
         available-for-sale,  are recorded at market value,  which  approximates
         cost.

         Effective  January  1,  1994,  the  Partnership  adopted  Statement  of
         Financial  Accounting  Standards  No. 115, (FAS 115),  "Accounting  for
         Certain  Investments  in  Debt  and  Equity  Securities".   Under  this
         standard,  the  Partnership is required to classify its  investments in
         debt  and  equity   securities  into  one  or  more  of  the  following
         categories:  held-to-maturity,  trading or available for sale. Adoption
         of this standard had no impact on the Partnership's  financial position
         or results of operations at the date of adoption.

         Concentration of Credit Risk
         Financial  instruments  which  potentially  expose the Partnership to a
         concentration  of  credit  risk  include  cash,  cash  equivalents  and
         accounts receivable. A significant amount of the Partnership's cash and
         cash equivalents are held by one financial  institution at December 31,
         1995. The  Partnership  does not believe that such deposits are subject
         to any unusual  credit risk  beyond the normal  credit risk  associated
         with operating its business.  The  Partnership  maintains  reserves for
         potential  credit losses and such losses,  in the  aggregate,  have not
         historically exceeded management's expectations.

         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.


3.       Related Party Transactions

         Prior  to  1995,  ABRY   Communications   II,  L.P.   provided  certain
         administrative and support services to the Partnership for which it was
         paid a management fee. Management fees charged to operations aggregated
         $319 in 1994. No management fees were charged to the Partnership during
         1995.



                                        2
<PAGE>
Cincinnati TV 64 Limited Partnership
Notes to Financial Statements (in thousands)
- - -------------------------------------------------------------------------------


         As of January 1995, the station became a network affiliate and licensed
         certain   programs  in   conjunction   with  the   forgiveness  of  the
         subordinated  debt of a related party by the network and licensor.  The
         term of the  affiliation  agreement  and the program  licenses is three
         years and one year,  respectively.  These  financial  statements do not
         include any amounts relating to such transaction.


4.       Property and Equipment

         Property and equipment consists of the following:
<TABLE>
<CAPTION>

                                                       Estimated
                                                      useful life                       December 31,
                                                        (years)                     1995          1994

<S>                                                       <C>                    <C>           <C>  
         Land and improvements                              -                    $      261    $      261
         Buildings                                         30                         1,719         1,719
         Transmission tower                                30                         3,226         3,226
         Transmission equipment                           7-8                         1,832         1,919
         Studio equipment                                 5-7                         1,079         1,005
         Vehicles, office equipment and furniture         5-7                           240           211
                                                                                  ---------     ---------

                                                                                      8,357         8,341
         Less - accumulated depreciation
           and amortization                                                           3,119         2,671
                                                                                  ---------     ---------
                                                                                 $    5,238    $    5,670
                                                                                  =========     =========
</TABLE>


5.       Broadcast Rights

         The Partnership purchases the right to broadcast programs through fixed
         term license agreements. Broadcast rights consist of the following:
<TABLE>
<CAPTION>

                                                                                        December 31,
                                                                                    1995          1994

<S>                                                                              <C>           <C>        
         Aggregate cost                                                          $   15,370    $    14,288
         Less - accumulated amortization                                              6,570          7,766
                                                                                  ---------      ---------

                                                                                      8,800          6,522

         Less - current portion                                                       4,461          3,461
                                                                                  ---------      ---------

                                                                                 $    4,339    $     3,061
                                                                                  =========     ==========
</TABLE>


                                        3
<PAGE>

Cincinnati TV 64 Limited Partnership
Notes to Financial Statements (in thousands)
- - -------------------------------------------------------------------------------


         Contractual  obligations incurred in connection with the acquisition of
         broadcast  rights are $9,483  including  $3,918 of barter  obligations.
         Future payments in connection with these contractual obligations are as
         follows at December 31, 1995:

         1996                                          $  5,221
         1997                                             2,502
         1998                                             1,340
         1999                                               381
         Thereafter                                          39
                                                       --------
                                                       $  9,483
                                                       ========


         The  Partnership  has  estimated  the fair  value of these  contractual
         obligations at approximately $8,591 and $6,478 at December 31, 1995 and
         1994,  respectively,  based on  future  cash  flows  discounted  at the
         Partnership's current borrowing rate.


6.       Debt

         Long-term debt consists of the following:

                                                        December 31,
                                                     1995          1994

         Term loan                               $  6,650        $  6,850
         Revolving credit facility                  4,772           6,972
         Supplemental loan                            461             961
                                                 --------        --------

                                                   11,883          14,783

         Less - current portion                    11,883             700
                                                 --------        --------

                                                 $      -        $ 14,083
                                                 ========        ========


         The  principal  amount  of the  term  loan  is  payable  in 36  monthly
         installments  of $17  which  commenced  January  1,  1995  and a  final
         installment  in an  amount  equal  to the  then  outstanding  principal
         balance is due January 1, 1998.

         The  Partnership  may  borrow up to  $8,350  under a  revolving  credit
         facility (the "revolver")  through December 31, 1995;  thereafter,  the
         credit  facility and related  borrowings are reduced on a monthly basis
         until no credit facility is available at January 1, 1998.

         The term loan,  revolver and supplemental  loan bear interest,  payable
         monthly, at the base rate, computed by taking the higher of the Federal
         Funds rate plus 1% or Prime (as defined in the agreement), plus 2.5%.


                                        4
<PAGE>
Cincinnati TV 64 Limited Partnership
Notes to Financial Statements (in thousands)
- - -------------------------------------------------------------------------------


         The  Partnership  is charged a fee for the available  revolving  credit
         commitment  at a  rate  of  1/2%  per  annum,  payable  quarterly.  The
         borrowings are secured by substantially all of the Partnership's assets
         and require the Partnership to comply with certain specified  financial
         ratios and  provisions.  At December  31,  1995,  all long term debt is
         classified  as a  current  liability  as a  result  of a  third-party's
         decision to exercise the option agreement (Note 9).

         At December 31, 1995 and 1994,  the current  portion of long-term  debt
         includes principal of $750 and $500, respectively, due by April 1, 1996
         and 1995 in  accordance  with the  acceleration  provisions of the loan
         agreement.   The  accelerated  principal  payments  were  made  by  the
         Partnership in April 1996 and January 1995, respectively.

         In addition to the  scheduled  principal  and  interest  payments,  the
         lender may be  entitled  to  contingent  interest,  payable  upon early
         repayment of the loans, a change in control of the  Partnership or upon
         the occurrence of certain other events as defined in the agreement. The
         amount of  contingent  interest  which will be due is  determined  by a
         formula which considers  appreciation in the value of the  Partnership.
         Based upon  management's  estimate of  appreciation in the value of the
         Partnership,  no accrual for  contingent  interest has been recorded at
         December 31, 1995 and 1994.

         The principal amount of the subordinated  note payable to Seller is due
         on January 1, 1998.  Interest on the outstanding  principal  accrues at
         the  rate of 8.5%  per  annum.  Interest  accrued  and  unpaid  through
         December  31,  1993 is due and  payable on  January  1, 1998.  Interest
         accrued  after  December 31, 1993 is payable  annually.  For  financial
         reporting  purposes,  however,  interest  on  the  note  accrues  at an
         implicit  rate of  14.5%  per  annum  and the  note's  original  stated
         principal  of $6 million  has been  discounted  to reflect  this yield.
         Accordingly,  interest  accrued  through  December 31, 1995 and 1994 of
         $2,877  and  $2,790,  respectively,  has been  added to the  discounted
         principal amount of the note. In January 1996, a third-party  exercised
         its option to acquire the assets of the station (Note 9).  Accordingly,
         the note has been  classified  as a current  liability  at December 31,
         1995.

         Interest  paid  during the years ended  December  31, 1995 and 1994 was
         $1,603 and $1,348, respectively.


7.       Retirement Savings Plan

         The  Partnership  has adopted a retirement  savings plan under  Section
         401(K) of the Internal Revenue Code. This plan covers substantially all
         employees  of the  Partnership  and  affiliated  partnerships  who meet
         minimum age and service requirements and allows participants to defer a
         portion of their annual  compensation  on a pre-tax basis.  Partnership
         contributions to the plan may be made at the discretion of the Board of
         Directors.  No Partnership  contributions were authorized for the years
         ended December 31, 1995 and 1994.




                                        5
<PAGE>
Cincinnati TV 64 Limited Partnership
Notes to Financial Statements (in thousands)
- - --------------------------------------------------------------------------------


8.       Commitments and Contingencies

         Employment Agreement
         As a result of the  Partnership's  execution  of the  Option  Agreement
         (Note  9) in  1994,  the  Partnership  and the  general  partner,  ABRY
         Communications II, L.P., amended an employment agreement which entitled
         certain key  employees  to  appreciation  rights  payable upon either a
         change in control of the  Partnership or the payment of certain partner
         cash distributions. Previously, the employees vested in these rights at
         the rate of 20% per year from the date the rights were granted,  except
         that they vested fully at the time the rights became  payable.  Amounts
         due to the employees in connection with those rights were determined by
         a formula which considers appreciation in the value of the Partnership.
         Under the amendment,  such employees  received  payments in lieu of the
         appreciation rights discussed above.  Compensation  expense of $862 was
         recognized  for  compensation  related to these rights  during the year
         ended December 31, 1994. An accrual for $700 for  compensation  related
         to these  rights  which  were paid in January  1995,  was  included  in
         accrued expenses at December 31, 1994.

         Broadcast License Agreements
         Broadcast  rights acquired under license  agreements are recorded as an
         asset and a  corresponding  liability  at the  inception of the license
         period.  In addition to these broadcast  rights payable at December 31,
         1995, the  Partnership  has $7,769 of commitments to acquire  broadcast
         rights for which the license period has not commenced and, accordingly,
         for which no  liability  has been  recorded.  Future  minimum  payments
         arising from such  commitments  outstanding  at December  31, 1995,  of
         which $4,232 represents barter commitments, are as follows:

         1996                                       $       903
         1997                                             2,221
         1998                                             1,918
         1999                                             1,517
         2000                                             1,210
                                                      ---------

                                                    $     7,769
                                                      =========


         Programming
         Under the  terms of an  agreement  executed  in  September  1995 with a
         third-party,  the  Partnership is committed to make  available  certain
         time periods for  broadcasting  Cincinnati  Reds baseball  games during
         each of the 1996-1998 major league baseball seasons,  in exchange for a
         fixed  fee per game  and  other  defined  compensation.  The  agreement
         expires in December  1998 or the  earliest  date after April 1, 1996 on
         which  the  third-party  no longer  has the  rights  to  telecast  such
         baseball  games.  In 1995,  the  Partnership  generated  revenue of $25
         related to this agreement.



                                        6
<PAGE>
Cincinnati TV 64 Limited Partnership
Notes to Financial Statements (in thousands)
- - -------------------------------------------------------------------------------

         Operating Leases
                   
         The Partnership  assumed a  noncancellable  operating lease under which
         property  at its  transmission  antenna  site is leased  through  1998.
         Charges to operations for this lease  aggregated $68 in 1995 and $71 in
         1994. As of December 31, 1995,  annual minimum lease payments under the
         property lease are $61 through 1997.


9.       Option Agreement

         On May 24, 1994, the Partnership  entered into an agreement whereby the
         Partnership  granted a  third-party  an option to acquire the assets of
         the station for an amount equal to the lesser of the  outstanding  debt
         as of  the  exercise  date,  including  accrued  interest  thereon,  or
         $11,000.  The acquiring entity will assume all other liabilities of the
         station.  In conjunction  with the option  agreement,  the  Partnership
         entered into an agreement with the third-party  whereby the Partnership
         would pay the  third-party a consulting fee of $250 per year as long as
         the  option is  outstanding.  Charges  to  operations  related  to this
         agreement were $250 in 1995 and $127 in 1994.

         The third-party  exercised this option in January 1996. The transaction
         is subject to regulatory approval.  As a result of the exercise of this
         option,  all debt of the station is  classified  as current at December
         31, 1995, in accordance with the  Partnership's  loan agreements  (Note
         6).

                                        7
<PAGE>
                             RIVER CITY BROADCASTING
                         (RIVER CITY BROADCASTING, L.P.
                       AND ITS MAJORITY-OWNED BUSINESSES)

                        Consolidated Financial Statements
                                  and Schedules

                           December 31, 1994 and 1995

                   (With Independent Auditors' Report Thereon)

<PAGE>



                          Independent Auditors' Report
                          ----------------------------

The Partners
River City Broadcasting, L.P.:

We have  audited  the  accompanying  consolidated  balance  sheets of River City
Broadcasting, L.P. and its majority-owned businesses as of December 31, 1994 and
1995, and the related consolidated  statements of operations,  partners' capital
(deficit),  and cash flows for each of the years in the three-year  period ended
December  31,   1995.   These   consolidated   financial   statements   are  the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We  conducted  our  audits  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 audits provide 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  River  City
Broadcasting, L.P. and its majority-owned businesses as of December 31, 1994 and
1995,  and the results of their  operations and their cash flows for each of the
years in the  three-year  period ended  December 31, 1995,  in  conformity  with
generally accepted accounting principles.

Our audits were made for the  purpose of forming an opinion on the  consolidated
financial statements taken as a whole. The consolidating information included in
Schedules  1 and 2 is  presented  for  purposes  of  additional  analysis of the
consolidated financial statements rather than to present the financial position,
results of operations,  and cash flows of the individual  broadcast  properties.
The  consolidating  information  has been  subjected to the auditing  procedures
applied in the  audits of the  consolidated  financial  statements  and,  in our
opinion,  is  fairly  stated  in  all  material  respects  in  relation  to  the
consolidated financial statements taken as a whole.


                                        KPMG Peat Marwick LLP




February 23, 1996

<PAGE>


                             RIVER CITY BROADCASTING

                           Consolidated Balance Sheets

                           December 31, 1994 and 1995


<TABLE>
<CAPTION>

<S>                                    <C>                              <C>                   <C>   

                                       Assets                               1994                  1995
                                       ------                               ----                  ----


Current assets:
   Cash and cash equivalents                                            $  2,444,738          $  3,009,949
   Receivables, less allowance for doubtful
     accounts of approximately $751,000 in 1994
     and $1,011,000 in 1995                                               38,380,927            55,700,972
   Current portion of program rights                                      18,721,662            23,275,767
   Prepaid and other current assets                                        3,364,193             4,456,352
                                                                          ----------            ----------
                    Total current assets                                  62,911,520            86,443,040
Property and equipment, net                                               83,518,363            96,269,944
Program rights, less current portion                                      19,255,197            19,650,217
Intangible assets, net                                                   239,689,766           350,878,357
Other noncurrent assets                                                   11,301,757            20,588,525
                                                                         -----------           -----------
                    Total assets                                       $ 416,676,603         $ 573,830,083
                                                                         ===========           ===========

                          Liabilities and Partners' Capital
                          ---------------------------------                         

Current liabilities:
   Current installments of long-term debt                                      $  -          $  38,587,000
   Current installments of program rights payable                         26,178,686            30,071,545
   Accrued expenses 7,376,801                                             12,462,416
   Accounts payable 862,162                                                6,924,246
   Distributions payable                                                   2,274,613                    -
                                                                          ----------           -----------
                    Total current liabilities                             36,692,262            88,045,207
Long-term debt, less current installments                                309,550,000           404,413,000
Program rights payable, less current installments                         17,136,852            27,579,601
Deferred compensation                                                      5,260,477             5,516,833
                                                                          ----------            ----------
                    Total liabilities                                    368,639,591           525,554,641

Commitments and contingencies

Partners' capital;  19,386 general partner units and 126,047
   and 148,651 limited partner units outstanding at 
   December 31, 1994 and 1995, respectively                               48,037,012            48,275,442
                                                                          -----------           ----------
                    Total liabilities an
                       partners' capital                               $ 416,676,603         $ 573,830,083
                                                                         ===========           ===========

</TABLE>

            See accompanying  notes to consolidated  financial statements.


<PAGE>


                             RIVER CITY BROADCASTING

                      Consolidated Statements of Operations

                  Years ended December 31, 1993, 1994, and 1995

<TABLE>
<CAPTION>


<S>                                                             <C>                  <C>                    <C>

                                                                   1993                 1994                 1995
                                                                   ----                 ----                 ----

Net operating revenues:
   Local time sales                                             $ 34,377,284         $  52,867,854          $ 107,591,097
   National time sales                                            28,718,245            42,950,399             69,945,187
   Other revenues                                                  3,119,122             4,567,058             10,653,860
                                                                  ----------            ----------            -----------
              Total operating revenues                            66,214,651           100,385,311            188,190,144
                                                                  ----------           -----------            -----------

Operating costs:
   Station operating expenses                                     15,857,926            26,516,623             62,040,690
   Selling expenses                                               10,889,632            11,977,659             25,973,660
   Program amortization expense                                   18,799,127            16,479,271             33,452,252
   Corporate expenses                                              1,872,983             2,498,181              4,482,364
   Depreciation                                                    6,287,274             8,259,487             11,523,526
   Amortization of intangible assets                               6,094,026            11,228,316             27,649,173
                                                                  ----------           -----------            -----------
              Total operating costs                               59,800,968            76,959,537            165,121,665
                                                                  ----------           -----------            -----------

              Operating income                                     6,413,683            23,425,774             23,068,479
                                                                  ----------           -----------            -----------

Other income (expense):
   Interest expense                                               (5,341,346)          (11,033,149)           (33,087,633)
   Amortization of deferred financing
     costs and debt discount                                      (1,573,262)           (1,066,296)            (1,434,904)
   Interest income                                                   177,656               333,673              1,715,104
   Other                                                             (45,227)               21,720                (22,616)
                                                                    --------               -------               --------
                                                                  (6,782,179)          (11,744,052)           (32,830,049)
                                                                  ----------           -----------            -----------
              Income (loss) before
                 extraordinary item                                 (368,496)           11,681,722             (9,761,570)

Extraordinary item - early extin-
   guishment of debt                                              (6,841,084)           (3,348,506)                    -
                                                                  ----------           -----------            -----------
              Net earnings (loss)                               $ (7,209,580)         $  8,333,216          $  (9,761,570)
                                                                  ==========            ==========            ===========

</TABLE>

              See accompanying  notes to consolidated  financial statements.


<PAGE>


                             RIVER CITY BROADCASTING

             Consolidated Statements of Partners' Capital (Deficit)

                  Years ended December 31, 1993, 1994, and 1995



<TABLE>
<CAPTION>


                                                                  General                Limited
                                                                  partner                partners               Total
                                                                  -------                --------               ------

<S>                                                            <C>                    <C>                    <C>    

Balance at December 31, 1992                                   $ (6,936,635)          $  -                  $ (6,936,635)

Partners' capital contributions                                          -              76,500,000             76,500,000

Conversion of equity debentures                                          -               8,191,527              8,191,527

Redemption of partners' capital                                 (12,986,107)           (15,580,796)           (28,566,903)

Net loss                                                           (973,697)            (6,235,883)            (7,209,580)
                                                                  ---------             ----------             ----------

Balance at December 31, 1993                                    (20,896,439)            62,874,848             41,978,409

Distributions -                                                                         (2,274,613)            (2,274,613)

Net earnings                                                      8,333,216                      -              8,333,216
                                                                 ----------             ----------             ----------

Balance at December 31, 1994                                    (12,563,223)            60,600,235             48,037,012

Issuance of limited partner interest                                     -              10,000,000             10,000,000

Net loss                                                                 -              (9,761,570)            (9,761,570)
                                                                 ----------             ----------             ----------

Balance at December 31, 1995                                   $(12,563,223)          $ 60,838,665           $ 48,275,442
                                                                 ==========             ==========             ==========

</TABLE>

          See accompanying  notes to consolidated  financial statements.


<PAGE>


                             RIVER CITY BROADCASTING

                      Consolidated Statements of Cash Flows

                  Years ended December 31, 1993, 1994, and 1995


                                  
<TABLE>
<CAPTION>


                                                                            1993                   1994                  1995
                                                                            ----                   ----                  ----
<S>                                                                      <C>                    <C>                  <C>
Cash flows from operating activities:
   Net earnings (loss)                                                   $ (7,209,580)          $  8,333,216         $  (9,761,570)
   Extraordinary item (note 12)                                             6,841,084              2,164,006                -
   Interest expense on conversion of debenture
     to equity                                                                101,327                -                      -
   Adjustments to reconcile net earnings
     (loss) to net cash provided by operating
     activities:
       Program amortization expense                                        18,799,127             16,479,271            33,452,252
       Depreciation                                                         6,287,274              8,259,487            11,523,526
       Loss on disposition of property and
         equipment                                                             47,416                -                     193,249
       Amortization of deferred financing    
         costs and debt discount                                            1,573,262              1,066,296             1,434,904
       Amortization of intangible assets                                    6,094,026             11,228,316            27,649,173
       Retirement of program rights payable                               (15,773,065)           (13,892,127)          (24,065,769)
       Change in assets and liabilities, net
         of effects from purchase of broad-
         cast properties:
           Increase in receivables, net                                    (1,816,872)            (7,940,420)          (17,320,045)
           Increase in prepaid and other current
             assets                                                          (133,109)              (472,744)             (763,768)
           Increase in other noncurrent assets                               (247,492)              (921,957)           (9,286,768)
           Increase (decrease) in accounts payable
             and accrued expenses                                          (1,087,119)              (644,978)           11,147,699
           Increase in deferred compensation                                1,161,000              3,236,477               256,356
                                                                           ----------             ----------              --------
           Net cash provided by operating
                  activities                                               14,637,279             26,894,843            24,459,239
                                                                           ----------            -----------           -----------
Cash flows from investing activities,
   net of effects from purchase of broad-
   cast properties:
     Costs to acquire broadcast properties                                      -               (175,397,321)         (137,884,857)
     Additions to property and equipment                                    1,080,171)            (5,304,587)          (11,286,967)
     Additions to intangible assets                                        (1,329,361)            (2,210,655)           (2,682,454)
     Funding of local marketing agreement                                       -                (11,000,000)               -
                                                                             --------           ------------           ------------
               Net cash used in investing
               activities                                                   2,409,532)          (193,912,563)         (151,854,278)
                                                                          -----------            -----------           -----------
Cash flows from financing activities:
   Retirement of long-term debt                                           (58,554,497)          (138,360,116)           (1,550,000)
   Proceeds from term loan                                                      -                120,000,000           110,000,000
   Net borrowings under revolving loan commitment                               -                188,000,000            25,000,000
   Redemption of partnership interest                                     (28,566,903)                 -                     -
   Proceeds from partners' capital
     contributions                                                         76,500,000                  -                     -
   Distributions paid                                                           -                      -                (2,274,613)
   Additions to deferred financing fees                                      (165,174)            (4,450,344)           (3,215,137)
                                                                            ---------            -----------           -----------
               Net cash provided by (used in)
                  financing activities                                    (10,786,574)           165,189,540           127,960,250
                                                                           ----------            -----------           -----------
               Net increase (decrease) in cash
                  and cash equivalents                                      1,441,173             (1,828,180)              565,211
Cash and cash equivalents, beginning of year                                2,831,745              4,272,918             2,444,738
                                                                           ----------             ----------            ----------
Cash and cash equivalents, end of year                                   $  4,272,918           $  2,444,738          $  3,009,949
                                                                           ==========             ==========            ==========

</TABLE>

             See  accompanying  notes to consolidated financial statements.

<PAGE>


                             RIVER CITY BROADCASTING

                   Notes to Consolidated Financial Statements

                           December 31, 1994 and 1995



                         
(1)    Business Description
       --------------------

       River  City   Broadcasting,   L.P.   (River  City   Broadcasting  or  the
          Partnership) is a limited  partnership  formed to purchase and operate
          broadcast  properties and related activities.  River City Broadcasting
          has acquired nine broadcast television stations and 24 radio stations.
          The Partnership  also operates one television  station and three radio
          stations  under  local  marketing   agreements   (LMAs).   River  City
          Broadcasting  is managed by its general  partner  subject to terms and
          conditions  specified in the Second Amended and Restated  Agreement of
          Limited Partnership (Limited Partnership Agreement).

       On September   3,  1993,   River  City   Broadcasting   entered   into  a
          Reorganization  Agreement,   whereby  additional  equity  funding  was
          injected into the Partnership,  and certain  partners'  interests were
          redeemed (the Recapitalization).

(2)    Summary of Significant Accounting Policies
       ------------------------------------------

       Principles of Consolidation
       ----------------------------
       The accompanying  consolidated  financial statements include the accounts
          of River City Broadcasting and its majority-owned businesses.

       Management's Use of Estimates
       -----------------------------
       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  disclosures 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.

       Program Rights
       --------------
       Program rights and related liabilities are recorded at cost when the film
          is  available  for  broadcasting.  Agreements  define the lives of the
          rights  and  frequently  the number of  showings.  The cost of program
          rights is charged against earnings using straight-line and accelerated
          methods.

       Program  rights,  representing  the cost of those  rights  available  for
          broadcasting  and expected to be broadcast  in the  succeeding  fiscal
          year,  are  shown as a  current  asset.  Program  rights  payable  are
          classified as current based on those payments of the various contracts
          contractually due within the succeeding fiscal year.

       Program  rights  are  stated  at the  lower  of  cost  or  estimated  net
          realizable value.

                                                                     (Continued)
<PAGE>
                                       2

                            RIVER CITY BROADCASTING

                   Notes to Consolidated Financial Statements


       Property and Equipment
       ----------------------
       Property and equipment is recorded at cost.  Maintenance  and repairs are
          charged against earnings, while improvements which extend useful lives
          are capitalized.

       Depreciation expense is computed using primarily the straight-line method
          over the estimated useful lives of the related assets.

       Intangible Assets
       -----------------
       Intangible assets consist principally of network affiliation  agreements,
          broadcasting  licenses,  covenants not to compete,  deferred financing
          costs, and going-concern values. Amortization expense is computed on a
          straight-line  basis over the  estimated  lives of the  assets,  which
          generally range from 5-20 years.

       The Partnership assesses the recoverability of these intangible assets by
          determining  whether the  amortization of the remaining  balances over
          their remaining lives can be recovered through projected  undiscounted
          future results. The amount of impairment, if any, is measured based on
          projected  discounted  future results using a discount rate reflecting
          the Company's  average cost of funds.  The methodology that management
          used to  project  results  of  operations  forward  was  based  on the
          historical trend line of actual results.

       Interest Rate Risk Management
       -----------------------------
       The Partnership uses a combination  of financial  instruments  as part of
          its program to manage  interest  rate risk on its floating  rate debt.
          Such investments are considered  hedges and,  accordingly,  changes in
          their market value,  representing the cost to close the  Partnership's
          position in these  financial  instruments,  are not  reflected  in the
          consolidated financial statements (see note 7).

       Deferred Compensation
       ---------------------
       River City Broadcasting has entered into deferred compensation agreements
          with members of  management  at certain of the  broadcast  properties.
          Deferred  compensation expense is recorded over the period of employee
          service based on terms as contained in the respective agreements.

       In addition to the deferred compensation  agreements described above, the
          Partnership  has granted  Phantom Warrant Units to certain key members
          of management.  These Phantom Warrant Units were granted pursuant to a
          Phantom  Unit Plan (the  Plan).  Under Plan  provisions,  the  Phantom
          Warrant Unit holders will receive  performance  compensation  based on
          the  appreciation in value of the  Partnership.  This  compensation is
          recognized as incurred based on a six-year vesting period.

       Warrant Units
       -------------
       Concurrently with the Recapitalization,  warrant units were issued to two
          key members of management,  who are also the sole  shareholders of the
          general  partner  of River  City  Broadcasting.  These  warrant  units
          provide   for,   among  other  things  as  described  in  the  Limited
          Partnership Agreement, participation in Partnership profits and losses
          and  equity  appreciation  on a basis  substantially  similar to a 10%
          partnership interest.

                                                                     (Continued)
<PAGE>
                                       3

                            RIVER CITY BROADCASTING

                   Notes to Consolidated Financial Statements


       Income Taxes and Distributions for Taxes
       ----------------------------------------
       No income tax provision has been included in the  consolidated  financial
          statements  since profit and loss in the  Partnership  and the related
          tax attributes  are deemed to be distributed  to, and to be reportable
          by, the partners of the  Partnership  on their  respective  income tax
          returns. Accordingly, based on the tax attributes to be passed through
          to the  partners,  the  Partnership  records  a  distribution  payable
          calculated pursuant to the Limited  Partnership  Agreement for amounts
          expected to be  distributed  to the partners for their  estimated  tax
          liability.

       Limited Partnership Agreement
       -----------------------------
       The allocation of  Partnership  profits and losses,  cash  distributions,
          voting rights,  certain equity preference and appreciation rights, and
          other matters are defined in the Limited Partnership Agreement.  These
          items,  except voting rights, are principally  determined based on the
          tax basis of the respective partners.

       Revenues
       --------
       Broadcasting  revenues are derived  principally  from the sale of program
          time  and  spot  announcements  to  local,   regional,   and  national
          advertisers.  Advertising  revenue is  recognized in the period during
          which the program time and spot announcements are broadcast.

       Barter Transaction
       ------------------
       Barter  transactions  are  recorded at the  estimated  fair values of the
          products and services  received.  Barter  revenues are recognized when
          commercials are broadcast. The assets or services received in exchange
          for broadcast time are recorded when received or used.

       Consolidated Statements of Cash Flows
       -------------------------------------
       For purposes  of  the   consolidated   statements   of  cash  flows,  the
          Partnership  considers all cash investments with an original  maturity
          of three months or less to be cash equivalents.

       Reclassification
       ----------------
       Certain 1993 and 1994 balances have been reclassified to conform with the
          1995 presentation.

(3)    Acquisition of Broadcast Properties
       -----------------------------------
       In September  1994, the Partnership  acquired  certain assets and assumed
          certain liabilities of Continental Broadcasting Ltd. (Continental) for
          total cash consideration of approximately $175,397,000.  In connection
          with the acquisition,  River City Broadcasting assumed $120,000,000 of
          senior  subordinated  notes and related  accrued  interest.  Broadcast
          properties   acquired  include  WSYX-TV  (Columbus,   Ohio),   KOVR-TV
          (Sacramento,   California),  and  WLOS-TV/WFBC-TV  (formerly  WAXA-TV)
          (Asheville, North Carolina, and Anderson, South Carolina).

                                                                     (Continued)
<PAGE>
                                       4

                            RIVER CITY BROADCASTING

                   Notes to Consolidated Financial Statements


       This acquisition is a purchase transaction and,  accordingly,  the assets
          acquired and liabilities assumed have been recorded at their estimated
          fair values as of the  acquisition  date, as determined by independent
          appraisal.  The  allocation  of the purchase  price is  summarized  as
          follows:

                Intangible assets                                 $ 221,995,342
                Property and equipment                               62,285,634
                Accounts receivable 13,313,252
                Program rights                                       10,471,346
                Prepaid and other current assets                        164,898
                Program rights payable                               (7,752,322)
                Accounts payable and accrued expenses                (2,672,495)
                                                                      ----------
                                          Total purchase price      297,805,655
                Assumption of debt, plus related
                   accrued interest (122,408,334)
                                    -------------
                                                                  $ 175,397,321
                                                                  =============

       In July  1995,  the  Partnership  acquired  certain  assets of  Keymarket
          Communication and affiliated companies (Keymarket),  as defined in the
          underlying Asset Purchase  Agreement,  for total cash consideration of
          approximately  $131,000,000  and $10,000,000 of limited partner units.
          Broadcast  properties acquired consist of 19 radio stations within the
          Los Angeles, California, Nashville, Tennessee, New Orleans, Louisiana,
          Memphis,  Tennessee,  Buffalo,  New  York  and  Wilkes-Barre/Scranton,
          Pennsylvania  markets.  Additionally,  the  Partnership  acquired  the
          rights to operate three radio stations under LMAs.

       In October 1995,  the  Partnership  acquired a 60% interest in Twin Peaks
          Radio   (Twin   Peaks)   through  its   acquisition   of  Sandia  Peak
          Broadcasters,  Inc. As discussed in note 17, the Partnership  acquired
          the remaining  40% interest in Twin Peaks in January 1996.  Twin Peaks
          is a partnership  which owns and operates  three radio stations in the
          Albuquerque,  New Mexico area. Total cash  consideration  paid in 1995
          amounted to approximately $3,200,000.

       In November 1995, the Partnership  acquired  certain assets of WVRV-FM in
          St.  Louis,   Missouri,   for  cash   consideration  of  approximately
          $3,600,000.  River City Broadcasting  previously operated this station
          under an LMA.

