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

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                               ------------------

                                    FORM 8-K

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

                               ------------------


Date  Of Report (Date of earliest event reported) June 23, 1997  Commission File
                                                                  Number 0-26076

                         SINCLAIR BROADCAST GROUP, INC.
                           (Exact name of registrant)

                            -------------------------

              MARYLAND                                52-1494660
     (State of organization)              (I.R.S. Employer Identification No.)

                             2000 WEST 41ST STREET,
                            BALTIMORE, MARYLAND 21211
              (Address of principal executive offices and zip code)

                                 (410) 467-5005
                         (Registrant's telephone number)



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<PAGE>


ITEM 5. OTHER EVENTS

     Sinclair Broadcast Group, Inc. (the "Company" or "Sinclair") is filing this
report on Form 8-K to  reflect  an updated  description  of recent  developments
regarding  its  business.  Additionally,  the  Company  incorporates  herein  by
reference the information  contained in the press release filed as Exhibit 99 to
this Form 8-K. Unless otherwise indicated,  defined terms shall have the meaning
set forth in the  "Glossary of Defined  Terms" below.  References  herein to the
Company shall include the Company's  subsidiaries,  unless the context otherwise
requires.


                             BUSINESS OF SINCLAIR


     The Company is a  diversified  broadcasting  company  that owns or provides
programming  services  to more  television  stations  than any other  commercial
broadcasting  group in the United States. The Company currently owns or provides
programming services to 29 television stations.  The Company believes it is also
one of the top 20 radio groups in the United States,  when measured by the total
number of radio stations  owned,  programmed or with which the Company has Joint
Sales Agreements ("JSAs").  The Company owns or provides programming services to
25 radio  stations,  has a pending  acquisition of one radio station,  has a JSA
with one  additional  radio  station  (which  station  the Company has agreed to
acquire) and has options to acquire an additional seven radio stations.

     The 29 television  stations the Company owns or programs  pursuant to local
marketing  agreements  or other  agreements  under  which the  Company  provides
programming  services to a station not owned by the Company ("LMAs") are located
in 21  geographically  diverse  markets,  with 23 of the  stations in the top 51
television  Designated Market Areas ("DMAs") in the United States. The Company's
television  station group is diverse in network  affiliation,  with ten stations
affiliated with Fox, 12 with United  Paramount  Television  Network  Partnership
("UPN"),  two with ABC,  two with Warner  Brothers  ("WB") and one with CBS. Two
stations operate as Independents.

     The Company's  radio station  group is also  geographically  diverse with a
variety of  programming  formats  including  country,  urban,  news/talk/sports,
album/progressive  rock  and  adult  contemporary.  Of  the 26  stations  owned,
programmed  or with which the Company has a JSA, 12 broadcast on the AM band and
14 on the FM band.  The Company owns or programs  from two to seven  stations in
all but one of the radio markets it serves.

     The Company has undergone rapid and  significant  growth over the course of
the last six years.  Beginning  with the  acquisition  of WPGH in  Pittsburgh in
1991,  the Company has increased  the number of  television  stations it owns or
programs  from  three to 29.  From  1991 to 1996,  net  broadcast  revenues  and
Adjusted EBITDA  increased from $39.7 million to $346.5 million,  and from $15.5
million to $180.3 million. Pro forma for the acquisitions  described above, 1996
net broadcasting  revenue and Adjusted EBITDA would have been $445.0 million and
$206.5 million, respectively.

                                       2


<PAGE>


TELEVISION BROADCASTING

     The Company owns and  operates,  provides  programming  services to, or has
agreed to acquire the following television stations:

<TABLE>
<CAPTION>
                                                                                        NUMBER OF
                                                                                        COMMERCIAL              EXPIRATION
                              MARKET                                                   STATIONS IN    STATION     DATE OF
          MARKET             RANK(a)   STATIONS   STATUS(b)   CHANNEL   AFFILIATION   THE MARKET(c)   RANK(d)   FCC LICENSE
---------------------------- --------- ---------- ----------- --------- ------------- --------------- --------- ------------
<S>                          <C>       <C>        <C>         <C>       <C>           <C>             <C>       <C>
PITTSBURGH, PENNSYLVANIA .         19  WPGH       O&O              53   FOX                 6            4           8/1/99
                                       WPTT       LMA              22   UPN                              5           8/1/99
St. Louis, Missouri   ......       20  KDNL       O&O              30   ABC                 7            5           2/1/98
Sacramento, California   ...       21  KOVR       O&O              13   CBS                 8            3           2/1/99
Baltimore, Maryland   ......       23  WBFF       O&O              45   FOX                 5            4          10/1/04
                                       WNUV       LMA              54   UPN                              5          10/1/04
Indianapolis, Indiana ......       25  WTTV       LMA(e)            4   UPN                 8            4           8/1/97
                                       WTTK       LMA(e)(f)        29   UPN                              4(f)        8/1/97
Cincinnati, Ohio   .........       29  WSTR       O&O              64   UPN                 5            5          10/1/97
Raleigh-Durham,
 North Carolina ............       30  WLFL       O&O              22   FOX                 7            3          12/1/04
                                       WRDC       LMA              28   UPN                              5          12/1/04
Milwaukee, Wisconsin  ......       31  WCGV       O&O              24   UPN                 6            4          12/1/97
                                       WVTV       LMA              18   WB                               5          12/1/97
Kansas City, Missouri ......       32  KSMO       O&O              62   UPN                 7            5           2/1/98
Columbus, Ohio  ............       34  WTTE       O&O              28   FOX                 5            4          10/1/97
Asheville, North Carolina 
 and Greenville/Spartanburg/
 Anderson, South Carolina...       35  WFBC       LMA(g)           40   IND(i)              6            5          12/1/04
                                       WLOS       LMA(e)           13   ABC                 6            3          12/0/04
San Antonio, Texas .........       37  KABB       LMA(e)           29   FOX                 7            4           8/1/98
                                       KRRT       LMA(h)           35   UPN                              6           8/1/98
Norfolk, Virginia  .........       40  WTVZ       O&O              33   FOX                 6            4          10/1/04
Oklahoma City, Oklahoma ....       43  KOCB       O&O              34   UPN                 7            5           6/1/98
Birmingham, Alabama   ......       51  WTTO       O&O              21   WB                  5            4           4/1/05
                                       WABM       LMA              68   UPN                              5           4/1/05
Flint/Saginaw/Bay City,
 Michigan ..................       60  WSMH       O&O              66   FOX                 5            4          10/1/97
Las Vegas, Nevada  .........       64  KUPN       O&O              21   UPN                 8            5          10/1/98
Lexington, Kentucky   ......       68  WDKY       O&O              56   FOX                 5            4           8/1/97
Des Moines, Iowa   .........       72  KDSM       O&O              17   FOX                 4            4           2/1/98
Peoria/Bloomington,
 Illinois ..................      109  WYZZ       O&O              43   FOX                 4            4          12/1/97
Tuscaloosa, Alabama   ......      187  WDBB       LMA              17   IND(i)              2            2           4/1/05
</TABLE>

----------

(a)  Rankings  are based on the relative  size of a station's  DMA among the 211
     generally recognized DMAs in the United States as estimated by Nielsen.

(b)  "O&O" refers to stations owned and operated by the Company, "LMA" refers to
     stations to which the Company provides  programming services pursuant to an
     LMA and "Pending" refers to stations the Company has agreed to acquire. See
     "1997 Acquisitions."

(c)  Represents  the  number of  television  stations  designated  by Nielsen as
     "local" to the DMA, excluding public television stations and stations which
     do not meet the minimum  Nielsen  reporting  standards  (weekly  cumulative
     audience of at least 2.5%) for the Sunday- Saturday, 6:00 a.m. to 2:00 a.m.
     time period.

                                         (Footnotes continued on following page)


                                       3


<PAGE>


(d)  The rank of each  station  in its market is based  upon the  November  1996
     Nielsen estimates of the percentage of persons tuned to each station in the
     market from 6:00 a.m. to 2:00 a.m., Sunday-Saturday.

(e)  Non-License  Assets  acquired from River City  Broadcasting,  L.P.  ("River
     City") and option exercised to acquire License Assets will become owned and
     operated  upon FCC  approval of  transfer of License  Assets and closing of
     acquisition of License Assets.

(f)  WTTK  currently  simulcasts  all of the  programming  aired on WTTV and the
     station rank applies to the combined viewership of these stations.

(g)  Non-License  Assets acquired from River City. License Assets to be acquired
     by  Glencairn,  Ltd.,  subject to the  Company's  LMA, upon FCC approval of
     transfer of License Assets.

(h)  River City  provided  programming  to this station  pursuant to an LMA. The
     Company  acquired River City's rights under the LMA from River City and the
     Non-License Assets from the owners of this station.  The License Assets are
     to be transferred to Glencairn upon FCC approval of transfer of the License
     Assets.

(i)  "IND" or "Independent"  refers to a station that is not affiliated with any
     of ABC, CBS, NBC, Fox, UPN or Warner Brothers.

Operating Strategy

     The  Company's  television  operating  strategy  includes the following key
elements.

Attracting Viewership

     Popular  Programming.  The Company  believes  that an  important  factor in
attracting  viewership to its stations is their network  affiliations  with Fox,
UPN, ABC, CBS and WB. These  affiliations  enable the Company to attract viewers
by  virtue of the  quality  first-run  original  programming  provided  by these
networks and the networks' promotion of such programming. The Company also seeks
to  obtain,  at  attractive  prices,  popular  syndicated  programming  that  is
complementary  to  the  station's  network  affiliation.   Examples  of  popular
syndicated  programming obtained by the Company for broadcast on its Fox, WB and
UPN affiliates and  Independent  stations are "Mad About You,"  "Frasier,"  "The
Simpsons,"   "Home   Improvement"   and   "Seinfeld."  In  addition  to  network
programming,  the Company's ABC and CBS affiliates broadcast news magazine, talk
show, and game show  programming such as "Hard Copy,"  "Entertainment  Tonight,"
"Regis and Kathie Lee," "Wheel of Fortune" and "Jeopardy."

     Children's  Programming.  The  Company  seeks to be a leader in  children's
programming in each of its respective DMAs. The Company's nationally  recognized
"Kids  Club" was the  forerunner  and model for the Fox  network-wide  marketing
efforts promoting  children's  programming.  Sinclair carries the Fox Children's
Network  ("FCN")  and  UPN's  childrens'  programming,  both  of  which  include
significant  amounts  of  animated  programming  throughout  the week.  In those
markets  where the Company owns or programs ABC or CBS  affiliates,  the Company
broadcasts those networks' animated programming during weekends.  In addition to
this  animated  programming,  the Company  broadcasts  other forms of children's
programming, which may be produced by the Company or by an affiliated network.

     Counter-Programming. The Company's programming strategy on its Fox, UPN and
Independent  stations also  includes  "counter-programming,"  which  consists of
broadcasting programs that are alternatives to the types of programs being shown
concurrently  on  competing  stations.  This  strategy  is  designed  to attract
additional  audience  share in  demographic  groups  not  served  by  concurrent
programming on competing  stations.  The Company believes that implementation of
this strategy enables its stations to achieve competitive rankings in households
in  the  18-49  and  25-54  demographics  and  to  offer  greater  diversity  of
programming in each of its DMAs.

     Local News. The Company  believes that the production and  broadcasting  of
local news can be an important link to the community and an aid to the station's
efforts to expand its  viewership.  In  addition,  local  news  programming  can
provide access to advertising  sources targeted  specifically to local news. The
Company carefully assesses the anticipated benefits and costs of producing local
news prior to introduction at a Company station because a significant investment
in capital equipment is required and substantial operating expenses are incurred
in  introducing,  developing and producing local news  programming.  The Company
currently  provides  local  news  programming  at  WBFF  in  Baltimore,  WLFL in
Raleigh/Durham, KDNL in St. Louis, KABB in San Antonio, KOVR in Sacramento, WPGH
in Pittsburgh and WLOS in Asheville.  The Company also  broadcasts news programs
on WDKY in  Lexington,  which are  produced  in part by the  Company and in part
through the purchase of production  services from an independent third party and
on

                                       4


<PAGE>

WTTV in  Indianapolis,  which are  produced by a third  party in exchange  for a
limited  number of  advertising  spots.  River City  provides  the Company  news
production  services with respect to the production of news  programming  and on
air  talent on WTTE.  Pursuant  to an  agreement,  River City  provides  certain
services to the Company in return for a fee equal to approximately  $416,000 per
year. The possible  introduction of local news at the other Company  stations is
reviewed  periodically.   The  Company's  policy  is  to  institute  local  news
programming  at a specific  station only if the expected  benefits of local news
programming at the station are believed to exceed the associated  costs after an
appropriate start-up period.

     Popular  Sporting  Events.  The  Company  attempts  to capture a portion of
advertising  dollars  designated to sports  programming  in selected  DMAs.  The
Company's   independent  and  UPN  affiliated   stations  generally  face  fewer
restrictions  on   broadcasting   live  local  sporting  events  than  do  their
competitors  that are affiliates of the major networks and Fox since  affiliates
of the major networks and Fox are subject to prohibitions against preemptions of
network  programming.  The Company has been able to acquire the local television
broadcast  rights for certain  sporting  events,  such as NBA basketball,  Major
League Baseball, NFL football, NHL hockey, ACC basketball,  Big Ten football and
basketball,   and  SEC  football.   The  Company  seeks  to  expand  its  sports
broadcasting  in  DMAs as  profitable  opportunities  arise.  In  addition,  the
Company's  stations that are affiliated with Fox broadcast  certain Major League
Baseball games, NFL football games and NHL hockey games.

Innovative Local Sales and Marketing

     The  Company  believes  that it is able to attract new  advertisers  to its
stations and increase its share of existing  customers'  advertising  budgets by
creating a sense of partnership  with those  advertisers.  The Company  develops
such relationships by training its sales forces to offer new marketing ideas and
campaigns to  advertisers.  These  campaigns  often involve the  sponsorship  by
advertisers of local  promotional  events that capitalize on the station's local
identity  and  programming  franchises.  For example,  several of the  Company's
stations  stage local "Kids Fairs" which allow station  advertisers to reinforce
their on-air  advertising with their target  audience.  Through its strong local
sales and marketing  focus,  the Company seeks to capture an increasing share of
its revenues from local  sources,  which are generally more stable than national
advertising.

Control of Operating and Programming Costs

     By employing a disciplined approach to managing programming acquisition and
other  costs,  the Company has been able to achieve  operating  margins that the
Company believes are among the highest in the television broadcast industry. The
Company  has sought in the past and will  continue  to seek to  acquire  quality
programming  for  prices at or below  prices  paid in the  past.  As an owner or
provider  of   programming   services  to  29  stations  in  21  DMAs   reaching
approximately 15% of U.S. television households, the Company believes that it is
able to negotiate favorable terms for the acquisition of programming.  Moreover,
the  Company  emphasizes  control  of  each  of its  stations'  programming  and
operating costs through  program-specific  profit analysis,  detailed budgeting,
tight control over staffing levels and detailed long-term planning models.

Attract and Retain High Quality Management

     The  Company  believes  that much of its  success is due to its  ability to
attract and retain highly skilled and motivated managers,  both at the corporate
and local  station  levels.  A portion of the  compensation  provided to general
managers,  sales managers and other station managers is based on their achieving
certain operating  results.  The Company also provides its corporate and station
managers with deferred  compensation  plans offering  options to acquire Class A
Common Stock.

Community Involvement

     Each of the Company's  stations actively  participates in various community
activities and offers many community services.  The Company's activities include
broadcasting  programming  of local  interest and  sponsorship  of community and
charitable  events.  The Company also encourages its station employees to become
active members of their communities and to promote  involvement in community and
charitable  affairs.  The Company believes that active community  involvement by
its stations  provides its stations with increased  exposure in their respective
DMAs and ultimately increases viewership and advertising support.

                                       5


<PAGE>

Establish LMAs

     The Company  believes  that it can attain  significant  growth in operating
cash flow through the utilization of LMAs. By expanding its presence in a market
in which it owns a station,  the Company can  improve its  competitive  position
with respect to a  demographic  sector.  In addition,  by providing  programming
services to an  additional  station in a market,  the Company is able to realize
significant economies of scale in marketing,  programming,  overhead and capital
expenditures. The Company provides programming services pursuant to an LMA to an
additional  station in seven of the 21  television  markets in which the Company
owns or programs a station.

Programming and Affiliations

     The Company  continually  reviews its existing  programming  inventory  and
seeks to purchase the most  profitable and  cost-effective  syndicated  programs
available  for each time period.  In  developing  its  selection  of  syndicated
programming, the Company balances the cost of available syndicated programs with
their  potential to increase  advertising  revenue and the risk of their reduced
popularity  during  the  term of the  program  contract.  The  Company  seeks to
purchase only those programs with  contractual  periods that permit  programming
flexibility and which complement a station's  overall  programming  strategy and
counter-programming  strategy.  Programs that can perform  successfully  in more
than  one  time  period  are  more  attractive  due to the  long  lead  time and
multi-year commitments inherent in program purchasing.

     Twenty-seven  of the 29 television  stations owned or provided  programming
services by the Company operate as affiliates of Fox (ten stations), UPN (twelve
stations),  ABC (two  stations),  WB (two  stations) or CBS (one  station).  The
networks  produce and  distribute  programming  in exchange  for each  station's
commitment  to air  the  programming  at  specified  times  and  for  commercial
announcement time during the programming.  In addition,  networks other than Fox
and UPN pay each  affiliated  station a fee for each  network-sponsored  program
broadcast by the stations.

     On August 21, 1996,  the Company  entered  into an agreement  with Fox (the
"Fox  Agreement")  which,  among other  things,  provides  that the  affiliation
agreements between Fox and eight stations owned or provided programming services
by the Company  (except as noted below)  would be amended to have new  five-year
terms commencing on the date of the Fox Agreement.  Fox has the option to extend
the affiliation  agreements for an additional five-year term and must extend all
of the affiliation agreements if it extends any (except that Fox may selectively
renew  affiliation  agreements  if any  station  has  breached  its  affiliation
agreement). The Fox Agreement also provides that the Company will have the right
to  purchase,  for fair  market  value,  any  station  Fox  acquires in a market
currently  served by a Company owned Fox  affiliate  (other than the Norfolk and
Raleigh-Durham markets) if Fox determines to terminate the affiliation agreement
with the  Company's  station in that market and operate the station  acquired by
Fox as a Fox affiliate.  The agreement confirmed that the affiliation  agreement
for WTTO  (Birmingham,  Alabama) would  terminate on September 1, 1996, and that
affiliation  agreements  for WTVZ (Norfolk,  Virginia) and WLFL (Raleigh,  North
Carolina)  will  terminate  August 31, 1998.  The Fox  Agreement  also  includes
provisions limiting the ability of the Company to preempt Fox programming except
where it has existing  programming  conflicts  or where the Company  preempts to
serve a public purpose.

     The  Company's  affiliation  agreements  with  ABC for KDNL and WLOS in St.
Louis and Asheville, respectively, have 10-year terms expiring in 2005 and 2004,
respectively.  Each of the  Company's  UPN  affiliation  agreements is for three
years, and expires in January 1998.

     Each of the  affiliation  agreements  relating to stations  involved in the
River City  Acquisition  (other  than River  City's Fox and ABC  affiliates)  is
terminable by the network upon transfer of the License Assets of the station.

RADIO BROADCASTING

     The  following  table sets forth  certain  information  regarding the radio
stations (i) programmed by the Company, (ii) with which the Company has JSAs, or
(iii) which the Company has an option to acquire.

                                       6


<PAGE>


<TABLE>
<CAPTION>
                   RANKING OF                                                    STATION RANK     EXPIRATION
 GEOGRAPHIC        STATION'S              STATION                 PRIMARY        IN PRIMARY        DATE OF
   MARKET          MARKET BY            PROGRAMMING             DEMOGRAPHIC      DEMOGRAPHIC         FCC
  SERVED(a)        REVENUE(b)              FORMAT                TARGET(c)        TARGET(d)        LICENSE
----------------   ------------   ---------------------------   --------------   --------------   ------------
<S>                <C>            <C>                           <C>              <C>              <C>
Los Angeles                2
 KBLA-AM(e)                       Korean                        NA                      N/A           12/1/97

St. Louis                 17
 KPNT-FM                          Alternative Rock              Adults 18-34              4            2/1/05
 WVRV-FM                          Modern Adult Contemporary     Adults 18-34              7           12/1/04

New Orleans               38
 WLMG-FM                          Adult Contemporary            Women 25-54               2            6/1/04
 KMEZ-FM                          Urban Oldies                  Women 25-54               6            6/1/04
 WWL-AM                           News/Talk/Sports              Adults 35-64              1            6/1/04
 WSMB-AM                          Talk/Sports                   Adults 35-64             19            6/1/04

Buffalo                   40
 WMJQ-FM                          Adult Contemporary            Women 25-54               2            6/1/98
 WKSE-FM                          Contemporary Hit Radio        Women 18-49               1            6/1/98
 WBEN-AM                          News/Talk/Sports              Adults 35-64              1            6/1/98
 WWKB-AM                          Country                       Adults 35-64             16            6/1/98
 WGR-AM                           Sports                        Adults 25-54             10            6/1/98
 WWWS-AM                          Urban Oldies                  Women 25-54              12            6/1/98

Memphis                   43
 WRVR-FM                          Soft Adult Contemporary       Women 25-54               3            8/1/04
 WJCE-AM                          Urban Oldies                  Women 25-54              11            8/1/04
 WOGY-FM                          Country                       Adults 25-54             10            8/1/04

Nashville                 44
 WLAC-FM                          Adult Contemporary            Women 25-54               6            8/1/04
 WJZC-FM                          Smooth Jazz                   Women 25-54               9            8/1/04
 WLAC-AM                          News/Talk/Sports              Adults 35-64             11            8/1/04

Greenville/
 Spartanburg              59
 WFBC-FM(g)                       Contemporary Hit Radio        Women 18-49               6           12/1/03
 WORD-AM(g)                       News/Talk                     Adults 35-64              9           12/1/03
 WFBC-AM(g)                       News/Talk                     Adults 35-64              9           12/1/03
 WSPA-AM(g)                       Full Service/Talk             Adults 35-64             15           12/1/03
 WSPA-FM(g)                       Soft Adult Contemporary       Women 25-54               2           12/1/03
 WOLI-FM(g)(h)                    Oldies                        Adults 25-54              9           12/1/03
 WOLT-FM(g)(i)                    Oldies                        Adults 25-54             10           12/1/03

Wilkes-Barre/
 Scranton                 61
 WKRZ-FM(n)                       Contemporary Hit Radio        Adults 18-49              1            8/1/98
 WGGY-FM                          Country                       Adults 25-54              3            8/1/98
 WILK-AM(j)                       News/Talk/Sports              Adults 35-64              6            8/1/98
 WGBI-AM(j)                       News/Talk/Sports              Adults 35-64             31            8/1/98
 WWSH-FM(f)                       Soft Hits                     Women 25-54               7            8/1/98
 WILP-AM                          News/Talk/Sports              Adults 35-64             31            8/1/98
 WWFH-FM(l)                       Soft Hits                     Women 25-54              17            8/1/98
 WKRF-FM(m)(n)                    Contemporary Hit Radio        Adults 18-49             26            8/1/98
</TABLE>

                          (Footnotes on following page)

                                       7
<PAGE>

----------

(a)  Actual city of license may differ from the geographic market served.

(b)  Ranking of the principal  radio market served by the station among all U.S.
     radio markets by 1995 aggregate gross radio broadcast  revenue according to
     1996 Broadcasting & Cable Yearbook.

(c)  Due to variations that may exist within  programming  formats,  the primary
     demographic  target of  stations  with the same  programming  format may be
     different.

(d)  All information  concerning ratings and audience  listening  information is
     derived from the Fall 1996  Arbitron  Metro Area Ratings  Survey (the "Fall
     1996  Arbitron").  Arbitron is the generally  accepted  industry source for
     statistical  information  concerning audience ratings. Due to the nature of
     listener  surveys,  other  radio  ratings  services  may  report  different
     rankings;  however,  the Company  does not believe  that any radio  ratings
     service  other than  Arbitron is accorded  significant  weight in the radio
     broadcast  industry.  "Station Rank in Primary  Demographic  Target" is the
     ranking of the  station  among all radio  stations  in its market  that are
     ranked  in its  target  demographic  group  and is based  on the  station's
     average persons share in the primary  demographic  target in the applicable
     Metro Survey Area. Source:  Average Quarter Hour Estimates,  Monday through
     Sunday, 6:00 a.m. to midnight, Fall 1996 Arbitron.

(e)  Programming  is  provided to this  station by a third party  pursuant to an
     LMA.

(f)  The Company has agreed to acquire this station,  subject to FCC approval of
     the transfer of the related licenses.

(g)  The Company has an option to acquire  Keymarket  of South  Carolina,  Inc.,
     ("Keymarket").  Keymarket owns and operates  WFBC-AM,  WORD-AM and WFBC-FM,
     has an option to acquire and provides  programming  services pursuant to an
     LMA to WSPA-AM and WSPA-FM,  and provides sales services  pursuant to a JSA
     and has an option to acquire WOLI-FM and WOLT-FM.

(h)  WOLI-FM was formerly WXWX-FM.

(i)  WOLT-FM was formerly WXWZ-FM.

(j)  WILK-AM and WGBI-AM simulcast their programming.

(k)  WILP-AM was formerly WXPX-AM.

(l)  WWFH-FM was formerly WQEQ-FM.

(m)  The FCC has approved the acquisition of this station.

(n)  WKRZ-FM and WKRF-FM simulcast their programming.

Radio Operating Strategy

     The Company's  radio  strategy is to operate a cluster of radio stations in
each  of a  variety  of  geographic  markets  throughout  the  country.  In each
geographic market, the Company employs broadly  diversified  programming formats
to appeal to a variety of  demographic  groups  within the  market.  The Company
seeks to strengthen the identity of each of its stations through its programming
and  promotional  efforts,  and emphasizes that identity to a far greater degree
than the identity of any local radio personality.

     The Company believes that its strategy of appealing to diverse  demographic
groups in a variety of geographic  markets  allows it to reach a larger share of
the overall  advertising market while realizing  economies of scale and avoiding
dependence  on one  demographic  or  geographic  market.  The  Company  realizes
economies  of scale  by  combining  sales  and  marketing  forces,  back  office
operations and general  management in each geographic  market. At the same time,
the  geographic  diversity of its portfolio of radio  stations  helps lessen the
potential impact of economic  downturns in specific markets and the diversity of
target  audiences  served  helps  lessen  the  impact of  changes  in  listening
preferences.  In addition,  the geographic and demographic  diversity allows the
Company to avoid dependence on any one or any small group of advertisers.

     The  Company's  group of radio  stations  includes the top billing  station
group in two markets and one of the top three billing  station groups in each of
its markets other than Los Angeles,  St. Louis and Nashville.  Through ownership
or LMAs, the group also includes duopolies in six of its seven markets and, upon
exercise of options to acquire  stations in the  Greenville/Spartanburg  market,
the Company will have duopolies in seven of its eight markets.