       The 1995 acquisitions are purchase  transactions  and,  accordingly,  the
          assets  acquired and  liabilities  assumed have been recorded at their
          estimated  fair values as of the  acquisition  date,  as determined by
          independent  appraisal.  The  allocation  of  the  purchase  price  is
          summarized as follows:

                  Intangible assets $ 134,375,077
                  Property and equipment                             13,181,389
                  Prepaid and other current
                     assets                                             328,391
                                                                      ---------
                                         Total purchase price       147,884,857
                  Issuance of limited partner units                 (10,000,000)
                                                                     -----------
                                                                  $ 137,884,857
                                                                  ==============


                                                                     (Continued)
<PAGE>
                                       5

                            RIVER CITY BROADCASTING

                   Notes to Consolidated Financial Statements


       The following unaudited   supplemental  pro  forma  information  presents
          revenues,  income (loss) before  extraordinary  item, and net earnings
          (loss) as though  River City  Broadcasting  had  consummated  the 1995
          acquisitions on January 1, 1994 (1994) and January 1, 1995 (1995):

<TABLE>
<CAPTION>

                                                      1994                 1995
                                                      ----                 ----

<S>                                              <C>                   <C>          
            Revenues                             $ 148,492,000         $ 213,749,000
                                                   ===========           ===========

            Loss before extraordinary item       $ (22,907,000)        $ (17,232,000)
                                                   ===========           ===========

            Net loss                             $ (26,255,000)        $ (17,232,000)
                                                   ===========           ===========
</TABLE>
<TABLE>
<CAPTION>

(4)    Intangible Assets
       -----------------
       A summary of intangible assets follows:

                                                                                        Asset
                                                                                       lives in
                                                     1994                  1995         years
                                                     ----                  ----         -----
<S>                                              <C>                   <C>                 <C>
        Network affiliation agreements, net
           of amortization of approximately
           $3,077,000 and $9,724,000 in 1994
           and 1995, respectively                $ 143,950,815         $ 137,813,988       20
        Broadcasting licenses, net of amortiza-
           tion of approximately $1,506,000 and
           $4,605,000 in 1994 and 1995, respec-
           tively                                   47,529,039           114,567,600       20
        Deferred financing costs, net of amor-
           tization of approximately $382,000
           and $1,817,000 in 1994 and 1995,
           respectively                              4,068,376             7,052,734        8
        Covenants not to compete, net of amor-
           tization of approximately $5,900,000
           and $11,410,000 in 1994 and 1995,
           respectively                             18,100,004            12,669,639        5
        Going-concern value, net of amortiza-
           tion of approximately $636,000 and
           $1,168,000 in 1994 and 1995, respec-
           tively                                    5,554,642             8,502,935       20
        Other intangible assets, net of amorti-
           zation of approximately $16,754,000
           and $27,118,000 in 1994 and 1995,
           respectively                             20,072,564            70,271,461      2-20
                                                   -----------           -----------      ====
                                                 $ 239,275,440         $ 350,878,357
                                                   ===========           ===========
</TABLE>


                                                                     (Continued)
<PAGE>

<TABLE>
<CAPTION>

(5)    Property and Equipment
       ----------------------
       A summary of property and equipment follows:

                                                                                        Lives
                                                     1994                  1995        in years
                                                     ----                  ----         --------

<S>                                              <C>                   <C>               <C>    
         Land                                    $  7,129,861          $  11,622,969       -
         Buildings and improvements                21,284,574             25,150,610     31.5
         Equipment, furniture, and fixtures        79,261,457             96,668,728     5-15
                                                                                         ====
         Construction in progress                   3,550,525              1,436,638
                                                   ----------             ----------
                                                  111,226,417            134,878,945
         Less accumulated depreciation             27,708,054             38,609,001
                                                   -----------           -----------
                                                 $ 83,518,363          $  96,269,944
                                                   ===========           ===========

(6)    Long-Term Debt
       A summary of long-term debt follows:

                                                    1994                   1995
                                                    ----                   ----

        Revolving Credit and Term Loan Agreements
        -----------------------------------------$ 308,000,000         $ 443,000,000
        Senior subordinated notes                    1,550,000                 -
                                                    ----------         -------------        
                                                   309,550,000           443,000,000
         Less current installments                       -                38,587,000
                                                   -----------           -----------
                                                 $ 309,550,000         $ 404,413,000
                                                   ===========           ===========
</TABLE>


       Upon the acquisition of the Continental broadcast properties in 1994, the
          Partnership assumed $120,000,000 of 10-5/8% senior subordinated notes.
          Interest is payable semiannually on January 1 and July 1 of each year.
          Pursuant to terms of the  underlying  indenture,  subsequent  to their
          assumption,  River City Broadcasting  offered to redeem the underlying
          notes from the holders at 101% of the  principal  amount  thereof.  In
          connection with this offer, $118,450,000 of the outstanding notes were
          redeemed in 1994. A put premium of  $1,184,500  was charged to expense
          in 1994. The balance of the senior  subordinated notes was redeemed in
          1995.

       Concurrent with the acquisition of the Continental  broadcast  properties
          in  1994,  the  Partnership  entered  into a  Senior  Credit  Facility
          providing a  $120,000,000  term loan  commitment  and a revolving loan
          commitment  of   $230,000,000.   In  December  1994,  the  Partnership
          exercised the $120,000,000 term loan commitment in connection with the
          redemption of the senior subordinated notes described above.

       In April 1995 the Partnership amended the Senior Credit Facility (Amended
          Senior Credit  Facility).  The Amended Senior Credit Facility provided
          for an additional term loan commitment of $110,000,000.  In July 1995,
          the  Partnership  exercised the  $110,000,000  term loan commitment in
          connection with the Keymarket acquisition.


                                                                     (Continued)
<PAGE>
                                       7

                            RIVER CITY BROADCASTING

                   Notes to Consolidated Financial Statements

       At December  31,  1995 the  Partnership  had  outstanding  borrowings  of
          $213,000,000  under the revolving loan commitment.  The revolving loan
          commitment  of  $230,000,000  is reduced as follows:  $9,200,000  each
          quarter  beginning  December  31,  1995  through  December  31,  1999;
          $10,750,000  each quarter  through  December 31, 2000; and $15,300,000
          each  quarter  through  June 30,  2001.  The term loan is  payable  in
          increasing quarterly  installments through December 2002.  Accelerated
          principal  payments are required upon the Partnership  meeting certain
          financial objectives or upon the occurrence of certain other events as
          defined in the Amended Senior Credit Facility.  Borrowings are secured
          by substantially all of the Partnership's  assets and by a lien on all
          limited partner interests. The Amended Senior Credit Facility includes
          certain covenants which,  among other things,  require the Partnership
          to meet  certain  financial  performance  goals and  maintain  certain
          financial ratios, limit capital expenditures, and limit the incurrence
          of additional indebtedness.

       Under terms of the Amended Senior Credit  Facility,  the  Partnership has
          the option to elect from various  interest rate  options.  The Amended
          Senior Credit Facility also includes a provision  whereby the interest
          rate is  adjusted  each  quarter  based on River  City  Broadcasting's
          financial  performance.  Substantially  all amounts borrowed under the
          Amended  Senior Credit  Facility  accrue  interest  based on the LIBOR
          rate. At December 31, 1995,  the Company's  effective  borrowing  rate
          under  this  agreement,  including  the effect of  interest  rate risk
          management  activities,  was 8.7%. The Amended Senior Credit  Facility
          requires  the  Partnership  to pay  unused  commitment  fees (term and
          revolver) at 3/8 of 1%, payable quarterly.

       Theaggregate  maturities of long-term  debt reflect  scheduled  principal
          payments due under the term loan commitment and the required principal
          reductions on the revolving loan commitment and are as follows:

              Year ending December 31:
                 1996                                        $  38,587,000
                 1997                                           46,387,000
                 1998                                           51,175,000
                 1999                                           55,963,000
                 2000                                           73,663,000
                 Thereafter                                    177,225,000
                                                               -----------
                                                             $ 443,000,000
                                                               ===========

(7)    Interest Rate Risk Management
       -----------------------------
       The Partnership  uses a combination  of financial  instruments, including
          interest rate swaps,  interest rate caps,  interest rate collars,  and
          forward rate agreements, as part of its program to manage the floating
          interest rate risk of its debt  portfolio and related  overall cost of
          borrowing.  These  financial  instruments,  which  are for  nontrading
          purposes,  allow the  Partnership  to maintain a target range of fixed
          rate debt. The Amended Senior Credit Facility requires the Partnership
          to hedge 50% of its floating rate risk through December 1997.

       Interest rate swaps  involve the exchange of floating rate for fixed rate
          interest  payments to effectively  convert floating rate debt to fixed
          rate  debt.  The  interest  rate  swap  agreement  is  for a  term  of
          approximately three years and matures December 1997.

                                                                     (Continued)
<PAGE>
                                       8

                            RIVER CITY BROADCASTING

                   Notes to Consolidated Financial Statements


       The Partnership  purchased  interest  rate caps to convert  floating rate
          debt to a fixed rate if such rates  rise above  9.5%.  The cost of the
          interest  rate  caps  totaled  approximately  $613,000  and  is  being
          amortized over the term of the agreements,  generally three years. The
          unamortized  balance is  approximately  $408,000 at December 31, 1995.
          Interest rate cap agreements mature in December 1997 and January 1998.

       Interest rate collars  involve the  conversion of floating rate debt to a
          fixed rate if such rates  exceed 9.5% or fall below a specified  floor
          rate (generally 4.0%-4.2%). Such agreements mature in December 1997.

       Forward rate agreements are short-term  contracts  (generally 3-6 months)
          which allow the  Partnership to lock in its effective LIBOR rates over
          short-term periods.  Such agreements mature January 1996 through April
          1996.

       The following financial instruments were held at December 31, 1995:

                                             Notional              Fair
                                              amounts              value
                                             --------              -----

                  Interest rate swap       $  50,000,000        $(2,103,000)
                  Interest rate caps         105,000,000             12,000
                  Interest rate collars       70,000,000            (91,000)
                  Forward rate agreements    411,000,000           (304,000)
                                             ===========          =========

       Estimated fair values shown above only  represent  the value of the hedge
          or swap component of these  transactions,  and thus are not indicative
          of  the  Partnership's   overall  hedged  position.  As  fully  hedged
          transactions, the estimated fair values of the interest rate financial
          instruments  do  not  affect  income  and  are  not  recorded  in  the
          consolidated  financial  statements,  but rather  only  represent  the
          amount which would be required to close the Partnership's  position in
          the financial instruments at December 31, 1995.

(8)    Disclosures About Fair Value of Financial Instruments
       -----------------------------------------------------
          Cash and Cash Equivalents,  Receivables,  and  Payables - The carrying
              amount  approximates fair value because of the short-term maturity
              of these instruments.

          Long-Term  Investment  - The  Partnership  holds a 16%  interest  in a
              partnership  for  which  there  are no  quoted  market  prices.  A
              reasonable   estimate  of  fair  value  could  not  be  made.  The
              investment   is  carried  at  its  cost  of   $1,654,000   in  the
              consolidated balance sheet.

          Long-Term Debt - The fair value of the Partnership's debt is estimated
              based on the current rates offered to the  Partnership for debt of
              the same remaining  maturities.  The carrying amount  approximates
              fair value  because of the variable  interest rate attached to the
              debt.


                                                                     (Continued)
<PAGE>
                                       9

                             RIVER CITY BROADCASTIN

                   Notes to Consolidated Financial Statements


          Program Rights Payable - The fair value of film  contracts  payable is
              the present value of the future  obligations  based on the current
              rates available to the  Partnership for debt of similar  maturity.
              The carrying  amount and fair value of program  rights  payable at
              December 31, 1995 were $56,223,000 and $48,494,000, respectively.

(9)    Local Marketing Agreement
       In August 1995 the  Partnership  entered into a five-year  LMA with KRRT,
          Inc.  (Licensee).  In a related  transaction,  the Partnership  loaned
          $10,000,000  to the Licensee.  The related note bears  interest at 8%.
          Pursuant  to the  LMA,  KRRT-TV  of  Kerrville,  Texas  (the  brokered
          station) will air programming  provided by River City  Broadcasting in
          exchange for specified compensation.  Such compensation is principally
          based on certain  station  operating  costs of the  brokered  station,
          including  debt  service.  River  City  Broadcasting  will  retain all
          advertising  revenues  derived  from  programming  for  which  it  has
          provided.  The  LMA is  cancellable  by the  Licensee  or  River  City
          Broadcasting.

(10)   Equity Debentures
       In connection with the purchase of KDSM-TV and the first amendment of the
          Limited  Partnership  Agreement,  River City  Broadcasting  issued two
          debentures  totaling  $2,500,000.  These  debentures  were  issued  in
          consideration  of, among other  things,  consent  granted by a certain
          partner   allowing  River  City   Broadcasting  to  complete   certain
          transactions  as contained  in the  respective  debenture  agreements.
          Amounts  due  under  the  debenture  agreements  were to be  satisfied
          through  equity  distributions  made in  accordance  with terms of the
          Limited Partnership  Agreement.  Accordingly,  for financial reporting
          purposes,  the debentures were treated as equity  preference items and
          the related  principal  and accrued  interest  were not  reflected (as
          liabilities or as equity) in the consolidated  financial statements of
          River City Broadcasting.  Concurrent with the Recapitalization,  these
          debentures  were  satisfied  through  an  equity  distribution  to the
          partner.

(11)   Supplemental Cash Flow and Other Financial Information
       Cash  paid  for interest totaled approximately  $6,106,000,  $11,523,000,
          and $29,249,000 for the years ended December 31, 1993, 1994, and 1995,
          respectively.

       River City  Broadcasting  purchased  program  rights,  on an  installment
          basis,  amounting  to  approximately  $16,285,000,   $15,749,000,  and
          $38,401,000 in 1993, 1994, and 1995,  respectively.  Amounts reflected
          as retirements of program rights payable  represent  amounts  actually
          paid to vendors under various program rights agreements.

       In connection with the Keymarket  acquisition,  the  Partnership  granted
       $10,000,000 of limited partner units to the Keymarket seller.

       Cash overdrafts  amounting to  approximately  $3,959,000 were included in
       accounts payable at December 31, 1995.

       Based on certain events, including network affiliation changes at certain
          broadcast properties,  management performed a review of program rights
          to  determine  projected  usage  and  revenue  streams.  Based on this
          review, the Partnership wrote off certain programming and recognized a
          charge of  approximately  $7,100,000 to operations  for the year ended
          December 31, 1995.

       Pursuant to the  deferred  compensation  agreements  and Phantom  Warrant
          Units  described in note 2, the Partnership  recognized  approximately
          $1,161,000,   $3,236,000,  and  $1,143,000  of  deferred  compensation
          expense in 1993, 1994, and 1995, respectively.

       At December 31, 1994, the Partnership  recorded a distribution payable of
          $2,274,613  in  anticipation  of income  taxes due by the  partners as
          described  in note 2.  In  accordance  with  the  Limited  Partnership
          Agreement this distribution was paid in 1995.

       In 1993,  River  City  Broadcasting  retired  a  $1,000,000  subordinated
          debenture for  $8,191,527.  This amount includes  accrued  interest of
          $350,443 of which  $101,327

                                                                     (Continued)
<PAGE>
                                       10

                            RIVER CITY BROADCASTING

                   Notes to Consolidated Financial Statements



          represents 1993 interest expense. The debenture contained a contingent
          interest provision,  determined based on certain equity like features,
          which was triggered  concurrent with the Recapitalization.  Retirement
          of  this  debenture  was  effected through its conversion to a limited
          partnership  interest  and a charge to  interest expense of $7,191,527
          (see note 16).

(12)    Extraordinary  Items  
        -------------------  
        Concurrently  with  the   Recapitalization   in  1993,  the  Partnership
          redeemed,   through   conversion  to  equity,   the  $1,000,000   1989
          subordinated  debenture for $8,191,527,  including accrued interest of
          $350,443.  This redemption was treated as an early  extinguishment  of
          debt for financial reporting purposes.

        As described in note 7, the  Partnership  redeemed  $118,450,000  of the
          outstanding  Continental  notes  with  a put  premium  of  $1,184,500.
          Additionally,  in  connection  with the  extinguishment  of its  prior
          Amended Senior Credit Facility, the Partnership expensed approximately
          $2,164,000  of  related  deferred  financing  fees.  These  items were
          treated as an early  extinguishment  of debt for  financial  reporting
          purposes.

(13)   Related Party Transactions
       --------------------------
       Prior to the Recapitalization,  the general partner received a management
           fee from each station  primarily  based on the  individual  station's
           revenues. Subsequent to the Recapitalization,  the general partner no
           longer received  management fees.  Pursuant to the  Recapitalization,
           corporate  expenses  are  allocated  to each  station  to  cover  the
           salaries and expenses of senior management.  Such allocation is based
           upon  certain  financial  information  and  management's  estimate of
           actual time spent.  Management  believes the allocation is reasonable
           and  approximates  what the expenses would have been on a stand-alone
           basis.  In 1993,  management fees totaling  approximately  $1,220,000
           were paid to a general partner whose interest was redeemed concurrent
           with the  Recapitalization.  Beginning in 1994, costs associated with
           certain  members of senior  management  were  allocated  to corporate
           expenses.  Previously, these costs were included in station operating
           expenses.  Total  management fees and expenses,  including  corporate
           expenses,  for the years ended  December  31,  1993,  1994,  and 1995
           amounted to  approximately  $1,873,000,  $2,498,000  and  $4,482,000,
           respectively.

                                                                     (Continued)


<PAGE>
                                       11

                             RIVER CITY BROADCASTING

                   Notes to Consolidated Financial Statements


(14)   Employee Benefits
       -----------------
       River City Broadcasting maintains a qualified  profit-sharing plan with a
           trustee,  which includes a thrift provision  qualifying under Section
           401(k) of the  Internal  Revenue  Code,  covering  substantially  all
           employees.  The provision allows the participants to contribute up to
           12% of their  compensation  in the plan year,  subject  to  statutory
           limitations.   River  City  Broadcasting  contributed   approximately
           $121,000,  $215,000,  and $388,000  for the years ended  December 31,
           1993, 1994, and 1995, respectively, to the Plan.

       In  1994, River City Broadcasting  began contributing to a multi-employer
           plan on behalf of certain union employees.  Contributions to the plan
           totaled  approximately  $20,000  and  $31,000  for  the  years  ended
           December 31, 1994 and 1995, respectively.

(15)   Commitments and Contingencies
       -----------------------------
       In conjunction  with River City  Broadcasting's  commitment to obtain new
          programming,  the Partnership has purchased approximately  $34,579,000
          of future program rights,  including  $14,089,000 of sports rights, of
          which  approximately  $4,047,000  will become  payable in 1996.  These
          rights are  generally  for a period  ranging  from one to four  years.
          Program   rights  and   related   obligations   in  the   accompanying
          consolidated   financial   statements  do  not  include  these  future
          commitments.

       The Partnership  loaned  approximately  $6,200,000  to Keymarket of South
          Carolina  (KSC), a Company owned by a member of Keymarket  management.
          The loan bears interest at the applicable  federal rate, is secured by
          all  of  the  assets  of  KSC,  and  is  payable  upon  demand  by the
          Partnership. KSC owns three radio stations and operates two additional
          radio stations under an LMA. River City  Broadcasting  holds an option
          to  acquire  KSC for  consideration  totaling  the amount of the loans
          outstanding, including accrued interest, plus $1,000,000.

       The Partnership   has   capitalized   approximately   $1,400,000 of  fees
          associated  with a bond  offering  filed with the SEC in 1995.  In the
          event the offering is aborted, the Partnership will recognize a charge
          to operations of  $1,400,000.  If the offering is  consummated,  these
          fees will be amortized over the life of the bonds.

       River City Broadcasting is involved in certain litigation matters arising
          in the normal course of business. In the opinion of management,  these
          matters  are not  significant  and will not  have a  material  adverse
          effect on the Partnership's financial position.

(16)   Subsequent Event
       ----------------
       In January 1996, the  Partnership  acquired the remaining 40% partnership
          interest  in Twin Peaks Radio  which  owned and  operated  three radio
          stations in the Albuquerque, New Mexico area.

                                                                     (Continued)

<PAGE>


                                                   Schedule 1
                                                   ----------




<PAGE>


                                                  Schedule 2
                                                  ----------

<PAGE>

<TABLE>
<CAPTION>
                                                                    RIVER CITY BROADCASTING 

                                                     Supplementary Information - Consolidating Balance Sheet

                                                                        December 31, 1995


                                                                                          WTTV-TV/ 
                Assets                  KDNL-TV           KABB-TV         KDSM-TV         WTTK-TV         KOVR-TV           
                ------                  -------           -------         -------         -------         -------           
<S>                                    <C>                <C>              <C>            <C>              <C>              
Current assets:
   Cash and cash equiva-
     lents                             $  136,987         663,728          61,963         257,698          276,919          
   Receivables, net                     9,446,816       6,475,645       1,971,162       7,524,596        5,333,369          
   Current portion of
     program rights                     5,048,222       4,990,635         990,783       7,557,344        2,270,161          
   Prepaid and other
     current assets                     2,762,779         404,158         177,762         115,647          101,716          
                                       ----------        --------        --------        --------         --------          
          Total current
             assets                    17,394,804      12,534,166       3,201,670      15,455,285        7,982,165          
Property and equipment,
   net                                 13,398,013       6,071,055       1,628,463       6,306,885       25,573,822          
Program rights, less
   current portion                      3,804,258       3,727,993         805,856       9,598,582          458,149          
Intangible assets, net                 13,834,974         330,825       2,979,140       4,981,976       53,061,805          
Other noncurrent assets                18,862,013         114,830              -          577,465        1,034,217          
Intracompany receivable
   (payable)                          419,533,197       6,829,155      (5,474,147)     (6,508,035)     (81,859,044)         
                                      -----------      ----------       ---------      ----------       ----------          
          Total assets              $ 486,827,259      29,608,024       3,140,982      30,412,158        6,251,114          
                                      ===========      ==========       =========      ==========       ==========          

            
            
                                                          WLOS-TV/        KPNT-FM/
                Assets                  WSYX-TV           WFBC-TV         WVRV-FM       KEYMARKET      Consolidated
                ------                  -------           -------         -------         -------         -------                

Current assets:
   Cash and cash equiva-
     lents                                150,287         167,249             418       1,294,700        3,009,949
   Receivables, net                     6,767,482       4,861,239       1,094,329      12,226,334       55,700,972
   Current portion of
     program rights                     1,432,430         986,192              -            -           23,275,767
   Prepaid and other
     current assets                       302,959         399,386          18,945         173,000        4,456,352
                                       ----------        --------        --------        --------         --------         
          Total current
             assets                     8,653,158       6,414,066       1,113,692      13,694,034       86,443,040
Property and equipment,
   net                                 15,504,051      15,949,746       2,081,073       9,756,836       96,269,944
Program rights, less
   current portion                        917,035         338,344              -            -           19,650,217
Intangible assets, net                113,401,363      33,195,000       4,375,786     124,717,488      350,878,357
Other noncurrent assets                     -                -               -                 -        20,588,525
Intracompany receivable
   (payable)                         (128,728,876)    (48,106,061)    (11,616,036)   (144,070,153)           -
                                      -----------      ----------      ----------     -----------       ----------
          Total assets              $   9,746,731       7,791,095      (4,045,485)      4,098,205      573,830,083
                                     
                                       ==========       ==========      ==========     ==========      ===========

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                       <C>               <C>             <C>             <C>              <C>             
Liabilities and
      Partners' Capital (Deficit)

Current liabilities:
   Current installments of
     long-term debt                      38,587,000              -               -               -                -          
   Current installments of
     Program rights payable               6,152,592       4,610,141       1,322,747      10,670,157        2,992,716         
   Accrued expenses                       5,881,279         849,425         534,880         912,655          987,257         
   Accounts payable                       3,907,463         573,611         372,024         306,187           13,758         
                                         ----------        --------        --------        --------          -------         
          Total current
             liabilities                 54,528,334       6,033,177       2,229,651      11,888,999        3,993,731         
Long-term debt, less
   current installments                 404,413,000              -               -               -                -          
Program rights payable,
   less current install-
   ments  7,655,070                       6,095,348       1,339,883       9,919,146       1,104,898        1,173,874         
Deferred compensation                     5,459,000              -               -               -            57,833         
                                         ----------             ---             ---             ---          -------         
          Total liabilities             472,055,404      12,128,525       3,569,534      21,808,145        5,156,462         
Partners' capital (deficit)              14,771,855      17,479,499        (428,552)      8,604,013        1,094,652         
                                        -----------      ----------       ---------      ----------       ----------         
          Total liabilities
             and partners'
             capital
             (deficit)                $ 486,827,259      29,608,024       3,140,982      30,412,158        6,251,114         
                                        ===========      ==========       =========      ==========       ==========         



Liabilities and
      Partners' Capital (Deficit)

Current liabilities:
   Current installments of
     long-term debt                             -                -               -                 -        38,587,000
   Current installments of
     Program rights payable               1,726,769       1,343,423              -          1,253,000       30,071,545
   Accrued expenses                        515,993          980,540         422,952         1,377,435       12,462,416
   Accounts payable                        282,022           52,453           1,207         1,415,521        6,924,246
                                          --------          -------          ------        ----------       ----------
          Total current
             liabilities                 2,524,784        2,376,416         424,159         4,045,956       88,045,207
Long-term debt, less
   current installments                         -                -               -                 -       404,413,000
Program rights payable,
   less current install-
   ments  7,655,070                        291,382               -               -         27,579,601
Deferred compensation                           -                -               -                 -         5,516,833
                                               ---              ---             ---               ---       ----------
          Total liabilities              3,698,658        2,667,798         424,159         4,045,956      525,554,641
Partners' capital (deficit)              6,048,073        5,123,297      (4,469,644)           52,249       48,275,442
                                        ----------       ----------      ----------           -------      -----------
          Total liabilities
             and partners'
             capital
             (deficit)                $  9,746,731        7,791,095      (4,045,485)        4,098,205      573,830,083
                                        ==========       ==========      ==========        ==========      ===========

<FN>
Note: Financing for the  Partnership's  acquisitions  and working capital needs,
      the acquisition of Twin Peaks, and Partnership  distributions are included
      in KDNL-TV.
</FN>
</TABLE>

See accompanying independent auditors' report.

<PAGE>
<TABLE>
<CAPTION>

                             RIVER CITY BROADCASTING

        Supplementary Information - Consolidating Schedule of Operations

                          Year ended December 31, 1995



                                                                                   WTTV-TV/ 
                                    KDNL-TV        KABB-TV          KDSM-TV        WTTK-TV          KOVR-TV         WSYX-TV   
                                    -------        -------          -------        -------          -------         -------   
<S>                             <C>                 <C>            <C>             <C>             <C>              <C>       
Net operating revenues:
   Local time sales             $ 15,219,598        9,291,868      4,327,637       14,617,850      10,941,996       15,378,536
   National time sales            10,572,978       10,260,740      2,844,380       10,481,144      12,358,279       12,067,694
   Other revenues                  1,438,516        1,544,350        306,137          924,624       2,045,354        1,320,056
                                  ----------       ----------       --------         --------      ----------       ----------
          Total operating
             revenues             27,231,092       21,096,958      7,478,154       26,023,618      25,345,629       28,766,286
                                  ----------       ----------      ---------       ----------      ----------       ----------
Operating costs:
   Station operating expenses      9,043,580        6,355,009      1,972,370        4,927,980      11,095,313        8,133,543
   Selling expenses                3,654,498        2,993,809      1,516,619        3,038,069       2,945,963        2,452,770
   Program amortization
     expense                       7,571,430        3,979,706      1,504,520        8,385,108       5,386,975        2,623,583
   Corporate expenses                649,508          500,000             -           550,000         400,000          700,000
   Depreciation                      633,464          713,700        897,220        2,283,646       2,680,064        2,107,422
   Amortization of intangi-
     ble assets                    1,010,731           97,507        936,720        2,239,389       3,771,848        9,779,555
                                  ----------          -------       --------       ----------      ----------       ----------
          Total operating
             costs                22,563,211       14,639,731      6,827,449       21,424,192      26,280,163       25,796,873
                                  ----------       ----------      ---------       ----------      ----------       ----------
          Operating income
             (loss)                4,667,881        6,457,227        650,705        4,599,426        (934,534)       2,969,413
                                  ----------       ----------       --------       ----------       ---------       ----------
Other income (expense):
   Interest expense              (32,986,956)              -              -          (100,677)             -                - 
   Amortization of de-
     ferred financing
     costs and debt
     discount                     (1,434,904)              -              -                -               -                - 
   Interest income                 1,697,599            3,965             -                -               -                - 
   Other       -                          -            12,041        (98,111)         170,633         (56,771)         (50,408
          ----------                     ---          -------       --------         --------        --------         --------
                                 (32,724,261)           3,965         12,041         (198,788)        170,633          (56,771
                                  ----------           ------        -------        ---------        --------         --------
          Net earnings
             (loss)             $(28,056,380)       6,461,192        662,746        4,400,638        (763,901)       2,912,642
                                  ==========       ==========       ========       ==========       =========       ==========



                                   WLOS-TV/       KPNT-FM/
                                   WFBC-TV        WVRV-FM        KEYMARKET      Consolidated
                                   -------        -------        ---------      ------------
Net operating revenues:
   Local time sales                9,350,343       4,334,425      24,128,844       107,591,097
   National time sales             8,407,648         322,655       2,629,669        69,945,187
   Other revenues                  1,566,790         363,859       1,144,174        10,653,860
                                  ----------        --------      ----------       -----------
          Total operating
             revenues             19,324,781       5,020,939      27,902,687       188,190,144
                                  ----------       ---------      ----------       -----------
Operating costs:
   Station operating expenses      6,808,280       2,313,721      11,390,894        62,040,690
   Selling expenses                2,310,355       1,407,484       5,654,093        25,973,660
   Program amortization
     expense                       1,600,930              -        2,400,000        33,452,252
   Corporate expenses                400,000         204,333       1,078,523         4,482,364
   Depreciation                    1,930,747         (91,281)        368,544        11,523,526
   Amortization of intangi-
     ble assets                    2,463,069         378,430       6,971,924        27,649,173
                                  ----------        --------      ----------       -----------
          Total operating
             costs                15,513,381       4,212,687      27,863,978       165,121,665
                                  ----------       ---------      ----------       -----------
          Operating income
             (loss)                3,811,400         808,252          38,709        23,068,479
                                  ----------        --------         -------       -----------
Other income (expense):
   Interest expense                       -               -               -        (33,087,633)
   Amortization of de-
     ferred financing
     costs and debt
     discount                             -               -               -         (1,434,904)
   Interest income                        -               -           13,540         1,715,104
   Other       -                          -               -          (22,616)
          ----------                     ---             ---        --------
                                     (50,408)             -           13,540       (32,830,049)
                                    --------             ---         -------       -----------
          Net earnings
             (loss)                3,760,992         808,252          52,249        (9,761,570)
                                  ==========        ========         =======       ===========

<FN>
Note: Interest   expense   related  to  the   financing  of  the   Partnership's
      acquisitions  and  working  capital  needs,   organization  costs  of  the
      Partnerships,  the  acquisition of Twin Peaks,  and deferred  compensation
      expense are included in KDNL-TV.
</FN>
</TABLE>


See accompanying independent auditors' report.
<PAGE>
                               INDEX TO EXHIBITS



EXHIBITS                      DESCRIPTION                             

10.70                  Asset Purchase Agreement dated April 10, 1996 is by and 
                       between KRRP, and Inc. and Sinclair Broadcast Group, Inc.


<PAGE>
[{"type": "8-K", "sequence": "1", "description": "FORM 8-K", "secsgml_size_bytes": 337000}]
{"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": "96569206"}, "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"}}
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

                                   May 9, 1996
                          ----------------------------
                        (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 7.  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.

                                                                         
                                                                         

SUPERIOR COMMUNICATIONS GROUP, INC.
         Independent Auditors Report                                     
         Consolidated Balance Sheets as of December 31, 1995 and
                  December 31, 1994                                      
         Consolidated Statements of Operations for the Years Ended
                  December 31, 1995 and December 31, 1994                
         Consolidated Statements of Stockholder's Equity for the Years
                  Ended December 31, 1995 and December 31, 1994          
         Consolidated Statements of Cash Flows for the Years Ended
                  December 31, 1995 and December 31, 1994                
         Notes to Consolidated Financial Statements                      

(b)      Pro Forma Financial Information

         The pro forma financial  information required by this item is submitted
in the pages to follow.

(c)      Exhibits  

         Asset Purchase  Agreement  dated April 10, 1996 is by and between KRRT,
Inc. and Sinclair Broadcast Group, Inc.

Item 5.  Other Matters

(a)      Financial Statements of Probable Business Acquisitions

         The  Financial  statements  required  by this item are  submitted  in a
separate section of this report.
PARAMOUNT STATIONS GROUP OF KERVILLE, INC.
         Report of Independent Public Accountants
         Consolidated Balance sheets as of August 3, 1995 and
                  December 31, 1994
         Consolidated  Statements  of  Operations for the period from January 1,
                  1995 through August 3, 1995 and the Year Ended December 31, 
                  1994
         Consolidated  Statements  of  Stockholders'  Equity for the Period from
                  January  1, 1995  through  August  3, 1995 and the
                  Year Ended December 31, 1994
         Consolidated  Statements  of Cash Flows for the Period from  January 1,
                  1995  through  August 3, 1995 and the Year Ended  December 31,
                  1994
         Notes to Consolidated Financial Statements

KRRT, Inc.
         Report of Independent Public Accountants
         Balance Sheet as of December 31, 1995
         Statement of Operations for the Period from July, 25 1995
                  through December 31, 1995
         Statements of Changes in  Stockholders' Equity for the Period from July
                  25, 1995 through December 31, 1995
         Statements of Cash  Flows  for the  Period  from  July 25, 1995 through
                  December 31, 1995
         Notes to Financial Statements

KANSAS CITY TV 62 LIMITED PARTNERSHIP
         Report of Independent Accountants
         Balance Sheets as of December 31, 1995 and December 31, 1994 Statements
                  of Operations for the Years Ended December 31, 1995 and
                  December 31, 1994
         Statements of Cash Flows for the Years Ended December 31, 1995
                  and December 31, 1994
         Statements of Changes is Partners' Capital for the Years Ended December
                  31, 1995 and December 31, 1994
         Notes to Financial Statements

CINCINNATI TV 64 LIMITED PARTNERSHIP
         Report of Independent Accountants
         Balance Sheets as of December 31, 1995 and December 31, 1994 Statements
                  of Operations for the Years Ended December 31, 1995 and 
                  December 31, 1994
         Statements of Changes in Partners' Capital for the Years Ended December
                  31, 1995 and December 31, 1994
         Statements of Cash Flows for the Years Ended December 31, 1995
                  and December 31, 1994
         Notes to Financial Statements
RIVER CITY BROADCASTING L.P.
         Independent Auditors' Report
         Consolidated Balance Sheets as of December 31, 1994 and
                  December 31, 1995
         Consolidated Statements of Operations for the Years Ended
                  December 31, 1993, 1994 and 1995
         Consolidated  Statements of Partners'  Capital  (Deficit) for the Years
                  Ended December 31, 1993, 1994 and 1995
         Consolidated Statements of Cash Flows for the Years Ended
                  December 31, 1993, 1994 and 1995
         Notes to Consolidated Financial Statements
         Supplementary Information-Consolidating Balance Sheet as of
                  December 31, 1995
         Supplementary Information-Consolidating Schedule of Operations
                  for the Year Ended December 31, 1995

(b)      Pro Forma Financial Information

         The pro forma  information  required by this item is  submitted  in the
pages to follow.

(c)      PRO FORMA CONSOLIDATED FINANCIAL DATA

         The Pro Forma  Consolidated  Financial  Data includes the unaudited pro
forma  consolidated  balance  sheet of the Company as of December  31, 1995 (the
"Pro Forma Consolidated Balance Sheet") and the unaudited pro forma consolidated
statement  of  operations  for the year ended  December 31, 1995 (the "Pro Forma
Consolidated Statement of Operations").

         The unaudited Pro Forma Consolidated  Balance Sheet is adjusted to give
effect to (I) the  consummation of the acquisition of the assets and liabilities
of  Superior   Communications  Group,  Inc.   ("Superior"),   and  the  probable
acquisitions of (II) KRRT, Inc., Kansas City TV 62 Limited Partnership ("KSMO"),
Cincinnati TV 64 Limited  Partnership  ("WSTR") and River City Broadcasting L.P.
("RCB") and (III) cash on hand and  borrowings  under the  existing  Bank Credit
Agreement  and New Credit  Facilities  in amounts  sufficient  to  complete  the
transactions described in (I) and (II) above.

         The  unaudited  Pro  Forma  Consolidated  Statement  of  Operations  is
adjusted to give effect to (I) the  consummation of the acquisition of Superior,
(II) the probable  acquisitions of KRRT, Inc., KSMO, WSTR and RCB and (III) cash
on hand and borrowings  under the existing Bank Credit  Agreement and New Credit
Facilities in amounts  sufficient to complete the transactions  described in (I)
and (II) above. The WSYX-TV  information in the Pro Forma  Consolidated  Balance
Sheet  and  Pro  Forma  Consolidated   Statement  of  Operations   reflects  the
modification of the current acquisition documents eliminating Sinclair Broadcast
Group,  Inc's.  ("SBG")  option to acquire the assets of WSYX-TV.  This resulted
from the Department of Justice  ("DOJ")  expressing  preliminary  concerns about
SBG's  operation  of two  television  stations in  Columbus,  Ohio.  In order to
maintain the original schedule for the rest of the transaction, SBG and RCB have
entered into an agreement with the DOJ that will result in a modification of the
terms of the previously mentioned probable transaction.
The pro forma  adjustments  are based upon  available  information  and
certain  assumptions  the  Company  believes  are  reasonable.   The  Pro  Forma
Consolidated  Financial  Data should be read in  conjunction  with the Company's
Consolidated  Financial  Statements  and related  notes  thereto,  the Financial
Statements and related notes of Superior,  KRRT,  Inc.,  KSMO, WSTR and RCB. The
unaudited  Pro Forma  Consolidated  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.
PRO FORMA CONSOLIDATED BALANCE SHEET
                            AS OF DECEMBER 31, 1995
                             (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)
Superior                         
                                                        Consolidated   Flint     Commmunications  Pro Forma        Pro Forma 
                                                         Historical  TV, Inc.(a)  Group, Inc.(b)  Adjustments     Consummated

                                                        --------------------------------------------------------------------
ASSETS
CURRENT ASSETS:
        Cash, including cash equivalents................  $112,450   $     -         $     -       $(37,550)(c)    $ 74,900     
        Accounts receivable, net of allowance for 
                doubtful accounts.......................    50,022                     2,801                         52,823         
        Current portion of program contract costs.......    18,036       378           2,028                         20,442         
        Deferred barter costs...........................     1,268                                                    1,268     
        Prepaid expenses and other current assets.......     1,972                       106                          2,078         
        Deferred tax asset..............................     4,565                                                    4,565     
                                                        --------------------------------------------------------------------
                        Total current assets............   188,313       378           4,935        (37,550)        156,076
PROPERTY AND EQUIPMENT, net.............................    42,797     2,276           9,993                         55,066         
PROGRAM CONTRACT COSTS, less current portion............    19,277       744           3,131                         23,152         
LOANS TO OFFICERS AND AFFILIATES, net...................    11,900                                                   11,900     
NON-COMPETE AND CONSULTING AGREEMENTS, net..............    30,379                                                   30,379     
DEFERRED TAX ASSET......................................    16,462                                                   16,462     
OTHER ASSETS............................................    27,355                                   (1,000)(c)      26,355     
ACQUIRED INTANGIBLE BROADCASTING ASSETS, net............   268,789    33,905          57,522                        360,216
                                                        --------------------------------------------------------------------
                        Total assets....................  $605,272   $37,303         $75,581       $(38,550)       $679,606   
                                                        =====================================================================

               LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
        Accounts payable................................  $  2,187   $      -        $   366       $      -        $  2,553
        Income taxes payable............................     3,944                                                    3,944      
        Accrued Liabilities.............................    20,720                       362                         21,082
        Current portion of long-term liabilities-                                                                       
                Notes payable and commercial bank
                     financing..........................     1,133                                                    1,133      
                Capital leases payable..................       524                                                      524      
                Notes and capital leases payable to
                     affiliates.........................     1,867                                                    1,867      
                Program contracts payable...............    26,395       848           1,825                         29,068         
        Deferred barter revenues........................     1,752                                                    1,752
                                                        -------------------------------------------------------------------- 
                        Total current liabilities.......    58,522       848           2,553              -          61,923         
LONG-TERM LIABILITIES
        Notes payable and commercial bank financing.....   400,644                                   59,850 (c)     460,494
        Capital leases payable..........................        44                                                       44         
        Notes and capital leases payable to affiliates..    13,959                                                   13,959         
        Program contracts payable.......................    30,942     1,055           2,783                         34,780         
        Deferred tax liability..........................         -                     3,736                          3,736        
        Other long-term liabilites......................     2,442                     3,509                          5,951
                                                        --------------------------------------------------------------------
                        Total liabilities...............   506,553     1,903          12,581         59,850         580,887
                                                        --------------------------------------------------------------------
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY............     2,345         -               -              -           2,345
                                                        --------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES...........................
STOCKHOLDERS' EQUITY....................................
        Preferred stock, $.01 par value, 5,000,000 shares
                authorized and -0- outstanding..........         -                                                        -      
        Class A Common stock, $.01 par value, 35,000,000
                shares authorized and -0- and 5,750,000 
                shares issued and outstanding, 
                respectively............................        58                                                       58      
        Class B Common stock, $.01 par value, 35,000,000                                                                
                shares authorized and 29,000,000 shares 
                issued and outstanding..................       290                                                      290      
        Additional paid-in-capital......................   116,089                                                  116,089
        Accumulated deficit.............................   (20,063)                                                 (20,063)
                                                        --------------------------------------------------------------------
                        Total stockholders' equity......    96,374         -                -            -           96,374     
                                                        --------------------------------------------------------------------
                        Total Liabilities and Stock-
                              holders' Equity...........  $605,272   $ 1,903          $12,581     $ 59,850         $679,606  
                                                        =====================================================================
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
                             (Dollars in thousands)

(a)   The Flint TV,  Inc.  (WSMH)  column  reflects  the assets and  liabilities
      acquired  in  connection  with  the  purchase  of  WSMH.   Total  acquired
      intangibles are calculated as follows:

                                                                 WSMH
                                                                 ----

      Purchase price........................................  $ 35,400
         Add:   Liabilities acquired -
                Current portion of program contract costs...       848
                Long-term portion of program contract costs.     1,055
         Less:  Assets acquired -
                Current portion of program contracts........      (378)
                Property and equipment......................    (2,276)
                Non-current portion of program contracts....      (744)
                                                                  ---- 

                Acquired intangibles........................  $ 33,905
                                                              ========

(b)   The Superior  Communications  Group,  Inc.  (Superior) column reflects the
      assets and  liabilities  acquired in  connection  with the purchase of the
      outstanding stock of Superior.  Total acquired  intangibles are calculated
      as follows:

                                                              Superior
                                                              --------

      Purchase price........................................  $63,000
           Add:  Liabilities acquired -
                 Accounts payable............................     366
                 Accrued expenses............................     362
                 Current portion of program contract costs...   1,825
                 Long-term portion of program contract costs.   2,783
                 Deferred tax liability......................   3,736
                 Other long-term liabilities.................   3,509
           Less: Assets acquired -
                 Accounts receivable.........................  (2,801)
                 Current portion of program contracts........  (2,028)
                 Prepaid expenses and other current assets...    (106)
                 Property and equipment......................  (9,993)
                 Non-current portion of program contracts....  (3,131)
                                                              ------ 

                 Acquired intangibles........................ $57,522
                                                             ========

(c)   In July 1995, the Company  exercised its option to purchase WSMH in Flint,
      Michigan for an option exercise price of $1 million. In February 1996, the
      Company  consummated the acquisition for a purchase price of $35.4 million
      at which time the balance due of $34.4 million was paid from the Company's
      existing cash balance.

      In March  1996,  the  Company  entered  into an  agreement  to acquire the
      outstanding  stock of Superior  and made a cash payment of $3.2 million to
      be applied  against cash  proceeds to the  stockholders  of Superior  upon
      closing.  The Company funded the remaining  cash proceeds to the seller of
      $59.8 million by utilizing available  indebtedness under Facility B of the
      Bank Credit Agreement.

  The pro forma cash adjustment is calculated as follows:

      Cash paid for WSMH acquisition........................ $34,400
      Cash paid for Superior acquisition....................   3,150
                                                               -----

      Total cash paid....................................... $37,550
                                                             =======
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
                             (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)
Superior
                                                       Consolidated      Flint        Commmunications      Pro Forma     Pro Forma
                                                        Historical     TV, Inc.(a)     Group, Inc.(b)     Adjustments   Consummated
                                                       --------------------------------------------------------------   -----------
REVENUES:
        Station broadcast revenues, net of agency
          commissions................................  $  187,934     $ 7,217        $  13,400             $            $   208,551 
        Revenues realized from station barter 
          arrangements...............................      18,200                                                            18,200
                                                       -----------------------------------------------------------------------------
                     Total revenues..................     206,134       7,217           13,400                     -        226,751
                                                       -----------------------------------------------------------------------------
OPERATING EXPENSES:
        Program and production.......................      22,563         511            1,461                               24,535
        Selling, general and administrative..........      41,763       2,114            4,188                               48,065
        Expenses realized from station barter 
                arrangements.........................      16,120                                                            16,120
        Amortization of program contract costs 
                and net realizable value 
                adjustments..........................      29,021         897            4,899                               34,817
        Depreciation and amortization of property
                and equipment........................       5,400          20            1,660                 (217)(c)       6,863
        Amortization of acquired intangible broad-
                casting assets, non-compete and 
                consulting agreements and other
                assets...............................      45,989          12             1,066               7,819 (d)      54,886
                                                       -----------------------------------------------------------------------------
                     Total operating expenses........     160,856       3,554            13,274               7,602         185,286
                                                       -----------------------------------------------------------------------------
                     Broadcast operating income 
                        (loss).......................      45,278       3,663               126              (7,602)         41,465
                                                       -----------------------------------------------------------------------------

OTHER INCOME (EXPENSE):
        Interest and amortization of debt 
          discount expense...........................     (39,253)                                                          (39,253)
        Interest (expense)...........................           -           -            (1,579)             (5,372)(e)      (6,951)
        Interest income..............................       3,942          81                                  (796)(f)       3,227
        Other income (expense).......................         221          41              (188)                                 74
                                                       -----------------------------------------------------------------------------
                     Income (loss) before (provision) 
                       benefit for income taxes and
                       extraordinary items...........      10,188       3,785            (1,641)            (13,770)         (1,438)

(PROVISION) BENEFIT FOR INCOME TAXES.................      (5,200)     (1,514)              461               6,610 (g)         357
                                                       -----------------------------------------------------------------------------
                     Net income (loss) before
                       extraordinary items...........       4,988       2,271            (1,180)             (7,160)         (1,081)

EXTRAORDINARY ITEM:
        Loss on early extinguishment of debt, 
               net of related income tax benefit.....      (4,912)                                                           (4,912)
                                                       -----------------------------------------------------------------------------

NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS...  $       76     $ 2,271         $  (1,180)          $  (7,160)    $    (5,993)
                                                       =============================================================================
          
EARNINGS PER COMMON SHARE
                     Net income before extraordinary
                       items........................   $     0.15                                                       $     (0.03)
                     Extraordinary items............   $    (0.15)                                                      $     (0.15)
                                                       -----------------------------------------------------------------------------
Net loss per common share...........................   $        -                                                       $     (0.19)
                                                       =============================================================================

WEIGHTED AVERAGE SHARES OUTSTANDING (in thousands)..       32,198                                                            32,198
                                                       =============================================================================
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                             (Dollars in thousands)

(a)   The Flint Inc.  column reflects the results of operations for WSMH for the
      year  ended  12/31/95  as the  purchase  transaction  was  consummated  in
      February 1996.

(b)   The Superior  Communications  Group,  Inc.  column reflects the results of
      operations  for  Superior  for the year  ended  12/31/95  as the  purchase
      transaction was consummated in May 1996.

(c)   To record  depreciation  expense  related to acquired  tangible assets and
      eliminate  depreciation  expense  recorded by WSMH and Superior.  Tangible
      assets are to be  depreciated over  lives  ranging  from 5 to 29.5  years,
      calculated as follows:

                                                  WSMH    Superior     Total
                                                  ----    --------     -----

  Depreciation expense on acquired assets..... $   191    $ 1,272     $1,463
  Less: Depreciation expense recorded by WSMH
     and Superior............................      (20)    (1,660)    (1,680)
                                                   ---     ------     ------ 

  Pro forma adjustment........................ $   171    $  (388)    $ (217)
                                               =======    =======     ====== 

(d)   To record  amortization  expense related to acquired intangible assets and
      eliminate  amortization expense recorded by WSMH and Superior.  Intangible
      assets  are  to be  amortized  over  lives  ranging  from  1 to 40  years,
      calculated as follows:

                                                   WSMH     Superior   Total
                                                   ----     --------   -----

  Amortization relating to acquired intangible
     assets...................................    $1,002    $ 7,895   $8,897

  Less: Intangible amortization recorded by 
     WSMH and Superior........................       (12)    (1,066)  (1,078)
                                                     ---     ------   ------ 

  Pro forma adjustment........................    $  990    $ 6,829   $7,819
                                                  ======    =======   ======

(e)   To record interest expense on acquisition  financing  relating to WSMH and
      Superior of $34,400 (in Credit Facility with commercial bank at 8.4% for 8
      months)  and  $59,850  (8.4% for 12 months),  respectively  and  eliminate
      interest expense recorded.

                                                    WSMH    Superior    Total
                                                    ----    --------    -----

  Interest expense adjustment as noted above..     $1,924   $ 5,027     $6,951

  Less: Interest expense recorded by WSMH and
     Superior................................           -    (1,579)    (1,579)
                                                    ------    ------     ------ 

  Pro forma adjustment........................     $1,924    $ 3,448    $5,372
                                                   ======    =======    ======

(f)   To eliminate  interest income on public debt proceeds relating to WSMH and
      Superior  of  $34,400  and  $3,150  (with  commercial  bank at 5.7%  for 4
      months), respectively and eliminate interest income recorded.

                                                   WSMH    Superior     Total
                                                   ----    --------     -----

  Interest income adjustment as noted above...    $ (655)   $  (60)   $  (715)

  Less: Interest income recorded by WSMH and 
     Superior.................................       (81)        -        (81)
                                                     ---        ---       --- 

  Pro forma adjustment........................    $  (736   $  (60)   $  (796)
                                                  =======   ======    ======= 

(g)   To record tax benefit of pro forma adjustments.
PRO FORMA CONSOLIDATED BALANCE SHEET
                            AS OF DECEMBER 31, 1995
                             (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)
KRRT Inc. (a)
                                                                      -------------------------
                                                                        Paramount   
                                                       Pro Forma      Stations Group    KRRT                                
                                                      Consummated    of Kerville, Inc.  Inc.            KSMO(b)     WSTR(c) 
                                                      ----------------------------------------------------------------------
ASSETS
CURRENT ASSETS:
    
   Cash, including cash equivalents................    $ 74,900          $            $              $      590     $   641 
   Accounts receivable, net of allowance 
         for doubtful accounts.....................      52,823                                           3,953       3,091 
   Current portion of program contract costs ......      20,442                          1,452            3,380       4,461 
   Deferred barter costs...........................       1,268                                                             
   Prepaid expenses and other current assets.......       2,078                                              21          15 
   Deferred tax asset..............................       4,565                                                             
                                                      ----------------------------------------------------------------------
                 Total current assets..............     156,076                 -        1,452            7,944       8,208 
PROPERTY AND EQUIPMENT, net........................      55,066                          3,068            3,286       8,357 
PROGRAM CONTRACT COSTS, less current portion.......      23,152                            869            3,754       4,339 
LOANS TO OFFICERS AND AFFILIATES, net..............      11,900                                                             
NON-COMPETE AND CONSULTING AGREEMENTS, net.........      30,379                                                             
DEFERRED TAX ASSET.................................      16,462                                                             
OTHER ASSETS.......................................      26,355                                                             
ACQUIRED INTANGIBLE BROADCASTING ASSETS, net.......     360,216                         26,532           10,014       8,807 
                                                       ---------------------------------------------------------------------
                 Total assets......................    $679,606          $            $ 31,921       $   24,998     $29,711 
                                                       =====================================================================

                                                      River City                       Pro Forma          Pro Forma
                                                   Broadcasting L.P.(d)    WSYX(e)    Adjustments    Consummated/Probable
                                                   ---------------------------------------------     ----------------------
                  ASSETS
CURRENT ASSETS:
   Cash, including cash equivalents................    $                 $            $ (72,882)(f)  $       3,249   
   Accounts receivable, net of allowance 
         for doubtful accounts.....................       10,000                                            69,867
   Current portion of program contract costs ......       23,276           (1,432)                          51,579
   Deferred barter costs...........................                                                          1,268 
   Prepaid expenses and other current assets.......                                                          2,114
   Deferred tax asset..............................                                                          4,565
                                                       -----------------------------------------     -------------------- 
                 Total current assets..............       33,276           (1,432)      (72,882)           132,642 
PROPERTY AND EQUIPMENT, net........................      134,879          (18,200)                         186,456
PROGRAM CONTRACT COSTS, less current portion.......       19,650             (917)                          50,847
LOANS TO OFFICERS AND AFFILIATES, net..............                                                         11,900
NON-COMPETE AND CONSULTING AGREEMENTS, net.........                                                         30,379
DEFERRED TAX ASSET.................................                                                         16,462 
OTHER ASSETS.......................................                                      14,725 (g)         41,080
ACQUIRED INTANGIBLE BROADCASTING ASSETS, net.......      795,695                                         1,201,264
                                                       -----------------------------------------     --------------------
                 Total assets......................    $ 983,500         $(20,549)    $ (58,157)     $   1,671,030
                                                       =========================================     ====================
KRRT Inc. (a)                                 
                                                                    -------------------------                            
                                                                       Paramount
                                                       Pro Forma     Stations Group    KRRT                                
                                                      Consummated   of Kerville, Inc.   Inc.            KSMO(b)     WSTR(c) 
                                                     ----------------------------------------------------------------------        
     LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts Payable................................    $  2,553          $            $              $    1,578     $ 1,127       
   Income Taxes Payable............................       3,944
   Accrued Liabilities.............................      21,082
   Current portion of long-term liabilities-
         Notes payable and commercial bank
                financing...........................      1,133
         Capital leases payable.....................        524
         Notes and capital leases payable to
                affiliates..........................      1,867
         Program contracts payable..................     29,068                          1,452            4,020       5,221
   Deferred barter revenues.........................      1,752
                                                       ---------------------------------------------------------------------
                 Total current liabilities..........     61,923                 -        1,452            5,598       6,348
LONG-TERM LIABILITIES
   Notes payable and commercial bank financing.....     460,494                              
   Capital leases payable...........................         44
   Notes and capital leases payable to affiliates...     13,959
   Program contracts payable........................     34,780                            869            3,107       4,262
   Deferred Tax Liability...........................      3,736
   Other long-term liabilites.......................      5,951                                           8,737
                                                       ---------------------------------------------------------------------
                 Total liabilities..................    580,887                 -        2,321           17,442      10,610
                                                       ---------------------------------------------------------------------
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY              2,345                 -            -                            -
                                                       ---------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES.......................
STOCKHOLDERS' EQUITY................................
   Preferred stock, $.01 par value, 5,000,000 shares
         authorized and -0- outstanding.............          -                               
   Class A Common stock, $.01 par value, 35,000,000
         shares authorized and -0- and 5,750,000
         shares issued and outstanding, respectively         58
   Class B Common stock, $.01 par value, 35,000,000
         shares authorized and 29,000,000 shares 
         issued and outstanding.....................        290
   Additional paid-in-capital.......................    116,089                  
   Accumulated deficit..............................    (20,063)
                                                       -----------------------------------------------------------------------
                 Total stockholders' equity.........     96,374                 -            -                -           -
                                                       -----------------------------------------------------------------------
                 Total Liabilities and Stockholders'
                          Equity.................... $  679,606          $      -     $  2,321       $   17,442     $10,610
                                                       =======================================================================
River City                     Pro Forma            Pro Forma
                                                   Broadcasting L.P.(d)  WSYX(e)      Adjustment      Consummated/Probable
                                                      ------------------------------------------     ----------------------

       LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts Payable................................    $                 $            $              $    5,258
   Income Taxes Payable............................                                                       3,944
   Accrued Liabilities.............................                                                      21,082
   Current portion of long-term liabilities                                                                   
         Notes payable and commercial bank                
                financing...........................                                                      1,133
         Capital leases payable.....................                                                        524
         Notes and capital leases payable to
                affiliates..........................                                                      1,867
         Program contracts payable..................    21,585             (1,727)                       59,619
   Deferred barter revenues.........................                                                      1,752
                                                       -----------------------------------------     ----------------------
                 Total current liabilities..........    21,585             (1,727)           -           95,179
LONG-TERM LIABILITIES                   
   Notes payable and commercial bank financing......                                   799,787 (h)    1,260,281
   Capital leases payable...........................                                                         44
   Notes and capital leases payable to affiliates...                                                     13,959
   Program contracts payable........................    27,580             (1,174)                       69,424
   Deferred Tax Liability...........................                                                      3,736
   Other long-term liabilites.......................                                                     14,688
                                                       -----------------------------------------     ----------------------
                 Total liabilities..................    49,165             (2,901)     799,787        1,457,311
                                                       -----------------------------------------     ----------------------
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY........         -                  -            -            2,345
                                                       -----------------------------------------     ----------------------
COMMITMENTS AND CONTINGENCIES.......................
STOCKHOLDERS' EQUITY................................
   Preferred stock, $.01 par value, 5,000,000 shares
         authorized and -0- outstanding.............                                                           
   Class A Common stock, $.01 par value, 35,000,000
         shares authorized and -0- and 5,750,000
         shares issued and outstanding, respectively                                        42 (i)          100
   Class B Common stock, $.01 par value, 35,000,000                                                           -
         shares authorized and 29,000,000 shares                                                              -
         issued and outstanding.....................                                                        290
   Additional paid-in-capital.......................                                   114,958 (j)      231,047
   Accumulated deficit..............................                                                    (20,063)
                                                       -----------------------------------------     -----------------------
                 Total stockholders' equity.........         -                  -      115,000          211,374
                                                       -----------------------------------------     -----------------------
                 Total Liabilities and Stockholders'
                          Equity.................... $  49,165           $ (2,901)    $914,787       $1,671,030              
                                                     ===========================================     =======================
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
                             (Dollars in thousands)

(a)   The KRRT Inc. (KRRT) column  reflects the assets and liabilities  acquired
      in connection  with the purchase of KRRT.  Total acquired  intangibles are
      calculated as follows:

          Purchase price ............................................ $29,600
                  Add:    Liabilities acquired -
                          Current portion of program contracts.......   1,452
                          Long - term portion of program contracts...     869
                  Less:   Assets acquired
                          Current portion of program contracts ......  (1,452)
                          Non-current portion of program contracts ..    (869)
                          Property and equipment ....................  (3,068)
                                                                       ------ 
                          Acquired intangibles ...................... $26,532
                                                                      =======

      The KSMO and WSTR columns reflect the assets and  liabilities  acquired in
      connection with the purchase of KSMO and WSTR. Total acquired  intangibles
      are calculated as follows:

(b)   KSMO:
          Purchase price ............................................ $  7,556
                  Add:    Liabilities acquired -
                          Accounts Payable...........................    1,578
                          Current portion of program contracts.......    4,020
                          Long - term portion of program contracts...    3,107
                          Subordinated debt .........................    8,737
                  Less:   Assets acquired
                          Current portion of program contracts ......   (3,380)
                          Non-current portion of program contracts ..   (3,286)
                          Cash.......................................     (590)
                          Accounts Receivable........................   (3,953)
                          Prepaid expenses...........................      (21)
                          Property and equipment ....................   (3,754)
                                                                        ------ 
                          Acquired intangibles ...................... $ 10,014
                                                                      ========

(c)   WSTR:
          Purchase price ............................................  $19,101
                  Add:    Liabilities acquired -
                          Accounts Payable...........................    1,127
                          Current portion of program contracts.......    5,221
                          Long - term ...............................    4,262
                  Less:   Assets acquired
                          Current portion of program contracts ......   (4,461)
                          Non-current portion of program contracts ..   (4,339)
                          Cash.......................................     (641)
                          Accounts Receivable........................   (3,091)
                          Prepaid expenses...........................      (15)
                          Property and equipment ....................   (8,357)
                                                                        ------ 
                          Acquired intangibles ...................... $  8,807
                                                                      ========
(d)   The River City Broadcasting L.P. (RCB)  column  reflects  the  assets  and
      liabilities  acquired in connection  with the purchase RCB. Total acquired
      intangibles are calculated as follows:

          Purchase price ............................................ $916,687
                  Add:    Liabilities acquired -
                          Current portion of program contracts.......   19,858
                          Long - term portion of program contracts...   26,406
                  Less:   Assets acquired-
                          Accounts receivable........................  (10,000)
                          Current portion of program contracts ......  (21,844)
                          Non-current portion of program contracts ..  (18,733)
                          Property and equipment .................... (116,679)
                                                                      -------- 
                          Acquired intangibles ...................... $795,695
                                                                      ========

(e)   To  reflect  the  modification  of  the  current   acquisition  documents
      eliminating the Company's option to acquire WSYX-TV.

(f)   To reflect  the  pay-off by the Company of KSMO and WSTR's debt of $12,882
      which was  purchased  by Chase Bank,  and to reflect  the cash  payment of
      $60.0 million made in conjunction with the purchase  agreement between the
      Company and River City Broadcasting L.P. which will be applied against the
      cash proceeds upon closing.

(g)   To record debt  acquisition  costs incurred in conjunction with the Senior
      Secured  Credit  Facilities  of $28.5  million,  and  removal  of the $9.0
      million  purchase  option  to  acquire  KSMO & WSTR  and the  $4,775  note
      receivable from WSTR.

(h)   In April 1996, the Company entered into separate agreements to acquire the
      assets of River City Broadcasting L.P. and KRRT Inc. The cash proceeds due
      the seller at closing of $847,456, $29,600, and $28,500 (transaction costs
      due to the lender) will be made utilizing available indebtedness under the
      Senior  Secured  Credit  Facilities  less the amount  attributable  to the
      purchase of WSYX-TV.

(i)   In conjunction with the River City Broadcasting L.P. agreement, the seller
      will  receive  $115  million  of Series A  Exchangeable  Preferred  Stock.
      Pending shareholder  approval,  the Series A Exchangeable  Preferred Stock
      will be exchangeable for 4,181,818 shares of $.01 par value Class A Common
      Stock.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
                             (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)
KRRT Inc. (a)  
                                                                    -------------------------                            
                                                                       Paramount
                                                       Pro Forma     Stations Group    KRRT                                      
                                                      Consummated   of Kerville, Inc.  Inc.            KSMO(b)       WSTR(c)     
                                                     ----------------------------------------------------------------------------
REVENUES:
   Station broadcast revenues, net of agency
          commissions...............................   $ 208,551         $ 7,567      $ 1,437        $  17,484      $ 15,529     
   Revenues realized from station barter
          arrangements..............................      18,200                                                                 
                                                       --------------------------------------------------------------------------
                   Total revenues...................     226,751           7,567        1,437           17,484        15,529     
                                                       --------------------------------------------------------------------------
                                                                                                                                 
OPERATING EXPENSES:                                                                                                              
   Program and production...........................      24,535             833          193            3,347         1,002     
   Selling, general and administrative..............      48,065           1,958          688            4,374         4,023     
   Expenses realized from station barter 
          arrangements..............................      16,120             876                                                 
Amortization of program contract costs and net 
          realizable value adjustments..............      34,817             921           70            4,007         4,971     
   Depreciation and amortization of property
          and equipment.............................       6,863             194          328              632           585     
   Amortization of acquired intangible broad-
          casting assets, non-compete and 
          consulting agreements and other 
          assets....................................      54,886             253          493              210            77     
                                                       --------------------------------------------------------------------------
                   Total operating expenses.........     185,286           5,035        1,772           12,570        10,658     
                   Broadcast operating income 
                    (loss)..........................      41,465           2,532         (335)           4,914         4,871     
                                                       --------------------------------------------------------------------------
OTHER INCOME (EXPENSE):
   Interest and amortization of debt discount 
     expense........................................     (39,253)                                                    
   Interest (expense)...............................      (6,951)                        (880)          (2,039)       (2,506)    
   Interest income..................................       3,227                           11                                    
   Other income (expense)...........................          74              63                           630                   
                                                       --------------------------------------------------------------------------
                   Income (loss) before (provision) 
                       benefit for income taxes and        
                       extraordinary items..........      (1,438)          2,595       (1,204)           3,505         2,365     
                                                                                                                                 
(PROVISION) BENEFIT FOR INCOME TAXES................         357          (1,076)           -           (1,682)       (1,135)    
                                                       --------------------------------------------------------------------------
                   Net income (loss) before                      
                       extraordinary items..........      (1,081)          1,519       (1,204)           1,823         1,230     
                                                                                                                                 
EXTRAORDINARY ITEM:                                                                                                              
   Loss on early extinguishment of debt, net of 
          related income tax benefit................      (4,912)                                                                
                                                       --------------------------------------------------------------------------
                                                                                                                                 
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREOLDERS...   $  (5,993)        $ 1,519      $(1,204)       $   1,823      $ 1,230      
                                                       ==========================================================================

EARNINGS PER COMMON SHARE
                   Net income before extraordinary
                       items........................   $   (0.03)                                                                
                   Extraordinary items..............   $   (0.15)                                                                
                                                       --------------------------------------------------------------------------
Net loss per common share...........................   $   (0.19)                                                                
                                                       ==========================================================================

WEIGHTED AVERAGE SHARES OUTSTANDING (in thousands)..      32,198                                                                 
                                                       ==========================================================================
River City                      Pro Forma         Pro Forma   
                                                     Broadcasting L.P.    WSYX (e)      Adjustments   Consummated/Probable
                                                     ----------------------------------------------    ----------------
REVENUES:                                                                                                              
   Station broadcast revenues, net of agency                                                                           
          commissions..............................       188,190        (28,767)       $ (1,437)       $  408,554 
   Revenues realized from station barter 
          arrangements.............................                                                         18,200 
                                                     ----------------------------------------------    ----------------
                   Total revenues..................       188,190        (28,767)         (1,437)          426,754 
                                                     ----------------------------------------------    ----------------
                                                                                                                 - 
OPERATING EXPENSES:                                                                                              - 
   Program and production..........................        62,041         (8,133)         (1,437) (g)       82,381 
   Selling, general and administrative.............        30,456         (3,153)           (620) (h)       85,791 
   Expenses realized from station barter 
          arrangements.............................                                                         16,996 
Amortization of program contract costs and net                                                                     
          realizable value adjustments.............        33,452         (2,624)                           75,614 
   Depreciation and amortization of property
          and equipment............................        11,524         (2,107)          3,433  (i)       21,452 
   Amortization of acquired intangible broadcasting                                                                
          assets, non-compete and consulting agreement                                                             
          and other assets.........................        27,649         (9,780)         41,136           114,924 
                                                     ----------------------------------------------    ----------------
                   Total operating expenses........       165,122        (25,797)         42,512           397,158 
                                                     ----------------------------------------------    ----------------
                   Broadcast operating income 
                    (loss).........................        23,068         (2,970)        (43,949)           29,596 
                                                     ----------------------------------------------    ----------------
OTHER INCOME (EXPENSE):                                                                                            
   Interest and amortization of debt discount expense.                                                     (39,253)        
   Interest expense................................       (34,523)                       (39,371) (k)      (86,270)
   Interest income.................................         1,715                         (3,673) (k)        1,280 
   Other income expense............................           (22)            57                               802 
                                                     ----------------------------------------------    ----------------
                   Income (loss) before (provision)                                                                
                       benefit for income taxes and                                                                
                       extraordinary items.........        (9,762)         (2,913)       (86,993)          (93,845)
                                                                                                                 - 
(PROVISION) BENEFIT FOR INCOME TAXES...............         4,686           1,398         41,756 (i)        44,304
                                                     ----------------------------------------------    ----------------
                   Net income (loss) before                                                                        
                       extraordinary items.........        (5,076)         (1,515)       (45,237)          (49,541)
                                                                                                                 - 
EXTRAORDINARY ITEM:                                                                                              - 
   Loss on early extinguishment of debt, net of                                                                    
          related income tax benefit...............                                                         (4,912)
                                                     ----------------------------------------------    ----------------
                                                                                                                 - 
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREOLDERS..      $ (5,076)       $  1,515       $(45,237)       $  (54,453)
                                                     ==============================================    =================
                                                                                                                   
EARNINGS PER COMMON SHARE                                                                                          
                   Net income before extraordinary                                                                 
                       items.......................                                                     $   (1.43)
                   Extraordinary items.............                                                     $   (0.14)
                                                     ----------------------------------------------    ----------------
Net loss per common share..........................                                                     $   (1.57)
                                                     ==============================================    =================
                                                                                                                   
WEIGHTED AVERAGE SHARES OUTSTANDING (in thousands).                                                         34,687 (m) 
                                                     ==============================================    =================
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                             (Dollars in thousands)

(a)   The KRRT Inc.  column  reflects the results of  operations  for  Paramount
      Stations  Group for the seven  months and three days ended 8/3/95 and KRRT
      for the five months ended December 31, 1995.