                                       8


<PAGE>

     Depending on the programming  format of a particular  station,  there are a
predetermined  number  of  advertisements   broadcast  each  hour.  The  Company
determines the optimum number of  advertisements  available for sale during each
hour without jeopardizing listening levels (and the resulting ratings). Although
there may be shifts from time to time in the number of advertisements  available
for sale during a particular  time of day,  the total  number of  advertisements
available for sale on a particular station normally does not vary significantly.
Any  change in net  radio  broadcasting  revenue,  with the  exception  of those
instances  where  stations  are  acquired or sold,  is  generally  the result of
pricing adjustments made to ensure that the station effectively uses advertising
time  available  for sale,  an increase in the number of  commercials  sold or a
combination of these two factors.

     Large,  well-trained  local sales forces are  maintained  by the Company in
each of its radio markets.  The Company's principal goal in its sales efforts is
to  develop  long-standing   customer   relationships  through  frequent  direct
contacts,  which the Company believes provides it with a competitive  advantage.
Additionally,  in some radio  markets,  duopolies  permit  the  Company to offer
creative advertising packages to local, regional and national advertisers.  Each
radio  station  programmed  by the Company also  engages a national  independent
sales  representative to assist it in obtaining national  advertising  revenues.
These  representatives  obtain advertising through national advertising agencies
and receive a commission  from the radio station based on its gross revenue from
the advertising obtained.

BROADCASTING ACQUISITION STRATEGY

     On February 8, 1996,  the  Telecommunications  Act of 1996 (the "1996 Act")
was signed into law. The 1996 Act represents  the most sweeping  overhaul of the
country's  telecommunications  laws  since the  Communications  Act of 1934,  as
amended (the "Communications Act"). The 1996 Act relaxes the broadcast ownership
rules and simplifies the process for renewal of broadcast station licenses.

     The Company  believes  that the enactment of the 1996 Act presents a unique
opportunity  to  build a  larger  and  more  diversified  broadcasting  company.
Additionally,  the Company  expects  that the  opportunity  to act as one of the
consolidators  of the  industry  will  enable  the  Company  to gain  additional
influence  with program  suppliers,  television  networks,  other  vendors,  and
alternative  delivery media. The Company also believes that the additions to its
management  team  as a  result  of the  River  City  Acquisition  will  give  it
additional resources to take advantage of these developments.

     In implementing its acquisition strategy, the Company seeks to identify and
pursue favorable  station or group  acquisition  opportunities  primarily in the
15th to 75th  largest  DMAs and  Metro  Service  Areas  ("MSAs").  In  assessing
potential  acquisitions,  the Company examines  opportunities to improve revenue
share, audience share and/or cost control.  Additional factors considered by the
Company in a potential  acquisition  include  geographic  location,  demographic
characteristics and competitive dynamics of the market.

     In furtherance of its acquisition strategy,  the Company routinely reviews,
and  conducts   investigations  of,  potential   television  and  radio  station
acquisitions.  When the Company  believes a favorable  opportunity  exists,  the
Company  seeks to  enter  into  discussions  with the  owners  of such  stations
regarding the  possibility of an acquisition by the Company.  At any given time,
the Company may be in discussions with one or more such station owners.

     Since the 1996 Act became  effective,  the Company has  acquired,  obtained
options  to  acquire or has  acquired  the right to  program  or  provide  sales
services to 17 television and 33 radio  stations for an aggregate  consideration
of approximately $1.3 billion. Certain terms of these acquisitions are described
below.

     River  City  Acquisition.  On May 31,  1996,  pursuant  to an  amended  and
restated asset purchase  agreement,  the Company acquired all of the Non-License
Assets of River  City other than the  assets  relating  to WSYX-TV in  Columbus,
Ohio.  Simultaneously,  the Company  entered  into a 10-year LMA with River City
with respect to all of River City's  License  Assets (with the  exception of the
License  Assets  relating to WSYX) and was  granted:  (i) a 10-year  option (the
"License  Assets  Option") to acquire  River  City's  License  Assets  (with the
exception of the License Assets relating to WSYX); and (ii) a three-year  option
to acquire the assets relating to WSYX-TV (both the License and Non-License


                                       9
<PAGE>

Assets,  collectively the "Columbus Option"). The exercise price for the License
Assets  Option is $20  million  and the  Company is  required to pay a quarterly
extension fee with respect to the License  Assets  Option as follows:  (1) 8% of
$20  million  for the  first  year  following  the  closing  of the  River  City
Acquisition;  (2) 15% of $20 million for the second year following such closing;
and (3) 25% of $20 million  for each  following  year.  The  Non-License  Assets
acquired  from  River  City  relate to eight  television  stations  and 21 radio
stations  owned and operated by River City.  In addition,  the Company  acquired
from another party the Non-License Assets relating to one additional  television
station (KRRT) to which River City provided  programming pursuant to an LMA. The
Company  assigned  its option to acquire  the License  Assets of one  television
station  (WFBC) to Glencairn,  and Glencairn also acquired the option to acquire
the License  Assets of KRRT. The Company also acquired River City's rights under
LMAs with respect to KRRT and four radio  stations to which River City  provided
programming  or sales  services.  The Company has exercised  the License  Assets
Option and has acquired the License Assets of three of the  television  stations
and all of the radio  stations.  Acquisition of the remaining  License Assets is
now subject to FCC approval of transfer of such License Assets.  There can be no
assurance that this approval will be obtained.  Applications for transfer of the
License  Assets  were  filed in July and August  1996,  except  application  for
transfer  of the  License  Assets  relating  to WTTV and WTTK which was filed in
November 1996.

     The  Company  paid an  aggregate  of  approximately  $1.0  billion  for the
Non-License Assets and the License Assets Option consisting of $847.6 million in
cash and 1,150,000 shares of Series A Convertible Preferred Stock of the Company
and 1,382,435 stock options.  The Series A Convertible  Preferred Stock has been
exchanged for 1,150,000  shares of Series B Convertible  Preferred  Stock of the
Company,  which at issuance had an aggregate  liquidation value of $115 million,
and are convertible at any time, at the option of the holders, into an aggregate
of 4,181,818  shares of Class A Common Stock of the Company  (which had a market
value on May 31, 1996 of approximately  $125.1 million).  The exercise price for
the  Columbus  Option  is   approximately   $130  million  plus  the  amount  of
indebtedness  secured by the WSYX assets on the date of exercise  (not to exceed
the amount  outstanding  on the date of closing of $105 million) and the Company
is required  to pay an  extension  fee with  respect to the  Columbus  Option as
follows:  (1) 8% of $130 million for the first year following the closing of the
River City  Acquisition;  (2) 15% of $130 million for the second year  following
the closing;  and (3) 25% of $130 million for each following year. The extension
fee accrues beginning on the date of closing, and is payable (beginning December
31, 1996) at the end of each  calendar  quarter until such time as the option is
exercised  or River City  sells  WSYX to a third  party.  The  Company  paid the
extension  fee due March 31, 1997.  Pursuant to the LMAs with River City and the
owner of KRRT, the Company is required to provide at least 166 hours per week of
programming  to each  television  and radio  station  and,  subject  to  certain
exceptions,  River  City and the owner of KRRT are  required  to  broadcast  all
programming  provided by the Company.  The Company is required to pay River City
and the owner of KRRT  monthly  fees under the LMAs in an amount  sufficient  to
cover  specified  expenses  of  operating  the  stations,  which  are  currently
approximately  $150,000  per  month  for all  River  City  television  and radio
stations the Company  programs  (including  KRRT).  The Company has the right to
sell  advertising  time on the  stations  during  the  hours  programmed  by the
Company.

     The Company and River City filed notification  under the  Hart-Scott-Rodino
Antitrust  Improvements Act of 1976, as amended (the "HSR Act"), with respect to
the  Company's  acquisition  of all  River  City  assets  prior to  closing  the
acquisition.  After the United States Justice  Department ("DOJ") indicated that
it would request additional  information regarding the antitrust implications of
the  acquisition  of WSYX by the Company in light of the Company's  ownership of
WTTE, the Company and River City agreed to submit  separate  notifications  with
respect to the WSYX assets and the other River City assets. The DOJ then granted
early  termination  of the waiting  period with  respect to the  transfer of the
River City assets other than WSYX, permitting the acquisition of those assets to
proceed.  The  Company  and River City  agreed to notify the DOJ 30 days  before
entering into an LMA or similar agreement with respect to WSYX and agreed not to
enter into such an agreement  until 20 days after  substantially  complying with
any request for information from DOJ regarding the  transaction.  The Company is
in the process of preparing a submission to the DOJ  regarding  the  competitive
effects of entering into an LMA arrangement in Columbus.  The Company has agreed
to sell the License  Assets of WTTE to  Glencairn  and to enter into an LMA with
Glencairn to provide programming services to WTTE. The FCC has


                                       10


<PAGE>

approved  this  transaction,   but  the  Company  does  not  believe  that  this
transaction will be completed unless the Company acquires WSYX.

     In the River City Acquisition,  the Company also acquired an option held by
River  City to  purchase  either  (i) all of the  assets of  Keymarket  of South
Carolina,  Inc.  ("KSC") for the  forgiveness  of debt held by the Company in an
aggregate  principal amount of approximately $7.4 million as of August 22, 1996,
plus payment of approximately $1,000,000 less certain adjustments or (ii) all of
the stock of KSC for $1,000,000 less certain adjustments.  KSC owns and operates
three  radio  stations  in  the  Greenville/  Spartanburg,  South  Carolina  MSA
(WFBC-FM,  WFBC-AM and WORD-AM).  The options to acquire the assets and stock of
KSC expire on  December  31,  1997.  KSC also  holds an option to  acquire  from
Spartan  Radiocasting,  Inc. certain assets relating to two additional  stations
(WSPA-AM and WSPA-FM) in the  Greenville/Spartanburg MSA and which KSC currently
programs pursuant to an LMA. KSC's option to acquire these assets is exercisable
for $5.15  million  and expires in January  2000,  subject to  extension  to the
extent the applicable  LMA is extended  beyond that date. KSC also has an option
to acquire assets of Palm Broadcasting Company,  L.P., which owns two additional
stations in the  Greenville/Spartanburg  MSA  (WOLI-FM and WOLT-FM) in an amount
equal to the outstanding debt of Palm Broadcasting Company, L.P. to the Company,
which was approximately  $3.03 million as of March 31, 1997. This option expires
in April 2001. KSC has a JSA with Palm Broadcasting Company,  L.P., but does not
provide programming for WOLI or WOLT.

     Superior  Acquisition.  On  May  8,  1996,  the  Company  acquired  WDKY-TV
(Lexington,  Kentucky)  and  KOCB-TV  (Oklahoma City, Oklahoma) by acquiring the
stock of Superior Communications Group, Inc. for approximately $63.5 million.

     Flint Acquisition.  On February 27, 1996 the Company acquired the assets of
WSMH-TV (Flint,  Michigan) for approximately $35.8 million by exercising options
granted in 1995.

     Cincinnati/Kansas City Acquisitions.  On July 1, 1996, the Company acquired
the assets of KSMO-TV (Kansas City, Missouri) and on August 1, 1996, it acquired
the assets of WSTR-TV (Cincinnati, Ohio) for approximately $34.2 million.

     Peoria/Bloomington  Acquisition.  On July 1, 1996, the Company acquired the
assets  of  WYZZ-TV  (Peoria/Bloomington,   Illinois)  for  approximately  $21.2
million.

1997 ACQUISITIONS

     Since the end of 1996,  the Company has entered into  agreements to acquire
one  television  station  and  four  radio  stations,   and  has  completed  the
acquisition of four television  stations and six radio stations.  On January 30,
1997,  the Company  entered  into an agreement to acquire the assets of KUPN-TV,
the UPN affiliate in Las Vegas, Nevada, for $87.0 million. The Company completed
this  acquisition on May 30, 1997. The Company also entered into an agreement on
January 29,  1997 to acquire  the assets of WGR-AM and  WWWS-AM in Buffalo,  New
York,  for $1.5  million.  The Company's  acquisition  of WGR-AM and WWWS-AM was
consummated  on April 18, 1997. On January 31, 1997,  the Company  completed the
acquisition  of the  assets  of  WWFH-FM  and  WILP-AM,  each  in  Wilkes-Barre,
Pennsylvania,  for aggregate  consideration of approximately  $773,000. On April
22, 1997,  the Company  consummated  its  acquisition  of the License  Assets of
KOVR-TV in Sacramento,  California,  and KDSM-TV in Des Moines, Iowa, and on May
16, 1997, consummated its acquisition of the License Assets of KDNL-TV,  WVRV-FM
and KPNT-FM in St. Louis, Missouri. The Company obtained the options pursuant to
which it acquired these assets in the River City Acquisition. On March 12, 1997,
the Company  entered into an  agreement  to acquire the assets of radio  station
WKRF-FM in the Wilkes-Barre/Scranton,  Pennsylvania market. The FCC has approved
this  acquisition.  In April 1997,  the Company  entered  into an  agreement  to
acquire the assets of radio station WWSH-FM in the Wilkes-Barre/Scranton market.

LOCAL MARKETING AGREEMENTS

     The  Company  generally  enters  into LMAs and  similar  arrangements  with
stations  located in markets in which the Company  already  owns and  operates a
station,  and in connection with acquisitions,  pending  regulatory  approval of
transfer of License Assets. Under the terms of the LMAs the Company

                                       11


<PAGE>

makes  specified  periodic  payments to the  owner-operator  in exchange for the
grant to the Company of the right to program and sell advertising on a specified
portion of the  station's  inventory of  broadcast  time.  Nevertheless,  as the
holder  of  the  FCC  license,  the  owner-operator  retains  full  control  and
responsibility  for the  operation  of the station,  including  control over all
programming broadcast on the station.

     The Company currently has LMA arrangements with stations in five markets in
which it owns a television station: Pittsburgh,  Pennsylvania (WPTT), Baltimore,
Maryland (WNUV),  Raleigh/Durham,  North Carolina (WRDC),  Milwaukee,  Wisconsin
(WVTV) and Birmingham,  Alabama (WABM). The Company also has LMA arrangements in
two  markets  (San  Antonio and  Asheville/Greenville/Spartanburg)  in which the
Company will own a station upon  completion of the acquisition of License Assets
from River City. In addition,  the Company has an LMA arrangement with a station
in the Tuscaloosa,  Alabama market (WDBB),  which is adjacent to Birmingham.  In
each of these markets, other than Pittsburgh and Tuscaloosa, the LMA arrangement
is (or will be after  transfer of License Assets from River City) with Glencairn
and the Company owns the  Non-License  Assets of the stations.  The Company owns
the assets of one radio station  (KBLA-AM in Los Angeles)  which an  independent
third party programs pursuant to an LMA.

     The Company  believes  that it is able to increase its revenues and improve
its margins by providing  programming  services to stations in selected DMAs and
MSAs where the Company  already  owns a station.  In certain  instances,  single
station  operators and stations operated by smaller ownership groups do not have
the management expertise or the operating  efficiencies available to the Company
as a multi-station  broadcaster.  The Company seeks to identify such stations in
selected markets and to provide such stations with programming services pursuant
to  LMAs.  In  addition  to  providing  the  Company  with  additional   revenue
opportunities,  the Company believes that these LMA  arrangements  have assisted
certain  stations  whose  operations  may have  been  marginally  profitable  to
continue to air popular  programming  and contribute to diversity of programming
in their respective DMAs and MSAs.

     In cases where the Company enters into LMA  arrangements in connection with
a station whose acquisition by the Company is pending FCC approval,  the Company
(i) obtains an option to acquire the station assets essential for broadcasting a
television or radio signal in compliance with regulatory  guidelines,  generally
consisting  of the  FCC  license,  transmitter,  transmission  lines,  technical
equipment,  call letters and  trademarks,  and certain  furniture,  fixtures and
equipment  (the "License  Assets") and (ii)  acquires the remaining  assets (the
"Non-License  Assets")  at  the  time  it  enters  into  the  option.  Following
acquisition of the Non-License  Assets,  the License Assets continue to be owned
by the  owner-operator  and holder of the FCC license,  which enters into an LMA
with the  Company.  After FCC  approval  for  transfer of the License  Assets is
obtained,  the Company  exercises  its option to acquire the License  Assets and
become the owner-operator of the station, and the LMA arrangement is terminated.

     In connection  with the River City  Acquisition,  the Company  entered into
LMAs with  River  City and the owner of KRRT  with  respect  to each of the nine
television  (including  KDSM-TV) and 21 radio stations with respect to which the
Company  acquired  Non-License  Assets.  The LMAs are for a ten-year term, which
corresponds with the term of the option the Company holds to acquire the related
River City License Assets. Pursuant to the LMAs, the Company pays River City and
the owner of KRRT fees in return  for  which  the  Company  acquires  all of the
inventory of  broadcast  time of the stations and the right to sell 100% of each
station's inventory of advertising time. The Company has filed applications with
respect to the  transfer of the License  Assets of seven of the nine  television
stations and the 21 radio  stations  with respect to which the Company  acquired
Non-License  Assets in the River City  Acquisition.  Such applications have been
granted with respect to three of the seven television  stations and all 21 radio
stations,  and  the  Company  has  acquired  the  license  assets  of the  three
television stations and all 21 of the radio stations. Upon grant of FCC approval
of the transfer of License  Assets with respect to the remaining  stations,  the
Company  intends to acquire the License  Assets,  and  thereafter  the LMAs will
terminate  and the  Company  will  operate  the  stations.  With  respect to the
remaining  two  television  stations,  Glencairn has applied for transfer of the
License  Assets of these  stations,  and the  Company  intends to program  these
stations  under LMAs with  Glencairn  upon FCC  approval of the  transfer of the
License Assets to Glencairn.  Petitions to deny or informal objections have been
filed against these applications by third parties. The Company has requested the
FCC to withhold action on the applications for the Company's acquisition of WTTV
and WTTK in Indianapolis (and a pending application for


                                       12


<PAGE>


the Controlling  Stockholders to divest their attributable  interests in WIIB in
Indianapolis)  until  the  FCC  completes  its  pending  rulemaking   proceeding
considering the cross-interest policy.

     In addition to its LMAs,  the Company  sells  commercial  air time for (but
does not provide  programming to) one radio station  pursuant to a JSA in an MSA
in which it has  interests  in other radio  stations.  The Company has agreed to
acquire  this  station.  Under the  Company's  JSA, the Company has obtained the
right,  for a fee  paid  to the  owner  and  operator  of the  station,  to sell
substantially all of the commercial advertising on the station.

FEDERAL REGULATION OF TELEVISION AND RADIO BROADCASTING

     The  ownership,  operation  and sale of television  and radio  stations are
subject to the jurisdiction of the Federal  Communications  Commission  ("FCC"),
which acts  under  authority  granted by the  Communications  Act.  Among  other
things,  the FCC  assigns  frequency  bands  for  broadcasting;  determines  the
particular  frequencies,  locations  and  operating  power of stations;  issues,
renews,  revokes and modifies  station  licenses;  regulates  equipment  used by
stations;  adopts and  implements  regulations  and  policies  that  directly or
indirectly affect the ownership, operation and employment practices of stations;
and has the  power  to  impose  penalties  for  violations  of its  rules or the
Communications Act.

     The   following  is  a  brief   summary  of  certain   provisions   of  the
Communications  Act,  the 1996 Act and specific FCC  regulations  and  policies.
Reference  should be made to the  Communications  Act,  FCC rules and the public
notices and rulings of the FCC for further information concerning the nature and
extent of federal regulation of broadcast stations.

     License Grant and Renewal.  Television and radio stations  operate pursuant
to broadcasting  licenses that are granted by the FCC for maximum terms of eight
years.

     Television  and  radio  station   licenses  are  subject  to  renewal  upon
application to the FCC.  During certain  periods when renewal  applications  are
pending,  competing  applicants  may file for the radio or television  frequency
being used by the renewal applicant.  During the same periods, petitions to deny
license  renewal  applications  may be filed by  interested  parties,  including
members of the public.  Prior to the 1996 Act, the FCC was generally required to
hold  hearings  on renewal  applications  if a competing  application  against a
renewal  application  was filed, if the FCC was unable to determine that renewal
of a license would serve the public interest, convenience and necessity, or if a
petition  to deny raised a  "substantial  and  material  question of fact" as to
whether the grant of the renewal  application would be prima facie  inconsistent
with the public interest, convenience and necessity.

     The 1996 Act does not  prohibit  either  the  filing of  petitions  to deny
license  renewals or the filing of competing  applications.  Under the 1996 Act,
the FCC is still  required  to hold  hearings on renewal  applications  if it is
unable to determine  that renewal of a license would serve the public  interest,
convenience  or necessity,  or if a petition to deny raises a  "substantial  and
material  question of fact" as to whether  the grant of the renewal  application
would be prima facie  inconsistent  with the public  interest,  convenience  and
necessity.  Pursuant  to the  1996  Act,  however,  the FCC is  prohibited  from
considering competing applications for a renewal applicant's  frequency,  and is
required  to grant  the  renewal  application,  if the FCC  finds:  (i) that the
station has served the public  interest,  convenience  and necessity;  (ii) that
there have been no serious  violations by the licensee of the Communications Act
or the rules and  regulations  of the FCC;  and (iii)  there  have been no other
violations  by  the  licensee  of  the  Communications  Act  or  the  rules  and
regulations of the FCC that, when taken together,  would constitute a pattern of
abuse.

     All of the stations that the Company (i) owns and operates, (ii) intends to
acquire  pursuant to the River City  Acquisition and other  acquisitions,  (iii)
currently provides programming services to pursuant to an LMA, or (iv) currently
sells  commercial air time on pursuant to a JSA, are presently  operating  under
regular  licenses,  which expire as to each station on the dates set forth under
"Television  Broadcasting" and "Radio  Broadcasting," above. Although renewal of
license is granted in the vast majority of cases even when petitions to deny are
filed,  there can be no  assurance  that the licenses of such  stations  will be
renewed.


                                       13


<PAGE>

Ownership Matters

General

     The  Communications  Act prohibits the assignment of a broadcast license or
the transfer of control of a broadcast  licensee  without the prior  approval of
the FCC. In determining  whether to permit the assignment or transfer of control
of, or the grant or renewal of, a broadcast license,  the FCC considers a number
of factors pertaining to the licensee,  including  compliance with various rules
limiting common ownership of media  properties,  the "character" of the licensee
and those persons holding "attributable"  interests therein, and compliance with
the Communications Act's limitations on alien ownership.

     To obtain the FCC's prior consent to assign a broadcast license or transfer
control of a broadcast licensee, appropriate applications must be filed with the
FCC. If the application involves a "substantial change" in ownership or control,
the application must be placed on public notice for a period of approximately 30
days during which  petitions to deny the  application may be filed by interested
parties,  including members of the public. If the application does not involve a
"substantial  change" in ownership or control,  it is a "pro forma" application.
The  "pro  forma"  application  is  nevertheless   subject  to  having  informal
objections  filed  against  it. If the FCC  grants  an  assignment  or  transfer
application, interested parties have approximately 30 days from public notice of
the grant to seek reconsideration of that grant. Generally,  parties that do not
file initial  petitions to deny or informal  objections  against the application
face difficulty in seeking  reconsideration  of the grant.  The FCC normally has
approximately  an  additional 10 days to set aside such grant on its own motion.
When passing on an  assignment  or transfer  application,  the FCC is prohibited
from considering whether the public interest might be served by an assignment or
transfer to any party other than the  assignee or  transferee  specified  in the
application.

     The FCC generally applies its ownership limits to "attributable"  interests
held by an individual,  corporation,  partnership or other  association.  In the
case of corporations  holding, or through  subsidiaries  controlling,  broadcast
licenses,  the  interests  of  officers,  directors  and those who,  directly or
indirectly, have the right to vote 5% or more of the corporation's stock (or 10%
or more of such stock in the case of insurance  companies,  investment companies
and  bank  trust   departments   that  are  passive   investors)  are  generally
attributable, except that, in general, no minority voting stock interest will be
attributable  if there is a single  holder of more  than 50% of the  outstanding
voting power of the  corporation.  The FCC has a pending  rulemaking  proceeding
that,  among other  things,  seeks  comment on whether the FCC should modify its
attribution rules by (i) raising the attribution stock benchmark from 5% to 10%;
(ii) raising the attribution  stock benchmark for passive  investors from 10% to
20%; (iii)  restricting  the  availability  of the single  majority  shareholder
exemption; and (iv) attributing certain interests such as non-voting stock, debt
and certain holdings by limited liability corporations in certain circumstances.
More  recently,  the FCC has solicited  comment on proposed rules that would (i)
treat an otherwise  nonattributable  equity or debt interest in a licensee as an
attributable  interest  where the interest  holder is a program  supplier or the
owner of a  broadcast  station in the same  market and the  equity  and/or  debt
holding is  greater  than a  specified  benchmark;  (ii)  treat a licensee  of a
television  station  which,  under an LMA,  brokers more than 15% of the time on
another  television  station serving the same market,  as having an attributable
interest in the brokered station; and (iii) in certain circumstances,  treat the
licensee of a broadcast  station that sells  advertising time on another station
in the same market pursuant to a JSA as having an  attributable  interest in the
station whose advertising is being sold.

     The Controlling  Stockholders hold  attributable  interests in two entities
owning media properties,  namely:  Channel 63, Inc.,  licensee of WIIB-TV, a UHF
television station in Bloomington,  Indiana, and Bay Television,  Inc., licensee
of WTTA-TV,  a UHF television  station in St.  Petersburg,  Florida.  All of the
issued and  outstanding  shares of Channel 63, Inc. are owned by the Controlling
Stockholders.  All the issued and outstanding shares of Bay Television, Inc. are
owned by the  Controlling  Stockholders  (75%) and Robert L.  Simmons  (25%),  a
former stockholder of the Company.  The Controlling  Stockholders have agreed to
divest their attributable interests in Channel 63, Inc. and the Company believes
that, after doing so, such holdings will not materially  restrict its ability to
acquire or program additional broadcast stations.


                                       14


<PAGE>

     Under its  "cross-interest"  policy, the FCC considers certain "meaningful"
relationships  among  competing  media  outlets in the same market,  even if the
ownership  rules do not  specifically  prohibit  the  relationship.  Under  this
policy,  the FCC may consider  significant  equity  interests  combined  with an
attributable interest in a media outlet in the same market, joint ventures,  and
common key  employees  among  competitors.  The  cross-interest  policy does not
necessarily prohibit all of these interests,  but requires that the FCC consider
whether,  in  a  particular  market,  the  "meaningful"   relationships  between
competitors  could have a significant  adverse effect upon economic  competition
and program  diversity.  Heretofore,  the FCC has not applied its cross-interest
policy to LMAs and JSAs between broadcast  stations.  In its ongoing  rulemaking
proceeding  concerning  the  attribution  rules,  the FCC has sought comment on,
among other things, (i) whether the cross-interest policy should be applied only
in smaller markets, and (ii) whether non-equity financial  relationships such as
debt, when combined with multiple business  interrelationships  such as LMAs and
JSAs,  raise concerns under the  cross-interest  policy.  Moreover,  in its most
recent proposals in its ongoing attribution rulemaking  proceeding,  the FCC has
proposed  treating  television  LMAs,  JSAs,  and debt or  equity  interests  as
attributable   interests  in  certain   circumstances   without  regard  to  the
cross-interest policy.