(b)   The KSMO  column  reflects  the results of  operations  for the year ended
      12/31/95.

(c)   The WSTR  column  reflects  the results of  operations  for the year ended
      12/31/95.

(d)   The River City  Broadcasting  L.P.  (RCB)  column  reflects the results of
      operations for RCB for the year ended 12/31/95.

(e)   To  reflect  the  modification  of  the  current   acquisition   documents
      eliminating the Company's option to acquire WSYX-TV.

(f)   To eliminate LMA fees from RCB.

(g)   To eliminate LMA and license fees paid by RCB to KRRT and JJK.

(h)   To  eliminate  management  fees paid  during 1995 by River City and record
      additional corporate expenses as follows:

      Corporate expenses on a pro forma basis........................... $9,236

      Less: Corporate expenses recorded by Company...................... (5,374)

      Less: Management fees paid during 1995 by RCB..................... (4,482)
                                                                         -------
      Pro forma adjustment.............................................. $ (620)

(i)   To record  depreciation  expense  related to acquired  tangible assets and
      eliminate depreciation expense recorded by Paramount and KRRT, KSMO, WSTR,
      and RCB.  Tangible assets are to be depreciated  over lives ranging from 5
      to 29.5 years, calculated as follows:

      Depreciation expense on acquired assets.......................... $14,589

      Less: Depreciation expenses recorded by Paramount and KRRT,
            KSMO, WSTR and RCB ........................................ (11,156)
                                                                        ------- 

      Pro forma adjustment............................................. $ 3,433
                                                                        =======
(j)   To record  amortization  expense related to acquired intangible assets and
      deferred financing costs, and eliminate  amortization  expense recorded by
      Paramount  and  KRRT,  KSMO,  WSTR,  and  RCB.  Intangible  assets  are to
      amortized over lives ranging from 1 to 40 years, calculated as follows:

     FCC  License.....................................................  $ 9,434
     Affiliation Agreements...........................................   19,854
     Goodwill.........................................................    5,963
     Goodwill  (LMA)..................................................   20,577
                                                                        -------
                                                                         55,828
     Deferred financing costs.........................................    3,718

     Less: Intangible  amortization recorded by Paramount and KRRT, KSMO 
          WSTR, and RCB...............................................  (18,410)
                                                                         -------

     Pro forma adjustment.............................................  $41,136
                                                                        ========

(k)   To record  interest  expense on  acquisition  financing of $875,956 for 12
      months on the Senior Secured Credit  Facilities for RCB and on acquisition
      financing of $60,000, $12,882, $29,600 (in Credit Facility with commercial
      bank at 8.4% for 8 months),  respectively,  for RCB, KSMO, WSTR, and KRRT.
      To  eliminate  interest  income on public  debt  proceeds  of $60,000  and
      $12,882 (with  commercial bank at 5.7% for 4 months),  for KSMO, WSTR, and
      RCB,  respectively,  and to eliminate interest expense and interest income
      recorded by KSMO, WSTR, Paramount, KRRT, and RCB.
Interest      Interest
                                                                        Expense       Income
                                                                        -------       ------
Interest expense and interest income adjustment as noted above..   $79,319)     $ (1,947)

     Less: Interest expense and interest income recorded by RCB, KSMO 
          and WSTR and Paramount and KRRT............................   (39,948)       (1,726)
                                                                         ------       -------

     Pro forma adjustment............................................   $39,371      $ (3,673)
                                                                        ========      =======
(l)   To record tax benefit of pro forma adjustments

(m)   Weighted  average shares  outstanding on a Pro Forma  Consummated/Probable
      basis  assumes  that the $115 million of Series A  Exchangeable  Preferred
      Stock was exchanged for 4,181,818  shares of $.01 par value Class A Common
      Stock as of the IPO date (June 13, 1995).
Consolidated Financial Statements
                         and Other Financial Information

                       Superior Communications Group, Inc.

                     Years ended December 31, 1995 and 1994
                       with Report of Independent Auditors
Superior Communications Group, Inc.

                        Consolidated Financial Statements
                         and Other Financial Information

                     Years ended December 31, 1995 and 1994

                                    Contents

Report of Independent Auditors ..............................................1

Consolidated Financial Statements

Consolidated Balance Sheets .................................................2
Consolidated Statements of Operations .......................................4
Consolidated Statements of Stockholders' Equity .............................5
Consolidated Statements of Cash Flows .......................................6
Notes to Consolidated Financial Statements ..................................7

Other Financial Information

Report of Independent Auditors on Other Financial Information ..............17
Details of Consolidated Balance Sheet ......................................18
Details of Consolidated Statement of Operations.............................19
Report of Independent Auditors

To the Board of Directors and Stockholders of
  Superior Communications Group, Inc.

We have  audited  the  accompanying  consolidated  balance  sheets  of  Superior
Communications  Group,  Inc. (the Company) as of December 31, 1995 and 1994, and
the related  consolidated  statements of operations,  stockholders'  equity, and
cash  flows  for the  years  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 audits.

We  conducted  our  audits  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 audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,   the  consolidated   financial  position  of  Superior
Communications   Group,  Inc.  as  of  December  31,  1995  and  1994,  and  the
consolidated results of their operations and their cash flows for the years then
ended in conformity with generally accepted accounting principles.

                                   Ernst & Young LLP

February 23, 1996
Superior Communications Group, Inc.

                           Consolidated Balance Sheets
December 31
                                                               1995                1994
                                                        ----------------------------------
Assets
Current assets:
Cash and cash equivalents                               $     272,218         $  1,088,527
Accounts receivable, less allowance
for doubtful accounts of $200,000 and $150,000              2,800,531            2,608,609
Deferred film costs                                         2,028,478            2,474,170
Prepaid expenses and other                                    106,344              165,053
                                                        ----------------------------------
Total current assets                                        5,207,571            6,336,359

Property and equipment:
Land                                                          538,144              535,347
Building                                                      723,186              723,186
Equipment and fixtures                                      8,731,303            8,482,329
                                                        ----------------------------------
                                                            9,992,633            9,740,862
Accumulated depreciation                                   (2,604,504)          (1,618,864)
                                                        ----------------------------------
                                                            7,388,129            8,121,998
Other assets:
Deferred film costs, net                                    3,131,340            3,533,338
Intangible assets, net                                      8,778,246           10,413,781
Other assets                                                    4,408               20,156
                                                        ----------------------------------
                                                           11,913,994           13,967,275

                                                        ----------------------------------
Total assets                                              $24,509,694          $28,425,632
                                                        ==================================
-2-
December 31
                                                                               1995                 1994
                                                                           --------------------------------
Liabilities and stockholders' equity 
Current liabilities:
  Current portion of long-term debt                                      $   1,805,532        $   1,617,089
  Current portion of film contract commitments                               1,824,891            1,559,914
  Accounts payable                                                             365,615              257,770
  Accrued expenses                                                             362,315              416,379
  Due to related parties                                                        58,760               62,482
                                                                           --------------------------------
Total current liabilities                                                    4,417,113            3,913,634

Long-term debt                                                              12,185,454           12,469,015
Film contract commitments                                                    2,783,220            2,298,625
Due to related parties                                                          35,000              100,000
Deferred income taxes                                                        3,383,907            3,899,249
Deferred income                                                                 31,341               37,341

Stockholders' equity:
  Preferred stock, $.001 par value, 20,000 shares authorized,  
    10,190.84 shares issued, 8,147.97 and  10,190.84 shares  
    outstanding at cost in 1995 and 1994. (Liquidation  
    preference at December 31, 1995 and 1994 of $10,043,731  
    and $11,323,291, respectively)                                           9,365,801            9,365,801
  Class B common stock, $.001 par value, 100,000 shares 
    authorized, 10,190.84 shares issued, 9,169.405 and 
    10,190.84 shares outstanding in 1995 and 1994.                                  10                   10
  Class A common stock, $.001 par value, 10,000 shares 
    authorized, 1,870.7 shares issued and outstanding                                2                    2
  Additional paid-in capital                                                    36,210               16,053
  Retained deficit                                                          (4,853,864)          (3,674,098)
  Treasury stock                                                            (2,874,500)                   -
                                                                           --------------------------------
Total stockholders' equity                                                   1,673,659            5,707,768
                                                                           --------------------------------
Total liabilities and stockholders' equity                                 $24,509,694          $28,425,632
                                                                           ================================
See accompanying notes.

                                       -3-
Superior Communications Group, Inc.

                      Consolidated Statements of Operations
Year ended December 31
                                                                                      1995                1994
                                                                                  --------------------------------
Gross sales                                                                       $15,837,243          $13,974,224
Less agency commissions                                                             2,437,582            2,032,429
                                                                                  --------------------------------
Net sales                                                                          13,399,661           11,941,795

Operating expenses:
 Sales and promotion                                                                2,127,911            2,015,648
 Broadcast operations                                                               1,460,716            1,065,579
 General and administrative                                                         2,059,805            2,013,921
                                                                                  --------------------------------
                                                                                    5,648,432            5,095,148
                                                                                  --------------------------------
Operating income                                                                    7,751,229            6,846,647

Other expenses:
Amortization--deferred film costs and barter programming                             4,899,093            4,382,047
Depreciation and amortization                                                       2,725,654            3,064,864
Interest expense, net                                                               1,578,898            1,324,130
Other expense, net                                                                    188,111                    -
                                                                                  --------------------------------
                                                                                    9,391,756            8,771,041
                                                                                  --------------------------------
Loss before income tax benefit                                                     (1,640,527)          (1,924,394)

Income tax benefit                                                                   (460,761)             (89,202)
                                                                                  --------------------------------

Net loss                                                                         $ (1,179,766)        $ (1,835,192)
                                                                                  ================================

Undeclared preferred stock dividend requirement, inception to date
                                                                                 $  1,895,761         $  1,132,451
                                                                                  ================================
See accompanying notes.

                                       -4-
Superior Communications Group, Inc.

                                 Consolidated Statements of Stockholders' Equity
Additional
                                                Partners'      Preferred       Class B        Class A          Paid-In       
                                                 Capital         Stock      Common Stock    Common Stock       Capital       
                                               ---------------------------------------------------------------------------
Balance at January 1, 1994                     $5,950,100    $        -         $  -            $  -         $         -     
 Conversion of Superior Communication 
  of Kentucky, L.P. interest into 
  preferred and common stock of 
  Company, January 28, 1994                    (5,950,100)     5,950,091           7               2                   -     
 Equity contribution, January 28, 1994                  -      3,099,997           3               -                   -     
 Conversion of stockholder note into
  preferred and common stock of 
  Company, January 28, 1994                             -        172,713           -               -                   -     
 Contribution of net assets by former 
  general partner including cash of 
  $17,052, January 28, 1994                             -        143,000           -               -                   -     
 Vesting of 120.7 shares of common stock
  from stock grant                                      -              -           -               -              16,053     
 Net loss                                               -              -           -               -                   -     
                                              -----------------------------------------------------------------------------
Balance at December 31, 1994                            -      9,365,801          10               2              16,053     
 Purchase of 2,042.87 shares of preferred
  stock and 1,021.435 of Class B 
  common stock by the Company                           -              -           -               -                   -     
 Vesting of shares of common stock from
  stock grant                                           -              -           -               -              20,157     
 Net loss                                               -              -           -               -                   -     
                                              -----------------------------------------------------------------------------
Balance at December 31, 1995                  $         -     $9,365,801         $10            $  2          $   36,210     
                                              ===============================================================================
See accompanying notes.
Retained         Treasury          Total
                                                  Deficit           Stock           Equity
                                               ----------------------------------------------
Balance at January 1, 1994                     $(1,838,906)     $          -       $4,111,194
 Conversion of Superior Communication 
  of Kentucky, L.P. interest into 
  preferred and common stock of 
  Company, January 28, 1994                               -                 -               -
 Equity contribution, January 28, 1994                    -                 -       3,100,000
 Conversion of stockholder note into
  preferred and common stock of Company,
  January 28, 1994                                        -                 -         172,713
 Contribution of net assets by former 
  general partner including cash of 
  $17,052, January 28, 1994                               -                 -         143,000
 Vesting of 120.7 shares of common stock
  from stock grant                                        -                 -          16,053
 Net loss                                        (1,835,192)                -      (1,835,192)
                                             --------------------------------------------------                         
Balance at December 31, 1994                     (3,674,098)                -       5,707,768
 Purchase of 2,042.87 shares of preferred
  stock and 1,021.435 of Class B 
  common stock by the Company                             -        (2,874,500)     (2,874,500)
 Vesting of shares of common stock from
  stock grant                                             -                 -          20,157
 Net loss                                        (1,179,766)                -      (1,179,766)
                                             --------------------------------------------------
Balance at December 31, 1995                    $(4,853,864)      $(2,874,500)     $1,673,659
                                             ==================================================
See accompanying notes.

                                       -5-
Superior Communications Group, Inc.

                                       Consolidated Statements of Cash Flows

                                                                                      Year ended December 31
                                                                                     1995                1994
                                                                             ---------------------------------------
Operating activities
Net loss                                                                         $(1,179,766)         $(1,835,192)
Adjustments to reconcile net loss to net cash
 provided by operating activities:
  Barter program revenue                                                          (1,565,295)          (1,310,618)
  Deferred income                                                                     (6,000)              (6,000)
  Stock grant expense                                                                 20,157               16,053
  Provision for bad debts                                                             50,000               99,750
  Amortization--deferred film costs and barter programming                         4,899,093            4,382,047
  Depreciation and amortization                                                    2,725,654            3,064,864
  Loss on disposal of assets                                                         193,415               36,769
  Deferred taxes                                                                    (515,342)            (118,720)
  Changes in operating assets and liabilities:
   Accounts receivable                                                              (241,922)            (744,505)
   Prepaid expenses and other                                                         58,709              (50,585)
   Accounts payable                                                                  107,845             (323,086)
   Accrued expenses                                                                  (54,064)             290,929
                                                                             ---------------------------------------
Net cash provided by operating activities                                          4,492,484            3,501,706

Investing activities
Capital expenditures                                                                (558,385)            (240,453)
Other assets                                                                          15,748                    -
Intangible assets acquired                                                                 -             (873,369)
Acquisition of Oklahoma City Broadcasting Company,
 less cash acquired                                                                        -          (10,696,379)
                                                                             ---------------------------------------
Net cash used in investing activities                                               (542,637)         (11,810,201)

Financing activities
Proceeds from long-term debt                                                          25,500           14,200,000
Payments on long-term debt                                                        (2,995,118)          (6,865,178)
Payments on film contract commitments                                             (1,727,816)          (1,545,099)
Net activity on related party liability                                              (68,722)              37,557
Proceeds from capital contribution                                                         -            3,117,052
                                                                             ---------------------------------------
Net cash (used) provided by financing activities                                  (4,766,156)           8,944,332
                                                                             ---------------------------------------
Net (decrease) increase in cash and cash equivalents                                (816,309)             635,837
Cash and cash equivalents at beginning of year                                     1,088,527              452,690
                                                                             ---------------------------------------
Cash and cash equivalents at end of year                                        $    272,218         $  1,088,527
                                                                             =======================================
See accompanying notes.

                                       -6-
Superior Communications Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 1995

1. Significant Accounting Policies

Description of Business

The consolidated  financial  statements of Superior  Communications  Group, Inc.
(SCGI) include the accounts of SCGI and its wholly owned subsidiaries,  Superior
Communications of Kentucky, Inc. (SCKI) and Superior Communications of Oklahoma,
Inc. (SCOI), which are collectively referred to as the Company. All intercompany
balances  have  been  eliminated.  The  Company  owns  and  operates  television
broadcasting stations in Lexington, Kentucky and Oklahoma City, Oklahoma.

Organization

The Company,  previously known as Superior Communications of Kentucky, L.P. (the
Partnership),  was  incorporated  in  its  current  form  on  January  28,  1994
concurrent with the acquisition of SCOI (Note 2). Effective on January 28, 1994,
the  former  partners  of the  Partnership  exchanged  all of their  partnership
interests  for shares of preferred  and common stock of the newly formed  parent
company,  SCGI,  under a Security  Purchase  and  Exchange  Agreement  (Exchange
Agreement) and the  Partnership  was then  dissolved.  Additionally,  the former
corporate  general  partner  of the  Partnership  was  also  dissolved  and  the
shareholders of the general partner  exchanged certain operating assets with the
Company  for  preferred  and  common  stock.  Furthermore,  under  the  Exchange
Agreement,  SCGI then contributed the operating assets of the former partnership
to the newly formed SCKI in exchange for all of the outstanding  common stock of
SCKI.

Operations and Credit Risk

The Company's accounts receivable are from the sale of advertising, primarily to
businesses  which are local to the  broadcast  area or to  national  advertising
agencies.  The Company performs credit  evaluations of its customers'  financial
condition and generally does not require collateral.  Receivables are due within
30 days. Credit losses have been within management's expectations.  The carrying
amount reported in the balance sheet for accounts  receivable  approximates  its
fair value.

Cash and Cash Equivalents

The Company considers all demand deposits and short-term  investments  purchased
with a maturity of 90 days or less to be cash  equivalents.  The carrying amount
reported in the balance  sheet for cash and cash  equivalents  approximates  its
fair value.

                                      -7-
Superior Communications Group, Inc.

             Notes to Consolidated Financial Statements (continued)

1. Significant Accounting Policies (continued)

Deferred Film Costs and Film Contract Commitments

The Company has contracts  with various film  distributors  from which films are
licensed for television  transmission  over various contract periods  (generally
one to five years) and for a specified  number of broadcasts.  Net deferred film
costs represent the lower of unamortized  cost or estimated net realizable value
of the film  contracts  available for use.  Deferred film costs are amortized on
the straight-line  method over the contract periods.  Film contract  commitments
represent the total  obligations due under these contracts,  which are generally
payable in equal installments over periods that are 12 to 18 months shorter than
the lives of the contracts, and do not bear interest.

The portion of the deferred film cost to be amortized  within one year and after
one  year is  reported  in the  balance  sheet  as  current  and  other  assets,
respectively,  and the payments under the film contract  commitments  due within
one year and after one year are  similarly  classified  as current and long-term
liabilities, respectively.

Property and Equipment

Property and equipment are stated at cost.  Depreciation for financial reporting
purposes  is based on the  straight-line  method  over  estimated  useful  lives
ranging from 5 to 12 years for  equipment and 15 years for  buildings.  Costs of
repairs and maintenance are charged to expense as incurred.

Intangible Assets

Intangible  assets as reflected in Note 3 are being amortized on a straight-line
basis over their useful lives ranging from one to fifteen years.

Barter Transactions

Revenue  from  barter  transactions   (advertising   provided  in  exchange  for
programming  or goods and services) is recognized as income when  advertisements
are  broadcast,  and goods or services  received are  capitalized  or charged to
operations  when received or used.  Included in the  statements of operations is
broadcasting  net revenue from barter  transactions of $1,940,989 and $1,593,330
during 1995 and 1994,  respectively,  and station  operating  costs and expenses
from barter  transactions  of $1,871,077  and  $1,632,184,  respectively.  As of
December 31, 1995 and 1994,  the Company has recorded  accrued  liabilities  for
deferred barter revenue of $86,586 and $149,434, respectively.

                                       -8-
Superior Communications Group, Inc.

             Notes to Consolidated Financial Statements (continued)

1. Significant Accounting Policies (continued)

Deferred Income

Deferred  income  relates  to  prepaid  rental  income  for use of SCKI's  tower
facility.  The amount is being recognized on a straight-line  basis through 2001
(term of agreement).

Use of Estimates

The  preparation  of the  financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the amounts  reported in the financial  statements  and
accompanying notes. Actual results could differ from those estimates.

Income Taxes

Deferred  income taxes  recorded on the Company's  consolidated  balance  sheets
reflect  the net tax  effects of  temporary  differences  between  the  carrying
amounts of assets and  liabilities  for  financial  reporting  purposes  and the
amounts used for income tax purposes.

Reclassifications

Certain  amounts in the 1994  financial  statements  have been  reclassified  or
restated to conform to the current year presentation.

2. Acquisition of Station

On January 28, 1994, SBI, a newly formed corporation and wholly owned subsidiary
of the  Company,  purchased  all of  the  outstanding  stock  of  Oklahoma  City
Broadcasting  Company (OCBC) for $10,973,241.  The acquisition was accounted for
as a purchase  transaction with the purchase price being allocated to the assets
and  liabilities  acquired  based upon their fair  market  values at the date of
acquisition.  In  connection  with  the  transaction,  SBI also  entered  into a
noncompete  agreement with the seller of OCBC valued at $1,500,000,  for which a
note  payable  was  issued to the seller  (Note 4).  The cost of the  noncompete
agreement is being  amortized  over the  five-year  term of the  agreement.  The
acquisition was financed from the issuance of stock for $3,100,000 and from bank
debt in the amount of $7,873,241.  Concurrent with the acquisition, SBI and OCBC
merged, forming SCOI.

                                       -9-
Superior Communications Group, Inc.

             Notes to Consolidated Financial Statements (continued)

3. Intangible Assets

The components of intangible  assets consist of the following as of December 31,
1995 and 1994:

                                                    1995              1994
                                             ---------------------------------

Advertising contracts acquired                 $          -        $   441,075
Loan origination costs and other                    617,410            624,064
Organization and syndication costs                1,634,828          1,634,828
Covenant not-to-compete                           2,500,000          2,500,000
FCC license and FOX affiliation agreement         4,269,819          4,391,223
Goodwill                                          3,546,186          3,546,186
                                             ---------------------------------
                                                 12,568,243         13,137,376
Less accumulated amortization                    (3,789,997)        (2,723,595)
                                             ---------------------------------
Intangible assets, net                         $  8,778,246        $10,413,781
                                             ==================================

4. Long-Term Debt

Long-term debt at December 31, 1995 consists of bank and seller debt as follows:

Bank Debt

On January  28,  1994,  the  Company  entered  into a senior  secured  term loan
agreement and revolving credit  agreement  (collectively  the Credit  Agreement)
with a bank in the amount of $12,700,000 and $2,000,000,  respectively. The term
loan is due in quarterly  installments  through  January 2000, and the revolving
credit  agreement is due January 2000. The outstanding  balance on the revolving
credit  agreement  was  $1,500,000  at December  31,  1994,  and no amounts were
outstanding at December 31, 1995. The Credit Agreement  provides for interest at
the bank's Base Rate (8.5% at December 31,  1995) plus 1.75%,  and is secured by
the  stock of SCGI  and its  subsidiaries.  Covenants  contained  in the  Credit
Agreement  limit capital  expenditures,  define  required levels of earnings and
cash flows and limit additional indebtedness and film contract commitments.

The  proceeds  of these  loans were  utilized  by the  Company  to  finance  the
acquisition  of SCOI,  and to repay  amounts  owed to a former bank under a term
note payable of $5,260,589.

                                      -10-
Superior Communications Group, Inc.

             Notes to Consolidated Financial Statements (continued)

4. Long-Term Debt (continued)

Bank Debt (continued)

On February 13, 1995, the Company repurchased 1,021.435 shares of Class B common
stock and 2,042.87 shares of preferred stock of the Company for $2,874,500.  The
repurchase  was  financed  through  an  additional  term  loan  with a bank  for
$2,900,000. The term loan is due in quarterly installments of $290,000 beginning
October 1997 through  January  2000,  plus interest at the bank's Base Rate plus
1.75%.  A mandatory  prepayment per the terms of the loan agreement was required
in 1995 and was applied to this loan. The outstanding  balance on this term loan
was $2,610,000 at December 31, 1995.

Seller Debt

In  connection   with  the  acquisition  of  OCBC,  the  Company  also  incurred
indebtedness to the former owner of OCBC for $1,500,000.  The note is secured by
a lien on SCOI's assets and is subordinated to that of the bank debt. The seller
debt bears interest at a rate of 7.5% and is payable in annual  installments  of
$300,000, plus interest,  beginning January 28, 1995. The outstanding balance on
this note was $1,200,000 at December 31, 1995.

The  following is a schedule of  aggregate  maturities  of long-term  debt as of
December 31, 1995:

         1996                                                   $  1,805,532
         1997                                                      2,820,973
         1998                                                      3,990,045
         1999                                                      4,322,500
         2000                                                      1,051,936
                                                              --------------
                                                                 $13,990,986
                                                              ==============

Fair Value

The carrying amounts of the Company's  borrowings under its bank and seller debt
arrangements approximate their fair value. The fair values of the Company's debt
are  estimated  using  discounted  cash flow  analyses,  based on the  Company's
current incremental borrowing rates for similar types of borrowing arrangements.

                                      -11-
Superior Communications Group, Inc.

             Notes to Consolidated Financial Statements (continued)

5. Film Contract Commitments

The Company has  acquired  certain  film rights under  long-term  film  contract
commitments.  These commitments are generally payable in equal installments over
periods that are twelve to eighteen months shorter than the lives of the related
film  rights and do not bear  interest.  Annual  payments  required  under these
commitments are as follows:

         1996                                                      $1,824,891
         1997                                                       1,514,859
         1998                                                         978,063
         1999                                                         287,637
         2000                                                           2,661
                                                                ---------------
                                                                   $4,608,111
                                                                ===============

The values of the film rights acquired under these contracts are included as net
deferred film costs in the accompanying  consolidated balance sheet and have the
following balances at December 31, 1995:

         Deferred film costs                                      $11,202,089
         Less accumulated amortization                             (6,042,271)
                                                               ----------------
                                                                    5,159,818
         Less current portion                                      (2,028,478)
                                                               ----------------
         Deferred film costs, net                                $  3,131,340
                                                               ================

As  discussed  in Note 1, the Company  enters into  contracts  with various film
distributors which allow limited showings of films and syndicated  programs.  At
December 31, 1995, the Company has entered into contracts totaling approximately
$1,063,943 for which the license period and program availability for telecasting
begins  after  December  31,  1995.  These  contracts  are not  recorded  in the
accompanying consolidated balance sheet.

6. Due to Related Parties

Amounts due to related  parties  consist of fees charged by  shareholders of the
Company  in  connection  with the  acquisition  of the  Partnership  (Note 1) in
November 1992 and includes accrued interest at 7.75%.

                                      -12-
Superior Communications Group, Inc.

             Notes to Consolidated Financial Statements (continued)

7. Income Taxes

Significant  components of the Company's  deferred tax assets and liabilities as
of December 31 are as follows:

                                                1995                1994
                                         -----------------------------------

Deferred tax assets:
Allowance for doubtful accounts            $     76,456         $     56,178
Net operating loss carryforwards                351,981              181,081
Other                                                 -               23,200
                                         -----------------------------------
Total deferred tax assets                       428,437              260,459
Deferred tax liabilities:
Properties and broadcast rights               2,500,911            2,234,846
Intangible assets                             1,311,433            1,924,862
                                         -----------------------------------
Total deferred tax liabilities                3,812,344            4,159,708
                                         -----------------------------------
Net deferred tax liabilities                 $3,383,907           $3,899,249
                                         =====================================

Significant components of the provision for income tax expense (benefit) for the
year ended December 31 are as follows:

                                                  1995                1994
                                            ----------------------------------

Current:
State                                         $   54,581          $    29,518
Deferred:
Federal                                         (461,231)            (127,337)
State                                            (54,111)               8,617
                                            ----------------------------------
Total deferred                                  (515,342)            (118,720)
                                            ----------------------------------
                                               $(460,761)          $  (89,202)
                                            ===================================

The Company's  effective  income tax rates differ from federal  statutory income
tax rates due primarily to the  amortization of goodwill and state income taxes.
Additionally,  in 1994 the  Company  recorded  deferred  income  tax  expense of
$507,673 upon the contribution of the partnership  interests and general partner
operating assets (Note 1).

At December  31,  1995,  the Company  has federal and state net  operating  loss
carryforwards of $666,000 and $2,090,000, respectively, which begin to expire in
2009.

                                      -13-
Superior Communications Group, Inc.

             Notes to Consolidated Financial Statements (continued)

8. Stockholders' Equity

As discussed in Note 1, the Company reorganized effective January 28, 1994 under
the terms of the Exchange Agreement.  Pursuant to the terms of the agreement the
former owners of the Partnership  were given 7,090.84 shares of preferred stock,
7,090.84 shares of Class B common stock and 1,750 shares of Class A common stock
of the Company.  Also on January 28, 1994, certain  stockholders  contributed an
additional  $3,100,000 in exchange for 3,100 shares each of preferred  stock and
Class B common stock of the Company.

On February 13, 1995, the Company repurchased 1,021.435 shares of Class B common
stock and 2,042.87 shares of preferred stock of the Company for $2,874,500.

The  preferred  stock,  which has a stated  liquidation  preference  of $1,000 a
share, has no voting rights.  Dividends accumulate at 12% based upon the stock's
stated  liquidation  value and are  payable  at the  discretion  of the Board of
Directors and subject to  restriction  within the Credit  Agreement.  Unless all
accumulated  dividends on the preferred stock have been paid, no dividend may be
paid,  and no  other  distributions  may be made  upon the  common  stock of the
Company.  Upon  liquidation of the Company,  any proceeds to be distributed  are
first  utilized to pay the preferred  stockholders  at an amount equal to $1,000
per share  (liquidation  preference)  plus any  accrued  but  unpaid  dividends,
inception to date ($1,895,761 at December 31, 1995). If amounts remain available
for distribution in excess of the preferred liquidation, those amounts are to be
allocated 80% to the Class B common  stockholders  and 20% to the Class A common
stockholders.  The  Class A common  stock is  subject  to  restriction  on sale,
transfer and also contain forfeiture provisions.

9. Stock Grants

The Company has granted  120.7  shares of Class A common  stock to an officer of
the Company.  The Class A common stock has  significant  restrictions  including
forfeiture obligations if the officer were no longer an employee of the Company.
Pursuant  to the terms of the stock grant  agreement,  all shares will vest upon
the  completion  of the sale of the  Company's  shares of  outstanding  stock as
discussed in Note 11.  Accordingly,  the Company recorded a charge to operations
of $20,157 in 1995  ($16,053 in 1994) to reflect  the  vesting of the  remaining
stock granted.

                                      -14-
Superior Communications Group, Inc.

             Notes to Consolidated Financial Statements (continued)

10. Operating Leases and Other Commitments

The Company has entered into various noncancelable lease arrangements for office
space rental,  ratings and research services,  broadcast accounting software and
other  licensing  agreements.  Total expense  charged to operations  under these
agreements was approximately $283,000 in 1995. The minimum future payments under
these agreements are as follows:

         1996                                                     $   252,088
         1997                                                         267,059
         1998                                                         281,039
         1999                                                         150,247
         2000                                                         139,323
                                                                 --------------
                                                                   $1,089,756
                                                                 ==============

11. Subsequent Event

On March 4, 1996, the shareholders of the Company entered into an agreement with
an unrelated entity to sell all of the Company's outstanding shares of preferred
and common stock.  Pursuant to the terms of the stock  purchase  agreement,  the
buyer will cause the Company to pay in full all of the  outstanding  debt of the
Company  plus  accrued  interest and  prepayment  penalties.  The balance of the
proceeds will be distributed to the selling shareholders.

12. Supplemental Cash Flow Disclosures

The Company entered into the following noncash transactions:

     o   As  discussed  in  Note 4, on  February  13,  1995,  the  Company  paid
         $2,874,500 for stock placed in treasury, which was financed through the
         issuance of long-term debt.

     o   Deferred film costs in the amount of  $2,548,375  and  $1,820,606  were
         recorded  through the  assumption of film contract  commitments  in the
         same amounts during 1995 and 1994, respectively.

     o   The Company recorded a $1,500,000  noncompete agreement from the seller
         of KOCB in exchange for the issuance of a note payable to the seller in
         the same amount during 1994.

     o   The Company  received  $125,948 of net assets in exchange  for stock in
         connection with the January 28, 1994 restructuring.

                                      -15-
Superior Communications Group, Inc.

             Notes to Consolidated Financial Statements (continued)

12. Supplemental Cash Flow Disclosures (continued)

Additionally, cash paid for interest and income taxes was as follows:

                                                 1995                1994
                                             ---------------------------------

Interest                                       $1,523,785         $1,262,553
                                             =================================
Income taxes                                   $   16,448         $   50,000
                                             =================================

                                      -16-
PARAMOUNT STATIONS GROUP OF KERVILLE, INC.

                   FINANCIAL STATEMENTS AS OF AUGUST 3, 1995 AND FOR THE
                   PERIOD FROM  JANUARY 1, 1995  THROUGH  AUGUST 3, 1995
                   AND AS OF DECEMBER 31, 1994  TOGETHER  WITH REPORT OF
                   INDEPENDENT PUBLIC ACCOUNTANTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

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

We have audited the accompanying  balance sheets of Paramount  Stations Group of
Kerville,  Inc. (a Virginia  corporation)  as of August 3, 1995 and December 31,
1994, and the related  statements of operations,  stockholders'  equity and cash
flows for the period from January 1, 1995 through  August 3, 1995,  and the year
ended December 31, 1994. 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 audits.

We  conducted  our  audits  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 audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Paramount  Stations Group of
Kerville,  Inc. as of August 3, 1995 and December  31, 1994,  and the results of
its  operations  and its cash flows for the period from  January 1, 1995 through
August 3,  1995,  and the year ended  December  31,  1994,  in  conformity  with
generally accepted accounting principles.

                                        Arthur Andersen LLP

Baltimore, Maryland,
    April 26, 1996
PARAMOUNT STATIONS GROUP OF KERVILLE, INC.
                   ------------------------------------------

                                 BALANCE SHEETS
                                 --------------

                   AS OF AUGUST 3, 1995 AND DECEMBER 31, 1994
                   ------------------------------------------
August 3,      December 31,
                                                                    1995               1994
                                                              -------------      --------------
ASSETS
                        ------
CURRENT ASSETS:
    Cash                                                        $      1,122       $        400
    Accounts receivable, net of allowance for doubtful
        accounts of $190,610 and $148,755, respectively            2,543,148          2,961,824
    Current portion of program contract costs                      1,144,236          1,130,513
    Deferred barter costs                                                 -              41,274
    Other current assets                                             340,302            123,132
                                                              --------------     --------------

           Total current assets                                    4,028,808          4,257,143
                                                              --------------     --------------

    Property and equipment, net                                      825,967            986,880

    Program contract costs, noncurrent portion                       504,701          1,430,927

    Due from affiliate                                             4,795,220          2,567,935

    Goodwill, net                                                 15,305,080         15,558,387

    Other assets                                                          -               5,092
                                                              --------------     --------------

           Total Assets                                         $ 25,459,776       $ 24,806,364
                                                                ============       ============

             LIABILITIES AND STOCKHOLDERS' EQUITY
             ------------------------------------
CURRENT LIABILITIES:
    Accounts payable                                            $      1,869       $    189,547
    Accrued liabilities                                               48,308            385,512
    Current portion of program contracts payable                   1,202,739          1,961,803
    Deferred barter revenues                                              -              13,674
                                                              --------------     --------------

           Total current liabilities                               1,252,916          2,550,536

LONG-TERM LIABILITIES:
    Program contracts payable, noncurrent portion                    932,591          1,576,134
                                                              --------------     --------------

           Total Liabilities                                       2,185,507          4,126,670
                                                              --------------     --------------

STOCKHOLDERS' EQUITY:
    Common stock, Class A, $1 par value; 1,000 shares
        authorized, 800 shares issued and outstanding                    800                800
    Common stock, Class B, $1 par value; 8,800 shares
        authorized; 7,040 issued and outstanding                       7,040              7,040
    Additional paid-in capital                                    16,954,952         15,879,113
    Retained earnings                                              6,311,477          4,792,741
                                                              --------------     --------------

           Total Stockholders' Equity                             23,274,269         20,679,694
                                                              --------------     --------------

           Total Liabilities and Stockholders' Equity           $ 25,459,776       $ 24,806,364
                                                                ============       ============
The accompanying notes are an integral part of these balance sheets.
PARAMOUNT STATIONS GROUP OF KERVILLE, INC.
                   ------------------------------------------

                            STATEMENTS OF OPERATIONS
                            ------------------------

           FOR THE PERIOD FROM JANUARY 1, 1995 THROUGH AUGUST 3, 1995
           ----------------------------------------------------------

                      AND THE YEAR ENDED DECEMBER 31, 1994
                      ------------------------------------
August 3,      December 31,
                                                                   1995               1994
                                                             --------------     --------------
REVENUES:
    Advertising revenues, net of agency commissions
        of $1,159,012 and $1,950,484, respectively             $  6,665,863       $ 11,499,302
    Revenues realized from station barter arrangements              900,743          1,300,904
                                                             --------------     --------------
           Total revenue                                          7,566,606         12,800,206
                                                             --------------     --------------

OPERATING EXPENSES:
    Programming                                                     288,704            427,316
    Selling                                                       1,459,894          2,700,025
    Administration                                                  497,671          1,003,846
    Promotion                                                       247,686            468,837
    Engineering                                                     296,677            571,813
    Amortization of program contract rights                         921,053          1,912,677
    Depreciation of property and equipment                          194,337            379,232
    Amortization of intangible assets                               253,307            426,495
    Barter expense                                                  875,950          1,255,799
                                                             --------------     --------------
           Total operating expenses                               5,035,279          9,146,040
                                                             --------------     --------------
           Broadcast operating income                             2,531,327          3,654,166

OTHER INCOME                                                         63,248              2,884
                                                             --------------     --------------

           Income before taxes                                    2,594,575          3,657,050

INCOME TAX PROVISION                                              1,075,839          1,541,215
                                                             --------------     --------------

           Net income                                          $  1,518,736       $  2,115,835
                                                               ============       ============
The accompanying notes are an integral part of these statements.
PARAMOUNT STATIONS GROUP OF KERVILLE, INC.

                                      STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
          
                FOR THE PERIOD FROM JANUARY 1, 1995 THROUGH AUGUST 3, 1995 AND THE YEAR ENDED DECEMBER 31, 1994

                                                 Common Stock      Common Stock
                                                    Class A           Class B         Additional                        Total
                                            -------------------  -----------------     Paid-In         Retained      Stockholders'
                                             Shares     Value     Shares    Value      Capital         Earnings         Equity
                                            -------  ----------  -------   -------   --------------  -------------  -------------
BALANCE, December 31, 1993                     800     $   800    7,040    $ 7,040   $ 14,337,898    $  2,676,906    $ 17,022,644

    Forgiveness of income taxes by Parent       -           -        -          -       1,541,215              -        1,541,215

    Net income                                  -           -        -          -              -        2,115,835       2,115,835
                                            ------   ---------   ------    -------    -----------    ------------   -------------

BALANCE, December 31, 1994                     800         800    7,040      7,040     15,879,113       4,792,741      20,679,694

    Forgiveness of income taxes by Parent       -           -        -          -       1,075,839              -        1,075,839

    Net income                                  -           -        -          -              -        1,518,736       1,518,736
                                            ------   ---------   ------    -------   ------------    ------------   -------------

BALANCE, August 3, 1995                        800     $   800    7,040    $ 7,040   $ 16,954,952     $ 6,311,477    $ 23,274,269
                                            ======   =========   ======    =======   ============    ============   =============
The accompanying notes are an integral part of these statements.
PARAMOUNT STATIONS GROUP OF KERVILLE, INC.
                   ------------------------------------------

                            STATEMENTS OF CASH FLOWS
                            ------------------------

           FOR THE PERIOD FROM JANUARY 1, 1995 THROUGH AUGUST 3, 1995
           ----------------------------------------------------------

                      AND THE YEAR ENDED DECEMBER 31, 1994
                      ------------------------------------
August 3,        December 31,
                                                                 1995               1994
                                                           --------------     --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                               $  1,518,736       $  2,115,835
    Adjustments to reconcile net income to net cash
        provided by operating activities:
        Amortization of program contract rights                   921,053          1,912,677
        Depreciation of property and equipment                    194,337            379,232
        Amortization of goodwill                                  253,307            426,495
        Forgiveness of income tax expense by Parent             1,075,839          1,541,215
    Changes in assets and liabilities:
        Increase in due from affiliate                         (2,227,285)        (2,567,935)
        Decrease (increase) in accounts receivable                418,676           (567,548)
        Decrease in deferred charges                               41,274             32,141
        (Increase) decrease in other current assets              (217,170)            62,407
        Decrease in other assets                                    5,092                 -
        (Decrease) increase in accounts payable                  (187,678)           119,639
        Decrease in due to related parties                             -          (1,553,444)
        (Decrease) increase in accrued liabilities               (337,204)           177,183
        Decrease in deferred barter revenue                       (13,674)           (50,660)
        Film rights payments                                   (1,411,157)        (1,975,061)
                                                           --------------     --------------

           Net cash provided by operating activities               34,146             52,176

CASH FLOWS FROM INVESTING ACTIVITIES:
    Additions to property and equipment                           (33,424)           (52,176)
                                                           --------------     --------------

           Net increase in cash                                       722                 -

CASH, beginning of year                                               400                400
                                                           --------------     --------------

CASH, end of year                                            $      1,122       $        400
                                                             ============       ============

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
    AND FINANCING ACTIVITIES:

    Film contracts acquired                                  $      8,550       $    981,351
                                                             ============       ============

    Film contract liability additions                        $      8,550       $    981,351
                                                             ============       ============
The accompanying notes are an integral part of these statements.
PARAMOUNT STATIONS GROUP OF KERVILLE, INC.
                   ------------------------------------------

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------

                      AUGUST 3, 1995 AND DECEMBER 31, 1994
                      ------------------------------------

1.     ORGANIZATION:
       ------------

Paramount  Stations  Group of Kerville,  Inc.  (the  Company) is a  wholly-owned
subsidiary of Paramount Stations Group Holding Company,  Inc. (the Parent).  The
Company was organized under the laws of Virginia on August 21, 1984. The Company
is a television  broadcaster serving the San Antonio, Texas area through station
KRRT on Channel 35. The Company was affiliated  with UPN and FOX during 1995 and
1994, respectively.

During 1994, the Company entered into an agreement to sell  substantially all of
its  assets  to KRRT,  Inc.  This  sale  was  consummated  on  August  4,  1995.
Accordingly,  the accompanying financial statements for 1995 are presented as of
August 3, 1995 (Note 9).

2.     SUMMARY OF ACCOUNTING POLICIES:
       ------------------------------

Cash
- - ----

All  cash  from  customers  is  deposited  directly  into a lock box held by the
Company's Parent (Note 4).

Revenue Recognition
- - -------------------

Revenue  from  the  sale of air  time to  advertisers  is  recognized  when  the
advertisement is broadcast.

Program Contract Costs
- - ----------------------

The Company has entered into  agreements with program  distributors  granting it
the right to broadcast  programs over contract  periods which generally run from
three  to seven  years.  Program  contract  costs  are  stated  at the  lower of
amortized cost or estimated net realizable value.  Broadcast  contract costs and
the related  liabilities  are  recorded at the  contract  value when the license
period begins and the program is available for use.  Program  contract costs are
amortized  using the greater of the  straight-line  by months over the  contract
term or straight-line over the number of showings on an aggregate basis.

Program  contract costs  expected to be used in the succeeding  year and program
contract rights due within one year are classified as current assets and current
liabilities, respectively.

Property and Equipment
- - ----------------------

Property and equipment are recorded at cost and  depreciated  over the estimated
useful  lives  of the  assets  on a  straight-line  basis.  Major  renewals  and
betterments are capitalized and ordinary  repairs and maintenance are charged to
expense in the period incurred.

                                      -2-
Goodwill
- - --------

In a series of transactions  completed in 1991, the Company's  Parent  purchased
all of the  outstanding  stock of TVX,  Inc.,  who  owned and  operated  several
television  stations,  including the Company.  Goodwill was allocated to each of
the stations based on specific  identification  and  allocation of  unidentified
goodwill  based on cash flow  multiples  used to calculate the purchase price of
each station.  Management monitors the financial  performance of the station and
continually  evaluates  the  realizability  of goodwill and the existence of any
impairment to its recoverability.

Goodwill in the amount of $17,370,000  was allocated to the Company and is being
amortized over 40 years using the  straight-line  method.  At August 3, 1995 and
December 31, 1994,  accumulated  amortization of goodwill aggregated  $2,064,920
and $1,811,613, respectively.

Barter Transactions
- - -------------------

Certain program contract rights provide for the exchange of advertising air time
in lieu of cash  payments for the  programming.  As the program is aired,  equal
amounts of revenue and program amortization  expense are recorded,  at estimated
fair market value, in results of operations.

In addition,  the Company provides  advertising air time to certain customers in
exchange  for  merchandise  or  services.   The  estimated  fair  value  of  the
merchandise  or  services  to be  received  is  recorded  as an  asset,  and the
corresponding  obligation  to  broadcast  advertising  is  recorded  as deferred
revenue.  Services  and other  assets are charged to expense as they are used or
consumed.   Deferred   revenue  is  recognized  in  operations  as  the  related
advertising is broadcast.

3.     INCOME TAXES:
       -------------

In February  1992,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement of Financial  Accounting  Standards  No. 109,  "Accounting  for Income
Taxes." The Company  adopted the new accounting and disclosure  rules  effective
December 31, 1994.

The provision for income taxes consists of the following:

                                              August 3,       December 31,
                                                1995              1994
                                          --------------    --------------

              Federal                      $     920,164     $   1,318,150
              State                              155,675           223,065
                                          --------------    --------------

                                           $   1,075,839     $   1,541,215
                                           =============     =============

                                      -3-
The following is a reconciliation  of the statutory  federal income taxes to the
recorded provision:

                                                    August 3,       December 31,
                                                      1995              1994
                                                 ------------     -------------
 
          Statutory federal income taxes         $    882,156      $  1,243,397

          Adjustments:
              State tax, net of federal effect        102,745           147,223
              Goodwill amortization                    86,125           145,008
              Others                                    4,813             5,587
                                                -------------     -------------

                  Provision for income taxes     $  1,075,839      $  1,541,215
                                                 ============      ============

The Company's Parent files a consolidated federal tax return, and separate state
tax  returns  for each of its  subsidiaries.  It is the  Parent's  policy not to
allocate  income tax expense to its  subsidiaries.  The  accompanying  financial
statements  have been prepared in accordance  with the separate return method of
FASB  109,  whereby  the  allocation  of  tax  expense  is  based  on  what  the
subsidiary's current and deferred tax expense would have been had the subsidiary
filed a federal income tax return outside its consolidated group. The difference
between the computed tax expense and the amounts paid to the Parent for taxes is
recorded as additional  paid-in-capital.  Under this method,  the Company has no
deferred tax assets or liabilities  because those amounts are considered paid to
or received from the Parent.  The Company had no alternative  minimum tax credit
carryforwards as of August 3, 1995.

The  temporary  differences  between  book basis and tax basis  generated by the
Company and recorded on the Parent's financial statements are as follows:
August 3,      December 31,
                                                                         1995              1994
                                                                  --------------     --------------
Program contract net realizable value adjustments        $     159,819      $      12,428
          Depreciation and amortization                                  (33,318)             5,550
          Bad debt reserves                                               16,362             24,047
                                                                  --------------     --------------

                                                                   $     142,863      $      42,025
                                                                   =============      =============
4.     RELATED PARTY TRANSACTIONS:
       --------------------------

The Parent pays the income taxes of the Company.  It is the Parent's  policy not
to charge this expense to its subsidiaries.  Therefore, the provision for income
tax  expense is  recorded  as  additional  paid-in  capital in the  accompanying
balance sheets.  The Parent also provides and receives  short-term cash advances
to and from the Company through a central cash management system. No interest is
charged or received for these advances.

                                      -4-
5.     PROPERTY AND EQUIPMENT:
       ----------------------

Property and equipment consists of the following:
Estimated
                                            Useful Life           August 3,      December 31,
                                              (Years)               1995               1994
                                           -------------      ----------------   ----------
Studio equipment                        5               $  2,931,607       $  2,898,183
        Leasehold improvements                 4-11                  358,472            358,472
        Furniture and fixtures                  5                     59,671             59,671
        Autos and trucks                        5                     32,700             32,700
                                                              --------------     --------------

                                                                   3,382,450          3,349,026

        Less-   Accumulated depreciation                           2,556,483          2,362,146
                                                              --------------     --------------

                                                                $    825,967       $    986,880
6.     PROGRAM CONTRACTS:
       -----------------

The Company purchases the right to broadcast programs through fixed term license
agreements.  Broadcast  rights consist of the following as of August 3, 1995 and
December 31, 1994:

                                                 August 3,        December 31,
                                                   1995               1994
                                             --------------     --------------

         Aggregate cost                       $  16,469,625      $  16,461,076

         Less-   Accumulated amortization        14,820,688         13,899,636
                                             --------------     --------------

                                                  1,648,937          2,561,440
         Less-   Current portion                  1,144,236          1,130,513
                                             --------------     --------------
                                              $     504,701      $   1,430,927
                                              =============      =============

Contractual obligations incurred in connection with the acquisition of broadcast
rights  are  $2,135,330  as of August 3, 1995.  Future  payments,  by year,  for
program contract rights payable as of August 3, 1995, are as follows:

             1995                                    $     580,830
             1996                                          941,200
             1997                                          459,900
             1998                                           97,300
             1999                                           30,500
             Thereafter                                     25,600
                                                     -------------
                                                     $   2,135,330
                                                     =============

The fair value of program  contracts  payable is the present value of the future
obligations  based on the  current  rates  available  to the Company for debt of
similar  maturity.  The carrying amount and the fair value of program  contracts
payable at August 3, 1995, were $2,135,300 and $1,521,665, respectively.

                                      -5-
7.     RETIREMENT SAVINGS PLAN:
       -----------------------

The Company  participates in the Parent company's  retirement savings plan under
Section 401(k) of the Internal Revenue Code. This plan covers  substantially all
employees of the Company who meet minimum age or service requirements and allows
participants to defer a portion of their annual compensation on a pre-tax basis.
Contributions from the Company are made on a monthly basis in an amount equal to
50%  of  the   participating   employee   contributions,   to  the  extent  such
contributions do not exceed 6% of the employees'  eligible  compensation  during
the month.

8.     COMMITMENTS AND CONTINGENCIES:
       -----------------------------

Broadcast rights acquired under license  agreements are recorded as an asset and
a corresponding liability at the inception of the license period. In addition to
these  rights  payable  at  August  3,  1995,  the  Company  had  $1,060,900  of
commitments  to acquire  broadcast  rights for which the license  period has not
commenced and,  accordingly,  for which no liability has been  recorded.  Future
payments  arising from such  commitments  outstanding  at August 3, 1995, are as
follows:

             1995                                        $      29,400
             1996                                              140,600
             1997                                              214,200
             1998                                              319,500
             1999                                              273,200
             Thereafter                                         84,000
                                                         -------------
                                                         $   1,060,900
                                                         =============

The Company has entered into operating  leases for building space and equipment.
Rental  expense  was $76,700 and  $129,268  for the period from  January 1, 1995
through  August 3, 1995 and year ended  December 31, 1994,  respectively.  As of
August 3, 1995,  future minimum lease payments under these operating leases were
as follows:

             1995                                        $      43,569
             1996                                               79,996
             1997                                                9,000
             1998                                                9,000
             1999                                                9,000
             Thereafter                                        491,250
                                                         -------------
                                                         $     641,815
                                                         =============

The  Company  has also  entered  into  several  contracts  for  data  processing
equipment  and  service.  Rental  expense was $36,425 and $61,341 for the period
from  January 1, 1995  through  August 3, 1995 and the year ended  December  31,
1994,  respectively.  As of August 3, 1995,  future minimum payments under these
contracts are as follows:

             1995                                        $      25,565
             1996                                               61,248
             1997                                               59,858
                                                         -------------

                                                         $     146,671
                                                         =============

                                      -6-
Litigation
- - ----------

Lawsuits  and  claims are filed  against  the  Company  from time to time in the
ordinary course of business.  These actions are in various  preliminary  stages,
and no judgments or decisions  have been  rendered by hearing  boards or courts.
Management,  after reviewing  developments to date with legal counsel, is of the
opinion that the outcome of such matters will not have a material adverse effect
on the Companies' financial position, results of operations or cash flows.

9.     SALES AGREEMENT:
       ----------------

During 1994,  the Company  entered into an agreement  with KRRT,  Inc.,  to sell
virtually  all tangible and  intangible  assets of the Company for  $30,000,000.
This sale was completed on August 4, 1995.

                                      -7-
KRRT, INC.

                           FINANCIAL STATEMENTS
                           AS OF DECEMBER 31, 1995 AND
                           FOR THE PERIOD FROM JULY 25, 1995
                           THROUGH DECEMBER 31, 1995
                           TOGETHER WITH REPORT OF
                           INDEPENDENT PUBLIC ACCOUNTANTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

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

We  have  audited  the  accompanying  balance  sheet  of  KRRT,  Inc.  (a  Texas
corporation) as of December 31, 1995, and the related  statements of operations,
stockholders'  equity and cash flows for the period from July 25,  1995  through
December 31, 1995.  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 financial  statements  referred to above present fairly, in
all material  respects,  the financial position of KRRT, Inc. as of December 31,
1995,  and the results of its  operations and its cash flows for the period from
July 25, 1995 through  December 31, 1995, in conformity with generally  accepted
accounting principles.

                                        Arthur Andersen LLP

Baltimore, Maryland,
    May 7, 1995
KRRT, INC.
                                   ----------

                                  BALANCE SHEET
                                  -------------

                             AS OF DECEMBER 31, 1995
                             -----------------------

                         ASSETS
                         ------
CURRENT ASSETS:
    Cash                                                          $      8,459
    Short-term investments                                             500,000
    Current portion of program contracts                             1,451,959
    Other receivable                                                    61,666
                                                                  ------------

           Total current assets                                      2,022,084

    Property and equipment, net                                      5,367,799

    Noncurrent portion of program contracts                            869,006

    FCC license, net of accumulated amortization of $397,075        23,427,401

    Goodwill, net of accumulated amortization of $6,095                579,067

    Other assets, net                                                  648,359
                                                                  ------------
           Total assets                                           $ 32,913,716
                                                                  ============

           LIABILITIES AND STOCKHOLDERS' EQUITY
           ------------------------------------
CURRENT LIABILITIES:
    Bank overdraft                                                $      7,108
    Accrued liabilities                                                  2,833
    LMA advance                                                        132,990
    Current portion of program contracts payable                     1,451,959
    Current portion of long-term debt                                2,000,000
    Accrued interest expense                                           152,578
                                                                  ------------

           Total current liabilities                                 3,747,468

LONG-TERM LIABILITIES:
    Noncurrent portion of program contracts                            869,006
    Note payable                                                       500,000
    Long-term debt, net of current portion                          19,000,000
                                                                  ------------

           Total liabilities                                        24,116,474
                                                                  ------------
STOCKHOLDERS' EQUITY:
    Common stock, no par value; 1,000 shares authorized, issued
        and outstanding                                                     -
    Additional paid-in capital                                      10,001,000
    Accumulated deficit                                             (1,203,758)
                                                                  ------------

           Total stockholders' equity                                8,797,242
                                                                  ------------
           Total liabilities and stockholders' equity             $ 32,913,716
                                                                  ============

       The accompanying notes are an integral part of this balance sheet.
KRRT, INC.
                                   ----------

                             STATEMENT OF OPERATIONS
                             -----------------------

           FOR THE PERIOD FROM JULY 25, 1995 THROUGH DECEMBER 31, 1995
           -----------------------------------------------------------

REVENUES                                                     $    1,437,039
                                                             --------------

OPERATING EXPENSES:
    Management fees                                                 277,775
    Rating services                                                 193,100
    Legal and professional fees                                     159,126
    Depreciation expense                                            328,125
    Amortization expense                                            492,811
    Film amortization expenses                                       69,674
    Miscellaneous expenses                                          251,748
                                                             --------------
           Total operating expenses                               1,772,359
                                                             --------------
           Operating loss                                          (335,320)

OTHER INCOME (EXPENSE):
    Interest income                                                  11,556
    Interest expense                                               (879,994)
                                                             --------------
           Net loss before benefit for income taxes              (1,203,758)

BENEFIT FOR INCOME TAXES                                                 -
                                                             --------------
           Net loss                                          $   (1,203,758)
                                                             ==============

         The accompanying notes are an integral part of this statement.
KRRT, INC.
                                                    ----------

                                   STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                   --------------------------------------------

                            FOR THE PERIOD FROM JULY 25, 1995 THROUGH DECEMBER 31, 1995
                            -----------------------------------------------------------

                                             Common Stock               Additional                              Total
                                   -------------------------------------  Paid-In      Accumulated          Stockholders'
                                         Shares            Value          Capital        Deficit                Equity
                                         ------            -----          -------        -------                ------
BALANCE, July 25,
    1995                                       -      $         -       $         -      $         -         $         -

    Capital contributions                   1,000               -         10,001,000               -           10,001,000

    Net loss                                   -                -                 -        (1,203,758)         (1,203,758)
                                   --------------   --------------    --------------   --------------      --------------

BALANCE, December 31,
    1995                                    1,000     $         -       $ 10,001,000     $ (1,203,758)       $  8,797,242
                                   ==============     ============      ============     ============        ============
The accompanying notes are an integral part of this statement.
KRRT, INC.
                                   ----------

                             STATEMENT OF CASH FLOWS
                             -----------------------

           FOR THE PERIOD FROM JULY 25, 1995 THROUGH DECEMBER 31, 1995
           -----------------------------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                                     $  (1,203,758)
    Adjustments to reconcile net income to net cash
        used in operating activities:
        Depreciation expense                                           328,125
        Amortization expense                                           492,811
        Film amortization expense                                       69,674
    Changes in assets and liabilities:
        Increase in short-term investments                            (500,000)
        Increase in other receivables                                  (61,666)
        Increase in bank overdraft                                       7,108
        Increase in accrued liabilities                                  2,833
        Increase in LMA advance                                        132,990
        Increase in accrued interest expense                           152,578
    Program payments                                                   (69,674)
                                                                  ------------
           Net cash used in operating activities                      (648,979)
                                                                  ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Assets acquired, net of debt financing of $21,000,000           (9,843,562)
                                                                  ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from note payable                                         500,000
    Contributed capital                                             10,001,000
                                                                  ------------
           Net cash flows provided by financing activities          10,501,000
                                                                  ------------

           Net increase in cash                                          8,459

CASH, beginning of period                                                   -
                                                                  ------------
CASH, end of period                                               $      8,459
                                                                  ============

SUPPLEMENTAL CASHFLOW DISCLOSURE:
    Cash paid for interest                                        $    727,416
                                                                  ============

         The accompanying notes are an integral part of this statement.
KRRT, INC.
                                   ----------

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------

                                DECEMBER 31, 1995
                                -----------------

1.   ORGANIZATION

KRRT, Inc., a Texas  corporation (the Company) was organized and incorporated on
July 25,  1995 and on August 4, 1995,  purchased  the  license  and  non-license
assets of Paramount Stations Group of Kerville,  Inc., the owner and operator of
television KRRT-TV, San Antonio, Texas. The Company is a wholly-owned subsidiary
of JJK Broadcasting,  Inc. (the "Parent").  The Company  simultaneously  entered
into a local marketing  agreement  (LMA) with River City  Broadcasting LP (River
City) (Note 2). The Company is a television  broadcaster serving the San Antonio
area through station KRRT on Channel 35, a UPN affiliate.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition
- - -------------------

The Company's  primary  source of revenue is monthly fees received in accordance
with the LMA with River  City.  Under the terms of this  agreement,  the Company
receives  monthly fees and is reimbursed for all operating  expenses,  scheduled
principal and interest  payments on the long-term  debt  discussed in Note 8 and
scheduled  program  rights  payments  in  exchange  for  the  right  to  provide
programming and general advertising receivables.
Revenue is recorded as payments are scheduled to be received.

Short-Term Investments
- - ----------------------

Short-term investments represent repurchase agreements which mature within three
months. This investment is stated at cost plus accrued income which approximates
market value.

Property and Equipment
- - ----------------------

Property and equipment are stated at cost. The Company depreciates and amortizes
property and equipment over the estimated useful lives of the assets,  generally
using the straight-line method over six to forty years.

Intangible Assets
- - -----------------

Intangible  assets include value  attributable to licenses issued by the Federal
Communications Commission (FCC) and goodwill representing the excess of the cost
over the fair market value of the assets purchased and the liabilities  assumed.
These assets are amortized using the straight-line method over twenty-five years
and forty years,  respectively.  The Company monitors the financial  performance
and continually evaluates the realizability of goodwill and the existence of any
impairment to its recoverability based on the projected future cash flows.

                                      -2-
Program Contract Rights
- - -----------------------

The station has entered into  agreements with program  distributors  granting it
the right to broadcast  programs over contract  periods which generally run from
one to seven years.  An asset and  liability  are booked equal to the  liability
assumed on the purchase date. The asset is recorded at its net realizable  value
based on expected future revenues.  Accordingly, given that the Company's future
revenues are based on program  payments  (Note 2),  amortization  is recorded in
amounts equal to program payments as they are scheduled to be made.

Use of Estimates
- - ----------------

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  requires  management to make estimates and  assumptions.
These  estimates  and  assumptions  affect  the  reported  amounts of assets and
liabilities and disclosures of contingent  assets and liabilities at the date of
the financial  statements and the reported amounts of revenue,  expenses,  gains
and losses during the reporting periods.  Actual results could differ from these
estimates.

3.   PROPERTY AND EQUIPMENT

Property and equipment consist of the following at December 31, 1995:

          Studio equipment                                       $    2,416,651
          Transmitting equipment                                      1,423,283
          Office equipment                                              139,337
          Furniture and fixtures                                        162,894
          Vehicles                                                       31,482
          Buildings                                                     111,574
          Leasehold improvements                                         64,534
          Towers                                                      1,204,827
          Tools and test equipment                                       69,828
          Spare parts                                                    71,514
                                                                 --------------

                                                                      5,695,924

          Less:  Accumulated depreciation and amortization             (328,125)
                                                                 ---------------
          Property and equipment, net                            $   5,367,799
                                                                 ===============

4.   ACQUISITION

In  August  1995,  the  Company  acquired  substantially  all of the  assets  of
Paramount Stations Group of Kerville, Inc. for $30 million. This acquisition was
accounted  for as a purchase  under  Accounting  Principles  Board  Opinion  16,
whereby the purchase  price was allocated to property,  FCC license and goodwill
for $5.7  million,  $23.8 million and $.5 million,  respectively,  based upon an
independent appraisal.

                                      -3-
5.   OTHER ASSETS

Other assets consist of the following at December 31, 1995:

                                                  Amortization
                                                    Period
                                                    ------

             Loan origination fee                   5 years     $      420,000
             Organization costs                     5 years            318,000
                                                                --------------

                                                                       738,000
             Less:  accumulated amortization                           (89,641)
                                                                --------------
             Other assets, net                                  $      648,359
                                                                ==============

6.   COMMITMENTS AND CONTINGENCIES

The Company has entered into operating  leases for building space and equipment.
Rental  expense was $76,913 for the period from July 25, 1995  through  December
31, 1995. As of December 31, 1995,  future  minimum lease  payments  under these
operating leases were as follows:

             1996                                                $     133,864
             1997                                                       61,478
             1998                                                       45,000
             1999                                                       45,000
             2000                                                       45,000
             Thereafter                                                482,250
                                                                --------------

                                                                 $     812,592
                                                                ==============

The  Company  has also  entered  into  several  contracts  for  data  processing
equipment and service.  Rental expense was $240,030 for the period from July 25,
1995 through December 31, 1995. As of December 31, 1995, future minimum payments
under these contracts are as follows:

             1996                                                $     592,443
             1997                                                      581,929
                                                                --------------

                                                                 $   1,174,372
                                                                 =============

Litigation
- - ----------

Lawsuits  and  claims are filed  against  the  Company  from time to time in the
ordinary course of business.  These actions are in various  preliminary  stages,
and no judgments or decisions  have been  rendered by hearing  boards or courts.
Management,  after reviewing  developments to date with legal counsel, is of the
opinion that the outcome of such matters will not have a material adverse effect
on the Company's financial position, results of operations or net cash flows.