     The  Communications Act prohibits the issuance of broadcast licenses to, or
the holding of a broadcast license by, any corporation of which more than 20% of
the  capital  stock is owned of record or voted by  non-U.S.  citizens  or their
representatives  or by a foreign government or a representative  thereof,  or by
any corporation  organized  under the laws of a foreign  country  (collectively,
"Aliens"). The Communications Act also authorizes the FCC, if the FCC determines
that it would be in the public interest, to prohibit the issuance of a broadcast
license to, or the holding of a broadcast  license by, any corporation  directly
or indirectly  controlled by any other corporation of which more than 25% of the
capital  stock is owned of  record  or voted by  Aliens.  The  Company  has been
advised that the FCC staff has  interpreted  this provision to require a finding
that such grant or holding  would be in the public  interest  before a broadcast
license may be granted to or held by any such corporation and that the FCC staff
has made  such a  finding  only in  limited  circumstances.  The FCC has  issued
interpretations  of existing law under which these restrictions in modified form
apply to other forms of business  organizations,  including  partnerships.  As a
result of these provisions,  the licenses granted to subsidiaries of the Company
by the FCC could be revoked  if,  among other  restrictions  imposed by the FCC,
more than 25% of the Company's stock were directly or indirectly  owned or voted
by Aliens. The Company and the Subsidiaries are domestic  corporations,  and the
Controlling  Stockholders  are all  United  States  citizens.  The  Amended  and
Restated  Articles of Incorporation  of the Company (the "Amended  Certificate")
contain  limitations  on Alien  ownership  and  control  that are  substantially
similar to those contained in the  Communications  Act.  Pursuant to the Amended
Certificate, the Company has the right to repurchase Alien-owned shares at their
fair  market  value to the extent  necessary,  in the  judgment  of the Board of
Directors, to comply with the Alien ownership restrictions.

Television

     National  Ownership  Rule.  Prior  to the 1996  Act,  FCC  rules  generally
prohibited an individual or entity from having an attributable  interest in more
than 12 television stations nationwide,  or in television stations reaching more
than 25% of the national television viewing audience.  Pursuant to the 1996 Act,
the FCC has  modified  its rules to eliminate  any  limitation  on the number of
television  stations an individual or entity may own nationwide,  subject to the
restriction  that no individual or entity may have an  attributable  interest in
television  stations reaching more than 35% of the national  television  viewing
audience.  Historically, VHF stations have shared a larger portion of the market
than UHF stations.  Therefore, only half of the households in the market area of
any UHF station are included  when  calculating  whether an entity or individual
owns  television  stations  reaching  more than 35% of the  national  television
viewing  audience.  All but  three of the  stations  owned and  operated  by the
Company, or to which the Company provides programming services, are UHF.

     Duopoly Rule. On a local level,  the  television  "duopoly"  rule generally
prohibits a single individual or entity from having an attributable  interest in
two or more television  stations with overlapping  Grade B service areas.  While
the 1996 Act has not  eliminated  the TV duopoly rule, it does direct the FCC to
initiate a rulemaking  proceeding  to determine  whether to retain,  modify,  or
eliminate the rule. The FCC 
                                       15


<PAGE>
has  pending a  rulemaking  proceeding  in which it has  proposed  to modify the
television duopoly rule to permit the common ownership of television stations in
different  DMAs,  so long as the Grade A signal  contours of the stations do not
overlap. Pending resolution of its rulemaking proceeding, the FCC has adopted an
interim waiver policy that permits the common  ownership of television  stations
in different DMAs with no overlapping  Grade A signal  contours,  conditioned on
the final outcome of the rulemaking proceeding.  The FCC has also sought comment
on whether  common  ownership of two  television  stations in a market should be
permitted  (i) where one or more of the  commonly  owned  stations is UHF,  (ii)
where  one of the  stations  is in  bankruptcy  or has  been  off  the air for a
substantial period of time and (iii) where the commonly owned stations have very
small audience or advertising shares, are located in a very large market, and/or
a specified  number of  independently  owned media voices would remain after the
acquisition.

     Local Marketing Agreements. Over the past few years, a number of television
stations,  including certain of the Company's  stations,  have entered into what
have commonly been referred to as LMAs.  While these agreements may take varying
forms,  pursuant to a typical  LMA,  separately  owned and  licensed  television
stations agree to enter into cooperative  arrangements of varying sorts, subject
to compliance  with the  requirements of antitrust laws and with the FCC's rules
and policies. Under these types of arrangements, separately-owned stations could
agree to function  cooperatively  in terms of  programming,  advertising  sales,
etc.,  subject  to the  requirement  that the  licensee  of each  station  shall
maintain  independent  control over the  programming  and  operations of its own
station.  One  typical  type  of  LMA is a  programming  agreement  between  two
separately-owned  television stations serving a common service area, whereby the
licensee of one station  programs  substantial  portions of the broadcast day on
the other licensee's  station,  subject to ultimate editorial and other controls
being exercised by the latter licensee,  and sells  advertising time during such
program  segments.  Such  arrangements  are an extension of the concept of "time
brokerage" agreements,  under which a licensee of a station sells blocks of time
on its  station to an entity or  entities  which  program the blocks of time and
which  sell  their own  commercial  advertising  announcements  during  the time
periods in question.  Over the past few years, the staff of the FCC's Mass Media
Bureau has held that LMAs are not contrary to the  Communications  Act, provided
that the  licensee of the station  which is being  substantially  programmed  by
another  entity  maintains   complete   responsibility   for  and  control  over
programming and operations of its broadcast station and assures  compliance with
applicable FCC rules and policies.

     At present, FCC rules permit television station LMAs, and the licensee of a
television   station  brokering  time  on  another  television  station  is  not
considered to have an attributable interest in the brokered station. However, in
connection  with its ongoing  rulemaking  proceeding  regarding  the  television
duopoly rule, the FCC has proposed to adopt rules providing that the licensee of
a  television  station  which  brokers  more  than  15% of the  time on  another
television  station  serving  the  same  market  would  be  deemed  to  have  an
attributable  interest in the brokered  station for purposes of the national and
local multiple ownership rules. In connection with this proceeding,  the FCC has
solicited  detailed  information from parties to television LMAs as to the terms
and characteristics of such LMAs.

     The 1996 Act provides that nothing  therein "shall be construed to prohibit
the  origination,  continuation,  or renewal of any television  local  marketing
agreement  that  is in  compliance  with  the  regulations  of the  [FCC]."  The
legislative history of the 1996 Act reflects that this provision was intended to
grandfather  television  LMAs that were in existence  upon enactment of the 1996
Act, and to allow  television LMAs consistent with the FCC's rules subsequent to
enactment of the 1996 Act. In its pending  rulemaking  proceeding  regarding the
television  duopoly rule, the FCC has proposed to adopt a grandfathering  policy
providing that, in the event that television LMAs become attributable interests,
LMAs that are in  compliance  with  existing  FCC rules  and  policies  and were
entered  into before  November 5, 1996,  would be permitted to continue in force
until the original term of the LMA expires. Under the FCC's proposal, television
LMAs that are entered  into or renewed  after  November 5, 1996 would have to be
terminated  if LMAs  are made  attributable  interests  and the LMA in  question
resulted  in a  violation  of  the  television  multiple  ownership  rules.  The
Company's LMAs with television stations WPTT in Pittsburgh,  Pennsylvania,  WNUV
in Baltimore,  Maryland, WVTV in Milwaukee,  Wisconsin,  WRDC in Raleigh/Durham,
North Carolina,  WABM in Birmingham,  Alabama, and WDBB in Tuscaloosa,  Alabama,
were in  existence on both the date of enactment of the 1996 Act and November 5,
1996. The 
                                       16


<PAGE>
Company's LMAs with television stations WTTV and WTTK in Indianapolis,  Indiana,
WLOS  in  Asheville,  North  Carolina,  WFBC  in  Greenville-Spartanburg,  South
Carolina,  and KABB in San Antonio,  Texas,  were entered into subsequent to the
date of enactment of the 1996 Act but prior to November 5, 1996.  The  Company's
LMA with  television  station KRRT in  Kerrville,  Texas was in existence on the
date of enactment of the 1996 Act, but was assumed by the Company  subsequent to
that date but prior to November 5, 1996.

     The TV duopoly  rule  currently  prevents the Company  from  acquiring  the
licenses of  television  stations  with which it has LMAs in those markets where
the Company owns a television  station.  As a result,  if the FCC were to decide
that the  provider of  programming  services  under a  television  LMA should be
treated as having an attributable  interest in the brokered  station,  and if it
did not relax its  television  duopoly  rule,  the Company  could be required to
modify or terminate  those of its LMAs that were not in existence on the date of
enactment of the 1996 Act or on November 5, 1996. Furthermore, if the FCC adopts
its present proposal with respect to the  grandfathering of television LMAs, the
Company could be required to terminate even those LMAs that were in effect prior
to the date of enactment of the 1996 Act or prior to November 5, 1996, after the
initial  term of the LMA or upon  assignment  of the LMA. In such an event,  the
Company  could be required to pay  termination  penalties  under certain of such
LMAs.  Further, if the FCC were to find, in connection with any of the Company's
LMAs, that the  owners/licensees of the stations with which the Company has LMAs
failed to maintain  control over their  operations  as required by FCC rules and
policies,  the licensee of the LMA station  and/or the Company could be fined or
set for hearing,  the outcome of which could be a monetary  forfeiture or, under
certain circumstances, loss of the applicable FCC license. The Company is unable
to predict the ultimate  outcome of possible  changes to these FCC rules and the
impact such FCC rules may have on its broadcasting operations.

     On June 1, 1995, the Chief of the FCC's Mass Media Bureau released a Public
Notice  concerning  the  processing  of  television  assignment  and transfer of
control  applications  proposing  LMAs.  Due to  the  pendency  of  the  ongoing
rulemaking proceeding concerning attribution of ownership, the Mass Media Bureau
has  placed  certain  restrictions  on the types of  television  assignment  and
transfer of control applications  involving LMAs that it will approve during the
pendency of the rulemaking.  Specifically, the Mass Media Bureau has stated that
it will not approve  arrangements where a time broker seeks to finance a station
acquisition  and hold an option to  purchase  the  station  in the  future.  The
Company  believes that none of the Company's  LMAs fall within the ambit of this
Public Notice.

Radio

     National  Ownership Rule. Prior to the 1996 Act, the FCC's rules limited an
individual or entity from holding attributable  interests in more than 20 AM and
20 FM radio stations nationwide.  Pursuant to the 1996 Act, the FCC has modified
its rules to eliminate any  limitation on the number of radio  stations a single
individual or entity may own nationwide.

     Local  Ownership  Rule.  Prior to the 1996 Act,  the FCC's rules  generally
permitted an individual or entity to hold attributable interests in no more than
four radio stations in a local market (no more than two of which could be in the
same service (AM or FM)),  and then only if the aggregate  audience share of the
commonly  owned  stations  did not exceed  25%.  In  markets  with fewer than 15
commercial  radio  stations,  an individual or entity could hold an attributable
interest in no more than three radio stations in the market (no more than two of
which could be in the same service), and then only if the number of the commonly
owned  stations  did not  exceed  50% of the total  number of  commercial  radio
stations in the market.

     Pursuant to the 1996 Act,  the limits on the number of radio  stations  one
entity may own locally have been  increased as follows:  (i) in a market with 45
or more  commercial  radio  stations,  an entity may own up to eight  commercial
radio stations,  not more than five of which are in the same service (AM or FM);
(ii) in a market with between 30 and 44 (inclusive)  commercial  radio stations,
an entity may own up to seven commercial  radio stations,  not more than four of
which  are in the  same  service;  (iii)  in a  market  with  between  15 and 29
(inclusive)  commercial  radio stations,  an entity may own up to six commercial
radio stations, not more than four of which are in the same service; and (iv) in
a market with 14 or fewer 

                                       17


<PAGE>
commercial  radio  stations,  an  entity  may  own up to five  commercial  radio
stations,  not more than three of which are in the same service,  except that an
entity may not own more than 50% of the stations in such market. These numerical
limits apply  regardless of the aggregate  audience share of the stations sought
to be commonly  owned.  FCC ownership  rules continue to permit an entity to own
one FM and  one  AM  station  in a  local  market  regardless  of  market  size.
Irrespective of FCC rules governing radio ownership,  however, the Department of
Justice and the Federal Trade Commission have the authority to determine, and in
certain  recent radio  transactions  not involving the Company have  determined,
that a particular transaction presents antitrust concerns.

     Local Marketing  Agreements.  As in television,  a number of radio stations
have entered into LMAs. The FCC's multiple ownership rules  specifically  permit
radio station LMAs to be entered into and  implemented,  so long as the licensee
of the  station  which is being  programmed  under  the LMA  maintains  complete
responsibility  for and control over programming and operations of its broadcast
station and assures  compliance with applicable FCC rules and policies.  For the
purposes of the multiple  ownership  rules,  in general,  a radio  station being
programmed  pursuant to an LMA by an entity is not  considered  an  attributable
ownership  interest of that  entity  unless  that  entity  already  owns a radio
station in the same market.  However,  a licensee that owns a radio station in a
market,  and brokers  more than 15% of the time on another  station  serving the
same market,  is considered to have an  attributable  ownership  interest in the
brokered  station  for  purposes of the FCC's  multiple  ownership  rules.  As a
result, in a market in which the Company owns a radio station, the Company would
not be permitted to enter into an LMA with another  local radio station which it
could not own under the local ownership rules, unless the Company's  programming
constituted  15% or less of the  other  local  station's  programming  time on a
weekly  basis.  The  FCC's  rules  also  prohibit  a  broadcast   licensee  from
simulcasting  more than 25% of its  programming  on another  station in the same
broadcast  service  (i.e.,  AM-AM or FM- FM)  through  a time  brokerage  or LMA
arrangement  where the brokered and brokering  stations serve  substantially the
same area.

     Joint  Sales  Agreements.  Over the past few years,  a number of radio (and
television) stations have entered into cooperative  arrangements  commonly known
as joint sales  agreements,  or JSAs.  While these  agreements  may take varying
forms,  under the typical JSA, a station licensee obtains,  for a fee, the right
to sell  substantially all of the commercial  advertising on a  separately-owned
and  licensed  station in the same  market.  The  typical  JSA also  customarily
involves the provision by the selling licensee of certain sales, accounting, and
"back  office"  services to the station  whose  advertising  is being sold.  The
typical JSA is distinct  from an LMA in that a JSA (unlike an LMA) normally does
not involve programming.

     The FCC has  determined  that issues of joint  advertising  sales should be
left to enforcement by antitrust  authorities,  and therefore does not generally
regulate joint sales practices between stations. Currently, stations for which a
licensee  sells time  under a JSA are not  deemed by the FCC to be  attributable
interests of that licensee.  However,  in connection with its ongoing rulemaking
proceeding concerning the attribution rules, the FCC is considering whether JSAs
should be  considered  attributable  interests  or within the scope of the FCC's
cross-interest policy,  particularly when JSAs contain provisions for the supply
of programming services and/or other elements typically associated with LMAs. If
JSAs become attributable  interests as a result of changes in the FCC rules, the
Company may be required to terminate  any JSA it might have with a radio station
which the Company could not own under the FCC's multiple ownership rules.

Other Ownership Matters

     There  remain  in  place  after  the  1996  Act  a  number  of   additional
cross-ownership rules and prohibitions pertaining to licensees of television and
radio stations. FCC rules, the Communications Act, or both generally prohibit an
individual or entity from having an  attributable  interest in both a television
station and a radio station,  a daily newspaper,  or a cable  television  system
that is located in or serves the same market area.

     Antitrust  Regulation.  The  Department  of Justice and the  Federal  Trade
Commission  have recently  increased  their scrutiny of the television and radio
industry,  and have indicated  their  intention to review matters related to the
concentration  of ownership  within markets  (including LMAs and JSAs) even 

                                       18


<PAGE>
when  the  ownership  or LMA or JSA in  question  is  permitted  under  the laws
administered by the FCC or by FCC rules and regulations.

     Radio/Television   Cross-Ownership   Rule.   The   FCC's   radio/television
cross-ownership  rule (the "one to a market" rule) generally  prohibits a single
individual  or entity  from  having an  attributable  interest  in a  television
station and a radio station serving the same market.  However, in each of the 25
largest local markets in the United States,  provided that there are at least 30
separately owned stations in the particular  market,  the FCC has  traditionally
employed a policy that presumptively  allows waivers of the one to a market rule
to permit  the  common  ownership  of one AM,  one FM and one TV  station in the
market. The 1996 Act directs the FCC to extend this policy to each of the top 50
markets.  Moreover,  the FCC has pending a rulemaking proceeding in which it has
solicited  comment  on whether  the one to a market  rule  should be  eliminated
altogether.

     However,  the FCC does not apply  its  presumptive  waiver  policy in cases
involving the common ownership of one television station,  and two or more radio
stations in the same service (AM or FM), in the same market. Pending its ongoing
rulemaking  proceeding to reexamine the one to a market rule, the FCC has stated
that it will consider  waivers of the rule in such  instances on a  case-by-case
basis,  considering  (i) the public  service  benefits  that will arise from the
joint operation of the facilities  such as economies of scale,  cost savings and
programming and service benefits;  (ii) the types of facilities involved;  (iii)
the number of media outlets owned by the applicant in the relevant market;  (iv)
the financial  difficulties of the stations involved;  and (v) the nature of the
relevant  market in light of the level of competition  and diversity after joint
operation  is  implemented.  The FCC has stated  that it  expects  that any such
waivers that are granted will be  conditioned  on the outcome of the  rulemaking
proceeding.

     In its ongoing rulemaking proceeding to reexamine the one to a market rule,
the FCC has proposed the  following  options for modifying the rule in the event
it is not  eliminated:  (i)  extending  the  presumptive  waiver  policy  to any
television  market in which a specified  number of  independently  owned  voices
would  remain after  common  ownership  of a television  station and one or more
radio stations is effectuated;  (ii) extending the presumptive  waiver policy to
entities  that seek to own more than one FM and/or one AM radio  station;  (iii)
reducing the minimum number of independently owned voices that must remain after
a transaction is effectuated;  and (iv) modifying the  five-factor  case-by-case
test for waivers.

     Local Television/Cable  Cross-Ownership Rule. While the 1996 Act eliminates
a previous  statutory  prohibition  against the common ownership of a television
broadcast station and a cable system that serve the same local market,  the 1996
Act leaves the current  FCC rule in place.  The  legislative  history of the Act
indicates  that the repeal of the  statutory ban should not prejudge the outcome
of any FCC review of the rule.

     Broadcast Network/Cable  Cross-Ownership Rule. The 1996 Act directs the FCC
to  eliminate  its rules which  formerly  prohibited  the common  ownership of a
broadcast  network and a cable  system,  subject to the  provision  that the FCC
revise its rules as  necessary  to ensure  carriage,  channel  positioning,  and
non-discriminatory  treatment  of  non-affiliated  broadcast  stations  by cable
systems  affiliated with a broadcast  network.  In March 1996, the FCC issued an
order implementing this legislative change.

     Broadcast/Daily  Newspaper  Cross-Ownership  Rule. The FCC's rules prohibit
the common  ownership  of a radio or  television  broadcast  station and a daily
newspaper  in the same  market.  The 1996 Act does not  eliminate or modify this
prohibition. In October 1996, however, the FCC initiated a rulemaking proceeding
to  determine  whether it should  liberalize  its waiver  policy with respect to
cross-ownership  of a daily newspaper and one or more radio stations in the same
market.

     Dual  Network  Rule.  The 1996 Act directs the FCC to repeal its rule which
formerly  prohibited an entity from operating more than one television  network.
In March 1996, the FCC issued an order  implementing  this  legislative  change.
Under the modified  rule, a network entity is permitted to operate more than one
television  network,  provided,  however,  that ABC,  CBS,  NBC,  and/or Fox are
prohibited  from  merging  with each other or with  another  network  television
entity such as UPN or Warner Brothers.

     Expansion  of the  Company's  broadcast  operations  on  both a  local  and
national level will continue to be subject to the FCC's  ownership rules and any
changes the FCC or Congress may adopt. Concomitantly,  any further relaxation of
the FCC's  ownership  rules may increase the level of competition in one

                                       19


<PAGE>
or more of the  markets  in which  the  Company's  stations  are  located,  more
specifically  to the  extent  that  any of the  Company's  competitors  may have
greater  resources  and thereby be in a superior  position to take  advantage of
such changes.

Must-Carry/Retransmission Consent

     Pursuant to the Cable Act of 1992, television  broadcasters are required to
make   triennial   elections  to  exercise   either  certain   "must-carry"   or
"retransmission  consent"  rights in  connection  with their  carriage  by cable
systems in each broadcaster's local market. By electing the must-carry rights, a
broadcaster  demands carriage on a specified channel on cable systems within its
Area of  Dominant  Influence,  in general as  defined  by the  Arbitron  1991-92
Television  Market Guide.  These must-carry  rights are not absolute,  and their
exercise is dependent on variables such as (i) the number of activated  channels
on a cable system;  (ii) the location and size of a cable system;  and (iii) the
amount of programming on a broadcast  station that duplicates the programming of
another broadcast station carried by the cable system. Therefore,  under certain
circumstances,   a  cable   system  may  decline  to  carry  a  given   station.
Alternatively,  if a  broadcaster  chooses to  exercise  retransmission  consent
rights,  it can prohibit  cable  systems  from  carrying its signal or grant the
appropriate  cable system the authority to retransmit the broadcast signal for a
fee or other  consideration.  In October 1996, the Company elected must-carry or
retransmission  consent  with  respect  to  each  of its  markets  based  on its
evaluation of the respective  markets and the position of the Company's  station
within  the  market.  The  Company's  stations  continue  to be  carried  on all
pertinent  cable  systems,  and the Company does not believe that its  elections
have  resulted in the shifting of its stations to less  desirable  cable channel
locations. Certain of the Company's stations affiliated with Fox are required to
elect retransmission  consent because Fox's retransmission  consent negotiations
on  behalf of the  Company  resulted  in  agreements  which  extend  into  1998.
Therefore,  the Company will need to negotiate retransmission consent agreements
for these  Fox-affiliated  stations to attain  carriage on those  relevant cable
systems for the balance of this  triennial  period (i.e.,  through  December 31,
1999).  For  subsequent  elections  beginning  with the  election  to be made by
October 1, 1999, the must-carry  market will be the station's DMA, in general as
defined by the Nielsen DMA Market and Demographic Rank Report of the prior year.

     The must-carry rules have been subject to judicial scrutiny. In April 1993,
the United States District Court for the District of Columbia  summarily  upheld
the  constitutionality  of the legislative  must-carry  provisions under a First
Amendment challenge.  However, in June 1994, the Supreme Court remanded the case
to the  lower  court  with  instructions  to test the  constitutionality  of the
must-carry rules under an "intermediate scrutiny" standard. In a decision issued
in December 1995, a closely divided three-judge  District Court panel ruled that
the record showed that there was substantial evidence before Congress from which
it could  draw the  reasonable  inferences  that (1) the  must-carry  rules were
necessary to protect the local broadcast industry;  and (2) the burdens on cable
systems  with  rapidly   increasing  channel  capacity  would  be  quite  small.
Accordingly,  the District  Court panel ruled that Congress had not violated the
First  Amendment in enacting the  "must-carry"  provisions.  In March 1997,  the
Supreme Court,  by a 5-4 majority,  affirmed the District  Court's  decision and
thereby let stand the must-carry rules.

Syndicated Exclusivity/Territorial Exclusivity

     The FCC has imposed  syndicated  exclusivity  rules and  expanded  existing
network  nonduplication  rules.  The  syndicated  exclusivity  rules allow local
broadcast   television  stations  to  demand  that  cable  operators  black  out
syndicated  non-network  programming carried on "distant signals" (i.e., signals
of broadcast stations,  including so-called  "superstations,"  which serve areas
substantially  removed from the cable  system's  local  community).  The network
non-duplication  rules allow local broadcast  network  television  affiliates to
require that cable operators black out duplicating  network  programming carried
on distant signals. However, in a number of markets in which the Company owns or
programs stations  affiliated with a network,  a station that is affiliated with
the same network in a nearby market is carried on cable systems in the Company's
market.  This is not in violation  of the FCC's  network  nonduplication  rules.
However,  the  carriage of two network  stations on the same cable  system could
result in a decline  of  viewership  adversely  affecting  the  revenues  of the
Company owned or programmed station.

                                       20


<PAGE>

Restrictions on Broadcast Advertising

     Advertising of cigarettes  and certain other tobacco  products on broadcast
stations has been banned for many years. Various states restrict the advertising
of  alcoholic  beverages.   Congressional   committees  have  recently  examined
legislation  proposals which may eliminate or severely  restrict the advertising
of beer and wine. Although no prediction can be made as to whether any or all of
the present  proposals will be enacted into law, the elimination of all beer and
wine advertising would have an adverse effect upon the revenues of the Company's
stations,  as well as the revenues of other  stations  which carry beer and wine
advertising.

     The FCC has imposed  commercial time  limitations in children's  television
programming pursuant to legislation. In television programs designed for viewing
by  children  of 12 years of age and under,  commercial  matter is limited to 12
minutes per hour on weekdays and 10.5 minutes per hour on weekends.  In granting
renewal of the  license  for  WBFF-TV,  the FCC imposed a fine of $10,000 on the
Company  alleging that the station had exceeded these  limitations.  The Company
has appealed this fine.

     The  Communications  Act and  FCC  rules  also  place  restrictions  on the
broadcasting  of  advertisements  by legally  qualified  candidates for elective
office.  Among other things, (i) stations must provide  "reasonable  access" for
the purchase of time by legally  qualified  candidates for federal office;  (ii)
stations  must provide  "equal  opportunities"  for the  purchase of  equivalent
amounts  of  comparable  broadcast  time by  opposing  candidates  for the  same
elective  office;  and (iii)  during the 45 days  preceding a primary or primary
run-off election and during the 60 days preceding a general or special election,
legally qualified candidates for elective office may be charged no more than the
station's  "lowest unit charge" for the same class of  advertisement,  length of
advertisement, and daypart.

Programming and Operation

     General. The Communications Act requires  broadcasters to serve the "public
interest."  The FCC  gradually  has  relaxed  or  eliminated  many  of the  more
formalized  procedures  it had developed in the past to promote the broadcast of
certain types of programming responsive to the needs of a station's community of
license. FCC licensees continue to be required,  however, to present programming
that is responsive to their communities' issues, and to maintain certain records
demonstrating  such   responsiveness.   Complaints  from  viewers  concerning  a
station's  programming  may be considered  by the FCC when it evaluates  renewal
applications  of a licensee,  although such  complaints may be filed at any time
and generally  may be considered by the FCC at any time.  Stations also must pay
regulatory and application  fees, and follow various rules promulgated under the
Communications  Act that regulate,  among other things,  political  advertising,
sponsorship  identifications,  the  advertisement  of  contests  and  lotteries,
obscene and indecent broadcasts,  and technical operations,  including limits on
radiofrequency  radiation.  In addition,  licensees  must develop and  implement
affirmative action programs designed to promote equal employment  opportunities,
and must submit  reports to the FCC with  respect to these  matters on an annual
basis and in connection with a renewal application.  Failure to observe these or
other rules and  policies  can result in the  imposition  of various  sanctions,
including monetary  forfeitures,  or the grant of a "short" (i.e., less than the
full) license renewal term or, for particularly egregious violations, the denial
of a license renewal application or the revocation of a license.