7.   INCOME TAXES

In February  1992,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement of Financial  Accounting  Standards  No. 109,  "Accounting  for Income
Taxes."

                                      -4-
The following is a reconciliation  of the statutory  federal income taxes to the
recorded provision:
                                                                  December 31,
                                                                      1995
                                                                 -------------

          Statutory federal income taxes                         $   (409,278)

          Adjustments:
              State income taxes, net of federal effect               (40,706)
              Valuation allowance                                     449,984
                                                                 -------------
                  (Benefit) for income taxes                     $       -
                                                                 =============

Temporary  differences  between the financial reporting carrying amounts and tax
basis of assets and  liabilities  give rise to  deferred  taxes.  The  principal
sources of temporary differences and their effects on the provision for deferred
income taxes are as follows:

                                                                  December 31,
                                                                      1995
                                                                 -------------

          Depreciation and amortization                          $     126,154
          Valuation allowance                                         (126,154)
                                                                --------------

                  Deferred income tax provision                  $        -
                                                                 =============

Total deferred tax assets and deferred tax  liabilities as of December 31, 1995,
and the sources of the difference between financial  accounting and tax bases of
the Company's assets and liabilities  which give rise to the deferred tax assets
and deferred tax liabilities and the tax effects of each are as follows:

                                                                 December 31,
                                                                      1995
                                                                 -------------

          Deferred tax assets:
              Depreciation and amortization                     $     126,154
              Valuation allowance                                    (126,154)
                                                               --------------

                                                                $        -
                                                                =============

During the year ended December 31, 1995,  the Company  recorded a full valuation
allowance  on the  deferred  tax  assets to reduce  the total to an amount  that
management  believes will  ultimately be realized.  Realization  of deferred tax
assets is dependent upon  sufficient  future total income during the period that
temporary  differences and  carryforwards are expected to be available to reduce
taxable income.

8.   LONG-TERM DEBT

In connection  with the acquisition of the Station,  KRRT,  Inc.  entered into a
Bank Credit Agreement with a principal of $21,000,000 and interest at LIBOR plus
2.5%.  Payments are scheduled to begin

                                      -5-
on January  31,  1996.  The debt is  secured  by all the  assets of KRRT,  Inc.,
including their rights under the LMA agreement and the assets of their Parent.

Annual maturities of long-term debt as of December 31, 1995, are as follows:

             1996                                         $   2,000,000
             1997                                             4,000,000
             1998                                             5,000,000
             1999                                             5,800,000
             2000                                             4,200,000
                                                          -------------
                                                          $  21,000,000
                                                          =============

The carrying amount the Company's  long-term debt  approximates  Fair value. The
Fair value was  determined  by  reference  to quoted  values  obtained  from the
lender.

9.   RELATED PARTY TRANSACTIONS

The Company's  Parent  receives a management fee equal to the portion of the LMA
fees designated as management fees for management services provided.  During the
period from July 25, 1995 through  December 31, 1995,  the Company paid $277,775
to their Parent.

During  1995,  the Parent  contributed  $10,001,000  to the Company to partially
finance  the  acquisition  of the  Station  from  Paramount  Stations  Group  of
Kerville, Inc. (Note 4).

In connection  with the  financing of the  acquisition,  the Parent  contributed
$500,000  to satisfy a covenant  with the Bank of  Montreal.  This  $500,000  is
recorded as a long-term note payable.

10.  PROGRAM CONTRACTS

The Company purchases the right to broadcast programs through fixed term license
agreements. Broadcast rights consist of the following as of December 31, 1995:

                                                               December 31,
                                                                   1995
                                                              -------------

             Aggregate cost                                 $   2,390,639

             Less-  Accumulated amortization                       69,674
                                                              -------------
                                                                2,320,965

             Less-  Current portion                             1,451,959
                                                              -------------
                                                            $     869,006
                                                              =============

                                      -6-
Contractual obligations incurred in connection with the acquisition of broadcast
rights are $2,320,965 as of December 31, 1995, respectively. Future payments, by
year,  for program  contract  rights  payable as of December  31,  1995,  are as
follows:

             1996                                             $   1,521,663
             1997                                                   525,399
             1998                                                   162,764
             1999                                                    77,007
             Thereafter                                              34,132
                                                              -------------
                                                              $   2,320,965
                                                              =============

The Fair  value of film  contracts  payable is the  present  value of the future
obligations  based on the  current  rates  available  to the Company for debt of
similar maturity.  The carrying amount and fair value of program rights, payable
at December 31, 1995, were 2,320,965 and 1,653,975 respectively.

11.  SUBSEQUENT EVENT

In April 1996,  Sinclair  Broadcast  Group,  Inc.  (SBG)  entered  into an asset
purchase  agreement with the Company  whereby the Company has agreed to sell the
non-license  assets for approximately  $29.6 million.  The Company estimates the
transaction will be consummated in May 1996.

                                      -7-
Kansas City TV 62
Limited Partnership
Financial Statements
December 31, 1995
Report of Independent Accountants

March 22, 1996

To the Partners of Kansas City TV 62 Limited Partnership

In our opinion,  the  accompanying  balance sheet and the related  statements of
operations, of changes in partners' capital and of cash flows present fairly, in
all  material  respects,  the  financial  position  of Kansas City TV 62 Limited
Partnership at December 31, 1995 and 1994, and the results of its operations and
its cash flows for the years then ended in conformity  with  generally  accepted
accounting principles.  These financial statements are the responsibility of the
Partnership's  management;  our responsibility is to express an opinion on these
financial  statements  based on our  audits.  We  conducted  our audits of these
statements  in accordance  with  generally  accepted  auditing  standards  which
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,  assessing the  accounting  principles
used and  significant  estimates made by management,  and evaluating the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for the opinion expressed above.

                                        Price Waterhouse LLP
Kansas City TV 62 Limited Partnership
Balance Sheet
- - --------------------------------------------------------------------------------
December 31,
                                                                               1995             1994
                                                                                   (in thousands)
Assets

Current assets:
  Cash and cash equivalents                                              $       590     $       978
  Accounts receivable, less allowance for doubtful accounts
    of $236 and $122 in 1995 and in 1994                                       3,953           3,052
  Broadcast rights                                                             3,380           2,864
  Prepaid expenses                                                                21              16
                                                                               -----           -----

    Total current assets                                                       7,944           6,910

  Property and equipment - net                                                   734           1,305

  Broadcast rights                                                             3,286           3,305

  Goodwill and other intangible assets                                         3,817           4,027
                                                                               -----           -----
                                                                         $    15,781     $    15,547
                                                                              ======          ======
Liabilities and Partners' Capital

Current liabilities:
  Current portion of long-term debt                                      $     6,998     $       338
  Subordinated note payable to Seller                                          7,816             -
  Accounts payable and accrued expenses                                        1,578           1,714
  Interest payable                                                               733           1,943
  Due to related parties                                                          -               40
  Broadcast rights payable                                                     4,020           3,837
                                                                               -----           -----

    Total current liabilities                                                 21,145           7,872

Broadcast rights payable                                                       3,107           3,569

Long-term debt                                                                     -           9,273

Subordinated note payable to Seller                                              921           7,730

Partners' capital                                                             (9,392)        (12,897)

Commitments and contingencies (Note 8)                                        ------          ------

                                                                            $ 15,781        $ 15,547
                                                                            ========        ========
The accompanying notes are an integral part of
                           these financial statements.
Kansas City TV 62 Limited Partnership
Statement of Operations
- - -------------------------------------------------------------------------------

                                                            Year ended
                                                            December 31,
                                                       1995             1994
                                                          (in thousands)

Revenues - net of agency and national
  representative commissions                     $    17,484     $    14,052

Costs and expenses:
  Programming, production and engineering              3,347           4,533
  Amortization of broadcast rights                     4,007           4,581
  Sales, promotion and marketing                       2,476           2,716
  General and administrative                           1,898           1,834
  Depreciation and amortization                          842             805
  Interest expense, net                                2,039           1,983
  Other income                                          (630)          -
                                                 ------------    ------------

Net income (loss)                                $     3,505     $    (2,400)
                                                 ===========      ===========

                 The accompanying notes are an integral part of
                           these financial statements.
Kansas City TV 62 Limited Partnership
Statement of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
- - --------------------------------------------------------------------------------
Year ended
                                                                                   December 31,
                                                                               1995          1994
                                                                                  (in thousands)
Cash flows from operating activities:
  Net income (loss)                                                      $     3,505     $    (2,400)
  Adjustments to reconcile net income (loss) to net cash
   provided (used) for operating activities:
    Depreciation                                                                 632             595
    Amortization of goodwill and other intangible assets                         210             210
    Amortization of broadcast rights, net of barter                            1,206           2,122
    Accretion of subordinated debt principal                                     210             197
    Gain on forgiveness of debt                                                 (398)           -
    Increase in accounts receivable                                             (901)           (655)
    Increase in prepaid expenses                                                  (5)             (6)
    Decrease in accounts payable and accrued expenses                            262            (396)
    (Decrease) increase in interest payable                                     (413)          1,806
    Decrease in due to related parties                                           (40)           (236)
    Decrease in broadcast rights payable, net of barter                       (1,982)         (1,745)
                                                                         ------------    ------------

     Net cash provided (used) for operating activities                         2,286            (508)
                                                                         ------------    ------------

Cash flows from investing activities:
  Additions to property and equipment                                            (61)            (35)
                                                                         ------------    ------------

Cash flows from financing activities:
  Repayment of long-term debt                                                 (2,613)             -
  Partner's contribution of capital                                              -             1,400
                                                                         ------------     -----------

     Net cash (used) provided by financing activities                         (2,613)          1,400
                                                                         ------------     ----------

Net (decrease) increase in cash                                                 (388)            857

Cash and cash equivalents at beginning of year                                   978             121
                                                                         ------------     ----------

Cash and cash equivalents at end of year                                 $       590     $       978
                                                                         ============    ===========

Supplemental schedule of noncash activities:
  Film contracts acquired                                                $     4,055     $     2,834
                                                                         ===========     ===========

  Film contract liability additions                                      $     4,055     $     2,834
                                                                         ===========     ===========

  Capitalized subordinated debt interest                                 $       797     $       884
                                                                         ===========     ===========
The accompanying notes are an integral part of
                           these financial statements.
Kansas City TV 62 Limited Partnership
Statement of Changes in Partners' Capital
For the Years Ended December 31, 1995 and 1994
- - -------------------------------------------------------------------------------
General           Limited
                                                       Partner           Partner           Total
                                                                      (in thousands)
Balance at December 31, 1993                           $ (11,897)            -           $ (11,897)

Capital contribution                                       1,400             -               1,400

Net loss for the year ended December 31, 1994             (2,400)            -              (2,400)
                                                       ----------         ---------      ----------

Balance at December 31, 1994                           $ (12,897)         $  -           $ (12,897)

Net income for the year ended December 31, 1995            3,505             -               3,505
                                                       -------------      ---------       ---------

Balance at December 31, 1995                           $  (9,392)         $  -           $  (9,392)
                                                       =========          =========      ==========
The accompanying notes are an integral part of
                           these financial statements.
Kansas City TV 62 Limited Partnership
Notes to Financial Statements (in thousands)
- - -------------------------------------------------------------------------------

1.       Organization

         Kansas City TV 62 Limited  Partnership (the  "Partnership")  is a joint
         venture of ABRY  Communications  III,  L.P., the general  partner,  and
         Copley Place Capital Group,  the limited  partner.  The Partnership was
         organized under the laws of the State of Delaware on April 18, 1990. On
         September  21, 1990 the  Partnership  acquired the business and certain
         assets of Kansas City Television,  Inc. (the "Seller"). The Partnership
         is a  television  broadcaster  serving  the  Kansas  City area  through
         station KSMO on UHF Channel 62.

2.       Summary of Significant  Accounting  Policies  

         Allocation of  Partnership  Results to Partners'  Capital  Accounts 
         Net losses of the Partnership are allocated among the capital  accounts
         of the partners based on their relative partnership interests until the
         limited  partner's capital has been exhausted.  Thereafter,  net losses
         are allocated solely to the general partner. Net income is allocated in
         proportion to previously allocated net losses in reverse  chronological
         order.  Thereafter,  net income is allocated to partners based on their
         relative partnership interests, as defined in the agreement.

         Broadcast   Rights
         Broadcast  rights  are  stated  at the  lower  of  unamortized  cost or
         estimated  net  realizable  value.  Broadcast  rights  and the  related
         liabilities  are recorded at the contract value when the license period
         begins  and the  right is  available  for  use.  Broadcast  rights  are
         amortized using the straight-line method over the number of showings or
         license period.  The net realizable value of broadcast rights for which
         the  Partnership is  contractually  committed is reviewed  annually and
         revisions to amortization  rates or write-downs to net realizable value
         may occur.  The current portion of broadcast  rights  represents  those
         rights   available  for  broadcast  which  will  be  amortized  in  the
         succeeding year.

         Property and Equipment
         Property and  equipment are recorded at cost and  depreciated  over the
         estimated  useful lives of the assets on a straight-line  basis.  Major
         renewals and  betterments  are  capitalized  and  ordinary  repairs and
         maintenance are charged to expense in the period incurred.

         Goodwill and Other Intangible Assets
         Goodwill  aggregating  $4,144  is  amortized  over 40 years  using  the
         straight-line  method.  Legal and accounting  fees  associated with the
         acquisition  of  loans,   aggregating  $555  and  organization  of  the
         Partnership,  aggregating  $59 are  capitalized  and amortized over the
         term of the related debt and five years, respectively. Other intangible
         assets,  aggregating  $119 are amortized  over their  estimated  useful
         life.  At  December  31,  1995  and  1994,   accumulated   amortization
         aggregated $1,060 and $850, respectively.

         Barter Transactions
Kansas City TV 62 Limited Partnership
Notes to Financial Statements (in thousands)
- - -------------------------------------------------------------------------------

         Revenue from barter  transactions is recognized when advertisements are
         broadcast and services or  merchandise  received are charged to expense
         when  received  or  used.   Revenues  arising  from  barter  and  trade
         transactions   aggregated   $2,907   and   $2,654  in  1995  and  1994,
         respectively.

         Income Taxes
         The  financial  statements  of  the  Partnership  do  not  include  any
         provision for federal or state income taxes.  All  Partnership  income,
         losses,  tax credits and deductions  are allocated  among the partners.
         Each  partner  is  responsible  to  report  its  distributed  share  of
         Partnership results in its federal and state income tax returns.

         Cash and Cash Equivalents
         The  Partnership  considers  all highly liquid  investment  instruments
         purchased  with  a  maturity  of  three  months  or  less  to  be  cash
         equivalents. The Partnership invests its cash in money market funds and
         in short-term  government securities that are subject to minimal market
         and  credit  risk.  At  December  31,  1995,  the  Partnership's   cash
         equivalents include $544 of money market funds.

         Effective  January  1,  1994,  the  Partnership  adopted  Statement  of
         Financial  Accounting  Standards  No.  115 (FAS 115),  "Accounting  for
         Certain  Investments  in  Debt  and  Equity  Securities".   Under  this
         standard,  the  Partnership is required to classify its  investments in
         debt  and  equity   securities  into  one  or  more  of  the  following
         categories:  held-to-maturity,  trading or available for sale. Adoption
         of this standard had no impact on the Partnership's  financial position
         or results of operations at the date of adoption.

         Concentration of Credit Risk
         Financial  instruments  which  potentially  expose the Partnership to a
         concentration  of  credit  risk  include  cash,  cash  equivalents  and
         accounts receivable. A significant amount of the Partnership's cash and
         cash equivalents are held by one financial  institution at December 31,
         1995. The  Partnership  does not believe that such deposits are subject
         to any unusual  credit risk  beyond the normal  credit risk  associated
         with operating its business.  The  Partnership  maintains  reserves for
         potential  credit losses and such losses,  in the  aggregate,  have not
         historically exceeded management's expectations.

         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.

3.       Related Party Transactions

                                       2
Kansas City TV 62 Limited Partnership
Notes to Financial Statements (in thousands)
- - -------------------------------------------------------------------------------

         Prior  to  1995,  ABRY   Communications  III,  L.P.,  provided  certain
         administrative and support services to the Partnership for which it was
         paid a management fee. Management fees charged to operations aggregated
         $276 in 1994. No management fees were charged during 1995.

                                       3
Kansas City TV 62 Limited Partnership
Notes to Financial Statements (in thousands)
- - --------------------------------------------------------------------------------

4.       Property and Equipment

         Property and equipment consists of the following:
Estimated
                                                             useful life                     December 31,
                                                               (years)                   1995            1994
Studio equipment                                        2-7                 $ 1,855            $ 1,824
         Transmission  equipment                                 7-8                   1,206              1,184
         Vehicles,  office  equipment and
          furniture                                              5-7                     396                388
         Leasehold improvements                                   8                      297                297
                                                                                     ------------   ------------

                                                                                       3,754              3,693
         Less -  accumulated  depreciation  and
          amortization                                                                 3,020              2,388
                                                                                     ------------   ------------

                                                                                     $   734            $ 1,305
                                                                                     ============   ============

5.       Broadcast Rights

         The Partnership purchases the right to broadcast programs through fixed
         term license agreements. Broadcast rights consist of the following:

                                                                                             December 31,
                                                                                           1995          1994

         Aggregate cost                                                              $  16,564          $14,350
         Less - accumulated amortization                                                 9,898            8,181
                                                                                    ------------    -----------

                                                                                         6,666            6,169

         Less - current portion                                                          3,380            2,864
                                                                                     ------------   -----------

                                                                                     $   3,286          $ 3,305
                                                                                     ============   ===========
4
Kansas City TV 62 Limited Partnership
Notes to Financial Statements (in thousands)
- - --------------------------------------------------------------------------------

         Contractual  obligations incurred in connection with the acquisition of
         broadcast  rights are $7,127  including  $3,742 of barter  obligations.
         Future payments in connection with these contractual obligations are as
         follows at December 31, 1995:

                  1996               $   4,058
                  1997                   1,776
                  1998                   1,064
                  1999                     169
                  2000                      23
                  Thereafter                37
                                   ------------

                                     $   7,127
                                    ==========

         The  Partnership  has  estimated  the fair  value of these  contractual
         obligations at approximately $6,800 and $6,776 at December 31, 1995 and
         1994,  respectively,  based on  future  cash  flows  discounted  at the
         Partnership's current borrowing rate.

6.       Debt

         Debt consists of the following:
                                                          December 31,
                                                      1995            1994

         Term loan                                $   1,455      $  2,133
         Revolving credit facility                    5,543         7,478
                                                  ----------     --------

                                                      6,998         9,611

         Less - current portion                       6,998           338
                                                  ---------      --------
                                                  $     -        $  9,273 
                                                  =========      ========

         The term loan and  revolving  credit  facility  (the  "revolver")  bear
         interest,  payable  monthly,  at the base rate,  computed by taking the
         higher of the  Federal  Funds  rate plus 1% or prime,  plus a  computed
         margin  rate which  ranges  from  1.75% to 2.25%.  The  Partnership  is
         charged a fee for the  average  daily  unused  portion of the  revolver
         commitment  at a  rate  of  1/2%  per  annum,  payable  quarterly.  The
         borrowings  are  secured  by  substantially  all of  the  Partnership's
         assets.

         The credit  agreement was amended on April 21, 1995. Under the terms of
         the amended credit agreement,  the principle amount of the term loan is
         payable in quarterly installments of varying amounts commencing October
         1, 1995.  The revolver was increased to $8,500 and will be reduced on a
         quarterly basis  commencing  April 1, 1997, until no credit facility is
         available at October 1, 1998.

                                        5
Kansas City TV 62 Limited Partnership
Notes to Financial Statements (in thousands)
- - --------------------------------------------------------------------------------

         In addition to the  scheduled  principal  and  interest  payments,  the
         lender  may be  entitled  to  contingent  interest  payable  upon early
         repayment of the term loan, a change in control of the  Partnership  or
         upon  the  occurrence  of  certain  other  events  as  defined  in  the
         agreement.  The  amount of  contingent  interest  which  will be due is
         determined by a formula which  considers  appreciation  in the value of
         the Partnership.  Based upon  management's  estimate of appreciation in
         the value of the  Partnership,  no accrual for contingent  interest has
         been recorded at December 31, 1995 and 1994.

         The  subordinated  note  payable  to  Seller  is  subordinated  to  the
         Partnership's term loan and revolver  borrowings.  The principal amount
         of the subordinated  note payable to Seller is payable in a lump sum on
         September 21, 1998.  Interest on the outstanding  principal  accrues at
         the  rate of 10%  and is  payable  annually.  For  financial  reporting
         purposes,  however, interest on the note accrues at an implicit rate of
         14% per annum,  and the note's original stated  principal of $8 million
         has been discounted to reflect this yield.

         In January  1996, a  third-party  exercised  its option to purchase the
         station  (Note 9).  Accordingly,  all  long-term  debt is classified as
         current at December 31, 1995. In March 1996, certain  subordinated note
         holders  agreed to extend the term of their notes through  October 1999
         and forgave interest for the five-year period then ended.  Accordingly,
         all subordinated debt, excluding the extended portion, is classified as
         current at December 31, 1995.

         In  1994,  certain  subordinated  note  holders  forgave  $680  of  the
         subordinated  note,  $157 of  capitalized  interest  and $62 of accrued
         interest. In consideration of the debt forgiveness, the Partnership and
         a related party signed a network  affiliation  agreement  with one note
         holder and licensed certain programs from the other note holder.  Under
         the terms of the affiliation agreement, the Partnership and the related
         party must broadcast  network  programming  over the three-year term of
         the  network  affiliation  agreement.  Under the  terms of the  license
         agreement,  the related party must broadcast  certain programs over the
         one-year term of the license agreement.  Accordingly,  the $899 gain on
         the forgiveness of debt and related  interest  thereon was deferred and
         is being amortized over the term of the affiliation and program license
         agreements.  The  Partnership  amortized  $398 of the gain to income in
         1995.  The gain on  forgiveness  of debt is included in other income in
         the statement of operations.  The deferred gain is included in accounts
         payable and accrued expenses at December 31, 1995 and 1994.

         Interest  payments of $2,301  were made during the year ended  December
         31, 1995. No interest payments were made during the year ended December
         31, 1994.

                                        6
Kansas City TV 62 Limited Partnership
Notes to Financial Statements (in thousands)
- - --------------------------------------------------------------------------------

7.       Retirement Savings Plan

         The  Partnership  has adopted a retirement  savings plan under  Section
         401(K) of the Internal Revenue Code. This plan covers substantially all
         employees of the  Partnership  and  affiliated  partnerships,  who meet
         minimum age and service requirements,  and allows participants to defer
         a portion of their annual compensation on a pre-tax basis.  Partnership
         contributions to the plan may be made at the discretion of the Board of
         Directors.  No Partnership  contributions were authorized for the years
         ended December 31, 1995 and 1994.

8.       Commitments and Contingencies

         Employment Agreements 
         As a result of the  Partnership's  execution  of the  Option  Agreement
         (Note  9) in  1994,  the  Partnership  and the  general  partner,  ABRY
         Communications III, L.P., amended employment  agreements which entitled
         certain key  employees  to  appreciation  rights  payable upon either a
         change in control of the  Partnership or the payment of certain partner
         cash distributions. Previously, the employees vested in these rights at
         the rate of 20% per year from the date the rights were granted,  except
         that they vested fully if they were employees of the Partnership at the
         time  the  rights  became  payable.  Amounts  due to the  employees  in
         connection  with  those  rights  were  determined  by a  formula  which
         considers  appreciation  in the  value of the  Partnership.  Under  the
         amendments,  in the event  that  certain  key  employees  meet  certain
         employment  criteria,  such employees will receive a payment in lieu of
         the  appreciation  rights  discussed above. An accrual for compensation
         related to these  rights for $162 was  included in accrued  expenses at
         December 31, 1994.  These  obligations  were satisfied during 1995 and,
         accordingly,  no accrual has been made related to these  agreements  at
         December 31, 1995.

         Broadcast License Agreements
         Broadcast  rights acquired under license  agreements are recorded as an
         asset and a  corresponding  liability  at the  inception of the license
         period.  In addition to these broadcast  rights payable at December 31,
         1995, the  Partnership  has $1,417 of commitments to acquire  broadcast
         rights for which the license period has not commenced and, accordingly,
         for which no  liability  has been  recorded.  Future  minimum  payments
         arising from such  commitments  outstanding  at December  31, 1995,  of
         which $729 represents barter commitments, are as follows:

               1996            $     133
               1997                  356
               1998                  347
               1999                  187
               2000                   79
               Thereafter            315
                              ----------
                              $    1,417
           

                                        7
Kansas City TV 62 Limited Partnership
Notes to Financial Statements (in thousands)
- - --------------------------------------------------------------------------------

         Sports Rights Agreement 
         The Partnership  broadcasts  certain baseball games for the Kansas City
         Royals  Baseball  Corporation  (the  "Royals").  Under the terms of the
         broadcast   agreement  as  amended  during  1995,  the  Partnership  is
         obligated  to  pay  broadcast  fees  and  to  provide  advertising  and
         promotions  to the Royals  through  October 1, 1998.  In addition,  the
         Partnership  is obligated  to pay the Royals 75% of  operating  profits
         less than $500 and 50% of operating profits exceeding $500,  related to
         such broadcasts. Future minimum annual broadcast fee payments under the
         agreement, as amended, are as follows:

                   1996                 $     1,080
                   1997                       1,080
                   1998                       1,080
                                        -----------
                                        $     3,240
                                              

         Broadcast  fees are payable  quarterly  on July 1, October 1, January 1
         and April 1 of each year. In the event the  Partnership  terminates the
         agreement  before  October  1, 1996 or 1997,  the  Partnership  will be
         required  to pay  the  Royals  a  cancellation  fee of  $500  or  $250,
         respectively.  The payment of all  amounts due to the Royals  under the
         agreement have been guaranteed by the Partnership's general partner and
         BVC   Communications,   III,   Inc.,   the  general   partner  of  ABRY
         Communications  III, L.P. Charges to operations for such broadcast fees
         aggregated $1,350 and $2,728 in 1995 and 1994, respectively.

         Operating Leases             
         The  Partnership  leases its antenna site,  studio and other  operating
         equipment under  noncancellable  operating lease arrangements  expiring
         through 2010. Charges to operations for such leases aggregated $154 and
         $146 in 1995 and 1994,  respectively.  Future  minimum  lease  payments
         under these leases are as follows at December 31, 1995:

                   1996                 $       166
                   1997                         160
                   1998                         161
                   1999                         124
                   2000                         123
                   Thereafter                   237
                                       

           Total minimum lease payments $       971
                                        ===========

         During 1995, the antenna site was damaged and the Partnership  received
         an insurance settlement of $248 for the related business  interruption.
         The insurance  settlement net of amounts  relating to the repair of the
         antenna, are included in other income in the statement of operations.

                                        8
Kansas City TV 62 Limited Partnership Notes to Financial Statements (in
         thousands)
         -----------------------------------------------------------------------

9.       Option Agreement

         On May 24, 1994, the Partnership  entered into an agreement whereby the
         Partnership  granted a  third-party  an option to acquire the assets of
         the station for an amount equal to the lesser of outstanding debt as of
         the exercise date,  including accrued interest thereon,  or $9,000. The
         acquiring entity will assume all other  liabilities of the station.  In
         conjunction with the option agreement,  the Partnership entered into an
         agreement with the third-party  whereby the  Partnership  would pay the
         third-party a consulting  fee of $250 per year as long as the option is
         outstanding.  Charges to operations related to this agreement were $250
         in 1995 and $147 in 1994.  The  third-party  exercised  this  option in
         January  1996.  Accordingly,  all debt of the station is  classified as
         current at December 31, 1995, excluding debt for which an extension was
         granted, in accordance with the Partnership's loan agreements (Note 6).
         The transaction is subject to regulatory approval.

                                       10
Cincinnati TV 64
Limited Partnership
Financial Statements
December 31, 1995
Report of Independent Accountants

March 22, 1996

To the Partners of Cincinnati TV 64 Limited Partnership

In our opinion,  the  accompanying  balance sheet and the related  statements of
operations, of changes in partners' capital and of cash flows present fairly, in
all  material  respects,  the  financial  position of  Cincinnati  TV 64 Limited
Partnership at December 31, 1995 and 1994, and the results of its operations and
its cash flows for the years then ended in conformity  with  generally  accepted
accounting principles.  These financial statements are the responsibility of the
Partnership's  management;  our responsibility is to express an opinion on these
financial  statements  based on our  audits.  We  conducted  our audits of these
statements  in accordance  with  generally  accepted  auditing  standards  which
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,  assessing the  accounting  principles
used and  significant  estimates made by management,  and evaluating the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for the opinion expressed above.

                                       Price Waterhouse LLP
Cincinnati TV 64 Limited Partnership
Balance Sheet
- - --------------------------------------------------------------------------------
December 31,
                                                                           1995               1994
                                                                                (in thousands)
Assets

Current assets:
  Cash and cash equivalents                                              $       641     $       482
  Accounts receivable, less allowance for doubtful
   accounts of $86 and $64 in 1995 in 1994, respectively                       3,091           2,773
  Broadcast rights                                                             4,461           3,461
  Prepaid expenses                                                                15              21
                                                                         -----------      ---------- 

    Total current assets                                                       8,208           6,737

Property and equipment - net                                                   5,238           5,670

Broadcast rights                                                               4,339           3,061

Goodwill and other intangible assets                                           1,746           1,823
                                                                         -----------      ---------- 
                                                                         $    19,531     $    17,291
                                                                         ===========      ==========
Liabilities and Partners' Capital

Current liabilities:
  Current portion of long-term debt                                      $    11,883     $       700
  Subordinated note payable to Seller                                          7,446               -
  Accounts payable and accrued expenses                                        1,127           1,082
  Interest payable                                                               718             650
  Broadcast rights payable                                                     5,221           3,957
                                                                         -----------      ---------- 

    Total current liabilities                                                 26,395           6,389

Broadcast rights payable                                                       4,262           3,221

Long-term debt                                                                     -          14,083 

Subordinated note payable to Seller                                                -           7,089

Partners' capital                                                            (11,126)        (13,491)

Commitments and contingencies (Note 8) 
                                                                          -----------      ---------- 
                                                                         $    19,531     $    17,291
                                                                          ===========      ==========
The accompanying notes are an integral
                       part of these financial statements.
Cincinnati TV 64 Limited Partnership
Statement of Operations
- - --------------------------------------------------------------------------------

                                                               Year ended
                                                              December 31,
                                                         1995             1994
                                                             (in thousands)

 Revenues - net of agency and national
   representative commissions                       $    15,529     $    13,727

 Costs and expenses:
   Programming, production and engineering                1,002             954
   Amortization of broadcast rights                       4,971           5,416
   Sales, promotion and marketing                         2,394           2,813
   General and administrative                             1,629           2,059
   Depreciation and amortization                            662             841
   Interest expense, net                                  2,506           2,375
                                                    -----------     -----------
                                                                      
 Net income (loss)                                  $     2,365     $      (731)
                                                    ===========     ===========

                     The accompanying notes are an integral
                       part of these financial statements.
Cincinnati TV 64 Limited Partnership
Statement of Changes in Partners' Capital
For the Years Ended December 31, 1995 and 1994
- - -------------------------------------------------------------------------------
General            Limited
                                       Partner            Partner            Total
                                                      (in thousands)
Balance at December 31, 1993         $   (12,760)         $     -         $   (12,760)

Net loss for the year ended
  December 31, 1994                         (731)               -                (731)
                                      ----------          -------           ---------                                     
Balance at December 31, 1994             (13,491)               -             (13,491)

Net income for the year ended
  December 31, 1995                        2,365                -               2,365
                                      ----------          -------           ---------                                     

Balance at December 31, 1995         $   (11,126)         $     -         $   (11,126)
                                      ==========          =======           =========
The accompanying notes are an integral
                       part of these financial statements.
Cincinnati TV 64 Limited Partnership
Statement of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
- - -------------------------------------------------------------------------------
Year ended
                                                                                  December 31,
                                                                               1995          1994
                                                                                 (in thousands)

Cash flows from operating activities:
Net income (loss)                                                      $     2,365     $      (731)
  Adjustments to reconcile net income (loss) to net cash
    provided by operating activities:
    Depreciation                                                                 585             759
    Amortization of goodwill and other intangible assets                          77              82
    Amortization of broadcast rights, net of barter                            1,621           2,294
    Loss on disposal of property and equipment                                    37               -
    Accretion of subordinated debt principal                                     357             312
    Deferred interest expense on subordinated note payable                         -              87
    Increase in accounts receivable                                             (318)           (516)
    (Increase) decrease in prepaid expenses                                        6              (6)
    Increase (decrease) in accounts payable and accrued expenses                  45             (80)
    Increase in interest payable                                                  68             650
    Decrease in due to related parties                                             -             (72)
    Decrease in broadcast rights payable, net of barter                       (1,594)         (1,676)
                                                                          ----------      ----------

        Net cash provided by operating activities                              3,249           1,103
                                                                          ----------      ----------

Cash flows from investing activities:
  Additions to property and equipment                                           (190)            (18)
                                                                          ----------      ----------

Cash flows from financing activities:
  Net repayments under revolving credit facility                              (2,200)           (750)
  Repayments of long-term debt                                                  (700)              -
                                                                          ----------      ----------

        Net cash used for financing activities                                (2,900)           (750)
                                                                          ----------      ----------

Net increase in cash and cash equivalents                                        159             335

Cash and cash equivalents at beginning of year                                   482             147
                                                                          ----------      ----------

Cash and cash equivalents at end of year                                 $       641     $       482
                                                                          ==========      ==========

Supplemental schedule of noncash activities:
  Film contracts acquired/obligations assumed                            $     2,961     $     2,026
                                                                          ==========      ==========
The accompanying notes are an integral
                       part of these financial statements.
Cincinnati TV 64 Limited Partnership
Notes to Financial Statements (in thousands)
- - --------------------------------------------------------------------------------

1.       Organization

         Cincinnati TV 64 Limited  Partnership  (the  "Partnership")  is a joint
         venture of ABRY  Communications II, L.P., the general partner (Note 3),
         and Copley Place Capital Group,  the limited  partner.  The Partnership
         was  organized  under  the laws of the State of  Delaware  on August 1,
         1989.  The  Partnership  is  a  television   broadcaster   serving  the
         Cincinnati, Ohio area through station WSTR on UHF Channel 64.

2.       Summary of Significant Accounting Policies

         Allocation of  Partnership  Results to Partners'  Capital  Accounts 
         Net losses of the Partnership are allocated among the capital  accounts
         of the partners based on their relative partnership interests until the
         limited  partner's capital has been exhausted.  Thereafter,  net losses
         are allocated solely to the general partner. Net income is allocated in
         proportion to previously allocated net losses in reverse  chronological
         order.  Thereafter,  net income is allocated to partners based on their
         relative partnership interests, as defined in the agreement.

         Broadcast   Rights   
         Broadcast  rights  are  stated  at the  lower  of  unamortized  cost or
         estimated  net  realizable  value.  Broadcast  rights  and the  related
         liabilities  are recorded at the contract value when the license period
         begins  and the  right is  available  for  use.  Broadcast  rights  are
         amortized using the straight-line method over the number of showings or
         license period.  The net realizable value of broadcast rights for which
         the  Partnership is  contractually  committed is reviewed  annually and
         revisions to amortization  rates or write-downs to net realizable value
         may occur.  The current portion of broadcast  rights  represents  those
         rights  available  for broadcast  which  management  estimates  will be
         amortized in the succeeding year.

         Property and Equipment
         Property and  equipment are recorded at cost and  depreciated  over the
         estimated  useful lives of the assets on a straight-line  basis.  Major
         renewals and  betterments  are  capitalized  and  ordinary  repairs and
         maintenance are charged to expense in the period incurred.

         Goodwill and Other Intangible Assets
         Goodwill  aggregating  $1,991  is  amortized  over 40 years  using  the
         straight-line  method.  Legal and accounting  fees  associated with the
         acquisition of loans  aggregating  $240 are  capitalized  and amortized
         over the term of the related debt.  Organization  costs aggregating $28
         were fully  amortized at December 31,  1995.  Accumulated  amortization
         aggregated $485 and $436 at December 31, 1995 and 1994, respectively.

         Barter Transactions
         Revenue from barter  transactions is recognized when advertisements are
         broadcast and services or  merchandise  received are charged to expense
         when  received  or  used.   Revenues  arising  from  barter  and  trade
         transactions   aggregated   $3,578   and   $3,410  in  1995  and  1994,
         respectively.

                                        1
Cincinnati TV 64 Limited Partnership
Notes to Financial Statements (in thousands)
- - -------------------------------------------------------------------------------

         Income Taxes
         The  financial  statements  of  the  Partnership  do  not  include  any
         provision for federal or state income taxes.  All  Partnership  income,
         losses,  tax credits and deductions  are allocated  among the partners.
         Each  partner  is  responsible  to  report  its  distributed  share  of
         Partnership results in its federal and state income tax returns.

         Cash and Cash Equivalents
         The  Partnership  considers  all highly liquid  investment  instruments
         purchased  with  a  maturity  of  three  months  or  less  to  be  cash
         equivalents.  The  Partnership  invests its excess  cash in  short-term
         government  securities  that are  subject to minimal  market and credit
         risk. At December 31, 1995 and 1994, the Partnership's cash equivalents
         include  $500  and  $400,   respectively,   of  short-term   government
         securities.    These    securities,    which    are    classified    as
         available-for-sale,  are recorded at market value,  which  approximates
         cost.

         Effective  January  1,  1994,  the  Partnership  adopted  Statement  of
         Financial  Accounting  Standards  No. 115, (FAS 115),  "Accounting  for
         Certain  Investments  in  Debt  and  Equity  Securities".   Under  this
         standard,  the  Partnership is required to classify its  investments in
         debt  and  equity   securities  into  one  or  more  of  the  following
         categories:  held-to-maturity,  trading or available for sale. Adoption
         of this standard had no impact on the Partnership's  financial position
         or results of operations at the date of adoption.

         Concentration of Credit Risk
         Financial  instruments  which  potentially  expose the Partnership to a
         concentration  of  credit  risk  include  cash,  cash  equivalents  and
         accounts receivable. A significant amount of the Partnership's cash and
         cash equivalents are held by one financial  institution at December 31,
         1995. The  Partnership  does not believe that such deposits are subject
         to any unusual  credit risk  beyond the normal  credit risk  associated
         with operating its business.  The  Partnership  maintains  reserves for
         potential  credit losses and such losses,  in the  aggregate,  have not
         historically exceeded management's expectations.

         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.

3.       Related Party Transactions

         Prior  to  1995,  ABRY   Communications   II,  L.P.   provided  certain
         administrative and support services to the Partnership for which it was
         paid a management fee. Management fees charged to operations aggregated
         $319 in 1994. No management fees were charged to the Partnership during
         1995.

                                        2
Cincinnati TV 64 Limited Partnership
Notes to Financial Statements (in thousands)
- - -------------------------------------------------------------------------------

         As of January 1995, the station became a network affiliate and licensed
         certain   programs  in   conjunction   with  the   forgiveness  of  the
         subordinated  debt of a related party by the network and licensor.  The
         term of the  affiliation  agreement  and the program  licenses is three
         years and one year,  respectively.  These  financial  statements do not
         include any amounts relating to such transaction.

4.       Property and Equipment

         Property and equipment consists of the following:
Estimated
                                                      useful life                       December 31,
                                                        (years)                     1995          1994
Land and improvements                              -                    $      261    $      261
         Buildings                                         30                         1,719         1,719
         Transmission tower                                30                         3,226         3,226
         Transmission equipment                           7-8                         1,832         1,919
         Studio equipment                                 5-7                         1,079         1,005
         Vehicles, office equipment and furniture         5-7                           240           211
                                                                                  ---------     ---------

                                                                                      8,357         8,341
         Less - accumulated depreciation
           and amortization                                                           3,119         2,671
                                                                                  ---------     ---------
                                                                                 $    5,238    $    5,670
                                                                                  =========     =========
5.       Broadcast Rights

         The Partnership purchases the right to broadcast programs through fixed
         term license agreements. Broadcast rights consist of the following:
December 31,
                                                                                    1995          1994
Aggregate cost                                                          $   15,370    $    14,288
         Less - accumulated amortization                                              6,570          7,766
                                                                                  ---------      ---------

                                                                                      8,800          6,522

         Less - current portion                                                       4,461          3,461
                                                                                  ---------      ---------

                                                                                 $    4,339    $     3,061
                                                                                  =========     ==========
3
Cincinnati TV 64 Limited Partnership
Notes to Financial Statements (in thousands)
- - -------------------------------------------------------------------------------

         Contractual  obligations incurred in connection with the acquisition of
         broadcast  rights are $9,483  including  $3,918 of barter  obligations.
         Future payments in connection with these contractual obligations are as
         follows at December 31, 1995:

         1996                                          $  5,221
         1997                                             2,502
         1998                                             1,340
         1999                                               381
         Thereafter                                          39
                                                       --------
                                                       $  9,483
                                                       ========

         The  Partnership  has  estimated  the fair  value of these  contractual
         obligations at approximately $8,591 and $6,478 at December 31, 1995 and
         1994,  respectively,  based on  future  cash  flows  discounted  at the
         Partnership's current borrowing rate.

6.       Debt

         Long-term debt consists of the following:

                                                        December 31,
                                                     1995          1994

         Term loan                               $  6,650        $  6,850
         Revolving credit facility                  4,772           6,972
         Supplemental loan                            461             961
                                                 --------        --------

                                                   11,883          14,783

         Less - current portion                    11,883             700
                                                 --------        --------

                                                 $      -        $ 14,083
                                                 ========        ========

         The  principal  amount  of the  term  loan  is  payable  in 36  monthly
         installments  of $17  which  commenced  January  1,  1995  and a  final
         installment  in an  amount  equal  to the  then  outstanding  principal
         balance is due January 1, 1998.

         The  Partnership  may  borrow up to  $8,350  under a  revolving  credit
         facility (the "revolver")  through December 31, 1995;  thereafter,  the
         credit  facility and related  borrowings are reduced on a monthly basis
         until no credit facility is available at January 1, 1998.

         The term loan,  revolver and supplemental  loan bear interest,  payable
         monthly, at the base rate, computed by taking the higher of the Federal
         Funds rate plus 1% or Prime (as defined in the agreement), plus 2.5%.

                                        4
Cincinnati TV 64 Limited Partnership
Notes to Financial Statements (in thousands)
- - -------------------------------------------------------------------------------

         The  Partnership  is charged a fee for the available  revolving  credit
         commitment  at a  rate  of  1/2%  per  annum,  payable  quarterly.  The
         borrowings are secured by substantially all of the Partnership's assets
         and require the Partnership to comply with certain specified  financial
         ratios and  provisions.  At December  31,  1995,  all long term debt is
         classified  as a  current  liability  as a  result  of a  third-party's
         decision to exercise the option agreement (Note 9).

         At December 31, 1995 and 1994,  the current  portion of long-term  debt
         includes principal of $750 and $500, respectively, due by April 1, 1996
         and 1995 in  accordance  with the  acceleration  provisions of the loan
         agreement.   The  accelerated  principal  payments  were  made  by  the
         Partnership in April 1996 and January 1995, respectively.

         In addition to the  scheduled  principal  and  interest  payments,  the
         lender may be  entitled  to  contingent  interest,  payable  upon early
         repayment of the loans, a change in control of the  Partnership or upon
         the occurrence of certain other events as defined in the agreement. The
         amount of  contingent  interest  which will be due is  determined  by a
         formula which considers  appreciation in the value of the  Partnership.
         Based upon  management's  estimate of  appreciation in the value of the
         Partnership,  no accrual for  contingent  interest has been recorded at
         December 31, 1995 and 1994.

         The principal amount of the subordinated  note payable to Seller is due
         on January 1, 1998.  Interest on the outstanding  principal  accrues at
         the  rate of 8.5%  per  annum.  Interest  accrued  and  unpaid  through
         December  31,  1993 is due and  payable on  January  1, 1998.  Interest
         accrued  after  December 31, 1993 is payable  annually.  For  financial
         reporting  purposes,  however,  interest  on  the  note  accrues  at an
         implicit  rate of  14.5%  per  annum  and the  note's  original  stated
         principal  of $6 million  has been  discounted  to reflect  this yield.
         Accordingly,  interest  accrued  through  December 31, 1995 and 1994 of
         $2,877  and  $2,790,  respectively,  has been  added to the  discounted
         principal amount of the note. In January 1996, a third-party  exercised
         its option to acquire the assets of the station (Note 9).  Accordingly,
         the note has been  classified  as a current  liability  at December 31,
         1995.

         Interest  paid  during the years ended  December  31, 1995 and 1994 was
         $1,603 and $1,348, respectively.

7.       Retirement Savings Plan

         The  Partnership  has adopted a retirement  savings plan under  Section
         401(K) of the Internal Revenue Code. This plan covers substantially all
         employees  of the  Partnership  and  affiliated  partnerships  who meet
         minimum age and service requirements and allows participants to defer a
         portion of their annual  compensation  on a pre-tax basis.  Partnership
         contributions to the plan may be made at the discretion of the Board of
         Directors.  No Partnership  contributions were authorized for the years
         ended December 31, 1995 and 1994.

                                        5
Cincinnati TV 64 Limited Partnership
Notes to Financial Statements (in thousands)
- - --------------------------------------------------------------------------------

8.       Commitments and Contingencies

         Employment Agreement
         As a result of the  Partnership's  execution  of the  Option  Agreement
         (Note  9) in  1994,  the  Partnership  and the  general  partner,  ABRY
         Communications II, L.P., amended an employment agreement which entitled
         certain key  employees  to  appreciation  rights  payable upon either a
         change in control of the  Partnership or the payment of certain partner
         cash distributions. Previously, the employees vested in these rights at
         the rate of 20% per year from the date the rights were granted,  except
         that they vested fully at the time the rights became  payable.  Amounts
         due to the employees in connection with those rights were determined by
         a formula which considers appreciation in the value of the Partnership.
         Under the amendment,  such employees  received  payments in lieu of the
         appreciation rights discussed above.  Compensation  expense of $862 was
         recognized  for  compensation  related to these rights  during the year
         ended December 31, 1994. An accrual for $700 for  compensation  related
         to these  rights  which  were paid in January  1995,  was  included  in
         accrued expenses at December 31, 1994.

         Broadcast License Agreements
         Broadcast  rights acquired under license  agreements are recorded as an
         asset and a  corresponding  liability  at the  inception of the license
         period.  In addition to these broadcast  rights payable at December 31,
         1995, the  Partnership  has $7,769 of commitments to acquire  broadcast
         rights for which the license period has not commenced and, accordingly,
         for which no  liability  has been  recorded.  Future  minimum  payments
         arising from such  commitments  outstanding  at December  31, 1995,  of
         which $4,232 represents barter commitments, are as follows:

         1996                                       $       903
         1997                                             2,221
         1998                                             1,918
         1999                                             1,517
         2000                                             1,210
                                                      ---------

                                                    $     7,769
                                                      =========

         Programming
         Under the  terms of an  agreement  executed  in  September  1995 with a
         third-party,  the  Partnership is committed to make  available  certain
         time periods for  broadcasting  Cincinnati  Reds baseball  games during
         each of the 1996-1998 major league baseball seasons,  in exchange for a
         fixed  fee per game  and  other  defined  compensation.  The  agreement
         expires in December  1998 or the  earliest  date after April 1, 1996 on
         which  the  third-party  no longer  has the  rights  to  telecast  such
         baseball  games.  In 1995,  the  Partnership  generated  revenue of $25
         related to this agreement.

                                        6
Cincinnati TV 64 Limited Partnership
Notes to Financial Statements (in thousands)
- - -------------------------------------------------------------------------------

         Operating Leases
                   
         The Partnership  assumed a  noncancellable  operating lease under which
         property  at its  transmission  antenna  site is leased  through  1998.
         Charges to operations for this lease  aggregated $68 in 1995 and $71 in
         1994. As of December 31, 1995,  annual minimum lease payments under the
         property lease are $61 through 1997.

9.       Option Agreement

         On May 24, 1994, the Partnership  entered into an agreement whereby the
         Partnership  granted a  third-party  an option to acquire the assets of
         the station for an amount equal to the lesser of the  outstanding  debt
         as of  the  exercise  date,  including  accrued  interest  thereon,  or
         $11,000.  The acquiring entity will assume all other liabilities of the
         station.  In conjunction  with the option  agreement,  the  Partnership
         entered into an agreement with the third-party  whereby the Partnership
         would pay the  third-party a consulting fee of $250 per year as long as
         the  option is  outstanding.  Charges  to  operations  related  to this
         agreement were $250 in 1995 and $127 in 1994.

         The third-party  exercised this option in January 1996. The transaction
         is subject to regulatory approval.  As a result of the exercise of this
         option,  all debt of the station is  classified  as current at December
         31, 1995, in accordance with the  Partnership's  loan agreements  (Note
         6).

                                        7
RIVER CITY BROADCASTING
                         (RIVER CITY BROADCASTING, L.P.
                       AND ITS MAJORITY-OWNED BUSINESSES)

                        Consolidated Financial Statements
                                  and Schedules

                           December 31, 1994 and 1995

                   (With Independent Auditors' Report Thereon)
Independent Auditors' Report
                          ----------------------------

The Partners
River City Broadcasting, L.P.:

We have  audited  the  accompanying  consolidated  balance  sheets of River City
Broadcasting, L.P. and its majority-owned businesses as of December 31, 1994 and
1995, and the related consolidated  statements of operations,  partners' capital
(deficit),  and cash flows for each of the years in the three-year  period ended
December  31,   1995.   These   consolidated   financial   statements   are  the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We  conducted  our  audits  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 audits provide 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  River  City
Broadcasting, L.P. and its majority-owned businesses as of December 31, 1994 and
1995,  and the results of their  operations and their cash flows for each of the
years in the  three-year  period ended  December 31, 1995,  in  conformity  with
generally accepted accounting principles.

Our audits were made for the  purpose of forming an opinion on the  consolidated
financial statements taken as a whole. The consolidating information included in
Schedules  1 and 2 is  presented  for  purposes  of  additional  analysis of the
consolidated financial statements rather than to present the financial position,
results of operations,  and cash flows of the individual  broadcast  properties.
The  consolidating  information  has been  subjected to the auditing  procedures
applied in the  audits of the  consolidated  financial  statements  and,  in our
opinion,  is  fairly  stated  in  all  material  respects  in  relation  to  the
consolidated financial statements taken as a whole.

                                        KPMG Peat Marwick LLP

February 23, 1996
RIVER CITY BROADCASTING

                           Consolidated Balance Sheets

                           December 31, 1994 and 1995
Assets                               1994                  1995
                                       ------                               ----                  ----

Current assets:
   Cash and cash equivalents                                            $  2,444,738          $  3,009,949
   Receivables, less allowance for doubtful
     accounts of approximately $751,000 in 1994
     and $1,011,000 in 1995                                               38,380,927            55,700,972
   Current portion of program rights                                      18,721,662            23,275,767
   Prepaid and other current assets                                        3,364,193             4,456,352
                                                                          ----------            ----------
                    Total current assets                                  62,911,520            86,443,040
Property and equipment, net                                               83,518,363            96,269,944
Program rights, less current portion                                      19,255,197            19,650,217
Intangible assets, net                                                   239,689,766           350,878,357
Other noncurrent assets                                                   11,301,757            20,588,525
                                                                         -----------           -----------
                    Total assets                                       $ 416,676,603         $ 573,830,083
                                                                         ===========           ===========

                          Liabilities and Partners' Capital
                          ---------------------------------                         

Current liabilities:
   Current installments of long-term debt                                      $  -          $  38,587,000
   Current installments of program rights payable                         26,178,686            30,071,545
   Accrued expenses 7,376,801                                             12,462,416
   Accounts payable 862,162                                                6,924,246
   Distributions payable                                                   2,274,613                    -
                                                                          ----------           -----------
                    Total current liabilities                             36,692,262            88,045,207
Long-term debt, less current installments                                309,550,000           404,413,000
Program rights payable, less current installments                         17,136,852            27,579,601
Deferred compensation                                                      5,260,477             5,516,833
                                                                          ----------            ----------
                    Total liabilities                                    368,639,591           525,554,641

Commitments and contingencies

Partners' capital;  19,386 general partner units and 126,047
   and 148,651 limited partner units outstanding at 
   December 31, 1994 and 1995, respectively                               48,037,012            48,275,442
                                                                          -----------           ----------
                    Total liabilities an
                       partners' capital                               $ 416,676,603         $ 573,830,083
                                                                         ===========           ===========
See accompanying  notes to consolidated  financial statements.
RIVER CITY BROADCASTING

                      Consolidated Statements of Operations

                  Years ended December 31, 1993, 1994, and 1995
1993                 1994                 1995
                                                                   ----                 ----                 ----

Net operating revenues:
   Local time sales                                             $ 34,377,284         $  52,867,854          $ 107,591,097
   National time sales                                            28,718,245            42,950,399             69,945,187
   Other revenues                                                  3,119,122             4,567,058             10,653,860
                                                                  ----------            ----------            -----------
              Total operating revenues                            66,214,651           100,385,311            188,190,144
                                                                  ----------           -----------            -----------

Operating costs:
   Station operating expenses                                     15,857,926            26,516,623             62,040,690
   Selling expenses                                               10,889,632            11,977,659             25,973,660
   Program amortization expense                                   18,799,127            16,479,271             33,452,252
   Corporate expenses                                              1,872,983             2,498,181              4,482,364
   Depreciation                                                    6,287,274             8,259,487             11,523,526
   Amortization of intangible assets                               6,094,026            11,228,316             27,649,173
                                                                  ----------           -----------            -----------
              Total operating costs                               59,800,968            76,959,537            165,121,665
                                                                  ----------           -----------            -----------

              Operating income                                     6,413,683            23,425,774             23,068,479
                                                                  ----------           -----------            -----------

Other income (expense):
   Interest expense                                               (5,341,346)          (11,033,149)           (33,087,633)
   Amortization of deferred financing
     costs and debt discount                                      (1,573,262)           (1,066,296)            (1,434,904)
   Interest income                                                   177,656               333,673              1,715,104
   Other                                                             (45,227)               21,720                (22,616)
                                                                    --------               -------               --------
                                                                  (6,782,179)          (11,744,052)           (32,830,049)
                                                                  ----------           -----------            -----------
              Income (loss) before
                 extraordinary item                                 (368,496)           11,681,722             (9,761,570)

Extraordinary item - early extin-
   guishment of debt                                              (6,841,084)           (3,348,506)                    -
                                                                  ----------           -----------            -----------
              Net earnings (loss)                               $ (7,209,580)         $  8,333,216          $  (9,761,570)
                                                                  ==========            ==========            ===========
See accompanying  notes to consolidated  financial statements.
RIVER CITY BROADCASTING

             Consolidated Statements of Partners' Capital (Deficit)

                  Years ended December 31, 1993, 1994, and 1995
General                Limited
                                                                  partner                partners               Total
                                                                  -------                --------               ------
Balance at December 31, 1992                                   $ (6,936,635)          $  -                  $ (6,936,635)

Partners' capital contributions                                          -              76,500,000             76,500,000

Conversion of equity debentures                                          -               8,191,527              8,191,527

Redemption of partners' capital                                 (12,986,107)           (15,580,796)           (28,566,903)

Net loss                                                           (973,697)            (6,235,883)            (7,209,580)
                                                                  ---------             ----------             ----------

Balance at December 31, 1993                                    (20,896,439)            62,874,848             41,978,409

Distributions -                                                                         (2,274,613)            (2,274,613)

Net earnings                                                      8,333,216                      -              8,333,216
                                                                 ----------             ----------             ----------

Balance at December 31, 1994                                    (12,563,223)            60,600,235             48,037,012

Issuance of limited partner interest                                     -              10,000,000             10,000,000

Net loss                                                                 -              (9,761,570)            (9,761,570)
                                                                 ----------             ----------             ----------

Balance at December 31, 1995                                   $(12,563,223)          $ 60,838,665           $ 48,275,442
                                                                 ==========             ==========             ==========
See accompanying  notes to consolidated  financial statements.
RIVER CITY BROADCASTING

                      Consolidated Statements of Cash Flows

                  Years ended December 31, 1993, 1994, and 1995
1993                   1994                  1995
                                                                            ----                   ----                  ----
Cash flows from operating activities:
   Net earnings (loss)                                                   $ (7,209,580)          $  8,333,216         $  (9,761,570)
   Extraordinary item (note 12)                                             6,841,084              2,164,006                -
   Interest expense on conversion of debenture
     to equity                                                                101,327                -                      -
   Adjustments to reconcile net earnings
     (loss) to net cash provided by operating
     activities:
       Program amortization expense                                        18,799,127             16,479,271            33,452,252
       Depreciation                                                         6,287,274              8,259,487            11,523,526
       Loss on disposition of property and
         equipment                                                             47,416                -                     193,249
       Amortization of deferred financing    
         costs and debt discount                                            1,573,262              1,066,296             1,434,904
       Amortization of intangible assets                                    6,094,026             11,228,316            27,649,173
       Retirement of program rights payable                               (15,773,065)           (13,892,127)          (24,065,769)
       Change in assets and liabilities, net
         of effects from purchase of broad-
         cast properties:
           Increase in receivables, net                                    (1,816,872)            (7,940,420)          (17,320,045)
           Increase in prepaid and other current
             assets                                                          (133,109)              (472,744)             (763,768)
           Increase in other noncurrent assets                               (247,492)              (921,957)           (9,286,768)
           Increase (decrease) in accounts payable
             and accrued expenses                                          (1,087,119)              (644,978)           11,147,699
           Increase in deferred compensation                                1,161,000              3,236,477               256,356
                                                                           ----------             ----------              --------
           Net cash provided by operating
                  activities                                               14,637,279             26,894,843            24,459,239
                                                                           ----------            -----------           -----------
Cash flows from investing activities,
   net of effects from purchase of broad-
   cast properties:
     Costs to acquire broadcast properties                                      -               (175,397,321)         (137,884,857)
     Additions to property and equipment                                    1,080,171)            (5,304,587)          (11,286,967)
     Additions to intangible assets                                        (1,329,361)            (2,210,655)           (2,682,454)
     Funding of local marketing agreement                                       -                (11,000,000)               -
                                                                             --------           ------------           ------------
               Net cash used in investing
               activities                                                   2,409,532)          (193,912,563)         (151,854,278)
                                                                          -----------            -----------           -----------
Cash flows from financing activities:
   Retirement of long-term debt                                           (58,554,497)          (138,360,116)           (1,550,000)
   Proceeds from term loan                                                      -                120,000,000           110,000,000
   Net borrowings under revolving loan commitment                               -                188,000,000            25,000,000
   Redemption of partnership interest                                     (28,566,903)                 -                     -
   Proceeds from partners' capital
     contributions                                                         76,500,000                  -                     -
   Distributions paid                                                           -                      -                (2,274,613)
   Additions to deferred financing fees                                      (165,174)            (4,450,344)           (3,215,137)
                                                                            ---------            -----------           -----------
               Net cash provided by (used in)
                  financing activities                                    (10,786,574)           165,189,540           127,960,250
                                                                           ----------            -----------           -----------
               Net increase (decrease) in cash
                  and cash equivalents                                      1,441,173             (1,828,180)              565,211
Cash and cash equivalents, beginning of year                                2,831,745              4,272,918             2,444,738
                                                                           ----------             ----------            ----------
Cash and cash equivalents, end of year                                   $  4,272,918           $  2,444,738          $  3,009,949
                                                                           ==========             ==========            ==========
See  accompanying  notes to consolidated financial statements.
RIVER CITY BROADCASTING

                   Notes to Consolidated Financial Statements

                           December 31, 1994 and 1995

                         
(1)    Business Description
       --------------------

       River  City   Broadcasting,   L.P.   (River  City   Broadcasting  or  the
          Partnership) is a limited  partnership  formed to purchase and operate
          broadcast  properties and related activities.  River City Broadcasting
          has acquired nine broadcast television stations and 24 radio stations.
          The Partnership  also operates one television  station and three radio
          stations  under  local  marketing   agreements   (LMAs).   River  City
          Broadcasting  is managed by its general  partner  subject to terms and
          conditions  specified in the Second Amended and Restated  Agreement of
          Limited Partnership (Limited Partnership Agreement).

       On September   3,  1993,   River  City   Broadcasting   entered   into  a
          Reorganization  Agreement,   whereby  additional  equity  funding  was
          injected into the Partnership,  and certain  partners'  interests were
          redeemed (the Recapitalization).

(2)    Summary of Significant Accounting Policies
       ------------------------------------------

       Principles of Consolidation
       ----------------------------
       The accompanying  consolidated  financial statements include the accounts
          of River City Broadcasting and its majority-owned businesses.

       Management's Use of Estimates
       -----------------------------
       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  disclosures 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.

       Program Rights
       --------------
       Program rights and related liabilities are recorded at cost when the film
          is  available  for  broadcasting.  Agreements  define the lives of the
          rights  and  frequently  the number of  showings.  The cost of program
          rights is charged against earnings using straight-line and accelerated
          methods.

       Program  rights,  representing  the cost of those  rights  available  for
          broadcasting  and expected to be broadcast  in the  succeeding  fiscal
          year,  are  shown as a  current  asset.  Program  rights  payable  are
          classified as current based on those payments of the various contracts
          contractually due within the succeeding fiscal year.

       Program  rights  are  stated  at the  lower  of  cost  or  estimated  net
          realizable value.

                                                                     (Continued)
2

                            RIVER CITY BROADCASTING

                   Notes to Consolidated Financial Statements

       Property and Equipment
       ----------------------
       Property and equipment is recorded at cost.  Maintenance  and repairs are
          charged against earnings, while improvements which extend useful lives
          are capitalized.

       Depreciation expense is computed using primarily the straight-line method
          over the estimated useful lives of the related assets.

       Intangible Assets
       -----------------
       Intangible assets consist principally of network affiliation  agreements,
          broadcasting  licenses,  covenants not to compete,  deferred financing
          costs, and going-concern values. Amortization expense is computed on a
          straight-line  basis over the  estimated  lives of the  assets,  which
          generally range from 5-20 years.

       The Partnership assesses the recoverability of these intangible assets by
          determining  whether the  amortization of the remaining  balances over
          their remaining lives can be recovered through projected  undiscounted
          future results. The amount of impairment, if any, is measured based on
          projected  discounted  future results using a discount rate reflecting
          the Company's  average cost of funds.  The methodology that management
          used to  project  results  of  operations  forward  was  based  on the
          historical trend line of actual results.

       Interest Rate Risk Management
       -----------------------------
       The Partnership uses a combination  of financial  instruments  as part of
          its program to manage  interest  rate risk on its floating  rate debt.
          Such investments are considered  hedges and,  accordingly,  changes in
          their market value,  representing the cost to close the  Partnership's
          position in these  financial  instruments,  are not  reflected  in the
          consolidated financial statements (see note 7).

       Deferred Compensation
       ---------------------
       River City Broadcasting has entered into deferred compensation agreements
          with members of  management  at certain of the  broadcast  properties.
          Deferred  compensation expense is recorded over the period of employee
          service based on terms as contained in the respective agreements.

       In addition to the deferred compensation  agreements described above, the
          Partnership  has granted  Phantom Warrant Units to certain key members
          of management.  These Phantom Warrant Units were granted pursuant to a
          Phantom  Unit Plan (the  Plan).  Under Plan  provisions,  the  Phantom
          Warrant Unit holders will receive  performance  compensation  based on
          the  appreciation in value of the  Partnership.  This  compensation is
          recognized as incurred based on a six-year vesting period.

       Warrant Units
       -------------
       Concurrently with the Recapitalization,  warrant units were issued to two
          key members of management,  who are also the sole  shareholders of the
          general  partner  of River  City  Broadcasting.  These  warrant  units
          provide   for,   among  other  things  as  described  in  the  Limited
          Partnership Agreement, participation in Partnership profits and losses
          and  equity  appreciation  on a basis  substantially  similar to a 10%
          partnership interest.

                                                                     (Continued)
3

                            RIVER CITY BROADCASTING

                   Notes to Consolidated Financial Statements

       Income Taxes and Distributions for Taxes
       ----------------------------------------
       No income tax provision has been included in the  consolidated  financial
          statements  since profit and loss in the  Partnership  and the related
          tax attributes  are deemed to be distributed  to, and to be reportable
          by, the partners of the  Partnership  on their  respective  income tax
          returns. Accordingly, based on the tax attributes to be passed through
          to the  partners,  the  Partnership  records  a  distribution  payable
          calculated pursuant to the Limited  Partnership  Agreement for amounts
          expected to be  distributed  to the partners for their  estimated  tax
          liability.

       Limited Partnership Agreement
       -----------------------------
       The allocation of  Partnership  profits and losses,  cash  distributions,
          voting rights,  certain equity preference and appreciation rights, and
          other matters are defined in the Limited Partnership Agreement.  These
          items,  except voting rights, are principally  determined based on the
          tax basis of the respective partners.

       Revenues
       --------
       Broadcasting  revenues are derived  principally  from the sale of program
          time  and  spot  announcements  to  local,   regional,   and  national
          advertisers.  Advertising  revenue is  recognized in the period during
          which the program time and spot announcements are broadcast.

       Barter Transaction
       ------------------
       Barter  transactions  are  recorded at the  estimated  fair values of the
          products and services  received.  Barter  revenues are recognized when
          commercials are broadcast. The assets or services received in exchange
          for broadcast time are recorded when received or used.

       Consolidated Statements of Cash Flows
       -------------------------------------
       For purposes  of  the   consolidated   statements   of  cash  flows,  the
          Partnership  considers all cash investments with an original  maturity
          of three months or less to be cash equivalents.

       Reclassification
       ----------------
       Certain 1993 and 1994 balances have been reclassified to conform with the
          1995 presentation.