     Children's Television Programming. Pursuant to legislation enacted in 1991,
all  television  stations  have  been  required  to  broadcast  some  television
programming designed to meet the educational and informational needs of children
16 years of age and under.  In August  1996,  the FCC adopted new rules  setting
forth more stringent children's programming  requirements.  Specifically,  as of
September 1, 1997,  television  stations will be required to broadcast a minimum
of three hours per week of "core" children's educational programming,  which the
FCC  defines  as  programming   that  (i)  has  serving  the   educational   and
informational  needs of  children  16 years  of age and  under as a  significant
purpose;  (ii) is  regularly  scheduled,  weekly  and at  least  30  minutes  in
duration;  and (iii) is aired  between  the hours of 7:00  a.m.  and 10:00  p.m.
Furthermore,  as of January 2, 1997, "core" children's  educational programs, in
order to qualify as such,  are  required to be  identified  as  educational  and
informational  programs  over the air at the time  they are  broadcast,  and are
required to be identified in the children's  programming  reports required to be
placed in stations'  public  inspection  files.  Additionally,  as of January 2,
1997, television

                                       21


<PAGE>


stations  are  required to identify and provide  information  concerning  "core"
children's programming to publishers of program guides and listings.

     Television Violence.  The 1996 Act contains a number of provisions relating
to television violence. First, pursuant to the 1996 Act, the television industry
has  developed  a ratings  system,  and the FCC has  recently  solicited  public
comment on that system.  Furthermore,  the 1996 Act provides that all television
sets larger than 13 inches that are manufactured one year after enactment of the
1996 Act must  include  the  so-called  "V-chip,"  a computer  chip that  allows
blocking of rated  programming.  In  addition,  the 1996 Act  requires  that all
television  license  renewal  applications  filed  after  May  1,  1995  contain
summaries of written  comments and suggestions  received by the station from the
public regarding violent programming.

     Closed  Captioning.  The 1996 Act directs the FCC to adopt rules  requiring
closed  captioning  of  all  broadcast  television  programming,   except  where
captioning would be "economically burdensome." The FCC has recently instituted a
rulemaking proceeding to implement such rules.

Digital Television

     The FCC has taken a number of steps to implement digital television ("DTV")
broadcasting  service in the United States.  In December 1996, the FCC adopted a
DTV broadcast  standard and, in April 1997, adopted decisions in several pending
rulemaking  proceedings that establish service rules and a plan for implementing
DTV. The FCC adopted a DTV Table of  Allotments  that  provides  all  authorized
television  stations  with a second  channel on which to broadcast a DTV signal.
The FCC has  attempted  to provide DTV  coverage  areas that are  comparable  to
stations'  existing service areas.  The FCC has ruled that television  broadcast
licensees may use their digital  channels for a wide variety of services such as
high-definition television, multiple standard definition television programming,
audio, data, and other types of communications,  subject to the requirement that
each broadcaster provide at least one free video channel equal in quality to the
current technical standard.

     Initially,  DTV  channels  will be  located in the range of  channels  from
channel 2 through  channel 51. The FCC is requiring that affiliates of ABC, CBS,
Fox and NBC in the top 10 television  markets begin digital  broadcasting by May
1, 1999 (the stations  affiliated with these networks in the top 10 markets have
voluntarily  committed to begin digital broadcasting within 18 months), and that
affiliates of these networks in markets 11 through 30 begin digital broadcasting
by November 1999.  The FCC's plan calls for the DTV transition  period to end in
the year  2006,  at which time the FCC  expects  that (i) DTV  channels  will be
clustered either in the range of channels 2 through 46 or channels 7 through 51;
and  (ii)  television  broadcasters  will  have  ceased  broadcasting  on  their
non-digital  channels,  allowing that spectrum to be recovered by the government
for other uses.  The FCC has stated that it will open a separate  proceeding  to
consider  the  recovery  of  television  channels  60  through  69 and how those
frequencies  will be used after they are eventually  recovered  from  television
broadcasters.  Additionally, the FCC will open a separate proceeding to consider
to what extent the cable must-carry requirements will apply to DTV signals.

     Implementation of digital  television will improve the technical quality of
television signals received by viewers.  Under certain  circumstances,  however,
conversion to digital operation may reduce a station's  geographic coverage area
or result in some increased interference.  The FCC's DTV allotment plan may also
result in UHF  stations  having  considerably  less signal  power  within  their
service areas than present VHF stations  that move to DTV channels.  The Company
has  filed  with the FCC,  a  petition  for  reconsideration  of the  FCC's  DTV
allotment plan,  because of its concerns with respect to the relative DTV signal
powers of VHF/UHF and UHF/UHF  stations.  Implementation  of digital  television
will also impose substantial  additional costs on television stations because of
the need to replace  equipment and because some stations will need to operate at
higher utility costs. The FCC is also  considering  imposing new public interest
requirements  on  television  licensees  in  exchange  for their  receipt of DTV
channels. The Company cannot predict what future actions the FCC might take with
respect  to DTV,  nor  can it  predict  the  effect  of the  FCC's  present  DTV
implementation plan or such future actions on the Company's business.


                                       22
<PAGE>

Proposed Changes

     The  Congress and the FCC have under  consideration,  and in the future may
consider and adopt, new laws,  regulations and policies regarding a wide variety
of matters that could affect, directly or indirectly,  the operation,  ownership
and  profitability of the Company's  broadcast  stations,  result in the loss of
audience share and advertising  revenues for the Company's  broadcast  stations,
and affect the ability of the Company to acquire  additional  broadcast stations
or finance such  acquisitions.  In addition to the changes and proposed  changes
noted above, such matters may include, for example, the license renewal process,
spectrum use fees, political  advertising rates,  potential  restrictions on the
advertising of certain products (beer, wine and hard liquor,  for example),  and
the rules and  policies to be applied in  enforcing  the FCC's equal  employment
opportunity regulations. Other matters that could affect the Company's broadcast
properties  include   technological   innovations  and  developments   generally
affecting competition in the mass communications  industry, such as direct radio
and television  broadcast  satellite  service,  the continued  establishment  of
wireless cable systems and low power television stations, digital television and
radio  technologies,  and the advent of telephone  company  participation in the
provision of video programming service.

Other Considerations

     The foregoing  summary does not purport to be a complete  discussion of all
provisions  of the  Communications  Act or  other  congressional  acts or of the
regulations and policies of the FCC. For further  information,  reference should
be made to the Communications Act, other congressional acts, and regulations and
public  notices  promulgated  from time to time by the FCC. There are additional
regulations  and  policies  of the FCC and other  federal  agencies  that govern
political broadcasts, public affairs programming,  equal employment opportunity,
and other matters affecting the Company's business and operations.

ENVIRONMENTAL REGULATION

     Prior to the Company's ownership or operation of its facilities, substances
or  waste  that  are  or  might  be  considered   hazardous   under   applicable
environmental  laws may have been  generated,  used,  stored or  disposed  of at
certain of those facilities.  In addition,  environmental conditions relating to
the soil and groundwater at or under the Company's facilities may be affected by
the proximity of nearby properties that have generated, used, stored or disposed
of hazardous  substances.  As a result,  it is possible  that the Company  could
become subject to  environmental  liabilities  in the future in connection  with
these facilities under applicable  environmental laws and regulations.  Although
the  Company   believes  that  it  is  in  substantial   compliance   with  such
environmental  requirements,  and have not in the past  been  required  to incur
significant  costs in connection  therewith,  there can be no assurance that the
Company's  costs to  comply  with such  requirements  will not  increase  in the
future.  The Company  presently  believes that none of its  properties  have any
condition  that is likely to have a  material  adverse  effect on the  Company's
financial condition or results of operations.

COMPETITION

     The Company's  television and radio stations compete for audience share and
advertising revenue with other television and radio stations in their respective
DMAs, as well as with other advertising  media,  such as newspapers,  magazines,
outdoor advertising,  transit advertising,  yellow page directories, direct mail
and local cable and wireless cable systems.  Some competitors are part of larger
organizations  with  substantially   greater  financial,   technical  and  other
resources than the Company.

     Television Competition. Competition in the television broadcasting industry
occurs  primarily in  individual  DMAs.  Generally,  a  television  broadcasting
station in one DMA does not compete with  stations in other DMAs.  The Company's
television stations are located in highly competitive DMAs. In addition, certain
of the Company's DMAs are overlapped by both  over-the-air and cable carriage of
stations in adjacent  DMAs,  which tends to spread  viewership  and  advertising
expenditures over a larger number of television stations.

                                       23

<PAGE>

     Broadcast  television  stations compete for advertising  revenues primarily
with other  broadcast  television  stations,  radio  stations  and cable  system
operators serving the same market. Major Network programming  generally achieves
higher household audience levels than Fox, UPN and WB programming and syndicated
programming  aired  by  independent  stations.  This  can  be  attributed  to  a
combination of factors, including the Major Networks' efforts to reach a broader
audience,  generally better signal carriage available when broadcasting over VHF
channels 2 through 13 versus  broadcasting  over UHF  channels 14 through 69 and
the higher number of hours of Major Network  programming being broadcast weekly.
However,  greater amounts of advertising time are available for sale during Fox,
UPN and WB programming and non-network syndicated  programming,  and as a result
the Company believes that the Company's  programming  typically achieves a share
of television market advertising revenues greater than its share of the market's
audience.

     Television  stations  compete for audience share  primarily on the basis of
program  popularity,  which has a direct effect on  advertising  rates.  A large
amount of the  Company's  prime time  programming  is  supplied  by Fox and to a
lesser extent UPN, WB, ABC and CBS. In those periods,  the Company's  affiliated
stations are totally dependent upon the performance of the networks' programs in
attracting  viewers.  Non-network  time  periods are  programmed  by the station
primarily  with  syndicated  programs  purchased for cash,  cash and barter,  or
barter-only,  and also  through  self-produced  news,  public  affairs and other
entertainment programming.

     Television  advertising rates are based upon factors which include the size
of the DMA in which the  station  operates,  a  program's  popularity  among the
viewers  that an  advertiser  wishes  to  attract,  the  number  of  advertisers
competing for the available  time, the  demographic  makeup of the DMA served by
the  station,  the  availability  of  alternative  advertising  media in the DMA
(including radio and cable), the aggressiveness and knowledge of sales forces in
the DMA and  development of projects,  features and programs that tie advertiser
messages to  programming.  The Company  believes that its sales and  programming
strategies allow it to compete effectively for advertising within its DMAs.

     Other  factors  that are  material to a  television  station's  competitive
position include signal coverage, local program acceptance, network affiliation,
audience  characteristics and assigned broadcast  frequency.  Historically,  the
Company's UHF broadcast  stations  have suffered a competitive  disadvantage  in
comparison   to  stations  with  VHF   broadcast   frequencies.   This  historic
disadvantage has gradually declined through (i) carriage on cable systems,  (ii)
improvement   in  television   receivers,   (iii)   improvement   in  television
transmitters, (iv) wider use of all channel antennae, (v) increased availability
of  programming,  and (vi) the  development of new networks such as Fox, UPN and
WB.

     The broadcasting  industry is continuously faced with technical changes and
innovations, the popularity of competing entertainment and communications media,
changes in labor conditions, and governmental restrictions or actions of federal
regulatory  bodies,  including  the FCC,  any of  which  could  possibly  have a
material  effect on a television  station's  operations  and profits.  There are
sources of video service other than conventional  television stations,  the most
common being cable  television,  which can increase  competition for a broadcast
television station by bringing into its market distant  broadcasting signals not
otherwise available to the station's audience,  serving as a distribution system
for national satellite-delivered programming and other non-broadcast programming
originated on a cable system and selling  advertising time to local advertisers.
Other  principal   sources  of  competition   include  home  video   exhibition,
direct-to-home broadcast satellite television ("DBS") entertainment services and
multichannel  multipoint  distribution services ("MMDS").  Moreover,  technology
advances and regulatory  changes  affecting  programming  delivery through fiber
optic telephone lines and video  compression  could lower entry barriers for new
video channels and encourage the development of increasingly specialized "niche"
programming.   The  1996  Act  permits  telephone  companies  to  provide  video
distribution  services via radio  communication,  on a common carrier basis,  as
"cable  systems"  or  as  "open  video  systems,"  each  pursuant  to  different
regulatory   schemes.   The  Company  is  unable  to  predict  the  effect  that
technological  and  regulatory  changes  will have on the  broadcast  television
industry and on the future  profitability  and value of a  particular  broadcast
television station.

     The FCC  authorizes DBS services  throughout the United States.  Currently,
two FCC permitees,  DirecTV and United States  Satellite  Broadcasting,  provide
subscription DBS services via high-power

                                       24


<PAGE>

communications  satellites and small dish receivers, and other companies provide
direct-to-home   video  service  using  lower  powered   satellites  and  larger
receivers.   Additional  companies  are  expected  to  commence   direct-to-home
operations in the near future.  DBS and MMDS, as well as other new technologies,
will further increase competition in the delivery of video programming.

     The Company  cannot  predict what other  matters might be considered in the
future,  nor can it judge in advance what impact, if any, the  implementation of
any of these proposals or changes might have on its business.

     The  Company  is  exploring  ways in which it might take  advantage  of new
technology,  including the delivery of  additional  content and services via the
broadcast spectrum.  There can be no assurance that any such efforts will result
in the development of technology or services that are commercially successful.

     The Company also competes for programming,  which involves negotiating with
national  program  distributors  or  syndicators  that sell  first-run and rerun
packages of programming.  The Company's stations compete for exclusive access to
those programs against in-market  broadcast  station  competitors for syndicated
products.  Cable  systems  generally  do not  compete  with local  stations  for
programming,  although  various  national  cable networks from time to time have
acquired  programs that would have  otherwise  been offered to local  television
stations.   Public  broadcasting  stations  generally  compete  with  commercial
broadcasters for viewers but not for advertising dollars.

     Historically,  the cost of programming has increased because of an increase
in the number of new Independent stations and a shortage of quality programming.
However,  the Company believes that over the past five years program prices have
stabilized and, in some instances, have declined as a result of recent increases
in the supply of programming and the failure of some Independent stations.

     The  Company  believes  it  competes  favorably  against  other  television
stations  because of its  management  skill and  experience,  the ability of the
Company  historically to generate revenue share greater than its audience share,
the network  affiliations  and its local program  acceptance.  In addition,  the
Company  believes  that it benefits  from the  operation  of multiple  broadcast
properties,   affording  it  certain  nonquantifiable  economies  of  scale  and
competitive advantages in the purchase of programming.

     Radio Competition. Radio broadcasting is a highly competitive business, and
each of the radio stations  operated by the Company  competes for audience share
and  advertising  revenue  directly with other radio  stations in its geographic
market,  as well as with other media,  including  television,  cable television,
newspapers,  magazines,  direct mail and  billboard  advertising.  The  audience
ratings and advertising  revenue of each of such stations are subject to change,
and any adverse  change in a  particular  market  could have a material  adverse
effect on the revenue of such radio stations  located in that market.  There can
be no assurance  that any one of the  Company's  radio  stations will be able to
maintain or increase its current audience ratings and radio advertising  revenue
market share.

     The  Company  will  attempt to improve  each  radio  station's  competitive
position  with  promotional  campaigns  designed  to enhance and  reinforce  its
identities with the listening public.  Extensive market research is conducted in
order to identify specific  demographic  groups and design a programming  format
for those groups.  The Company seeks to build a strong listener base composed of
specific  demographic  groups in each market,  and thereby  attract  advertisers
seeking to reach these listeners.  Aside from building its stations'  identities
and  targeting  its  programming  at  specific  demographic  groups,  management
believes  that the Company  also  obtains a  competitive  advantage by operating
duopolies or multiple stations in the nation's larger mid-size markets.

     The radio  broadcasting  industry is also subject to  competition  from new
media technologies that are being developed or introduced,  such as the delivery
of  audio  programming  by  cable  television   systems  and  by  digital  audio
broadcasting  ("DAB"). DAB may provide a medium for the delivery by satellite or
terrestrial  means of  multiple  new  audio  programming  formats  to local  and
national audiences.  Historically,  the radio broadcasting industry has grown in
terms of total revenues  despite the  introduction of new  technologies  for the
delivery of  entertainment  and  information,  such as television  broadcasting,
cable  television,  audio tapes and compact  disks.  There can be no  assurance,
however,  that the  development or  introduction  in the future of any new media
technology will not have an adverse effect on the radio broadcast industry.

                                       25


<PAGE>

EMPLOYEES

     As of May 31, 1997, the Company had approximately 2,740 employees. With the
exception of certain of the employees of KOVR-TV,  KDNL-TV,  WBEN-AM and WWL-AM,
none of the  employees  are  represented  by labor unions  under any  collective
bargaining agreement. No significant labor problems have been experienced by the
Company, and the Company considers its overall labor relations to be good.

LEGAL PROCEEDINGS

     The  Company  currently  and from time to time is  involved  in  litigation
incidental  to the  conduct  of its  business.  The  Company is not party to any
lawsuit or proceeding that, in the opinion of the Company,  will have a material
adverse effect on the Company.

                           GLOSSARY OF DEFINED TERMS

     "ABC" means Capital Cities/ABC, Inc.

     "Adjusted EBITDA" means broadcast cash flow less corporate overhead expense
and is a commonly used measure of performance for broadcast companies.  Adjusted
EBITDA does not purport to represent  cash  provided by operating  activities as
reflected  in the  Company's  consolidated  statements  of cash flows,  is not a
measure of financial  performance under generally accepted accounting principles
and should not be  considered  in isolation  or as a substitute  for measures of
performance   prepared  in  accordance   with  generally   accepted   accounting
principles.

     "Adjusted EBITDA margin" means the Adjusted EBITDA divided by net broadcast
revenues.

     "Amended   Certificate"   means   the  Amended  and  Restated  Articles  of
Incorporation of the Company.

     "Arbitron" means Arbitron, Inc.

     "Broadcast  cash flow  margin"  means  broadcast  cash flow  divided by net
broadcast revenues.

     "Broadcast  Cash Flow"  means  operating  income  plus  corporate  overhead
expenses,  special  bonuses  paid  to  executive  officers,   non-cash  deferred
compensation,   depreciation  and  amortization,  including  both  tangible  and
intangible assets and program rights, less cash payment for program rights. Cash
program  payments  represent cash payments made for current program payables and
sports  rights  and do not  necessarily  correspond  to program  usage.  Special
bonuses paid to executive officers are considered unusual and non-recurring. The
Company has presented  broadcast cash flow data,  which the Company believes are
comparable to the data provided by other companies in the industry, because such
data are commonly  used as a measure of  performance  for  broadcast  companies.
However,  broadcast cash flow (i) does not purport to represent cash provided by
operating  activities as reflected in the Company's  consolidated  statements of
cash  flow,  (ii) is not a measure  of  financial  performance  under  generally
accepted  accounting  principles and (iii) should not be considered in isolation
or as a  substitute  for measures of  performance  prepared in  accordance  with
generally accepted accounting principles.

     "CBS" means CBS, Inc.

     "Cincinnati/Kansas  City Acquisitions"  means the Company's  acquisition of
the assets and liabilities of WSTR-TV (Cincinnati, OH) and KSMO-TV (Kansas City,
MO).

     "Class A Common Stock" means the Company's Class A Common Stock,  par value
$.01 per share.

     "Class B Common Stock" means the Company's Class B Common Stock,  par value
$.01 per share.

     "Columbus   Option"  means  the  Company's  option  to  purchase  both  the
Non-License  Assets and the License Assets relating to WSYX-TV (ABC),  Columbus,
OH.

     "Commission" means the Securities and Exchange Commission.

     "Common  Securities"  means the common  securities of Sinclair  Capital,  a
subsidiary trust of the Company.



                                       26


<PAGE>

     "Common  Stock"  means  the  Class  A  Common  Stock and the Class B Common
Stock.

     "Communications Act" means the Communications Act of 1934, as amended.

     "Company"  means  Sinclair  Broadcast  Group,  Inc.  and  its  wholly owned
subsidiaries.

     "Controlling  Stockholders"  means  David  D. Smith, Frederick G. Smith, J.
Duncan Smith and Robert E. Smith.

     "DAB" means digital audio broadcasting.

     "DBS" means direct-to-home broadcast satellite television.

     "Designated Market Area" or "DMA" means one of the 211 generally-recognized
television market areas.

     "DOJ" means the United States Justice Department.

     "DTV" means digital television.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "FCC" means the Federal Communications Commision.

     "FCN" means the Fox Children's Network.

     "Flint  Acquisition"  means  the  Company's  acquisition  of  the assets of
WSMH-TV (Flint, Michigan).

     "Fox" means Fox Broadcasting Company.

     "Glencairn" means Glencairn, Ltd. and its subsidiaries.

     "Greenville  Stations"  means radio  stations  WFBC-FM,  WORD-AM,  WFBC-AM,
WSPA-AM,  WSPA-FM,  WOLI-FM, and WOLT-FM located in the  Greenville/Spartanburg,
South Carolina area.

     "HSR" means the Hart-Scott-Rodino Antitrust Improvements Act, as amended.

     "Incremental  Facility"  means the loan by the Banks of up to an additional
$200.0 million to the Company  pursuant to the Bank Credit Agreement at any time
prior to September 29, 1997.

     "Independent"  means a station that is not affiliated with any of ABC, CBS,
NBC, FOX, UPN or Warner Brothers.

     "JSAs"  means  joint sales  agreements  pursuant to which an entity has the
right,  for a fee  paid  to  the  owner  and  operator  of a  station,  to  sell
substantially all of the commercial advertising on the station.

     "KSC" means Keymarket of South Carolina, Inc.

     "License  Assets" means the television  and radio station assets  essential
for  broadcasting  a television  or radio signal in compliance  with  regulatory
guidelines,  generally consisting of the FCC license, transmitter,  transmission
lines, technical equipment, call letters and trademarks,  and certain furniture,
fixtures and equipment.

     "License Assets Option" means the Company's  option to purchase the License
Assets of KDNL-TV (ABC), St. Louis, MO; KOVR-TV (CBS),  Sacramento,  CA; WTTV-TV
(UPN) and WTTK-TV (UPN), Indianapolis, IN; WLOS-TV (ABC), Asheville, NC; KABB-TV
(Fox), San Antonio, TX; and KDSM-TV (Fox), Des Moines, IA.

     "LMAs" means program  services  agreements,  time  brokerage  agreements or
local  marketing  agreements  pursuant to which an entity  provides  programming
services to television or radio stations that are not owned by the entity.

     "Major Networks" means each of ABC, CBS or NBC, singly or collectively.

     "MSA" means the Metro Survey Area as defined by Arbitron.

     "MMDS" means multichannel multipoint distribution services.

     "NBC" means the National Broadcasting Company.



                                       27
<PAGE>

     "Nielsen" means the A.C. Nielsen Company Station Index dated May 1996.

     "1996 Act" means the Telecommunications Act of 1996.

     "Non-License Assets" means the assets relating to operation of a television
or radio station other than License Assets.

     "Parent  Preferred"  means  the  $206,200,000  liquidation  amount  of  the
Company's  12 5/8% Series C Preferred Stock,  par value $.01 per share purchased
by KDSM, Inc.

     "Peoria/Bloomington  Acquisition"  means the  acquisition by the Company of
the assets of WYZZ-TV on July 1, 1996.

     "Permitted  Transferee"  means (i) any  Controlling  Stockholder,  (ii) the
estate of a  Controlling  Stockholder,  (iii) the  spouse or former  spouse of a
Controlling   Stockholder,   (iv)  any  lineal   descendant   of  a  Controlling
Stockholder,   any  spouse  of  any  such  lineal   descendant,   a  Controlling
Stockholder's   grandparent,   parent,  brother  or  sister,  or  a  Controlling
Stockholder's  spouse's  brother  or  sister,  (v)  any  guardian  or  custodian
(including a custodian for purposes of the Uniform Gift to Minors Act or Uniform
Transfers to Minors Act) for, or any  conservator or other legal  representative
of, one or more Permitted  Transferees,  (vi) any trust or savings or retirement
account,  including  an  individual  retirement  account for purposes of federal
income tax laws,  whether or not involving a trust,  principally for the benefit
of one or more Permitted Transferees,  including any trust in respect of which a
Permitted   Transferee  has  any  general  or  special   testamentary  power  of
appointment or general or special non-testamentary power of appointment which is
limited  to any other  Permitted  Transferee,  (vii)  the  Company,  (viii)  any
employee benefit plan or trust thereunder sponsored by the Company or any of its
subsidiaries,  (ix) any trust  principally for the benefit of one or more of the
persons referred to in (i) through (iii) above, (x) any corporation, partnership
or other entity if all of the beneficial ownership is held by one or more of the
persons  referred to in (i) through (iv) above, and (xi) any broker or dealer in
securities, clearing house, bank, trust company, savings and loan association or
other financial  institution which holds Class B Common Stock for the benefit of
a Controlling Stockholder or Permitted Transferee thereof.

     "Preferred Securities Offering" means the private placement of $200 million
aggregate  liquidation  value of 11 5/8%  High  Yield  Trust  Offered  Preferred
Securities (the "Preferred  Securities") of Sinclair Capital, a subsidiary trust
of the Company, completed in March 1997.

     "Revolving  Credit  Facility" means the reducing  revolving credit facility
under the Bank Credit Agreement in the principal amount of $250.0 million.

     "River City" means River City Broadcasting, L.P.

     "River City  Acquisition"  means the Company's  acquisition from River City
and the owner of KRRT of certain Non-License Assets,  options to acquire certain
License and  Non-License  Assets and rights to provide  programming or sales and
marketing for certain stations, which was completed May 31, 1996.

     "SCI" means Sinclair Communications, Inc., a wholly owned subsidiary of the
Company that will hold all of the broadcast operations of the Company.

     "Securities Act" means the Securities Act of 1933, as amended.

     "Series A  Preferred  Stock"  means  the  Company's  Series A  Exchangeable
Preferred  Stock,  par value $.01,  each share of which has been exchanged for a
share of the Company's Series B Convertible Preferred Stock.

     "Series  B  Convertible  Preferred  Stock"  means  the  Company's  Series B
Convertible Preferred Stock, par value $.01.

     "Series C Preferred  Stock" means the Company's  Series C Preferred  Stock,
par value $.01.

     "Sinclair"  means  Sinclair  Broadcast  Group,  Inc.  and  its wholly owned
subsidiaries.

     "Sinclair  Capital" means Sinclair Capital, a Delaware Business Trust, 100%
of the common  securities of which are held by KDSM,  Inc.,  an indirect  wholly
owned subsidiary of the Company.



                                       28


<PAGE>

     "Superior  Acquisition"  means  the  Company's  acquisition of the stock of
Superior Communications, Inc. ("Superior").

     "TBAs" means time brokerage agreements; see definition of "LMAs."

     "UHF" means ultra-high frequency.

     "UPN" means United Paramount Television Network Partnership.

     "VHF" means very-high frequency.

     "WB" or "Warner Brothers" means Warner Brothers, Inc.

                                       29
<PAGE>

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

     The Company is filing certain  financial  information about itself relating
to a $200 million private offering (the "Offering" or the "Debt Offering") of 9%
Senior Subordinated Notes due 2007 (the "Notes").

                        USE OF PROCEEDS OF THE OFFERING

     Net proceeds of the Offering of  approximately  $195.3 million will be used
to reduce  outstanding  borrowings  under  the Bank  Credit  Agreement  with the
remainder  retained for general corporate  purposes.  The Company plans to repay
all amounts  outstanding  under its  revolving  credit  facility  under the Bank
Credit Agreement (which amounts may be reborrowed)  which as of May 31, 1997 had
an outstanding  principal balance of $160 million. Such amounts were borrowed to
fund acquisitions and for general corporate purposes.  The remaining proceeds of
the Offering,  estimated at $35.3  million,  will be retained by the Company and
used for general corporate purposes including acquisitions, or the repurchase of
shares  of Class A Common  Stock.  The  interest  rate on the  revolving  credit
facility  that will be repaid is  variable  and  averaged  6.7% per year for the
month ended May 31, 1997.

            PRO FORMA CONSOLIDATED FINANCIAL INFORMATION OF SINCLAIR

     The following Pro Forma  Consolidated  Financial Data include the unaudited
pro  forma  consolidated  balance  sheet as of March 31,  1997  (the "Pro  Forma
Consolidated Balance Sheet") and the unaudited pro forma consolidated statements
of  operations  for the year ended  December 31, 1996 and the three months ended
March 31, 1997 (the "Pro Forma  Consolidated  Statements  of  Operations").  The
unaudited Pro Forma Consolidated Balance Sheet is adjusted to give effect to the
Offering as if it occurred on March 31,  1997 and  assuming  application  of the
proceeds  of the  Offering  as set forth in "Use of  Proceeds  of the  Offering"
above. The unaudited Pro Forma Consolidated Statement of Operations for the year
ended December 31, 1996 is adjusted to give effect to the 1996 Acquisitions, the
Preferred  Securities  Offering (as defined in the  "Glossary of Defined  Terms"
above in Item 5) and the Offering as if each  occurred at the  beginning of such
period and  assuming  application  of the proceeds of the  Preferred  Securities
Offering and the Offering as set forth in "Use of Proceeds of the Offering." The
unaudited Pro Forma  Consolidated  Statement of Operations  for the three months
ended March 31, 1997 is adjusted to give effect to the Old  Securities  Offering
and the  Offering  as if each  occurred  at the  beginning  of such  period  and
assuming  application  of the  proceeds of the Old  Securities  Offering and the
Offering  as set  forth in "Use of  Proceeds  of the  Offering."  The pro  forma
adjustments are based upon available  information and certain  assumptions  that
the Company believes are reasonable.  The Pro Forma Consolidated  Financial Data
should  be  read  in  conjunction  with  the  Company's  Consolidated  Financial
Statements  as of and for the year ended  December  31, 1996 and  related  notes
thereto, the Company's unaudited consolidated financial statements for the three
months ended March 31, 1997 and related notes thereto,  the historical financial
data of Flint  T.V.,  Inc.,  the  historical  financial  data of  Superior,  the
historical financial data of KSMO and WSTR, and the historical financial data of
River City,  all of which have been filed with the Commission as part of (i) the
Company's  Annual  Report on Form 10-K for the year ended  December 31, 1996 (as
amended), together with the report of Arthur Andersen LLP, independent certified
public  accountants;  (ii) the Company's  Quarterly  Report on Form 10-Q for the
quarter ended March 31, 1997; or (iii) the Company's Current Reports on Form 8-K
and Form 8-K/A filed May 10,  1996,  May 13, 1996,  May 17,  1996,  May 29, 1996
August 30, 1996 and  September 5, 1996.  The  unaudited  Pro Forma  Consolidated
Financial  Data do not  purport  to  represent  what the  Company's  results  of
operations  or  financial  position  would have been had any of the above events
occurred  on  the  dates  specified  or to  project  the  Company's  results  of
operations or financial  position for or at any future  period or date.  The Pro
Forma  Consolidated  Financial  Data does not give effect to the  acquisition of
KUPN-TV  which  was  consumated  on May 30,  1997.  The Pro  Forma  Consolidated
Financial  Data  reflects the  repayment of $103 million  which  represents  all
amounts outstanding under the revolving credit facility as of March 31, 1997. As
of May 31, 1997,  $160 million was  outstanding.  Such  additional  amounts were
incurred in part to finance the acqusition of KUPN-TV and in part as a result of
the restructuring of the Bank Credit Facility.

                                       30


<PAGE>
                        SINCLAIR BROADCAST GROUP, INC.
           PRO FORMA CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1997

<TABLE>
<CAPTION>
                                                                                                                  POST DEBT
                                                                           CONSOLIDATED      DEBT OFFERING         OFFERING
                                                                           HISTORICAL        ADJUSTMENTS(a)       ADJUSTMENTS
                                                                           --------------   -------------------   -------------
                                                                                          (DOLLARS IN THOUSANDS)
                                                                                               (UNAUDITED)
<S>                                                                        <C>              <C>                   <C>

                               ASSETS
CURRENT ASSETS:
 Cash, including cash equivalents   ....................................     $    36,705         $   92,125(b)      $   128,830
 Accounts receivable, net of allowance for doubtful accounts   .........          89,079                                 89,079
 Current portion of program contract costs   ...........................          37,741                                 37,741
 Prepaid expenses and other current assets   ...........................           3,757                                  3,757
 Deferred barter costs  ................................................           4,490                                  4,490
 Deferred tax asset  ...................................................           1,445                                  1,445
                                                                              -----------        -----------         ----------
   Total current assets ................................................         173,217             92,125             265,342
PROGRAM CONTRACT COSTS, less current portion ...........................          35,511                                 35,511
LOANS TO OFFICERS AND AFFILIATES .......................................          11,411                                 11,411
PROPERTY AND EQUIPMENT, net   ..........................................         152,554                                152,554
NON-COMPETE AND CONSULTING AGREEMENTS, net   ...........................           5,493                                  5,493
DEFERRED TAX ASSET   ...................................................           7,771                                  7,771
OTHER ASSETS   .........................................................          79,100              4,750(c)           83,850
ACQUIRED INTANGIBLE BROADCASTING ASSETS, net ...........................       1,244,874                              1,244,874
                                                                              -----------        -----------        -----------
   Total Assets   ......................................................      $1,709,931            $96,875          $1,806,806
                                                                              ===========        ============        ===========
                    LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Accounts payable ......................................................     $     4,791                            $     4,791
 Income taxes payable   ................................................             733                                    733
 Accrued liabilities ...................................................          36,842                                 36,842
 Current portion of long-term liabilities-
  Notes payable and commercial bank financing   ........................          64,000                                 64,000
  Capital leases payable   .............................................              11                                     11
  Notes and capital leases payable to affiliates   .....................           1,476                                  1,476
  Program contracts payable   ..........................................          51,573                                 51,573
 Deferred barter revenues  .............................................           4,218                                  4,218
                                                                              -----------        -----------        -----------
   Total current liabilities  ..........................................         163,644                                163,644
LONG-TERM LIABILITIES:
  Notes payable and commercial bank financing   ........................       1,039,125         $   96,875(d)        1,136,000
  Capital leases payable   .............................................              33                                     33
  Notes and capital leases payable to affiliates   .....................          12,007                                 12,007
  Program contracts payable   ..........................................          50,986                                 50,986
  Other long-term liabilities ..........................................           2,892                                  2,892
                                                                              -----------        -----------         -----------
   Total liabilities ...................................................       1,268,687             96,875           1,365,562
                                                                              -----------        ------------        -----------
MINORITY INTEREST IN CONSOLIDATED
 SUBSIDIARIES  .........................................................           3,928                                  3,928
                                                                              -----------        -----------         -----------
COMMITMENTS AND CONTINGENCIES
COMPANY OBLIGATED MANDATORILY REDEEMABLE SECUITY
 OF SUBSIDIARY TRUST HOLDING SOLELY KDSM SENIOR
 DEBENTURES ............................................................         200,000                                200,000
                                                                              -----------        -----------        -----------
STOCKHOLDERS' EQUITY:
  Preferred stock, $.01 par value, 10,000,000 shares authorized and
   1,138,138 and 1,115,370 shares issued and outstanding, respectively.               11                                     11
  Class A Common stock, $.01 par value, 100,000,000 shares authorized
   and 6,911,880 and 6,937,827 shares issued and outstanding, respec-
   tively ..............................................................              70                                     70
  Class B Common stock, $.01 par value, 35,000,000 shares authorized
   and 27,850,581 shares issued and outstanding ........................             279                                    279
  Additional paid-in capital  ..........................................         255,576                                255,576
  Accumulated deficit   ................................................         (26,546)                               (26,546)
  Additional paid-in capital - equity put options  .....................           8,938                                  8,938
  Additional paid-in capital - deferred compensation  ..................          (1,012)                                (1,012)
                                                                              -----------        -----------         -----------
   Total stockholders' equity ..........................................         237,316                                237,316
                                                                              -----------        -----------         -----------
   Total Liabilities and Stockholders' Equity   ........................      $1,709,931            $96,875          $1,806,806
                                                                              ===========        ============        ===========
</TABLE>

                          (Continued on following page)

                                       31
<PAGE>
                 NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET

(a)  To reflect the  proceeds  of the  Offering,  net of offering  costs and the
     application of the net proceeds  therefrom as set forth in "Use of Proceeds
     of the Offering."

(b)  To record net proceeds of the Offering after giving effect to the repayment
     of the  revolving  credit  facility  under  the Bank  Credit  Agreement  as
     follows:

     Offering proceeds ...........................................   $  200,000
     Underwriting discounts, commissions and estimated expenses ..       (4,750)
     Repayment of revolving credit facility under the Bank Credit
     Agreement ...................................................     (103,125)
                                                                      ----------
     Pro forma adjustment  .......................................   $   92,125
                                                                     ==========

(c)  To record  underwriting  discounts,  commissions and estimated  expenses of
     $4.75 million.

(d)  To reflect the repayment of the revolving  credit  facility  under the Bank
     Credit  Agreement  as set forth in "Use of  Proceeds of the  Offering,"  as
     follows:

     Indebtedness incurred .......................................   $  200,000
     Repayment of revolving credit facility under the Bank Credit
     Agreement ...................................................     (103,125)
                                                                      ----------
     Pro forma adjustment  .......................................   $   96,875
                                                                      ==========

                                       32
<PAGE>
                         SINCLAIR BROADCAST GROUP, INC.
                 PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                     FOR THE YEAR ENDED DECEMBER 31, 1996
                 (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                    SUPERIOR
                                                    CONSOLIDATED      FLINT      COMMUNICATIONS
                                                     HISTORICAL    TV, INC.(a)   GROUP, INC.(b)    KSMO(c)    WSTR(d)
                                                    -------------- ------------- ---------------- ---------- ----------
                                                                                                       (UNAUDITED)
<S>                                                 <C>            <C>           <C>              <C>        <C>
REVENUES:
  Station broadcast revenues, net of agency commis-
    sions .........................................    $ 346,459        $1,012        $ 4,431       $ 7,694    $  7,488
  Revenues realized from station barter arrange-
    ments  ........................................       32,029             -              -         2,321       1,715
                                                         ---------    --------        -------        -------    --------
    Total revenues  ...............................      378,488         1,012          4,431        10,015       9,203
                                                         ---------    --------        -------        -------    --------
OPERATING EXPENSES:
  Program and production  .........................       66,652           101            539         1,550         961
  Selling, general and administrative .............       75,924           345          2,002         2,194       2,173
  Expenses realized from barter arrangements   ....       25,189                                      2,276       1,715
  Amortization of program contract costs and net
    realizable value adjustments ..................       47,797           125            736           601       1,011
  Amortization of deferred compensation  ..........          739
  Depreciation and amortization of property and
    equipment  ....................................       11,711             4            373           374         284
  Amortization of acquired intangible broadcasting
    assets, non-compete and consulting agreements
    and other assets ..............................       58,530             -            529             -          39
  Amortization of excess syndicated programming ...        3,043             -              -             -           -
                                                         ---------    -------         -------        -------    --------
  Total operating expenses ........................      289,585           575          4,179         6,995       6,183
                                                         ---------    -------         -------        -------    --------
 Broadcast operating income (loss)  ...............       88,903           437            252         3,020       3,020
                                                         ---------    -------         -------        -------    --------
OTHER INCOME (EXPENSE):
  Interest and amortization of debt discount expense     (84,314)            -           (457)         (823)     (1,127)
  Interest income   ...............................        3,136             -              -             -          15
  Subsidiary trust minority interest expense   ....            -             -              -             -           -
  Other income (expense)  .........................          342            19              4             7           -
                                                         ---------    -------         -------        -------    --------
  Income (loss) before provision (benefit) for
    income taxes ..................................        8,067           456           (201)        2,204       1,908
PROVISION (BENEFIT) FOR INCOME
  TAXES ...........................................        6,936             -              -             -           -
                                                         ---------    -------         -------        -------    --------
NET INCOME (LOSS) .................................    $   1,131        $  456        $  (201)      $ 2,204    $  1,908
                                                         =========    =======         =======        =======    ========
NET INCOME (LOSS) AVAILABLE TO COMMON
  STOCKHOLDERS  ...................................    $   1,131
                                                         =========
NET INCOME (LOSS) PER COMMON AND
  COMMON EQUIVALENT SHARE .........................    $    0.03
                                                         =========
WEIGHTED AVERAGE COMMON AND COMMON 
  EQUIVALENT SHARES OUTSTANDING  ..................       37,381
                                                         =========
</TABLE>
<PAGE>

<TABLE>
<CAPTION> 
                                                            RIVER CITY (e)                     1996                 POST
                                                      ----------------------                ACQUISITIONS            1996    
                                                      RIVER CITY      WSYX     WYZZ(f)      ADJUSTMENTS         ACQUISITIONS
                                                      ----------   ---------   -------      -----------         ------------
<S>                                                 <C>          <C>         <C>       <C>                <C>
REVENUES:
  Station broadcast revenues, net of agency commis-
    sions .........................................   $  86,869   $  (10,783)   $1,838                          $445,008
  Revenues realized from station barter arrange-
    ments .........................................           -            -         -                            36,065
                                                       ---------   ---------   -------      -------------       ----------
    Total revenues  ...............................      86,869      (10,783)    1,838                           481,073
                                                       ---------   ----------  -------      -------------       ----------
OPERATING EXPENSES:
  Program and production  .........................      10,001         (736)      214                            79,282
  Selling, general and administrative .............      39,786       (3,950)      702      $  (3,577)(g)        115,599
  Expenses realized from barter arrangements   ....                                                               29,180
  Amortization of program contract costs and net
     realizable value adjustments .................       9,721         (458)      123              -             59,656
  Amortization of deferred compensation  ..........                                               194(h)             933
  Depreciation and amortization of property and
    equipment  ....................................       6,294       (1,174)        6           (943)(i)         16,929
  Amortization of acquired intangible broadcasting
    assets, non-compete and consulting agreements
    and other assets ..............................      14,041       (3,599)        3          4,034(j)          73,577
  Amortization of excess syndicated programming ...           -            -         -              -              3,043
                                                       ---------   ----------  -------      -----------         ----------
    Total operating expenses ......................      79,843       (9,917)    1,048           (292)           378,199
                                                       ---------   ----------  -------      -----------         ----------
  Broadcast operating income (loss)  ..............       7,026         (866)      790            292            102,874
                                                       ---------   ----------  -------      -----------         ----------
OTHER INCOME (EXPENSE):
  Interest and amortization of debt discount 
      expense .....................................     (12,352)           -         -        (17,409)(k)       (116,482)
  Interest income   ...............................         195            -         -         (1,636)(l)          1,710
  Subsidiary trust minority interest expense ......           -            -         -              -                  -
  Other income (expense)  .........................        (149)          (8)        -              -                215
                                                       ---------   ----------  -------      -----------         ----------
  Income (loss) before provision (benefit) for
     income taxes .................................      (5,280)        (874)      790        (18,753)           (11,683)
PROVISION (BENEFIT) FOR INCOME
  TAXES ...........................................           -            -         -         (7,900)(m)           (964)
                                                       ---------   ----------  -------      -----------         ----------
NET INCOME (LOSS) .................................   $  (5,280)  $     (874)   $  790      $ (10,853)          $(10,719)
                                                       =========   ==========  =======      ===========         ==========
NET INCOME (LOSS) AVAILABLE TO COMMON
  STOCKHOLDERS ....................................                                                             $(10,719)
                                                                                                                ==========
NET INCOME (LOSS) PER COMMON AND
  COMMON EQUIVALENT SHARE .........................                                                             $  (0.27)
                                                                                                                ==========
WEIGHTED AVERAGE COMMON AND COMMON
  EQUIVALENT SHARES OUTSTANDING ...................                                                               39,058 (n)
                                                                                                                ==========
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                                         PREFERRED         POST PREFERRED                          POST DEBT AND
                                                         SECURITIES          SECURITIES             DEBT       PREFERRED SECURITIES
                                                         OFFERING        OFFERING AND 1996        OFFERING       OFFERINGS AND 1996
                                                        ADJUSTMENTS         ACQUISITIONS         ADJUSTMENTS         ACQUISITONS
                                                        -----------         ----------           -----------         -----------
<S>                                                 <C>              <C>                   <C>                     <C>
REVENUES:
  Station broadcast revenues, net of agency commis-
    sions .........................................                         $445,008                                 $  445,008  
  Revenues realized from station barter arrange-                                                                                   
    ments  ........................................                           36,065                                     36,065  
                                                        -----------         ----------           ----------          ----------  
     Total revenues  ...............................                          481,073                                    481,073  
                                                        -----------         ----------           ----------          ----------  
OPERATING EXPENSES:                                                                                                              
  Program and production  .........................                           79,282                                     79,282  
  Selling, general and administrative .............                          115,599                                    115,599  
  Expenses realized from barter arrangements   ....                           29,180                                     29,180  
  Amortization of program contract costs and net                                                                                 
    realizable value adjustments ..................                           59,656                                     59,656  
  Amortization of deferred compensation  ..........                              933                                        933  
  Depreciation and amortization of property and                                                                                  
    equipment  ....................................                           16,929                                     16,929  
  Amortization of acquired intangible broadcasting                                                                                 
    assets, non-compete and consulting agreements                                                                                   
    and other assets ..............................     $     500(o)          74,077             $     475(r)            74,552  
  Amortization of excess syndicated programming ...             -              3,043                                      3,043  
                                                        -----------         ----------           -----------         ----------  
    Total operating expenses ......................           500            378,699                   475              379,174  
                                                        -----------         ----------           -----------         ----------  
  Broadcast operating income (loss)  ..............          (500)           102,374                  (475)             101,899  
                                                        -----------         ----------           -----------         ----------  
OTHER INCOME (EXPENSE):                                                                                                          
  Interest and amortization of debt discount
    expense .......................................        11,820(p)        (104,662)              (18,000)(s)         (122,662) 
  Interest income   ...............................                            1,710                                      1,710  
  Subsidiary trust minority interest expense ......       (23,250)(q)        (23,250)                                   (23,250) 
  Other income (expense)  .........................             -                215                                        215  
                                                        -----------         ----------           -----------         ---------- 
  Income (loss) before provision (benefit) for                                                                                    
    income taxes ..................................       (11,930)           (23,613)              (18,475)             (42,088) 
PROVISION (BENEFIT) FOR INCOME                                                                                                   
  TAXES ...........................................        (4,772)(m)         (5,736)               (7,390)(m)          (13,126) 
                                                        -----------         ----------           -----------         ----------  
NET INCOME (LOSS) .................................     $  (7,158)          $(17,877)            $ (11,085)          $  (28,962) 
                                                        ===========         ==========           ===========         ==========  
NET INCOME (LOSS) AVAILABLE TO COMMON                                                                                              
  STOCKHOLDERS ....................................                         $(17,877)                                $  (28,962) 
                                                                            ==========                               ==========  
NET INCOME (LOSS) PER COMMON AND                                                                                                 
  COMMON EQUIVALENT SHARE .........................                         $  (0.46)                                $    (0.74) 
                                                                            ==========                               ==========  
WEIGHTED AVERAGE COMMON AND COMMON                                                                                                 
  EQUIVALENT SHARES OUTSTANDING ...................                           39,058(n)                                  39,058  
                                                                            ==========                               ==========  
                                                                                                                    
</TABLE>

                          (Continued on following page)

                                       33
<PAGE>
                        SINCLAIR BROADCAST GROUP, INC.
                 PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                   FOR THE THREE MONTHS ENDED MARCH 31, 1997
                 (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                                      PREFERRED
                                                                                                                      SECURITIES   
                                                                                             CONSOLIDATED             OFFERING      
                                                                                              HISTORICAL             ADJUSTMENTS    
                                                                                           -----------------       ---------------- 
REVENUES:                                                                                                                           
  Station broadcast revenues, net of agency commissions    .................................    $ 98,909                            
  Revenues realized from station barter arrangements .......................................       9,315                            
                                                                                                ----------              ----------  
   Total revenues ..........................................................................     108,224                            
                                                                                                ----------              ----------  
OPERATING EXPENSES:                                                                                                                 
  Program and production  ..................................................................      22,507                            
  Selling, general and administrative ......................................................      25,241                            
  Expenses realized from station barter arrangements .......................................       7,444                            
  Amortization of program contract costs and net realizable value adjustments   ............      17,518                            
  Amortization of deferred compensation  ...................................................         117                            
  Depreciation and amortization of property and equipment  .................................       4,161                            
  Amortization of acquired intangible broadcasting assets, non-compete and consulting                                               
    agreements and other assets ............................................................      19,021                $    125(t)
                                                                                                ----------              ----------  
   Total operating expenses   ..............................................................      96,009                     125    
                                                                                                ----------              ----------  
  Broadcast operating income (loss) ........................................................      12,215                    (125)   
                                                                                                ----------              ----------  
OTHER INCOME (EXPENSE):                                                                                                             
  Interest and amortization of debt discount expense .......................................     (27,065)                  2,022(u)
  Interest income   ........................................................................         402                            
  Subsidiary trust minority interest expense   .............................................      (1,210)                 (4,603)(v)
  Other income   ...........................................................................         144                       -    
                                                                                                ----------              ----------  
  Loss before provision (benefit) for income taxes    ......................................     (15,514)                 (2,706)   
PROVISION (BENEFIT) FOR INCOME TAXES   .....................................................      (7,900)                 (1,082)(m)
                                                                                                ----------              ----------  
NET INCOME (LOSS) ..........................................................................    $ (7,614)               $ (1,624)   
                                                                                                ==========              ==========  
NET LOSS AVAILABLE TO COMMON                                                                                                        
  STOCKHOLDERS  ............................................................................    $ (7,614)                           
                                                                                                ==========                          
NET LOSS PER COMMON AND COMMON EQUIVALENT SHARE ............................................    $  (0.22)                           
                                                                                                ==========                          
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES                                                                                
  OUTSTANDING    ...........................................................................      34,769(n)                        
                                                                                                ==========                          
                                                                                                                   
<PAGE>


<CAPTION>
                                                                            POST                                 POST DEBT AND    
                                                                    PREFERRED SECURITIES           DEBT      PREFERRED SECURITIES
                                                                      OFFERING AND 1996          OFFERING      OFFERINGS AND 1996
                                                                         ACQUISITIONS           ADJUSTMENTS       ACQUISITIONS   
                                                                        ----------              -----------       -----------    
 <C>                   <C>                                                                                                         
REVENUES:
  Station broadcast revenues, net of agency commissions    ...........  $ 98,909                                   $ 98,909      
  Revenues realized from station barter arrangements .................     9,315                                      9,315      
                                                                        ----------              -----------        ----------    
   Total revenues ....................................................   108,224                                    108,224      
                                                                        ----------              -----------        ----------    
OPERATING EXPENSES:                                                                                                              
  Program and production  ............................................    22,507                                     22,507      
  Selling, general and administrative ................................    25,241                                     25,241      
  Expenses realized from station barter arrangements .................     7,444                                      7,444      
  Amortization of program contract costs and net realizable                                        
    value adjustments   ..............................................    17,518                                     17,518      
  Amortization of deferred compensation  .............................       117                                        117      
  Depreciation and amortization of property and equipment  ...........     4,161                                      4,161      
  Amortization of acquired intangible broadcasting assets,                                                                         
    non-compete and consulting agreements and other assets ...........    19,146                 $    119(w)         19,265      
                                                                        ----------               ----------        ----------    
   Total operating expenses   ........................................    96,134                      119            96,253      
                                                                        ----------               ----------        ----------    
  Broadcast operating income (loss) ..................................    12,090                     (119)           11,971      
                                                                        ----------               ----------        ----------    
OTHER INCOME (EXPENSE):                                                                                                          
  Interest and amortization of debt discount expense .................   (25,043)                  (4,500)(x)       (29,543)    
  Interest income   ..................................................       402                                        402     
  Subsidiary trust minority interest expense   .......................    (5,813)                                    (5,813)    
  Other income   .....................................................       144                                        144     
                                                                        ----------               ----------        ----------   
  Loss before provision (benefit) for income taxes    ................   (18,220)                  (4,619)          (22,839)    
PROVISION (BENEFIT) FOR INCOME TAXES   ...............................    (8,982)                  (1,848)(m)       (10,830)    
                                                                        ----------               ----------        ----------   
NET INCOME (LOSS) ....................................................  $ (9,238)                $ (2,771)         $(12,009)    
                                                                        ==========               ==========        ==========   
NET LOSS AVAILABLE TO COMMON                                                                                                    
  STOCKHOLDERS   .....................................................  $ (9,238)                                  $(12,009)   
                                                                        ==========                                 ==========   
NET LOSS PER COMMON AND COMMON EQUIVALENT SHARE ......................  $  (0.27)                                  $  (0.35)   
                                                                        ==========                                 ==========   
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES                                                                            
  OUTSTANDING    .....................................................    34,769(n)                                  34,769(n)
                                                                        ==========                                 ==========   
</TABLE>

                          (Continued on following page)

                                       34
<PAGE>


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

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

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

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

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

(e)  The River City column  reflects  the results of  operations  for River City
     (including KRRT, Inc.) for the period from January 1, 1996 to May 31, 1996,
     the date the  River  City  Acquisition  was  consummated.  The WSYX  column
     removes the results of WSYX from the results of River City for the period.