(3)    Acquisition of Broadcast Properties
       -----------------------------------
       In September  1994, the Partnership  acquired  certain assets and assumed
          certain liabilities of Continental Broadcasting Ltd. (Continental) for
          total cash consideration of approximately $175,397,000.  In connection
          with the acquisition,  River City Broadcasting assumed $120,000,000 of
          senior  subordinated  notes and related  accrued  interest.  Broadcast
          properties   acquired  include  WSYX-TV  (Columbus,   Ohio),   KOVR-TV
          (Sacramento,   California),  and  WLOS-TV/WFBC-TV  (formerly  WAXA-TV)
          (Asheville, North Carolina, and Anderson, South Carolina).

                                                                     (Continued)
4

                            RIVER CITY BROADCASTING

                   Notes to Consolidated Financial Statements

       This acquisition is a purchase transaction and,  accordingly,  the assets
          acquired and liabilities assumed have been recorded at their estimated
          fair values as of the  acquisition  date, as determined by independent
          appraisal.  The  allocation  of the purchase  price is  summarized  as
          follows:

                Intangible assets                                 $ 221,995,342
                Property and equipment                               62,285,634
                Accounts receivable 13,313,252
                Program rights                                       10,471,346
                Prepaid and other current assets                        164,898
                Program rights payable                               (7,752,322)
                Accounts payable and accrued expenses                (2,672,495)
                                                                      ----------
                                          Total purchase price      297,805,655
                Assumption of debt, plus related
                   accrued interest (122,408,334)
                                    -------------
                                                                  $ 175,397,321
                                                                  =============

       In July  1995,  the  Partnership  acquired  certain  assets of  Keymarket
          Communication and affiliated companies (Keymarket),  as defined in the
          underlying Asset Purchase  Agreement,  for total cash consideration of
          approximately  $131,000,000  and $10,000,000 of limited partner units.
          Broadcast  properties acquired consist of 19 radio stations within the
          Los Angeles, California, Nashville, Tennessee, New Orleans, Louisiana,
          Memphis,  Tennessee,  Buffalo,  New  York  and  Wilkes-Barre/Scranton,
          Pennsylvania  markets.  Additionally,  the  Partnership  acquired  the
          rights to operate three radio stations under LMAs.

       In October 1995,  the  Partnership  acquired a 60% interest in Twin Peaks
          Radio   (Twin   Peaks)   through  its   acquisition   of  Sandia  Peak
          Broadcasters,  Inc. As discussed in note 17, the Partnership  acquired
          the remaining  40% interest in Twin Peaks in January 1996.  Twin Peaks
          is a partnership  which owns and operates  three radio stations in the
          Albuquerque,  New Mexico area. Total cash  consideration  paid in 1995
          amounted to approximately $3,200,000.

       In November 1995, the Partnership  acquired  certain assets of WVRV-FM in
          St.  Louis,   Missouri,   for  cash   consideration  of  approximately
          $3,600,000.  River City Broadcasting  previously operated this station
          under an LMA.

       The 1995 acquisitions are purchase  transactions  and,  accordingly,  the
          assets  acquired and  liabilities  assumed have been recorded at their
          estimated  fair values as of the  acquisition  date,  as determined by
          independent  appraisal.  The  allocation  of  the  purchase  price  is
          summarized as follows:

                  Intangible assets $ 134,375,077
                  Property and equipment                             13,181,389
                  Prepaid and other current
                     assets                                             328,391
                                                                      ---------
                                         Total purchase price       147,884,857
                  Issuance of limited partner units                 (10,000,000)
                                                                     -----------
                                                                  $ 137,884,857
                                                                  ==============

                                                                     (Continued)
5

                            RIVER CITY BROADCASTING

                   Notes to Consolidated Financial Statements

       The following unaudited   supplemental  pro  forma  information  presents
          revenues,  income (loss) before  extraordinary  item, and net earnings
          (loss) as though  River City  Broadcasting  had  consummated  the 1995
          acquisitions on January 1, 1994 (1994) and January 1, 1995 (1995):
1994                 1995
                                                      ----                 ----
Revenues                             $ 148,492,000         $ 213,749,000
                                                   ===========           ===========

            Loss before extraordinary item       $ (22,907,000)        $ (17,232,000)
                                                   ===========           ===========

            Net loss                             $ (26,255,000)        $ (17,232,000)
                                                   ===========           ===========
(4)    Intangible Assets
       -----------------
       A summary of intangible assets follows:

                                                                                        Asset
                                                                                       lives in
                                                     1994                  1995         years
                                                     ----                  ----         -----
Network affiliation agreements, net
           of amortization of approximately
           $3,077,000 and $9,724,000 in 1994
           and 1995, respectively                $ 143,950,815         $ 137,813,988       20
        Broadcasting licenses, net of amortiza-
           tion of approximately $1,506,000 and
           $4,605,000 in 1994 and 1995, respec-
           tively                                   47,529,039           114,567,600       20
        Deferred financing costs, net of amor-
           tization of approximately $382,000
           and $1,817,000 in 1994 and 1995,
           respectively                              4,068,376             7,052,734        8
        Covenants not to compete, net of amor-
           tization of approximately $5,900,000
           and $11,410,000 in 1994 and 1995,
           respectively                             18,100,004            12,669,639        5
        Going-concern value, net of amortiza-
           tion of approximately $636,000 and
           $1,168,000 in 1994 and 1995, respec-
           tively                                    5,554,642             8,502,935       20
        Other intangible assets, net of amorti-
           zation of approximately $16,754,000
           and $27,118,000 in 1994 and 1995,
           respectively                             20,072,564            70,271,461      2-20
                                                   -----------           -----------      ====
                                                 $ 239,275,440         $ 350,878,357
                                                   ===========           ===========
(Continued)
(5)    Property and Equipment
       ----------------------
       A summary of property and equipment follows:

                                                                                        Lives
                                                     1994                  1995        in years
                                                     ----                  ----         --------
Land                                    $  7,129,861          $  11,622,969       -
         Buildings and improvements                21,284,574             25,150,610     31.5
         Equipment, furniture, and fixtures        79,261,457             96,668,728     5-15
                                                                                         ====
         Construction in progress                   3,550,525              1,436,638
                                                   ----------             ----------
                                                  111,226,417            134,878,945
         Less accumulated depreciation             27,708,054             38,609,001
                                                   -----------           -----------
                                                 $ 83,518,363          $  96,269,944
                                                   ===========           ===========

(6)    Long-Term Debt
       A summary of long-term debt follows:

                                                    1994                   1995
                                                    ----                   ----

        Revolving Credit and Term Loan Agreements
        -----------------------------------------$ 308,000,000         $ 443,000,000
        Senior subordinated notes                    1,550,000                 -
                                                    ----------         -------------        
                                                   309,550,000           443,000,000
         Less current installments                       -                38,587,000
                                                   -----------           -----------
                                                 $ 309,550,000         $ 404,413,000
                                                   ===========           ===========
Upon the acquisition of the Continental broadcast properties in 1994, the
          Partnership assumed $120,000,000 of 10-5/8% senior subordinated notes.
          Interest is payable semiannually on January 1 and July 1 of each year.
          Pursuant to terms of the  underlying  indenture,  subsequent  to their
          assumption,  River City Broadcasting  offered to redeem the underlying
          notes from the holders at 101% of the  principal  amount  thereof.  In
          connection with this offer, $118,450,000 of the outstanding notes were
          redeemed in 1994. A put premium of  $1,184,500  was charged to expense
          in 1994. The balance of the senior  subordinated notes was redeemed in
          1995.

       Concurrent with the acquisition of the Continental  broadcast  properties
          in  1994,  the  Partnership  entered  into a  Senior  Credit  Facility
          providing a  $120,000,000  term loan  commitment  and a revolving loan
          commitment  of   $230,000,000.   In  December  1994,  the  Partnership
          exercised the $120,000,000 term loan commitment in connection with the
          redemption of the senior subordinated notes described above.

       In April 1995 the Partnership amended the Senior Credit Facility (Amended
          Senior Credit  Facility).  The Amended Senior Credit Facility provided
          for an additional term loan commitment of $110,000,000.  In July 1995,
          the  Partnership  exercised the  $110,000,000  term loan commitment in
          connection with the Keymarket acquisition.

                                                                     (Continued)
7

                            RIVER CITY BROADCASTING

                   Notes to Consolidated Financial Statements

       At December  31,  1995 the  Partnership  had  outstanding  borrowings  of
          $213,000,000  under the revolving loan commitment.  The revolving loan
          commitment  of  $230,000,000  is reduced as follows:  $9,200,000  each
          quarter  beginning  December  31,  1995  through  December  31,  1999;
          $10,750,000  each quarter  through  December 31, 2000; and $15,300,000
          each  quarter  through  June 30,  2001.  The term loan is  payable  in
          increasing quarterly  installments through December 2002.  Accelerated
          principal  payments are required upon the Partnership  meeting certain
          financial objectives or upon the occurrence of certain other events as
          defined in the Amended Senior Credit Facility.  Borrowings are secured
          by substantially all of the Partnership's  assets and by a lien on all
          limited partner interests. The Amended Senior Credit Facility includes
          certain covenants which,  among other things,  require the Partnership
          to meet  certain  financial  performance  goals and  maintain  certain
          financial ratios, limit capital expenditures, and limit the incurrence
          of additional indebtedness.

       Under terms of the Amended Senior Credit  Facility,  the  Partnership has
          the option to elect from various  interest rate  options.  The Amended
          Senior Credit Facility also includes a provision  whereby the interest
          rate is  adjusted  each  quarter  based on River  City  Broadcasting's
          financial  performance.  Substantially  all amounts borrowed under the
          Amended  Senior Credit  Facility  accrue  interest  based on the LIBOR
          rate. At December 31, 1995,  the Company's  effective  borrowing  rate
          under  this  agreement,  including  the effect of  interest  rate risk
          management  activities,  was 8.7%. The Amended Senior Credit  Facility
          requires  the  Partnership  to pay  unused  commitment  fees (term and
          revolver) at 3/8 of 1%, payable quarterly.

       Theaggregate  maturities of long-term  debt reflect  scheduled  principal
          payments due under the term loan commitment and the required principal
          reductions on the revolving loan commitment and are as follows:

              Year ending December 31:
                 1996                                        $  38,587,000
                 1997                                           46,387,000
                 1998                                           51,175,000
                 1999                                           55,963,000
                 2000                                           73,663,000
                 Thereafter                                    177,225,000
                                                               -----------
                                                             $ 443,000,000
                                                               ===========

(7)    Interest Rate Risk Management
       -----------------------------
       The Partnership  uses a combination  of financial  instruments, including
          interest rate swaps,  interest rate caps,  interest rate collars,  and
          forward rate agreements, as part of its program to manage the floating
          interest rate risk of its debt  portfolio and related  overall cost of
          borrowing.  These  financial  instruments,  which  are for  nontrading
          purposes,  allow the  Partnership  to maintain a target range of fixed
          rate debt. The Amended Senior Credit Facility requires the Partnership
          to hedge 50% of its floating rate risk through December 1997.

       Interest rate swaps  involve the exchange of floating rate for fixed rate
          interest  payments to effectively  convert floating rate debt to fixed
          rate  debt.  The  interest  rate  swap  agreement  is  for a  term  of
          approximately three years and matures December 1997.

                                                                     (Continued)
8

                            RIVER CITY BROADCASTING

                   Notes to Consolidated Financial Statements

       The Partnership  purchased  interest  rate caps to convert  floating rate
          debt to a fixed rate if such rates  rise above  9.5%.  The cost of the
          interest  rate  caps  totaled  approximately  $613,000  and  is  being
          amortized over the term of the agreements,  generally three years. The
          unamortized  balance is  approximately  $408,000 at December 31, 1995.
          Interest rate cap agreements mature in December 1997 and January 1998.

       Interest rate collars  involve the  conversion of floating rate debt to a
          fixed rate if such rates  exceed 9.5% or fall below a specified  floor
          rate (generally 4.0%-4.2%). Such agreements mature in December 1997.

       Forward rate agreements are short-term  contracts  (generally 3-6 months)
          which allow the  Partnership to lock in its effective LIBOR rates over
          short-term periods.  Such agreements mature January 1996 through April
          1996.

       The following financial instruments were held at December 31, 1995:

                                             Notional              Fair
                                              amounts              value
                                             --------              -----

                  Interest rate swap       $  50,000,000        $(2,103,000)
                  Interest rate caps         105,000,000             12,000
                  Interest rate collars       70,000,000            (91,000)
                  Forward rate agreements    411,000,000           (304,000)
                                             ===========          =========

       Estimated fair values shown above only  represent  the value of the hedge
          or swap component of these  transactions,  and thus are not indicative
          of  the  Partnership's   overall  hedged  position.  As  fully  hedged
          transactions, the estimated fair values of the interest rate financial
          instruments  do  not  affect  income  and  are  not  recorded  in  the
          consolidated  financial  statements,  but rather  only  represent  the
          amount which would be required to close the Partnership's  position in
          the financial instruments at December 31, 1995.

(8)    Disclosures About Fair Value of Financial Instruments
       -----------------------------------------------------
          Cash and Cash Equivalents,  Receivables,  and  Payables - The carrying
              amount  approximates fair value because of the short-term maturity
              of these instruments.

          Long-Term  Investment  - The  Partnership  holds a 16%  interest  in a
              partnership  for  which  there  are no  quoted  market  prices.  A
              reasonable   estimate  of  fair  value  could  not  be  made.  The
              investment   is  carried  at  its  cost  of   $1,654,000   in  the
              consolidated balance sheet.

          Long-Term Debt - The fair value of the Partnership's debt is estimated
              based on the current rates offered to the  Partnership for debt of
              the same remaining  maturities.  The carrying amount  approximates
              fair value  because of the variable  interest rate attached to the
              debt.

                                                                     (Continued)
9

                             RIVER CITY BROADCASTIN

                   Notes to Consolidated Financial Statements

          Program Rights Payable - The fair value of film  contracts  payable is
              the present value of the future  obligations  based on the current
              rates available to the  Partnership for debt of similar  maturity.
              The carrying  amount and fair value of program  rights  payable at
              December 31, 1995 were $56,223,000 and $48,494,000, respectively.

(9)    Local Marketing Agreement
       In August 1995 the  Partnership  entered into a five-year  LMA with KRRT,
          Inc.  (Licensee).  In a related  transaction,  the Partnership  loaned
          $10,000,000  to the Licensee.  The related note bears  interest at 8%.
          Pursuant  to the  LMA,  KRRT-TV  of  Kerrville,  Texas  (the  brokered
          station) will air programming  provided by River City  Broadcasting in
          exchange for specified compensation.  Such compensation is principally
          based on certain  station  operating  costs of the  brokered  station,
          including  debt  service.  River  City  Broadcasting  will  retain all
          advertising  revenues  derived  from  programming  for  which  it  has
          provided.  The  LMA is  cancellable  by the  Licensee  or  River  City
          Broadcasting.

(10)   Equity Debentures
       In connection with the purchase of KDSM-TV and the first amendment of the
          Limited  Partnership  Agreement,  River City  Broadcasting  issued two
          debentures  totaling  $2,500,000.  These  debentures  were  issued  in
          consideration  of, among other  things,  consent  granted by a certain
          partner   allowing  River  City   Broadcasting  to  complete   certain
          transactions  as contained  in the  respective  debenture  agreements.
          Amounts  due  under  the  debenture  agreements  were to be  satisfied
          through  equity  distributions  made in  accordance  with terms of the
          Limited Partnership  Agreement.  Accordingly,  for financial reporting
          purposes,  the debentures were treated as equity  preference items and
          the related  principal  and accrued  interest  were not  reflected (as
          liabilities or as equity) in the consolidated  financial statements of
          River City Broadcasting.  Concurrent with the Recapitalization,  these
          debentures  were  satisfied  through  an  equity  distribution  to the
          partner.

(11)   Supplemental Cash Flow and Other Financial Information
       Cash  paid  for interest totaled approximately  $6,106,000,  $11,523,000,
          and $29,249,000 for the years ended December 31, 1993, 1994, and 1995,
          respectively.

       River City  Broadcasting  purchased  program  rights,  on an  installment
          basis,  amounting  to  approximately  $16,285,000,   $15,749,000,  and
          $38,401,000 in 1993, 1994, and 1995,  respectively.  Amounts reflected
          as retirements of program rights payable  represent  amounts  actually
          paid to vendors under various program rights agreements.

       In connection with the Keymarket  acquisition,  the  Partnership  granted
       $10,000,000 of limited partner units to the Keymarket seller.

       Cash overdrafts  amounting to  approximately  $3,959,000 were included in
       accounts payable at December 31, 1995.

       Based on certain events, including network affiliation changes at certain
          broadcast properties,  management performed a review of program rights
          to  determine  projected  usage  and  revenue  streams.  Based on this
          review, the Partnership wrote off certain programming and recognized a
          charge of  approximately  $7,100,000 to operations  for the year ended
          December 31, 1995.

       Pursuant to the  deferred  compensation  agreements  and Phantom  Warrant
          Units  described in note 2, the Partnership  recognized  approximately
          $1,161,000,   $3,236,000,  and  $1,143,000  of  deferred  compensation
          expense in 1993, 1994, and 1995, respectively.

       At December 31, 1994, the Partnership  recorded a distribution payable of
          $2,274,613  in  anticipation  of income  taxes due by the  partners as
          described  in note 2.  In  accordance  with  the  Limited  Partnership
          Agreement this distribution was paid in 1995.

       In 1993,  River  City  Broadcasting  retired  a  $1,000,000  subordinated
          debenture for  $8,191,527.  This amount includes  accrued  interest of
          $350,443 of which  $101,327

                                                                     (Continued)
10

                            RIVER CITY BROADCASTING

                   Notes to Consolidated Financial Statements

          represents 1993 interest expense. The debenture contained a contingent
          interest provision,  determined based on certain equity like features,
          which was triggered  concurrent with the Recapitalization.  Retirement
          of  this  debenture  was  effected through its conversion to a limited
          partnership  interest  and a charge to  interest expense of $7,191,527
          (see note 16).

(12)    Extraordinary  Items  
        -------------------  
        Concurrently  with  the   Recapitalization   in  1993,  the  Partnership
          redeemed,   through   conversion  to  equity,   the  $1,000,000   1989
          subordinated  debenture for $8,191,527,  including accrued interest of
          $350,443.  This redemption was treated as an early  extinguishment  of
          debt for financial reporting purposes.

        As described in note 7, the  Partnership  redeemed  $118,450,000  of the
          outstanding  Continental  notes  with  a put  premium  of  $1,184,500.
          Additionally,  in  connection  with the  extinguishment  of its  prior
          Amended Senior Credit Facility, the Partnership expensed approximately
          $2,164,000  of  related  deferred  financing  fees.  These  items were
          treated as an early  extinguishment  of debt for  financial  reporting
          purposes.

(13)   Related Party Transactions
       --------------------------
       Prior to the Recapitalization,  the general partner received a management
           fee from each station  primarily  based on the  individual  station's
           revenues. Subsequent to the Recapitalization,  the general partner no
           longer received  management fees.  Pursuant to the  Recapitalization,
           corporate  expenses  are  allocated  to each  station  to  cover  the
           salaries and expenses of senior management.  Such allocation is based
           upon  certain  financial  information  and  management's  estimate of
           actual time spent.  Management  believes the allocation is reasonable
           and  approximates  what the expenses would have been on a stand-alone
           basis.  In 1993,  management fees totaling  approximately  $1,220,000
           were paid to a general partner whose interest was redeemed concurrent
           with the  Recapitalization.  Beginning in 1994, costs associated with
           certain  members of senior  management  were  allocated  to corporate
           expenses.  Previously, these costs were included in station operating
           expenses.  Total  management fees and expenses,  including  corporate
           expenses,  for the years ended  December  31,  1993,  1994,  and 1995
           amounted to  approximately  $1,873,000,  $2,498,000  and  $4,482,000,
           respectively.

                                                                     (Continued)
11

                             RIVER CITY BROADCASTING

                   Notes to Consolidated Financial Statements

(14)   Employee Benefits
       -----------------
       River City Broadcasting maintains a qualified  profit-sharing plan with a
           trustee,  which includes a thrift provision  qualifying under Section
           401(k) of the  Internal  Revenue  Code,  covering  substantially  all
           employees.  The provision allows the participants to contribute up to
           12% of their  compensation  in the plan year,  subject  to  statutory
           limitations.   River  City  Broadcasting  contributed   approximately
           $121,000,  $215,000,  and $388,000  for the years ended  December 31,
           1993, 1994, and 1995, respectively, to the Plan.

       In  1994, River City Broadcasting  began contributing to a multi-employer
           plan on behalf of certain union employees.  Contributions to the plan
           totaled  approximately  $20,000  and  $31,000  for  the  years  ended
           December 31, 1994 and 1995, respectively.

(15)   Commitments and Contingencies
       -----------------------------
       In conjunction  with River City  Broadcasting's  commitment to obtain new
          programming,  the Partnership has purchased approximately  $34,579,000
          of future program rights,  including  $14,089,000 of sports rights, of
          which  approximately  $4,047,000  will become  payable in 1996.  These
          rights are  generally  for a period  ranging  from one to four  years.
          Program   rights  and   related   obligations   in  the   accompanying
          consolidated   financial   statements  do  not  include  these  future
          commitments.

       The Partnership  loaned  approximately  $6,200,000  to Keymarket of South
          Carolina  (KSC), a Company owned by a member of Keymarket  management.
          The loan bears interest at the applicable  federal rate, is secured by
          all  of  the  assets  of  KSC,  and  is  payable  upon  demand  by the
          Partnership. KSC owns three radio stations and operates two additional
          radio stations under an LMA. River City  Broadcasting  holds an option
          to  acquire  KSC for  consideration  totaling  the amount of the loans
          outstanding, including accrued interest, plus $1,000,000.

       The Partnership   has   capitalized   approximately   $1,400,000 of  fees
          associated  with a bond  offering  filed with the SEC in 1995.  In the
          event the offering is aborted, the Partnership will recognize a charge
          to operations of  $1,400,000.  If the offering is  consummated,  these
          fees will be amortized over the life of the bonds.

       River City Broadcasting is involved in certain litigation matters arising
          in the normal course of business. In the opinion of management,  these
          matters  are not  significant  and will not  have a  material  adverse
          effect on the Partnership's financial position.

(16)   Subsequent Event
       ----------------
       In January 1996, the  Partnership  acquired the remaining 40% partnership
          interest  in Twin Peaks Radio  which  owned and  operated  three radio
          stations in the Albuquerque, New Mexico area.

                                                                     (Continued)
Schedule 1
                                                   ----------
Schedule 2
                                                  ----------
RIVER CITY BROADCASTING 

                                                     Supplementary Information - Consolidating Balance Sheet

                                                                        December 31, 1995

                                                                                          WTTV-TV/ 
                Assets                  KDNL-TV           KABB-TV         KDSM-TV         WTTK-TV         KOVR-TV           
                ------                  -------           -------         -------         -------         -------
Current assets:
   Cash and cash equiva-
     lents                             $  136,987         663,728          61,963         257,698          276,919          
   Receivables, net                     9,446,816       6,475,645       1,971,162       7,524,596        5,333,369          
   Current portion of
     program rights                     5,048,222       4,990,635         990,783       7,557,344        2,270,161          
   Prepaid and other
     current assets                     2,762,779         404,158         177,762         115,647          101,716          
                                       ----------        --------        --------        --------         --------          
          Total current
             assets                    17,394,804      12,534,166       3,201,670      15,455,285        7,982,165          
Property and equipment,
   net                                 13,398,013       6,071,055       1,628,463       6,306,885       25,573,822          
Program rights, less
   current portion                      3,804,258       3,727,993         805,856       9,598,582          458,149          
Intangible assets, net                 13,834,974         330,825       2,979,140       4,981,976       53,061,805          
Other noncurrent assets                18,862,013         114,830              -          577,465        1,034,217          
Intracompany receivable
   (payable)                          419,533,197       6,829,155      (5,474,147)     (6,508,035)     (81,859,044)         
                                      -----------      ----------       ---------      ----------       ----------          
          Total assets              $ 486,827,259      29,608,024       3,140,982      30,412,158        6,251,114          
                                      ===========      ==========       =========      ==========       ==========          

            
            
                                                          WLOS-TV/        KPNT-FM/
                Assets                  WSYX-TV           WFBC-TV         WVRV-FM       KEYMARKET      Consolidated
                ------                  -------           -------         -------         -------         -------                

Current assets:
   Cash and cash equiva-
     lents                                150,287         167,249             418       1,294,700        3,009,949
   Receivables, net                     6,767,482       4,861,239       1,094,329      12,226,334       55,700,972
   Current portion of
     program rights                     1,432,430         986,192              -            -           23,275,767
   Prepaid and other
     current assets                       302,959         399,386          18,945         173,000        4,456,352
                                       ----------        --------        --------        --------         --------         
          Total current
             assets                     8,653,158       6,414,066       1,113,692      13,694,034       86,443,040
Property and equipment,
   net                                 15,504,051      15,949,746       2,081,073       9,756,836       96,269,944
Program rights, less
   current portion                        917,035         338,344              -            -           19,650,217
Intangible assets, net                113,401,363      33,195,000       4,375,786     124,717,488      350,878,357
Other noncurrent assets                     -                -               -                 -        20,588,525
Intracompany receivable
   (payable)                         (128,728,876)    (48,106,061)    (11,616,036)   (144,070,153)           -
                                      -----------      ----------      ----------     -----------       ----------
          Total assets              $   9,746,731       7,791,095      (4,045,485)      4,098,205      573,830,083
                                     
                                       ==========       ==========      ==========     ==========      ===========
Liabilities and
      Partners' Capital (Deficit)

Current liabilities:
   Current installments of
     long-term debt                      38,587,000              -               -               -                -          
   Current installments of
     Program rights payable               6,152,592       4,610,141       1,322,747      10,670,157        2,992,716         
   Accrued expenses                       5,881,279         849,425         534,880         912,655          987,257         
   Accounts payable                       3,907,463         573,611         372,024         306,187           13,758         
                                         ----------        --------        --------        --------          -------         
          Total current
             liabilities                 54,528,334       6,033,177       2,229,651      11,888,999        3,993,731         
Long-term debt, less
   current installments                 404,413,000              -               -               -                -          
Program rights payable,
   less current install-
   ments  7,655,070                       6,095,348       1,339,883       9,919,146       1,104,898        1,173,874         
Deferred compensation                     5,459,000              -               -               -            57,833         
                                         ----------             ---             ---             ---          -------         
          Total liabilities             472,055,404      12,128,525       3,569,534      21,808,145        5,156,462         
Partners' capital (deficit)              14,771,855      17,479,499        (428,552)      8,604,013        1,094,652         
                                        -----------      ----------       ---------      ----------       ----------         
          Total liabilities
             and partners'
             capital
             (deficit)                $ 486,827,259      29,608,024       3,140,982      30,412,158        6,251,114         
                                        ===========      ==========       =========      ==========       ==========         

Liabilities and
      Partners' Capital (Deficit)

Current liabilities:
   Current installments of
     long-term debt                             -                -               -                 -        38,587,000
   Current installments of
     Program rights payable               1,726,769       1,343,423              -          1,253,000       30,071,545
   Accrued expenses                        515,993          980,540         422,952         1,377,435       12,462,416
   Accounts payable                        282,022           52,453           1,207         1,415,521        6,924,246
                                          --------          -------          ------        ----------       ----------
          Total current
             liabilities                 2,524,784        2,376,416         424,159         4,045,956       88,045,207
Long-term debt, less
   current installments                         -                -               -                 -       404,413,000
Program rights payable,
   less current install-
   ments  7,655,070                        291,382               -               -         27,579,601
Deferred compensation                           -                -               -                 -         5,516,833
                                               ---              ---             ---               ---       ----------
          Total liabilities              3,698,658        2,667,798         424,159         4,045,956      525,554,641
Partners' capital (deficit)              6,048,073        5,123,297      (4,469,644)           52,249       48,275,442
                                        ----------       ----------      ----------           -------      -----------
          Total liabilities
             and partners'
             capital
             (deficit)                $  9,746,731        7,791,095      (4,045,485)        4,098,205      573,830,083
                                        ==========       ==========      ==========        ==========      ===========
Note: Financing for the  Partnership's  acquisitions  and working capital needs,
      the acquisition of Twin Peaks, and Partnership  distributions are included
      in KDNL-TV.
See accompanying independent auditors' report.
RIVER CITY BROADCASTING

        Supplementary Information - Consolidating Schedule of Operations

                          Year ended December 31, 1995

                                                                                   WTTV-TV/ 
                                    KDNL-TV        KABB-TV          KDSM-TV        WTTK-TV          KOVR-TV         WSYX-TV   
                                    -------        -------          -------        -------          -------         -------
Net operating revenues:
   Local time sales             $ 15,219,598        9,291,868      4,327,637       14,617,850      10,941,996       15,378,536
   National time sales            10,572,978       10,260,740      2,844,380       10,481,144      12,358,279       12,067,694
   Other revenues                  1,438,516        1,544,350        306,137          924,624       2,045,354        1,320,056
                                  ----------       ----------       --------         --------      ----------       ----------
          Total operating
             revenues             27,231,092       21,096,958      7,478,154       26,023,618      25,345,629       28,766,286
                                  ----------       ----------      ---------       ----------      ----------       ----------
Operating costs:
   Station operating expenses      9,043,580        6,355,009      1,972,370        4,927,980      11,095,313        8,133,543
   Selling expenses                3,654,498        2,993,809      1,516,619        3,038,069       2,945,963        2,452,770
   Program amortization
     expense                       7,571,430        3,979,706      1,504,520        8,385,108       5,386,975        2,623,583
   Corporate expenses                649,508          500,000             -           550,000         400,000          700,000
   Depreciation                      633,464          713,700        897,220        2,283,646       2,680,064        2,107,422
   Amortization of intangi-
     ble assets                    1,010,731           97,507        936,720        2,239,389       3,771,848        9,779,555
                                  ----------          -------       --------       ----------      ----------       ----------
          Total operating
             costs                22,563,211       14,639,731      6,827,449       21,424,192      26,280,163       25,796,873
                                  ----------       ----------      ---------       ----------      ----------       ----------
          Operating income
             (loss)                4,667,881        6,457,227        650,705        4,599,426        (934,534)       2,969,413
                                  ----------       ----------       --------       ----------       ---------       ----------
Other income (expense):
   Interest expense              (32,986,956)              -              -          (100,677)             -                - 
   Amortization of de-
     ferred financing
     costs and debt
     discount                     (1,434,904)              -              -                -               -                - 
   Interest income                 1,697,599            3,965             -                -               -                - 
   Other       -                          -            12,041        (98,111)         170,633         (56,771)         (50,408
          ----------                     ---          -------       --------         --------        --------         --------
                                 (32,724,261)           3,965         12,041         (198,788)        170,633          (56,771
                                  ----------           ------        -------        ---------        --------         --------
          Net earnings
             (loss)             $(28,056,380)       6,461,192        662,746        4,400,638        (763,901)       2,912,642
                                  ==========       ==========       ========       ==========       =========       ==========

                                   WLOS-TV/       KPNT-FM/
                                   WFBC-TV        WVRV-FM        KEYMARKET      Consolidated
                                   -------        -------        ---------      ------------
Net operating revenues:
   Local time sales                9,350,343       4,334,425      24,128,844       107,591,097
   National time sales             8,407,648         322,655       2,629,669        69,945,187
   Other revenues                  1,566,790         363,859       1,144,174        10,653,860
                                  ----------        --------      ----------       -----------
          Total operating
             revenues             19,324,781       5,020,939      27,902,687       188,190,144
                                  ----------       ---------      ----------       -----------
Operating costs:
   Station operating expenses      6,808,280       2,313,721      11,390,894        62,040,690
   Selling expenses                2,310,355       1,407,484       5,654,093        25,973,660
   Program amortization
     expense                       1,600,930              -        2,400,000        33,452,252
   Corporate expenses                400,000         204,333       1,078,523         4,482,364
   Depreciation                    1,930,747         (91,281)        368,544        11,523,526
   Amortization of intangi-
     ble assets                    2,463,069         378,430       6,971,924        27,649,173
                                  ----------        --------      ----------       -----------
          Total operating
             costs                15,513,381       4,212,687      27,863,978       165,121,665
                                  ----------       ---------      ----------       -----------
          Operating income
             (loss)                3,811,400         808,252          38,709        23,068,479
                                  ----------        --------         -------       -----------
Other income (expense):
   Interest expense                       -               -               -        (33,087,633)
   Amortization of de-
     ferred financing
     costs and debt
     discount                             -               -               -         (1,434,904)
   Interest income                        -               -           13,540         1,715,104
   Other       -                          -               -          (22,616)
          ----------                     ---             ---        --------
                                     (50,408)             -           13,540       (32,830,049)
                                    --------             ---         -------       -----------
          Net earnings
             (loss)                3,760,992         808,252          52,249        (9,761,570)
                                  ==========        ========         =======       ===========
Note: Interest   expense   related  to  the   financing  of  the   Partnership's
      acquisitions  and  working  capital  needs,   organization  costs  of  the
      Partnerships,  the  acquisition of Twin Peaks,  and deferred  compensation
      expense are included in KDNL-TV.
See accompanying independent auditors' report.
INDEX TO EXHIBITS

EXHIBITS                      DESCRIPTION                             

10.70                  Asset Purchase Agreement dated April 10, 1996 is by and 
                       between KRRP, and Inc. and Sinclair Broadcast Group, Inc.