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

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

(h)  To  record  compensation  expense  related  to  options  granted  under the
     Long-Term Incentive Plan:

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

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

<TABLE>
<CAPTION>
                                                                                          YEAR ENDED
                                                                                       DECEMBER 31, 1996
                                                          --------------------------------------------------------------------------
                                                          FLINT-TV   SUPERIOR     KSMO      WSTR    RIVER CITY    WYZZ       TOTAL  
                                                          ---------- ---------- --------- --------- ------------ -------  ----------
<S>                                                       <C>        <C>        <C>       <C>       <C>          <C>     <C>        
  Depreciation expense on acquired tangible assets    ...    $  32     $   315   $   240    $  507    $    3,965  $ 159    $  5,218 
  Less: Depreciation expense recorded by Flint-TV,                                                                                  
   Superior, KSMO, WSTR, River City(e) and WYZZ .........       (4)       (373)     (374)     (284)       (5,120)    (6)     (6,161)
                                                               -----    -------  --------    ------    ---------  ------    --------
  Pro forma adjustment  .................................    $  28     $   (58)  $  (134)   $  223    $   (1,155) $ 153    $   (943)
                                                               =====    =======  ========    ======    =========  ======    ========
</TABLE>
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                          YEAR ENDED
                                                                                      DECEMBER 31, 1996
                                                            ----------------------------------------------------------------------
                                                            FLINT-TV   SUPERIOR    KSMO    WSTR   RIVER CITY   WYZZ      TOTAL
                                                            ---------- ---------- ------- ------- ------------ ------ ------------
<S>                                                         <C>        <C>        <C>     <C>     <C>          <C>    <C>
  Amortization expense on acquired intangible assets    ...     $ 167     $  827   $ 180   $ 285    $  12,060   $  99   $  13,618
  Deferred financing costs   ..............................                                             1,429               1,429
  Less: Amortization expense recorded by Flint-TV, Su-
   perior, KSMO, WSTR, River City(e) and WYZZ .............         -       (529)      -     (39)     (10,442)     (3)    (11,013) 
                                                               ------       -----  ------  ------    ---------   -----   -------- 
  Pro forma adjustment    .................................     $ 167     $  298   $ 180   $ 246    $   3,047   $  96   $   4,034
                                                               ======       =====  ======  ======    =========   =====   ========
</TABLE>



                                       35


<PAGE>

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

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


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

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

(m)  To  record  tax  provision  (benefit)  for the 1996  Acquisitions,  the Old
     Securities  Offering and the Debt Offering  adjustments  at the  applicable
     statutory tax rates.

(n)  Weighted  average shares  outstanding on a pro forma basis assumes that the
     1,150,000 shares of Series B Convertible  Preferred Stock were converted to
     4,181,818  shares of $.01 par value Class A Common Stock and the  Incentive
     Stock Options and Long-Term  Incentive Plan Options were  outstanding as of
     the beginning of the period.

(o)  To record  amortization  expense on other  assets for one year ($6  million
     over 12 years).

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

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

(q)  To record  subsidiary trust minority  interest  expense  for the year ended
     December 31, 1996 ($200 million  aggregate  Liquidation  Value of Preferred
     Securities at a distribution rate of 11.625%).

(r)  To record amortization  expense on other assets for one year ($4.75 million
     over 10 years).

(s)  To record interest expense on the Notes for one year ($200 million at 9%)

(t)  To record amortization expenses on other assets for one quarter ($6 million
     over 12 years).

                                       36


<PAGE>

(u)  To  record  the  net  interest  expense   reduction  for  1997  related  to
     application  of the Old  Securities  Offering  proceeds to the  outstanding
     balance  under the  revolving  credit  facility  offset by an  increase  in
     commitment  fees for the  available  but unused  portion  of the  revolving
     credit facility for the quarter ended March 31, 1997.

<TABLE>
<S>                                                                                  <C>
     Interest on adjusted borrowing on term loans   ..............................    $   2,162
     Commitment fee on available but unused borrowings of $250,000 of revolving 
       credit facility at 1/2 of 1% for three months   ...........................         (313)
     Commitment fee on available borrowings recorded by the Company   ............          173
                                                                                      ---------
     Pro forma adjustment   ......................................................    $   2,022
                                                                                      =========

(v)  To record subsidiary trust minority interest expense  for the quarter ended
     March 31,  1997 ($200  million  aggregate  Liquidation  Value of  Preferred
     Securities at a distribution rate of 11.625%).

     Subsidiary trust minority interest expense for 
      one quarter  ............ ............................                          $  (5,813)  
     Subsidiary trust minority interest expense made by the                                       
      Company during the quarter ...........................                              1,210   
                                                                                       ---------  
     Pro forma adjustment  .................................                          $  (4,603)  
                                                                                       =========  
                                                                                      
</TABLE>
(w)  To record  amortization  expense  on other  assets for one  quarter  ($4.75
     million over 10 years).

(x)  To record  interest  expense on the Notes for one quarter  ($200 million at
     9%).



                                       37



<PAGE>

                                   SIGNATURE

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                        SINCLAIR BROADCAST GROUP, INC.

                                        BY: /s/ David B. Amy
                                           ------------------------------------
                                           David B. Amy
                                           Chief Financial Officer/
                                           Principal Accounting Officer


Dated: June 27, 1997

<PAGE>





                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
                                                                                    SUBSEQUENTLY
EXHIBIT NO.                                                                         NUMBERED PAGE
-------------                                                                       --------------
<S>           <C>                                                                   <C>
      99      Press Release by Sinclair Broadcast Group, Inc. dated June 23, 1997
</TABLE>
[{"type": "8-K", "sequence": "1", "description": "FORM 8-K", "secsgml_size_bytes": 194170}]
{"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": "97631432"}, "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 ACT OF 1934

                               ------------------

Date  Of Report (Date of earliest event reported) June 23, 1997  Commission File
                                                                  Number 0-26076

                         SINCLAIR BROADCAST GROUP, INC.
                           (Exact name of registrant)

                            -------------------------

              MARYLAND                                52-1494660
     (State of organization)              (I.R.S. Employer Identification No.)

                             2000 WEST 41ST STREET,
                            BALTIMORE, MARYLAND 21211
              (Address of principal executive offices and zip code)

                                 (410) 467-5005
                         (Registrant's telephone number)

================================================================================
ITEM 5. OTHER EVENTS

     Sinclair Broadcast Group, Inc. (the "Company" or "Sinclair") is filing this
report on Form 8-K to  reflect  an updated  description  of recent  developments
regarding  its  business.  Additionally,  the  Company  incorporates  herein  by
reference the information  contained in the press release filed as Exhibit 99 to
this Form 8-K. Unless otherwise indicated,  defined terms shall have the meaning
set forth in the  "Glossary of Defined  Terms" below.  References  herein to the
Company shall include the Company's  subsidiaries,  unless the context otherwise
requires.

                             BUSINESS OF SINCLAIR

     The Company is a  diversified  broadcasting  company  that owns or provides
programming  services  to more  television  stations  than any other  commercial
broadcasting  group in the United States. The Company currently owns or provides
programming services to 29 television stations.  The Company believes it is also
one of the top 20 radio groups in the United States,  when measured by the total
number of radio stations  owned,  programmed or with which the Company has Joint
Sales Agreements ("JSAs").  The Company owns or provides programming services to
25 radio  stations,  has a pending  acquisition of one radio station,  has a JSA
with one  additional  radio  station  (which  station  the Company has agreed to
acquire) and has options to acquire an additional seven radio stations.

     The 29 television  stations the Company owns or programs  pursuant to local
marketing  agreements  or other  agreements  under  which the  Company  provides
programming  services to a station not owned by the Company ("LMAs") are located
in 21  geographically  diverse  markets,  with 23 of the  stations in the top 51
television  Designated Market Areas ("DMAs") in the United States. The Company's
television  station group is diverse in network  affiliation,  with ten stations
affiliated with Fox, 12 with United  Paramount  Television  Network  Partnership
("UPN"),  two with ABC,  two with Warner  Brothers  ("WB") and one with CBS. Two
stations operate as Independents.

     The Company's  radio station  group is also  geographically  diverse with a
variety of  programming  formats  including  country,  urban,  news/talk/sports,
album/progressive  rock  and  adult  contemporary.  Of  the 26  stations  owned,
programmed  or with which the Company has a JSA, 12 broadcast on the AM band and
14 on the FM band.  The Company owns or programs  from two to seven  stations in
all but one of the radio markets it serves.

     The Company has undergone rapid and  significant  growth over the course of
the last six years.  Beginning  with the  acquisition  of WPGH in  Pittsburgh in
1991,  the Company has increased  the number of  television  stations it owns or
programs  from  three to 29.  From  1991 to 1996,  net  broadcast  revenues  and
Adjusted EBITDA  increased from $39.7 million to $346.5 million,  and from $15.5
million to $180.3 million. Pro forma for the acquisitions  described above, 1996
net broadcasting  revenue and Adjusted EBITDA would have been $445.0 million and
$206.5 million, respectively.

                                       2
TELEVISION BROADCASTING

     The Company owns and  operates,  provides  programming  services to, or has
agreed to acquire the following television stations:
NUMBER OF
                                                                                        COMMERCIAL              EXPIRATION
                              MARKET                                                   STATIONS IN    STATION     DATE OF
          MARKET             RANK(a)   STATIONS   STATUS(b)   CHANNEL   AFFILIATION   THE MARKET(c)   RANK(d)   FCC LICENSE
---------------------------- --------- ---------- ----------- --------- ------------- --------------- --------- ------------
PITTSBURGH, PENNSYLVANIA .         19  WPGH       O&O              53   FOX                 6            4           8/1/99
                                       WPTT       LMA              22   UPN                              5           8/1/99
St. Louis, Missouri   ......       20  KDNL       O&O              30   ABC                 7            5           2/1/98
Sacramento, California   ...       21  KOVR       O&O              13   CBS                 8            3           2/1/99
Baltimore, Maryland   ......       23  WBFF       O&O              45   FOX                 5            4          10/1/04
                                       WNUV       LMA              54   UPN                              5          10/1/04
Indianapolis, Indiana ......       25  WTTV       LMA(e)            4   UPN                 8            4           8/1/97
                                       WTTK       LMA(e)(f)        29   UPN                              4(f)        8/1/97
Cincinnati, Ohio   .........       29  WSTR       O&O              64   UPN                 5            5          10/1/97
Raleigh-Durham,
 North Carolina ............       30  WLFL       O&O              22   FOX                 7            3          12/1/04
                                       WRDC       LMA              28   UPN                              5          12/1/04
Milwaukee, Wisconsin  ......       31  WCGV       O&O              24   UPN                 6            4          12/1/97
                                       WVTV       LMA              18   WB                               5          12/1/97
Kansas City, Missouri ......       32  KSMO       O&O              62   UPN                 7            5           2/1/98
Columbus, Ohio  ............       34  WTTE       O&O              28   FOX                 5            4          10/1/97
Asheville, North Carolina 
 and Greenville/Spartanburg/
 Anderson, South Carolina...       35  WFBC       LMA(g)           40   IND(i)              6            5          12/1/04
                                       WLOS       LMA(e)           13   ABC                 6            3          12/0/04
San Antonio, Texas .........       37  KABB       LMA(e)           29   FOX                 7            4           8/1/98
                                       KRRT       LMA(h)           35   UPN                              6           8/1/98
Norfolk, Virginia  .........       40  WTVZ       O&O              33   FOX                 6            4          10/1/04
Oklahoma City, Oklahoma ....       43  KOCB       O&O              34   UPN                 7            5           6/1/98
Birmingham, Alabama   ......       51  WTTO       O&O              21   WB                  5            4           4/1/05
                                       WABM       LMA              68   UPN                              5           4/1/05
Flint/Saginaw/Bay City,
 Michigan ..................       60  WSMH       O&O              66   FOX                 5            4          10/1/97
Las Vegas, Nevada  .........       64  KUPN       O&O              21   UPN                 8            5          10/1/98
Lexington, Kentucky   ......       68  WDKY       O&O              56   FOX                 5            4           8/1/97
Des Moines, Iowa   .........       72  KDSM       O&O              17   FOX                 4            4           2/1/98
Peoria/Bloomington,
 Illinois ..................      109  WYZZ       O&O              43   FOX                 4            4          12/1/97
Tuscaloosa, Alabama   ......      187  WDBB       LMA              17   IND(i)              2            2           4/1/05
----------

(a)  Rankings  are based on the relative  size of a station's  DMA among the 211
     generally recognized DMAs in the United States as estimated by Nielsen.

(b)  "O&O" refers to stations owned and operated by the Company, "LMA" refers to
     stations to which the Company provides  programming services pursuant to an
     LMA and "Pending" refers to stations the Company has agreed to acquire. See
     "1997 Acquisitions."

(c)  Represents  the  number of  television  stations  designated  by Nielsen as
     "local" to the DMA, excluding public television stations and stations which
     do not meet the minimum  Nielsen  reporting  standards  (weekly  cumulative
     audience of at least 2.5%) for the Sunday- Saturday, 6:00 a.m. to 2:00 a.m.
     time period.

                                         (Footnotes continued on following page)

                                       3
(d)  The rank of each  station  in its market is based  upon the  November  1996
     Nielsen estimates of the percentage of persons tuned to each station in the
     market from 6:00 a.m. to 2:00 a.m., Sunday-Saturday.

(e)  Non-License  Assets  acquired from River City  Broadcasting,  L.P.  ("River
     City") and option exercised to acquire License Assets will become owned and
     operated  upon FCC  approval of  transfer of License  Assets and closing of
     acquisition of License Assets.

(f)  WTTK  currently  simulcasts  all of the  programming  aired on WTTV and the
     station rank applies to the combined viewership of these stations.

(g)  Non-License  Assets acquired from River City. License Assets to be acquired
     by  Glencairn,  Ltd.,  subject to the  Company's  LMA, upon FCC approval of
     transfer of License Assets.

(h)  River City  provided  programming  to this station  pursuant to an LMA. The
     Company  acquired River City's rights under the LMA from River City and the
     Non-License Assets from the owners of this station.  The License Assets are
     to be transferred to Glencairn upon FCC approval of transfer of the License
     Assets.

(i)  "IND" or "Independent"  refers to a station that is not affiliated with any
     of ABC, CBS, NBC, Fox, UPN or Warner Brothers.

Operating Strategy

     The  Company's  television  operating  strategy  includes the following key
elements.

Attracting Viewership

     Popular  Programming.  The Company  believes  that an  important  factor in
attracting  viewership to its stations is their network  affiliations  with Fox,
UPN, ABC, CBS and WB. These  affiliations  enable the Company to attract viewers
by  virtue of the  quality  first-run  original  programming  provided  by these
networks and the networks' promotion of such programming. The Company also seeks
to  obtain,  at  attractive  prices,  popular  syndicated  programming  that  is
complementary  to  the  station's  network  affiliation.   Examples  of  popular
syndicated  programming obtained by the Company for broadcast on its Fox, WB and
UPN affiliates and  Independent  stations are "Mad About You,"  "Frasier,"  "The
Simpsons,"   "Home   Improvement"   and   "Seinfeld."  In  addition  to  network
programming,  the Company's ABC and CBS affiliates broadcast news magazine, talk
show, and game show  programming such as "Hard Copy,"  "Entertainment  Tonight,"
"Regis and Kathie Lee," "Wheel of Fortune" and "Jeopardy."

     Children's  Programming.  The  Company  seeks to be a leader in  children's
programming in each of its respective DMAs. The Company's nationally  recognized
"Kids  Club" was the  forerunner  and model for the Fox  network-wide  marketing
efforts promoting  children's  programming.  Sinclair carries the Fox Children's
Network  ("FCN")  and  UPN's  childrens'  programming,  both  of  which  include
significant  amounts  of  animated  programming  throughout  the week.  In those
markets  where the Company owns or programs ABC or CBS  affiliates,  the Company
broadcasts those networks' animated programming during weekends.  In addition to
this  animated  programming,  the Company  broadcasts  other forms of children's
programming, which may be produced by the Company or by an affiliated network.

     Counter-Programming. The Company's programming strategy on its Fox, UPN and
Independent  stations also  includes  "counter-programming,"  which  consists of
broadcasting programs that are alternatives to the types of programs being shown
concurrently  on  competing  stations.  This  strategy  is  designed  to attract
additional  audience  share in  demographic  groups  not  served  by  concurrent
programming on competing  stations.  The Company believes that implementation of
this strategy enables its stations to achieve competitive rankings in households
in  the  18-49  and  25-54  demographics  and  to  offer  greater  diversity  of
programming in each of its DMAs.

     Local News. The Company  believes that the production and  broadcasting  of
local news can be an important link to the community and an aid to the station's
efforts to expand its  viewership.  In  addition,  local  news  programming  can
provide access to advertising  sources targeted  specifically to local news. The
Company carefully assesses the anticipated benefits and costs of producing local
news prior to introduction at a Company station because a significant investment
in capital equipment is required and substantial operating expenses are incurred
in  introducing,  developing and producing local news  programming.  The Company
currently  provides  local  news  programming  at  WBFF  in  Baltimore,  WLFL in
Raleigh/Durham, KDNL in St. Louis, KABB in San Antonio, KOVR in Sacramento, WPGH
in Pittsburgh and WLOS in Asheville.  The Company also  broadcasts news programs
on WDKY in  Lexington,  which are  produced  in part by the  Company and in part
through the purchase of production  services from an independent third party and
on

                                       4
WTTV in  Indianapolis,  which are  produced by a third  party in exchange  for a
limited  number of  advertising  spots.  River City  provides  the Company  news
production  services with respect to the production of news  programming  and on
air  talent on WTTE.  Pursuant  to an  agreement,  River City  provides  certain
services to the Company in return for a fee equal to approximately  $416,000 per
year. The possible  introduction of local news at the other Company  stations is
reviewed  periodically.   The  Company's  policy  is  to  institute  local  news
programming  at a specific  station only if the expected  benefits of local news
programming at the station are believed to exceed the associated  costs after an
appropriate start-up period.

     Popular  Sporting  Events.  The  Company  attempts  to capture a portion of
advertising  dollars  designated to sports  programming  in selected  DMAs.  The
Company's   independent  and  UPN  affiliated   stations  generally  face  fewer
restrictions  on   broadcasting   live  local  sporting  events  than  do  their
competitors  that are affiliates of the major networks and Fox since  affiliates
of the major networks and Fox are subject to prohibitions against preemptions of
network  programming.  The Company has been able to acquire the local television
broadcast  rights for certain  sporting  events,  such as NBA basketball,  Major
League Baseball, NFL football, NHL hockey, ACC basketball,  Big Ten football and
basketball,   and  SEC  football.   The  Company  seeks  to  expand  its  sports
broadcasting  in  DMAs as  profitable  opportunities  arise.  In  addition,  the
Company's  stations that are affiliated with Fox broadcast  certain Major League
Baseball games, NFL football games and NHL hockey games.

Innovative Local Sales and Marketing

     The  Company  believes  that it is able to attract new  advertisers  to its
stations and increase its share of existing  customers'  advertising  budgets by
creating a sense of partnership  with those  advertisers.  The Company  develops
such relationships by training its sales forces to offer new marketing ideas and
campaigns to  advertisers.  These  campaigns  often involve the  sponsorship  by
advertisers of local  promotional  events that capitalize on the station's local
identity  and  programming  franchises.  For example,  several of the  Company's
stations  stage local "Kids Fairs" which allow station  advertisers to reinforce
their on-air  advertising with their target  audience.  Through its strong local
sales and marketing  focus,  the Company seeks to capture an increasing share of
its revenues from local  sources,  which are generally more stable than national
advertising.

Control of Operating and Programming Costs

     By employing a disciplined approach to managing programming acquisition and
other  costs,  the Company has been able to achieve  operating  margins that the
Company believes are among the highest in the television broadcast industry. The
Company  has sought in the past and will  continue  to seek to  acquire  quality
programming  for  prices at or below  prices  paid in the  past.  As an owner or
provider  of   programming   services  to  29  stations  in  21  DMAs   reaching
approximately 15% of U.S. television households, the Company believes that it is
able to negotiate favorable terms for the acquisition of programming.  Moreover,
the  Company  emphasizes  control  of  each  of its  stations'  programming  and
operating costs through  program-specific  profit analysis,  detailed budgeting,
tight control over staffing levels and detailed long-term planning models.

Attract and Retain High Quality Management

     The  Company  believes  that much of its  success is due to its  ability to
attract and retain highly skilled and motivated managers,  both at the corporate
and local  station  levels.  A portion of the  compensation  provided to general
managers,  sales managers and other station managers is based on their achieving
certain operating  results.  The Company also provides its corporate and station
managers with deferred  compensation  plans offering  options to acquire Class A
Common Stock.

Community Involvement

     Each of the Company's  stations actively  participates in various community
activities and offers many community services.  The Company's activities include
broadcasting  programming  of local  interest and  sponsorship  of community and
charitable  events.  The Company also encourages its station employees to become
active members of their communities and to promote  involvement in community and
charitable  affairs.  The Company believes that active community  involvement by
its stations  provides its stations with increased  exposure in their respective
DMAs and ultimately increases viewership and advertising support.

                                       5
Establish LMAs

     The Company  believes  that it can attain  significant  growth in operating
cash flow through the utilization of LMAs. By expanding its presence in a market
in which it owns a station,  the Company can  improve its  competitive  position
with respect to a  demographic  sector.  In addition,  by providing  programming
services to an  additional  station in a market,  the Company is able to realize
significant economies of scale in marketing,  programming,  overhead and capital
expenditures. The Company provides programming services pursuant to an LMA to an
additional  station in seven of the 21  television  markets in which the Company
owns or programs a station.

Programming and Affiliations

     The Company  continually  reviews its existing  programming  inventory  and
seeks to purchase the most  profitable and  cost-effective  syndicated  programs
available  for each time period.  In  developing  its  selection  of  syndicated
programming, the Company balances the cost of available syndicated programs with
their  potential to increase  advertising  revenue and the risk of their reduced
popularity  during  the  term of the  program  contract.  The  Company  seeks to
purchase only those programs with  contractual  periods that permit  programming
flexibility and which complement a station's  overall  programming  strategy and
counter-programming  strategy.  Programs that can perform  successfully  in more
than  one  time  period  are  more  attractive  due to the  long  lead  time and
multi-year commitments inherent in program purchasing.

     Twenty-seven  of the 29 television  stations owned or provided  programming
services by the Company operate as affiliates of Fox (ten stations), UPN (twelve
stations),  ABC (two  stations),  WB (two  stations) or CBS (one  station).  The
networks  produce and  distribute  programming  in exchange  for each  station's
commitment  to air  the  programming  at  specified  times  and  for  commercial
announcement time during the programming.  In addition,  networks other than Fox
and UPN pay each  affiliated  station a fee for each  network-sponsored  program
broadcast by the stations.

     On August 21, 1996,  the Company  entered  into an agreement  with Fox (the
"Fox  Agreement")  which,  among other  things,  provides  that the  affiliation
agreements between Fox and eight stations owned or provided programming services
by the Company  (except as noted below)  would be amended to have new  five-year
terms commencing on the date of the Fox Agreement.  Fox has the option to extend
the affiliation  agreements for an additional five-year term and must extend all
of the affiliation agreements if it extends any (except that Fox may selectively
renew  affiliation  agreements  if any  station  has  breached  its  affiliation
agreement). The Fox Agreement also provides that the Company will have the right
to  purchase,  for fair  market  value,  any  station  Fox  acquires in a market
currently  served by a Company owned Fox  affiliate  (other than the Norfolk and
Raleigh-Durham markets) if Fox determines to terminate the affiliation agreement
with the  Company's  station in that market and operate the station  acquired by
Fox as a Fox affiliate.  The agreement confirmed that the affiliation  agreement
for WTTO  (Birmingham,  Alabama) would  terminate on September 1, 1996, and that
affiliation  agreements  for WTVZ (Norfolk,  Virginia) and WLFL (Raleigh,  North
Carolina)  will  terminate  August 31, 1998.  The Fox  Agreement  also  includes
provisions limiting the ability of the Company to preempt Fox programming except
where it has existing  programming  conflicts  or where the Company  preempts to
serve a public purpose.

     The  Company's  affiliation  agreements  with  ABC for KDNL and WLOS in St.
Louis and Asheville, respectively, have 10-year terms expiring in 2005 and 2004,
respectively.  Each of the  Company's  UPN  affiliation  agreements is for three
years, and expires in January 1998.

     Each of the  affiliation  agreements  relating to stations  involved in the
River City  Acquisition  (other  than River  City's Fox and ABC  affiliates)  is
terminable by the network upon transfer of the License Assets of the station.

RADIO BROADCASTING

     The  following  table sets forth  certain  information  regarding the radio
stations (i) programmed by the Company, (ii) with which the Company has JSAs, or
(iii) which the Company has an option to acquire.

                                       6
RANKING OF                                                    STATION RANK     EXPIRATION
 GEOGRAPHIC        STATION'S              STATION                 PRIMARY        IN PRIMARY        DATE OF
   MARKET          MARKET BY            PROGRAMMING             DEMOGRAPHIC      DEMOGRAPHIC         FCC
  SERVED(a)        REVENUE(b)              FORMAT                TARGET(c)        TARGET(d)        LICENSE
----------------   ------------   ---------------------------   --------------   --------------   ------------
Los Angeles                2
 KBLA-AM(e)                       Korean                        NA                      N/A           12/1/97

St. Louis                 17
 KPNT-FM                          Alternative Rock              Adults 18-34              4            2/1/05
 WVRV-FM                          Modern Adult Contemporary     Adults 18-34              7           12/1/04

New Orleans               38
 WLMG-FM                          Adult Contemporary            Women 25-54               2            6/1/04
 KMEZ-FM                          Urban Oldies                  Women 25-54               6            6/1/04
 WWL-AM                           News/Talk/Sports              Adults 35-64              1            6/1/04
 WSMB-AM                          Talk/Sports                   Adults 35-64             19            6/1/04

Buffalo                   40
 WMJQ-FM                          Adult Contemporary            Women 25-54               2            6/1/98
 WKSE-FM                          Contemporary Hit Radio        Women 18-49               1            6/1/98
 WBEN-AM                          News/Talk/Sports              Adults 35-64              1            6/1/98
 WWKB-AM                          Country                       Adults 35-64             16            6/1/98
 WGR-AM                           Sports                        Adults 25-54             10            6/1/98
 WWWS-AM                          Urban Oldies                  Women 25-54              12            6/1/98

Memphis                   43
 WRVR-FM                          Soft Adult Contemporary       Women 25-54               3            8/1/04
 WJCE-AM                          Urban Oldies                  Women 25-54              11            8/1/04
 WOGY-FM                          Country                       Adults 25-54             10            8/1/04

Nashville                 44
 WLAC-FM                          Adult Contemporary            Women 25-54               6            8/1/04
 WJZC-FM                          Smooth Jazz                   Women 25-54               9            8/1/04
 WLAC-AM                          News/Talk/Sports              Adults 35-64             11            8/1/04

Greenville/
 Spartanburg              59
 WFBC-FM(g)                       Contemporary Hit Radio        Women 18-49               6           12/1/03
 WORD-AM(g)                       News/Talk                     Adults 35-64              9           12/1/03
 WFBC-AM(g)                       News/Talk                     Adults 35-64              9           12/1/03
 WSPA-AM(g)                       Full Service/Talk             Adults 35-64             15           12/1/03
 WSPA-FM(g)                       Soft Adult Contemporary       Women 25-54               2           12/1/03
 WOLI-FM(g)(h)                    Oldies                        Adults 25-54              9           12/1/03
 WOLT-FM(g)(i)                    Oldies                        Adults 25-54             10           12/1/03

Wilkes-Barre/
 Scranton                 61
 WKRZ-FM(n)                       Contemporary Hit Radio        Adults 18-49              1            8/1/98
 WGGY-FM                          Country                       Adults 25-54              3            8/1/98
 WILK-AM(j)                       News/Talk/Sports              Adults 35-64              6            8/1/98
 WGBI-AM(j)                       News/Talk/Sports              Adults 35-64             31            8/1/98
 WWSH-FM(f)                       Soft Hits                     Women 25-54               7            8/1/98
 WILP-AM                          News/Talk/Sports              Adults 35-64             31            8/1/98
 WWFH-FM(l)                       Soft Hits                     Women 25-54              17            8/1/98
 WKRF-FM(m)(n)                    Contemporary Hit Radio        Adults 18-49             26            8/1/98
(Footnotes on following page)

                                       7
----------

(a)  Actual city of license may differ from the geographic market served.

(b)  Ranking of the principal  radio market served by the station among all U.S.
     radio markets by 1995 aggregate gross radio broadcast  revenue according to
     1996 Broadcasting & Cable Yearbook.

(c)  Due to variations that may exist within  programming  formats,  the primary
     demographic  target of  stations  with the same  programming  format may be
     different.

(d)  All information  concerning ratings and audience  listening  information is
     derived from the Fall 1996  Arbitron  Metro Area Ratings  Survey (the "Fall
     1996  Arbitron").  Arbitron is the generally  accepted  industry source for
     statistical  information  concerning audience ratings. Due to the nature of
     listener  surveys,  other  radio  ratings  services  may  report  different
     rankings;  however,  the Company  does not believe  that any radio  ratings
     service  other than  Arbitron is accorded  significant  weight in the radio
     broadcast  industry.  "Station Rank in Primary  Demographic  Target" is the
     ranking of the  station  among all radio  stations  in its market  that are
     ranked  in its  target  demographic  group  and is based  on the  station's
     average persons share in the primary  demographic  target in the applicable
     Metro Survey Area. Source:  Average Quarter Hour Estimates,  Monday through
     Sunday, 6:00 a.m. to midnight, Fall 1996 Arbitron.

(e)  Programming  is  provided to this  station by a third party  pursuant to an
     LMA.

(f)  The Company has agreed to acquire this station,  subject to FCC approval of
     the transfer of the related licenses.

(g)  The Company has an option to acquire  Keymarket  of South  Carolina,  Inc.,
     ("Keymarket").  Keymarket owns and operates  WFBC-AM,  WORD-AM and WFBC-FM,
     has an option to acquire and provides  programming  services pursuant to an
     LMA to WSPA-AM and WSPA-FM,  and provides sales services  pursuant to a JSA
     and has an option to acquire WOLI-FM and WOLT-FM.

(h)  WOLI-FM was formerly WXWX-FM.

(i)  WOLT-FM was formerly WXWZ-FM.

(j)  WILK-AM and WGBI-AM simulcast their programming.

(k)  WILP-AM was formerly WXPX-AM.

(l)  WWFH-FM was formerly WQEQ-FM.

(m)  The FCC has approved the acquisition of this station.

(n)  WKRZ-FM and WKRF-FM simulcast their programming.

Radio Operating Strategy

     The Company's  radio  strategy is to operate a cluster of radio stations in
each  of a  variety  of  geographic  markets  throughout  the  country.  In each
geographic market, the Company employs broadly  diversified  programming formats
to appeal to a variety of  demographic  groups  within the  market.  The Company
seeks to strengthen the identity of each of its stations through its programming
and  promotional  efforts,  and emphasizes that identity to a far greater degree
than the identity of any local radio personality.

     The Company believes that its strategy of appealing to diverse  demographic
groups in a variety of geographic  markets  allows it to reach a larger share of
the overall  advertising market while realizing  economies of scale and avoiding
dependence  on one  demographic  or  geographic  market.  The  Company  realizes
economies  of scale  by  combining  sales  and  marketing  forces,  back  office
operations and general  management in each geographic  market. At the same time,
the  geographic  diversity of its portfolio of radio  stations  helps lessen the
potential impact of economic  downturns in specific markets and the diversity of
target  audiences  served  helps  lessen  the  impact of  changes  in  listening
preferences.  In addition,  the geographic and demographic  diversity allows the
Company to avoid dependence on any one or any small group of advertisers.

     The  Company's  group of radio  stations  includes the top billing  station
group in two markets and one of the top three billing  station groups in each of
its markets other than Los Angeles,  St. Louis and Nashville.  Through ownership
or LMAs, the group also includes duopolies in six of its seven markets and, upon
exercise of options to acquire  stations in the  Greenville/Spartanburg  market,
the Company will have duopolies in seven of its eight markets.

                                       8
Depending on the programming  format of a particular  station,  there are a
predetermined  number  of  advertisements   broadcast  each  hour.  The  Company
determines the optimum number of  advertisements  available for sale during each
hour without jeopardizing listening levels (and the resulting ratings). Although
there may be shifts from time to time in the number of advertisements  available
for sale during a particular  time of day,  the total  number of  advertisements
available for sale on a particular station normally does not vary significantly.
Any  change in net  radio  broadcasting  revenue,  with the  exception  of those
instances  where  stations  are  acquired or sold,  is  generally  the result of
pricing adjustments made to ensure that the station effectively uses advertising
time  available  for sale,  an increase in the number of  commercials  sold or a
combination of these two factors.

     Large,  well-trained  local sales forces are  maintained  by the Company in
each of its radio markets.  The Company's principal goal in its sales efforts is
to  develop  long-standing   customer   relationships  through  frequent  direct
contacts,  which the Company believes provides it with a competitive  advantage.
Additionally,  in some radio  markets,  duopolies  permit  the  Company to offer
creative advertising packages to local, regional and national advertisers.  Each
radio  station  programmed  by the Company also  engages a national  independent
sales  representative to assist it in obtaining national  advertising  revenues.
These  representatives  obtain advertising through national advertising agencies
and receive a commission  from the radio station based on its gross revenue from
the advertising obtained.

BROADCASTING ACQUISITION STRATEGY

     On February 8, 1996,  the  Telecommunications  Act of 1996 (the "1996 Act")
was signed into law. The 1996 Act represents  the most sweeping  overhaul of the
country's  telecommunications  laws  since the  Communications  Act of 1934,  as
amended (the "Communications Act"). The 1996 Act relaxes the broadcast ownership
rules and simplifies the process for renewal of broadcast station licenses.

     The Company  believes  that the enactment of the 1996 Act presents a unique
opportunity  to  build a  larger  and  more  diversified  broadcasting  company.
Additionally,  the Company  expects  that the  opportunity  to act as one of the
consolidators  of the  industry  will  enable  the  Company  to gain  additional
influence  with program  suppliers,  television  networks,  other  vendors,  and
alternative  delivery media. The Company also believes that the additions to its
management  team  as a  result  of the  River  City  Acquisition  will  give  it
additional resources to take advantage of these developments.

     In implementing its acquisition strategy, the Company seeks to identify and
pursue favorable  station or group  acquisition  opportunities  primarily in the
15th to 75th  largest  DMAs and  Metro  Service  Areas  ("MSAs").  In  assessing
potential  acquisitions,  the Company examines  opportunities to improve revenue
share, audience share and/or cost control.  Additional factors considered by the
Company in a potential  acquisition  include  geographic  location,  demographic
characteristics and competitive dynamics of the market.

     In furtherance of its acquisition strategy,  the Company routinely reviews,
and  conducts   investigations  of,  potential   television  and  radio  station
acquisitions.  When the Company  believes a favorable  opportunity  exists,  the
Company  seeks to  enter  into  discussions  with the  owners  of such  stations
regarding the  possibility of an acquisition by the Company.  At any given time,
the Company may be in discussions with one or more such station owners.

     Since the 1996 Act became  effective,  the Company has  acquired,  obtained
options  to  acquire or has  acquired  the right to  program  or  provide  sales
services to 17 television and 33 radio  stations for an aggregate  consideration
of approximately $1.3 billion. Certain terms of these acquisitions are described
below.

     River  City  Acquisition.  On May 31,  1996,  pursuant  to an  amended  and
restated asset purchase  agreement,  the Company acquired all of the Non-License
Assets of River  City other than the  assets  relating  to WSYX-TV in  Columbus,
Ohio.  Simultaneously,  the Company  entered  into a 10-year LMA with River City
with respect to all of River City's  License  Assets (with the  exception of the
License  Assets  relating to WSYX) and was  granted:  (i) a 10-year  option (the
"License  Assets  Option") to acquire  River  City's  License  Assets  (with the
exception of the License Assets relating to WSYX); and (ii) a three-year  option
to acquire the assets relating to WSYX-TV (both the License and Non-License

                                       9
Assets,  collectively the "Columbus Option"). The exercise price for the License
Assets  Option is $20  million  and the  Company is  required to pay a quarterly
extension fee with respect to the License  Assets  Option as follows:  (1) 8% of
$20  million  for the  first  year  following  the  closing  of the  River  City
Acquisition;  (2) 15% of $20 million for the second year following such closing;
and (3) 25% of $20 million  for each  following  year.  The  Non-License  Assets
acquired  from  River  City  relate to eight  television  stations  and 21 radio
stations  owned and operated by River City.  In addition,  the Company  acquired
from another party the Non-License Assets relating to one additional  television
station (KRRT) to which River City provided  programming pursuant to an LMA. The
Company  assigned  its option to acquire  the License  Assets of one  television
station  (WFBC) to Glencairn,  and Glencairn also acquired the option to acquire
the License  Assets of KRRT. The Company also acquired River City's rights under
LMAs with respect to KRRT and four radio  stations to which River City  provided
programming  or sales  services.  The Company has exercised  the License  Assets
Option and has acquired the License Assets of three of the  television  stations
and all of the radio  stations.  Acquisition of the remaining  License Assets is
now subject to FCC approval of transfer of such License Assets.  There can be no
assurance that this approval will be obtained.  Applications for transfer of the
License  Assets  were  filed in July and August  1996,  except  application  for
transfer  of the  License  Assets  relating  to WTTV and WTTK which was filed in
November 1996.

     The  Company  paid an  aggregate  of  approximately  $1.0  billion  for the
Non-License Assets and the License Assets Option consisting of $847.6 million in
cash and 1,150,000 shares of Series A Convertible Preferred Stock of the Company
and 1,382,435 stock options.  The Series A Convertible  Preferred Stock has been
exchanged for 1,150,000  shares of Series B Convertible  Preferred  Stock of the
Company,  which at issuance had an aggregate  liquidation value of $115 million,
and are convertible at any time, at the option of the holders, into an aggregate
of 4,181,818  shares of Class A Common Stock of the Company  (which had a market
value on May 31, 1996 of approximately  $125.1 million).  The exercise price for
the  Columbus  Option  is   approximately   $130  million  plus  the  amount  of
indebtedness  secured by the WSYX assets on the date of exercise  (not to exceed
the amount  outstanding  on the date of closing of $105 million) and the Company
is required  to pay an  extension  fee with  respect to the  Columbus  Option as
follows:  (1) 8% of $130 million for the first year following the closing of the
River City  Acquisition;  (2) 15% of $130 million for the second year  following
the closing;  and (3) 25% of $130 million for each following year. The extension
fee accrues beginning on the date of closing, and is payable (beginning December
31, 1996) at the end of each  calendar  quarter until such time as the option is
exercised  or River City  sells  WSYX to a third  party.  The  Company  paid the
extension  fee due March 31, 1997.  Pursuant to the LMAs with River City and the
owner of KRRT, the Company is required to provide at least 166 hours per week of
programming  to each  television  and radio  station  and,  subject  to  certain
exceptions,  River  City and the owner of KRRT are  required  to  broadcast  all
programming  provided by the Company.  The Company is required to pay River City
and the owner of KRRT  monthly  fees under the LMAs in an amount  sufficient  to
cover  specified  expenses  of  operating  the  stations,  which  are  currently
approximately  $150,000  per  month  for all  River  City  television  and radio
stations the Company  programs  (including  KRRT).  The Company has the right to
sell  advertising  time on the  stations  during  the  hours  programmed  by the
Company.

     The Company and River City filed notification  under the  Hart-Scott-Rodino
Antitrust  Improvements Act of 1976, as amended (the "HSR Act"), with respect to
the  Company's  acquisition  of all  River  City  assets  prior to  closing  the
acquisition.  After the United States Justice  Department ("DOJ") indicated that
it would request additional  information regarding the antitrust implications of
the  acquisition  of WSYX by the Company in light of the Company's  ownership of
WTTE, the Company and River City agreed to submit  separate  notifications  with
respect to the WSYX assets and the other River City assets. The DOJ then granted
early  termination  of the waiting  period with  respect to the  transfer of the
River City assets other than WSYX, permitting the acquisition of those assets to
proceed.  The  Company  and River City  agreed to notify the DOJ 30 days  before
entering into an LMA or similar agreement with respect to WSYX and agreed not to
enter into such an agreement  until 20 days after  substantially  complying with
any request for information from DOJ regarding the  transaction.  The Company is
in the process of preparing a submission to the DOJ  regarding  the  competitive
effects of entering into an LMA arrangement in Columbus.  The Company has agreed
to sell the License  Assets of WTTE to  Glencairn  and to enter into an LMA with
Glencairn to provide programming services to WTTE. The FCC has

                                       10
approved  this  transaction,   but  the  Company  does  not  believe  that  this
transaction will be completed unless the Company acquires WSYX.

     In the River City Acquisition,  the Company also acquired an option held by
River  City to  purchase  either  (i) all of the  assets of  Keymarket  of South
Carolina,  Inc.  ("KSC") for the  forgiveness  of debt held by the Company in an
aggregate  principal amount of approximately $7.4 million as of August 22, 1996,
plus payment of approximately $1,000,000 less certain adjustments or (ii) all of
the stock of KSC for $1,000,000 less certain adjustments.  KSC owns and operates
three  radio  stations  in  the  Greenville/  Spartanburg,  South  Carolina  MSA
(WFBC-FM,  WFBC-AM and WORD-AM).  The options to acquire the assets and stock of
KSC expire on  December  31,  1997.  KSC also  holds an option to  acquire  from
Spartan  Radiocasting,  Inc. certain assets relating to two additional  stations
(WSPA-AM and WSPA-FM) in the  Greenville/Spartanburg MSA and which KSC currently
programs pursuant to an LMA. KSC's option to acquire these assets is exercisable
for $5.15  million  and expires in January  2000,  subject to  extension  to the
extent the applicable  LMA is extended  beyond that date. KSC also has an option
to acquire assets of Palm Broadcasting Company,  L.P., which owns two additional
stations in the  Greenville/Spartanburg  MSA  (WOLI-FM and WOLT-FM) in an amount
equal to the outstanding debt of Palm Broadcasting Company, L.P. to the Company,
which was approximately  $3.03 million as of March 31, 1997. This option expires
in April 2001. KSC has a JSA with Palm Broadcasting Company,  L.P., but does not
provide programming for WOLI or WOLT.

     Superior  Acquisition.  On  May  8,  1996,  the  Company  acquired  WDKY-TV
(Lexington,  Kentucky)  and  KOCB-TV  (Oklahoma City, Oklahoma) by acquiring the
stock of Superior Communications Group, Inc. for approximately $63.5 million.

     Flint Acquisition.  On February 27, 1996 the Company acquired the assets of
WSMH-TV (Flint,  Michigan) for approximately $35.8 million by exercising options
granted in 1995.

     Cincinnati/Kansas City Acquisitions.  On July 1, 1996, the Company acquired
the assets of KSMO-TV (Kansas City, Missouri) and on August 1, 1996, it acquired
the assets of WSTR-TV (Cincinnati, Ohio) for approximately $34.2 million.

     Peoria/Bloomington  Acquisition.  On July 1, 1996, the Company acquired the
assets  of  WYZZ-TV  (Peoria/Bloomington,   Illinois)  for  approximately  $21.2
million.

1997 ACQUISITIONS

     Since the end of 1996,  the Company has entered into  agreements to acquire
one  television  station  and  four  radio  stations,   and  has  completed  the
acquisition of four television  stations and six radio stations.  On January 30,
1997,  the Company  entered  into an agreement to acquire the assets of KUPN-TV,
the UPN affiliate in Las Vegas, Nevada, for $87.0 million. The Company completed
this  acquisition on May 30, 1997. The Company also entered into an agreement on
January 29,  1997 to acquire  the assets of WGR-AM and  WWWS-AM in Buffalo,  New
York,  for $1.5  million.  The Company's  acquisition  of WGR-AM and WWWS-AM was
consummated  on April 18, 1997. On January 31, 1997,  the Company  completed the
acquisition  of the  assets  of  WWFH-FM  and  WILP-AM,  each  in  Wilkes-Barre,
Pennsylvania,  for aggregate  consideration of approximately  $773,000. On April
22, 1997,  the Company  consummated  its  acquisition  of the License  Assets of
KOVR-TV in Sacramento,  California,  and KDSM-TV in Des Moines, Iowa, and on May
16, 1997, consummated its acquisition of the License Assets of KDNL-TV,  WVRV-FM
and KPNT-FM in St. Louis, Missouri. The Company obtained the options pursuant to
which it acquired these assets in the River City Acquisition. On March 12, 1997,
the Company  entered into an  agreement  to acquire the assets of radio  station
WKRF-FM in the Wilkes-Barre/Scranton,  Pennsylvania market. The FCC has approved
this  acquisition.  In April 1997,  the Company  entered  into an  agreement  to
acquire the assets of radio station WWSH-FM in the Wilkes-Barre/Scranton market.

LOCAL MARKETING AGREEMENTS

     The  Company  generally  enters  into LMAs and  similar  arrangements  with
stations  located in markets in which the Company  already  owns and  operates a
station,  and in connection with acquisitions,  pending  regulatory  approval of
transfer of License Assets. Under the terms of the LMAs the Company

                                       11
makes  specified  periodic  payments to the  owner-operator  in exchange for the
grant to the Company of the right to program and sell advertising on a specified
portion of the  station's  inventory of  broadcast  time.  Nevertheless,  as the
holder  of  the  FCC  license,  the  owner-operator  retains  full  control  and
responsibility  for the  operation  of the station,  including  control over all
programming broadcast on the station.

     The Company currently has LMA arrangements with stations in five markets in
which it owns a television station: Pittsburgh,  Pennsylvania (WPTT), Baltimore,
Maryland (WNUV),  Raleigh/Durham,  North Carolina (WRDC),  Milwaukee,  Wisconsin
(WVTV) and Birmingham,  Alabama (WABM). The Company also has LMA arrangements in
two  markets  (San  Antonio and  Asheville/Greenville/Spartanburg)  in which the
Company will own a station upon  completion of the acquisition of License Assets
from River City. In addition,  the Company has an LMA arrangement with a station
in the Tuscaloosa,  Alabama market (WDBB),  which is adjacent to Birmingham.  In
each of these markets, other than Pittsburgh and Tuscaloosa, the LMA arrangement
is (or will be after  transfer of License Assets from River City) with Glencairn
and the Company owns the  Non-License  Assets of the stations.  The Company owns
the assets of one radio station  (KBLA-AM in Los Angeles)  which an  independent
third party programs pursuant to an LMA.

     The Company  believes  that it is able to increase its revenues and improve
its margins by providing  programming  services to stations in selected DMAs and
MSAs where the Company  already  owns a station.  In certain  instances,  single
station  operators and stations operated by smaller ownership groups do not have
the management expertise or the operating  efficiencies available to the Company
as a multi-station  broadcaster.  The Company seeks to identify such stations in
selected markets and to provide such stations with programming services pursuant
to  LMAs.  In  addition  to  providing  the  Company  with  additional   revenue
opportunities,  the Company believes that these LMA  arrangements  have assisted
certain  stations  whose  operations  may have  been  marginally  profitable  to
continue to air popular  programming  and contribute to diversity of programming
in their respective DMAs and MSAs.

     In cases where the Company enters into LMA  arrangements in connection with
a station whose acquisition by the Company is pending FCC approval,  the Company
(i) obtains an option to acquire the station assets essential for broadcasting a
television or radio signal in compliance with regulatory  guidelines,  generally
consisting  of the  FCC  license,  transmitter,  transmission  lines,  technical
equipment,  call letters and  trademarks,  and certain  furniture,  fixtures and
equipment  (the "License  Assets") and (ii)  acquires the remaining  assets (the
"Non-License  Assets")  at  the  time  it  enters  into  the  option.  Following
acquisition of the Non-License  Assets,  the License Assets continue to be owned
by the  owner-operator  and holder of the FCC license,  which enters into an LMA
with the  Company.  After FCC  approval  for  transfer of the License  Assets is
obtained,  the Company  exercises  its option to acquire the License  Assets and
become the owner-operator of the station, and the LMA arrangement is terminated.

     In connection  with the River City  Acquisition,  the Company  entered into
LMAs with  River  City and the owner of KRRT  with  respect  to each of the nine
television  (including  KDSM-TV) and 21 radio stations with respect to which the
Company  acquired  Non-License  Assets.  The LMAs are for a ten-year term, which
corresponds with the term of the option the Company holds to acquire the related
River City License Assets. Pursuant to the LMAs, the Company pays River City and
the owner of KRRT fees in return  for  which  the  Company  acquires  all of the
inventory of  broadcast  time of the stations and the right to sell 100% of each
station's inventory of advertising time. The Company has filed applications with
respect to the  transfer of the License  Assets of seven of the nine  television
stations and the 21 radio  stations  with respect to which the Company  acquired
Non-License  Assets in the River City  Acquisition.  Such applications have been
granted with respect to three of the seven television  stations and all 21 radio
stations,  and  the  Company  has  acquired  the  license  assets  of the  three
television stations and all 21 of the radio stations. Upon grant of FCC approval
of the transfer of License  Assets with respect to the remaining  stations,  the
Company  intends to acquire the License  Assets,  and  thereafter  the LMAs will
terminate  and the  Company  will  operate  the  stations.  With  respect to the
remaining  two  television  stations,  Glencairn has applied for transfer of the
License  Assets of these  stations,  and the  Company  intends to program  these
stations  under LMAs with  Glencairn  upon FCC  approval of the  transfer of the
License Assets to Glencairn.  Petitions to deny or informal objections have been
filed against these applications by third parties. The Company has requested the
FCC to withhold action on the applications for the Company's acquisition of WTTV
and WTTK in Indianapolis (and a pending application for

                                       12
the Controlling  Stockholders to divest their attributable  interests in WIIB in
Indianapolis)  until  the  FCC  completes  its  pending  rulemaking   proceeding
considering the cross-interest policy.

     In addition to its LMAs,  the Company  sells  commercial  air time for (but
does not provide  programming to) one radio station  pursuant to a JSA in an MSA
in which it has  interests  in other radio  stations.  The Company has agreed to
acquire  this  station.  Under the  Company's  JSA, the Company has obtained the
right,  for a fee  paid  to the  owner  and  operator  of the  station,  to sell
substantially all of the commercial advertising on the station.

FEDERAL REGULATION OF TELEVISION AND RADIO BROADCASTING

     The  ownership,  operation  and sale of television  and radio  stations are
subject to the jurisdiction of the Federal  Communications  Commission  ("FCC"),
which acts  under  authority  granted by the  Communications  Act.  Among  other
things,  the FCC  assigns  frequency  bands  for  broadcasting;  determines  the
particular  frequencies,  locations  and  operating  power of stations;  issues,
renews,  revokes and modifies  station  licenses;  regulates  equipment  used by
stations;  adopts and  implements  regulations  and  policies  that  directly or
indirectly affect the ownership, operation and employment practices of stations;
and has the  power  to  impose  penalties  for  violations  of its  rules or the
Communications Act.

     The   following  is  a  brief   summary  of  certain   provisions   of  the
Communications  Act,  the 1996 Act and specific FCC  regulations  and  policies.
Reference  should be made to the  Communications  Act,  FCC rules and the public
notices and rulings of the FCC for further information concerning the nature and
extent of federal regulation of broadcast stations.

     License Grant and Renewal.  Television and radio stations  operate pursuant
to broadcasting  licenses that are granted by the FCC for maximum terms of eight
years.

     Television  and  radio  station   licenses  are  subject  to  renewal  upon
application to the FCC.  During certain  periods when renewal  applications  are
pending,  competing  applicants  may file for the radio or television  frequency
being used by the renewal applicant.  During the same periods, petitions to deny
license  renewal  applications  may be filed by  interested  parties,  including
members of the public.  Prior to the 1996 Act, the FCC was generally required to
hold  hearings  on renewal  applications  if a competing  application  against a
renewal  application  was filed, if the FCC was unable to determine that renewal
of a license would serve the public interest, convenience and necessity, or if a
petition  to deny raised a  "substantial  and  material  question of fact" as to
whether the grant of the renewal  application would be prima facie  inconsistent
with the public interest, convenience and necessity.

     The 1996 Act does not  prohibit  either  the  filing of  petitions  to deny
license  renewals or the filing of competing  applications.  Under the 1996 Act,
the FCC is still  required  to hold  hearings on renewal  applications  if it is
unable to determine  that renewal of a license would serve the public  interest,
convenience  or necessity,  or if a petition to deny raises a  "substantial  and
material  question of fact" as to whether  the grant of the renewal  application
would be prima facie  inconsistent  with the public  interest,  convenience  and
necessity.  Pursuant  to the  1996  Act,  however,  the FCC is  prohibited  from
considering competing applications for a renewal applicant's  frequency,  and is
required  to grant  the  renewal  application,  if the FCC  finds:  (i) that the
station has served the public  interest,  convenience  and necessity;  (ii) that
there have been no serious  violations by the licensee of the Communications Act
or the rules and  regulations  of the FCC;  and (iii)  there  have been no other
violations  by  the  licensee  of  the  Communications  Act  or  the  rules  and
regulations of the FCC that, when taken together,  would constitute a pattern of
abuse.

     All of the stations that the Company (i) owns and operates, (ii) intends to
acquire  pursuant to the River City  Acquisition and other  acquisitions,  (iii)
currently provides programming services to pursuant to an LMA, or (iv) currently
sells  commercial air time on pursuant to a JSA, are presently  operating  under
regular  licenses,  which expire as to each station on the dates set forth under
"Television  Broadcasting" and "Radio  Broadcasting," above. Although renewal of
license is granted in the vast majority of cases even when petitions to deny are
filed,  there can be no  assurance  that the licenses of such  stations  will be
renewed.

                                       13
Ownership Matters

General

     The  Communications  Act prohibits the assignment of a broadcast license or
the transfer of control of a broadcast  licensee  without the prior  approval of
the FCC. In determining  whether to permit the assignment or transfer of control
of, or the grant or renewal of, a broadcast license,  the FCC considers a number
of factors pertaining to the licensee,  including  compliance with various rules
limiting common ownership of media  properties,  the "character" of the licensee
and those persons holding "attributable"  interests therein, and compliance with
the Communications Act's limitations on alien ownership.

     To obtain the FCC's prior consent to assign a broadcast license or transfer
control of a broadcast licensee, appropriate applications must be filed with the
FCC. If the application involves a "substantial change" in ownership or control,
the application must be placed on public notice for a period of approximately 30
days during which  petitions to deny the  application may be filed by interested
parties,  including members of the public. If the application does not involve a
"substantial  change" in ownership or control,  it is a "pro forma" application.
The  "pro  forma"  application  is  nevertheless   subject  to  having  informal
objections  filed  against  it. If the FCC  grants  an  assignment  or  transfer
application, interested parties have approximately 30 days from public notice of
the grant to seek reconsideration of that grant. Generally,  parties that do not
file initial  petitions to deny or informal  objections  against the application
face difficulty in seeking  reconsideration  of the grant.  The FCC normally has
approximately  an  additional 10 days to set aside such grant on its own motion.
When passing on an  assignment  or transfer  application,  the FCC is prohibited
from considering whether the public interest might be served by an assignment or
transfer to any party other than the  assignee or  transferee  specified  in the
application.

     The FCC generally applies its ownership limits to "attributable"  interests
held by an individual,  corporation,  partnership or other  association.  In the
case of corporations  holding, or through  subsidiaries  controlling,  broadcast
licenses,  the  interests  of  officers,  directors  and those who,  directly or
indirectly, have the right to vote 5% or more of the corporation's stock (or 10%
or more of such stock in the case of insurance  companies,  investment companies
and  bank  trust   departments   that  are  passive   investors)  are  generally
attributable, except that, in general, no minority voting stock interest will be
attributable  if there is a single  holder of more  than 50% of the  outstanding
voting power of the  corporation.  The FCC has a pending  rulemaking  proceeding
that,  among other  things,  seeks  comment on whether the FCC should modify its
attribution rules by (i) raising the attribution stock benchmark from 5% to 10%;
(ii) raising the attribution  stock benchmark for passive  investors from 10% to
20%; (iii)  restricting  the  availability  of the single  majority  shareholder
exemption; and (iv) attributing certain interests such as non-voting stock, debt
and certain holdings by limited liability corporations in certain circumstances.
More  recently,  the FCC has solicited  comment on proposed rules that would (i)
treat an otherwise  nonattributable  equity or debt interest in a licensee as an
attributable  interest  where the interest  holder is a program  supplier or the
owner of a  broadcast  station in the same  market and the  equity  and/or  debt
holding is  greater  than a  specified  benchmark;  (ii)  treat a licensee  of a
television  station  which,  under an LMA,  brokers more than 15% of the time on
another  television  station serving the same market,  as having an attributable
interest in the brokered station; and (iii) in certain circumstances,  treat the
licensee of a broadcast  station that sells  advertising time on another station
in the same market pursuant to a JSA as having an  attributable  interest in the
station whose advertising is being sold.

     The Controlling  Stockholders hold  attributable  interests in two entities
owning media properties,  namely:  Channel 63, Inc.,  licensee of WIIB-TV, a UHF
television station in Bloomington,  Indiana, and Bay Television,  Inc., licensee
of WTTA-TV,  a UHF television  station in St.  Petersburg,  Florida.  All of the
issued and  outstanding  shares of Channel 63, Inc. are owned by the Controlling
Stockholders.  All the issued and outstanding shares of Bay Television, Inc. are
owned by the  Controlling  Stockholders  (75%) and Robert L.  Simmons  (25%),  a
former stockholder of the Company.  The Controlling  Stockholders have agreed to
divest their attributable interests in Channel 63, Inc. and the Company believes
that, after doing so, such holdings will not materially  restrict its ability to
acquire or program additional broadcast stations.

                                       14
Under its  "cross-interest"  policy, the FCC considers certain "meaningful"
relationships  among  competing  media  outlets in the same market,  even if the
ownership  rules do not  specifically  prohibit  the  relationship.  Under  this
policy,  the FCC may consider  significant  equity  interests  combined  with an
attributable interest in a media outlet in the same market, joint ventures,  and
common key  employees  among  competitors.  The  cross-interest  policy does not
necessarily prohibit all of these interests,  but requires that the FCC consider
whether,  in  a  particular  market,  the  "meaningful"   relationships  between
competitors  could have a significant  adverse effect upon economic  competition
and program  diversity.  Heretofore,  the FCC has not applied its cross-interest
policy to LMAs and JSAs between broadcast  stations.  In its ongoing  rulemaking
proceeding  concerning  the  attribution  rules,  the FCC has sought comment on,
among other things, (i) whether the cross-interest policy should be applied only
in smaller markets, and (ii) whether non-equity financial  relationships such as
debt, when combined with multiple business  interrelationships  such as LMAs and
JSAs,  raise concerns under the  cross-interest  policy.  Moreover,  in its most
recent proposals in its ongoing attribution rulemaking  proceeding,  the FCC has
proposed  treating  television  LMAs,  JSAs,  and debt or  equity  interests  as
attributable   interests  in  certain   circumstances   without  regard  to  the
cross-interest policy.

     The  Communications Act prohibits the issuance of broadcast licenses to, or
the holding of a broadcast license by, any corporation of which more than 20% of
the  capital  stock is owned of record or voted by  non-U.S.  citizens  or their
representatives  or by a foreign government or a representative  thereof,  or by
any corporation  organized  under the laws of a foreign  country  (collectively,
"Aliens"). The Communications Act also authorizes the FCC, if the FCC determines
that it would be in the public interest, to prohibit the issuance of a broadcast
license to, or the holding of a broadcast  license by, any corporation  directly
or indirectly  controlled by any other corporation of which more than 25% of the
capital  stock is owned of  record  or voted by  Aliens.  The  Company  has been
advised that the FCC staff has  interpreted  this provision to require a finding
that such grant or holding  would be in the public  interest  before a broadcast
license may be granted to or held by any such corporation and that the FCC staff
has made  such a  finding  only in  limited  circumstances.  The FCC has  issued
interpretations  of existing law under which these restrictions in modified form
apply to other forms of business  organizations,  including  partnerships.  As a
result of these provisions,  the licenses granted to subsidiaries of the Company
by the FCC could be revoked  if,  among other  restrictions  imposed by the FCC,
more than 25% of the Company's stock were directly or indirectly  owned or voted
by Aliens. The Company and the Subsidiaries are domestic  corporations,  and the
Controlling  Stockholders  are all  United  States  citizens.  The  Amended  and
Restated  Articles of Incorporation  of the Company (the "Amended  Certificate")
contain  limitations  on Alien  ownership  and  control  that are  substantially
similar to those contained in the  Communications  Act.  Pursuant to the Amended
Certificate, the Company has the right to repurchase Alien-owned shares at their
fair  market  value to the extent  necessary,  in the  judgment  of the Board of
Directors, to comply with the Alien ownership restrictions.

Television

     National  Ownership  Rule.  Prior  to the 1996  Act,  FCC  rules  generally
prohibited an individual or entity from having an attributable  interest in more
than 12 television stations nationwide,  or in television stations reaching more
than 25% of the national television viewing audience.  Pursuant to the 1996 Act,
the FCC has  modified  its rules to eliminate  any  limitation  on the number of
television  stations an individual or entity may own nationwide,  subject to the
restriction  that no individual or entity may have an  attributable  interest in
television  stations reaching more than 35% of the national  television  viewing
audience.  Historically, VHF stations have shared a larger portion of the market
than UHF stations.  Therefore, only half of the households in the market area of
any UHF station are included  when  calculating  whether an entity or individual
owns  television  stations  reaching  more than 35% of the  national  television
viewing  audience.  All but  three of the  stations  owned and  operated  by the
Company, or to which the Company provides programming services, are UHF.

     Duopoly Rule. On a local level,  the  television  "duopoly"  rule generally
prohibits a single individual or entity from having an attributable  interest in
two or more television  stations with overlapping  Grade B service areas.  While
the 1996 Act has not  eliminated  the TV duopoly rule, it does direct the FCC to
initiate a rulemaking  proceeding  to determine  whether to retain,  modify,  or
eliminate the rule. The FCC 
                                       15
has  pending a  rulemaking  proceeding  in which it has  proposed  to modify the
television duopoly rule to permit the common ownership of television stations in
different  DMAs,  so long as the Grade A signal  contours of the stations do not
overlap. Pending resolution of its rulemaking proceeding, the FCC has adopted an
interim waiver policy that permits the common  ownership of television  stations
in different DMAs with no overlapping  Grade A signal  contours,  conditioned on
the final outcome of the rulemaking proceeding.  The FCC has also sought comment
on whether  common  ownership of two  television  stations in a market should be
permitted  (i) where one or more of the  commonly  owned  stations is UHF,  (ii)
where  one of the  stations  is in  bankruptcy  or has  been  off  the air for a
substantial period of time and (iii) where the commonly owned stations have very
small audience or advertising shares, are located in a very large market, and/or
a specified  number of  independently  owned media voices would remain after the
acquisition.

     Local Marketing Agreements. Over the past few years, a number of television
stations,  including certain of the Company's  stations,  have entered into what
have commonly been referred to as LMAs.  While these agreements may take varying
forms,  pursuant to a typical  LMA,  separately  owned and  licensed  television
stations agree to enter into cooperative  arrangements of varying sorts, subject
to compliance  with the  requirements of antitrust laws and with the FCC's rules
and policies. Under these types of arrangements, separately-owned stations could
agree to function  cooperatively  in terms of  programming,  advertising  sales,
etc.,  subject  to the  requirement  that the  licensee  of each  station  shall
maintain  independent  control over the  programming  and  operations of its own
station.  One  typical  type  of  LMA is a  programming  agreement  between  two
separately-owned  television stations serving a common service area, whereby the
licensee of one station  programs  substantial  portions of the broadcast day on
the other licensee's  station,  subject to ultimate editorial and other controls
being exercised by the latter licensee,  and sells  advertising time during such
program  segments.  Such  arrangements  are an extension of the concept of "time
brokerage" agreements,  under which a licensee of a station sells blocks of time
on its  station to an entity or  entities  which  program the blocks of time and
which  sell  their own  commercial  advertising  announcements  during  the time
periods in question.  Over the past few years, the staff of the FCC's Mass Media
Bureau has held that LMAs are not contrary to the  Communications  Act, provided
that the  licensee of the station  which is being  substantially  programmed  by
another  entity  maintains   complete   responsibility   for  and  control  over
programming and operations of its broadcast station and assures  compliance with
applicable FCC rules and policies.

     At present, FCC rules permit television station LMAs, and the licensee of a
television   station  brokering  time  on  another  television  station  is  not
considered to have an attributable interest in the brokered station. However, in
connection  with its ongoing  rulemaking  proceeding  regarding  the  television
duopoly rule, the FCC has proposed to adopt rules providing that the licensee of
a  television  station  which  brokers  more  than  15% of the  time on  another
television  station  serving  the  same  market  would  be  deemed  to  have  an
attributable  interest in the brokered  station for purposes of the national and
local multiple ownership rules. In connection with this proceeding,  the FCC has
solicited  detailed  information from parties to television LMAs as to the terms
and characteristics of such LMAs.

     The 1996 Act provides that nothing  therein "shall be construed to prohibit
the  origination,  continuation,  or renewal of any television  local  marketing
agreement  that  is in  compliance  with  the  regulations  of the  [FCC]."  The
legislative history of the 1996 Act reflects that this provision was intended to
grandfather  television  LMAs that were in existence  upon enactment of the 1996
Act, and to allow  television LMAs consistent with the FCC's rules subsequent to
enactment of the 1996 Act. In its pending  rulemaking  proceeding  regarding the
television  duopoly rule, the FCC has proposed to adopt a grandfathering  policy
providing that, in the event that television LMAs become attributable interests,
LMAs that are in  compliance  with  existing  FCC rules  and  policies  and were
entered  into before  November 5, 1996,  would be permitted to continue in force
until the original term of the LMA expires. Under the FCC's proposal, television
LMAs that are entered  into or renewed  after  November 5, 1996 would have to be
terminated  if LMAs  are made  attributable  interests  and the LMA in  question
resulted  in a  violation  of  the  television  multiple  ownership  rules.  The
Company's LMAs with television stations WPTT in Pittsburgh,  Pennsylvania,  WNUV
in Baltimore,  Maryland, WVTV in Milwaukee,  Wisconsin,  WRDC in Raleigh/Durham,
North Carolina,  WABM in Birmingham,  Alabama, and WDBB in Tuscaloosa,  Alabama,
were in  existence on both the date of enactment of the 1996 Act and November 5,
1996. The 
                                       16
Company's LMAs with television stations WTTV and WTTK in Indianapolis,  Indiana,
WLOS  in  Asheville,  North  Carolina,  WFBC  in  Greenville-Spartanburg,  South
Carolina,  and KABB in San Antonio,  Texas,  were entered into subsequent to the
date of enactment of the 1996 Act but prior to November 5, 1996.  The  Company's
LMA with  television  station KRRT in  Kerrville,  Texas was in existence on the
date of enactment of the 1996 Act, but was assumed by the Company  subsequent to
that date but prior to November 5, 1996.

     The TV duopoly  rule  currently  prevents the Company  from  acquiring  the
licenses of  television  stations  with which it has LMAs in those markets where
the Company owns a television  station.  As a result,  if the FCC were to decide
that the  provider of  programming  services  under a  television  LMA should be
treated as having an attributable  interest in the brokered  station,  and if it
did not relax its  television  duopoly  rule,  the Company  could be required to
modify or terminate  those of its LMAs that were not in existence on the date of
enactment of the 1996 Act or on November 5, 1996. Furthermore, if the FCC adopts
its present proposal with respect to the  grandfathering of television LMAs, the
Company could be required to terminate even those LMAs that were in effect prior
to the date of enactment of the 1996 Act or prior to November 5, 1996, after the
initial  term of the LMA or upon  assignment  of the LMA. In such an event,  the
Company  could be required to pay  termination  penalties  under certain of such
LMAs.  Further, if the FCC were to find, in connection with any of the Company's
LMAs, that the  owners/licensees of the stations with which the Company has LMAs
failed to maintain  control over their  operations  as required by FCC rules and
policies,  the licensee of the LMA station  and/or the Company could be fined or
set for hearing,  the outcome of which could be a monetary  forfeiture or, under
certain circumstances, loss of the applicable FCC license. The Company is unable
to predict the ultimate  outcome of possible  changes to these FCC rules and the
impact such FCC rules may have on its broadcasting operations.

     On June 1, 1995, the Chief of the FCC's Mass Media Bureau released a Public
Notice  concerning  the  processing  of  television  assignment  and transfer of
control  applications  proposing  LMAs.  Due to  the  pendency  of  the  ongoing
rulemaking proceeding concerning attribution of ownership, the Mass Media Bureau
has  placed  certain  restrictions  on the types of  television  assignment  and
transfer of control applications  involving LMAs that it will approve during the
pendency of the rulemaking.  Specifically, the Mass Media Bureau has stated that
it will not approve  arrangements where a time broker seeks to finance a station
acquisition  and hold an option to  purchase  the  station  in the  future.  The
Company  believes that none of the Company's  LMAs fall within the ambit of this
Public Notice.

Radio

     National  Ownership Rule. Prior to the 1996 Act, the FCC's rules limited an
individual or entity from holding attributable  interests in more than 20 AM and
20 FM radio stations nationwide.  Pursuant to the 1996 Act, the FCC has modified
its rules to eliminate any  limitation on the number of radio  stations a single
individual or entity may own nationwide.

     Local  Ownership  Rule.  Prior to the 1996 Act,  the FCC's rules  generally
permitted an individual or entity to hold attributable interests in no more than
four radio stations in a local market (no more than two of which could be in the
same service (AM or FM)),  and then only if the aggregate  audience share of the
commonly  owned  stations  did not exceed  25%.  In  markets  with fewer than 15
commercial  radio  stations,  an individual or entity could hold an attributable
interest in no more than three radio stations in the market (no more than two of
which could be in the same service), and then only if the number of the commonly
owned  stations  did not  exceed  50% of the total  number of  commercial  radio
stations in the market.

     Pursuant to the 1996 Act,  the limits on the number of radio  stations  one
entity may own locally have been  increased as follows:  (i) in a market with 45
or more  commercial  radio  stations,  an entity may own up to eight  commercial
radio stations,  not more than five of which are in the same service (AM or FM);
(ii) in a market with between 30 and 44 (inclusive)  commercial  radio stations,
an entity may own up to seven commercial  radio stations,  not more than four of
which  are in the  same  service;  (iii)  in a  market  with  between  15 and 29
(inclusive)  commercial  radio stations,  an entity may own up to six commercial
radio stations, not more than four of which are in the same service; and (iv) in
a market with 14 or fewer 

                                       17
commercial  radio  stations,  an  entity  may  own up to five  commercial  radio
stations,  not more than three of which are in the same service,  except that an
entity may not own more than 50% of the stations in such market. These numerical
limits apply  regardless of the aggregate  audience share of the stations sought
to be commonly  owned.  FCC ownership  rules continue to permit an entity to own
one FM and  one  AM  station  in a  local  market  regardless  of  market  size.
Irrespective of FCC rules governing radio ownership,  however, the Department of
Justice and the Federal Trade Commission have the authority to determine, and in
certain  recent radio  transactions  not involving the Company have  determined,
that a particular transaction presents antitrust concerns.

     Local Marketing  Agreements.  As in television,  a number of radio stations
have entered into LMAs. The FCC's multiple ownership rules  specifically  permit
radio station LMAs to be entered into and  implemented,  so long as the licensee
of the  station  which is being  programmed  under  the LMA  maintains  complete
responsibility  for and control over programming and operations of its broadcast
station and assures  compliance with applicable FCC rules and policies.  For the
purposes of the multiple  ownership  rules,  in general,  a radio  station being
programmed  pursuant to an LMA by an entity is not  considered  an  attributable
ownership  interest of that  entity  unless  that  entity  already  owns a radio
station in the same market.  However,  a licensee that owns a radio station in a
market,  and brokers  more than 15% of the time on another  station  serving the
same market,  is considered to have an  attributable  ownership  interest in the
brokered  station  for  purposes of the FCC's  multiple  ownership  rules.  As a
result, in a market in which the Company owns a radio station, the Company would
not be permitted to enter into an LMA with another  local radio station which it
could not own under the local ownership rules, unless the Company's  programming
constituted  15% or less of the  other  local  station's  programming  time on a
weekly  basis.  The  FCC's  rules  also  prohibit  a  broadcast   licensee  from
simulcasting  more than 25% of its  programming  on another  station in the same
broadcast  service  (i.e.,  AM-AM or FM- FM)  through  a time  brokerage  or LMA
arrangement  where the brokered and brokering  stations serve  substantially the
same area.

     Joint  Sales  Agreements.  Over the past few years,  a number of radio (and
television) stations have entered into cooperative  arrangements  commonly known
as joint sales  agreements,  or JSAs.  While these  agreements  may take varying
forms,  under the typical JSA, a station licensee obtains,  for a fee, the right
to sell  substantially all of the commercial  advertising on a  separately-owned
and  licensed  station in the same  market.  The  typical  JSA also  customarily
involves the provision by the selling licensee of certain sales, accounting, and
"back  office"  services to the station  whose  advertising  is being sold.  The
typical JSA is distinct  from an LMA in that a JSA (unlike an LMA) normally does
not involve programming.

     The FCC has  determined  that issues of joint  advertising  sales should be
left to enforcement by antitrust  authorities,  and therefore does not generally
regulate joint sales practices between stations. Currently, stations for which a
licensee  sells time  under a JSA are not  deemed by the FCC to be  attributable
interests of that licensee.  However,  in connection with its ongoing rulemaking
proceeding concerning the attribution rules, the FCC is considering whether JSAs
should be  considered  attributable  interests  or within the scope of the FCC's
cross-interest policy,  particularly when JSAs contain provisions for the supply
of programming services and/or other elements typically associated with LMAs. If
JSAs become attributable  interests as a result of changes in the FCC rules, the
Company may be required to terminate  any JSA it might have with a radio station
which the Company could not own under the FCC's multiple ownership rules.

Other Ownership Matters

     There  remain  in  place  after  the  1996  Act  a  number  of   additional
cross-ownership rules and prohibitions pertaining to licensees of television and
radio stations. FCC rules, the Communications Act, or both generally prohibit an
individual or entity from having an  attributable  interest in both a television
station and a radio station,  a daily newspaper,  or a cable  television  system
that is located in or serves the same market area.

     Antitrust  Regulation.  The  Department  of Justice and the  Federal  Trade
Commission  have recently  increased  their scrutiny of the television and radio
industry,  and have indicated  their  intention to review matters related to the
concentration  of ownership  within markets  (including LMAs and JSAs) even 

                                       18
when  the  ownership  or LMA or JSA in  question  is  permitted  under  the laws
administered by the FCC or by FCC rules and regulations.

     Radio/Television   Cross-Ownership   Rule.   The   FCC's   radio/television
cross-ownership  rule (the "one to a market" rule) generally  prohibits a single
individual  or entity  from  having an  attributable  interest  in a  television
station and a radio station serving the same market.  However, in each of the 25
largest local markets in the United States,  provided that there are at least 30
separately owned stations in the particular  market,  the FCC has  traditionally
employed a policy that presumptively  allows waivers of the one to a market rule
to permit  the  common  ownership  of one AM,  one FM and one TV  station in the
market. The 1996 Act directs the FCC to extend this policy to each of the top 50
markets.  Moreover,  the FCC has pending a rulemaking proceeding in which it has
solicited  comment  on whether  the one to a market  rule  should be  eliminated
altogether.

     However,  the FCC does not apply  its  presumptive  waiver  policy in cases
involving the common ownership of one television station,  and two or more radio
stations in the same service (AM or FM), in the same market. Pending its ongoing
rulemaking  proceeding to reexamine the one to a market rule, the FCC has stated
that it will consider  waivers of the rule in such  instances on a  case-by-case
basis,  considering  (i) the public  service  benefits  that will arise from the
joint operation of the facilities  such as economies of scale,  cost savings and
programming and service benefits;  (ii) the types of facilities involved;  (iii)
the number of media outlets owned by the applicant in the relevant market;  (iv)
the financial  difficulties of the stations involved;  and (v) the nature of the
relevant  market in light of the level of competition  and diversity after joint
operation  is  implemented.  The FCC has stated  that it  expects  that any such
waivers that are granted will be  conditioned  on the outcome of the  rulemaking
proceeding.

     In its ongoing rulemaking proceeding to reexamine the one to a market rule,
the FCC has proposed the  following  options for modifying the rule in the event
it is not  eliminated:  (i)  extending  the  presumptive  waiver  policy  to any
television  market in which a specified  number of  independently  owned  voices
would  remain after  common  ownership  of a television  station and one or more
radio stations is effectuated;  (ii) extending the presumptive  waiver policy to
entities  that seek to own more than one FM and/or one AM radio  station;  (iii)
reducing the minimum number of independently owned voices that must remain after
a transaction is effectuated;  and (iv) modifying the  five-factor  case-by-case
test for waivers.

     Local Television/Cable  Cross-Ownership Rule. While the 1996 Act eliminates
a previous  statutory  prohibition  against the common ownership of a television
broadcast station and a cable system that serve the same local market,  the 1996
Act leaves the current  FCC rule in place.  The  legislative  history of the Act
indicates  that the repeal of the  statutory ban should not prejudge the outcome
of any FCC review of the rule.

     Broadcast Network/Cable  Cross-Ownership Rule. The 1996 Act directs the FCC
to  eliminate  its rules which  formerly  prohibited  the common  ownership of a
broadcast  network and a cable  system,  subject to the  provision  that the FCC
revise its rules as  necessary  to ensure  carriage,  channel  positioning,  and
non-discriminatory  treatment  of  non-affiliated  broadcast  stations  by cable
systems  affiliated with a broadcast  network.  In March 1996, the FCC issued an
order implementing this legislative change.

     Broadcast/Daily  Newspaper  Cross-Ownership  Rule. The FCC's rules prohibit
the common  ownership  of a radio or  television  broadcast  station and a daily
newspaper  in the same  market.  The 1996 Act does not  eliminate or modify this
prohibition. In October 1996, however, the FCC initiated a rulemaking proceeding
to  determine  whether it should  liberalize  its waiver  policy with respect to
cross-ownership  of a daily newspaper and one or more radio stations in the same
market.

     Dual  Network  Rule.  The 1996 Act directs the FCC to repeal its rule which
formerly  prohibited an entity from operating more than one television  network.
In March 1996, the FCC issued an order  implementing  this  legislative  change.
Under the modified  rule, a network entity is permitted to operate more than one
television  network,  provided,  however,  that ABC,  CBS,  NBC,  and/or Fox are
prohibited  from  merging  with each other or with  another  network  television
entity such as UPN or Warner Brothers.

     Expansion  of the  Company's  broadcast  operations  on  both a  local  and
national level will continue to be subject to the FCC's  ownership rules and any
changes the FCC or Congress may adopt. Concomitantly,  any further relaxation of
the FCC's  ownership  rules may increase the level of competition in one

                                       19
or more of the  markets  in which  the  Company's  stations  are  located,  more
specifically  to the  extent  that  any of the  Company's  competitors  may have
greater  resources  and thereby be in a superior  position to take  advantage of
such changes.

Must-Carry/Retransmission Consent

     Pursuant to the Cable Act of 1992, television  broadcasters are required to
make   triennial   elections  to  exercise   either  certain   "must-carry"   or
"retransmission  consent"  rights in  connection  with their  carriage  by cable
systems in each broadcaster's local market. By electing the must-carry rights, a
broadcaster  demands carriage on a specified channel on cable systems within its
Area of  Dominant  Influence,  in general as  defined  by the  Arbitron  1991-92
Television  Market Guide.  These must-carry  rights are not absolute,  and their
exercise is dependent on variables such as (i) the number of activated  channels
on a cable system;  (ii) the location and size of a cable system;  and (iii) the
amount of programming on a broadcast  station that duplicates the programming of
another broadcast station carried by the cable system. Therefore,  under certain
circumstances,   a  cable   system  may  decline  to  carry  a  given   station.
Alternatively,  if a  broadcaster  chooses to  exercise  retransmission  consent
rights,  it can prohibit  cable  systems  from  carrying its signal or grant the
appropriate  cable system the authority to retransmit the broadcast signal for a
fee or other  consideration.  In October 1996, the Company elected must-carry or
retransmission  consent  with  respect  to  each  of its  markets  based  on its
evaluation of the respective  markets and the position of the Company's  station
within  the  market.  The  Company's  stations  continue  to be  carried  on all
pertinent  cable  systems,  and the Company does not believe that its  elections
have  resulted in the shifting of its stations to less  desirable  cable channel
locations. Certain of the Company's stations affiliated with Fox are required to
elect retransmission  consent because Fox's retransmission  consent negotiations
on  behalf of the  Company  resulted  in  agreements  which  extend  into  1998.
Therefore,  the Company will need to negotiate retransmission consent agreements
for these  Fox-affiliated  stations to attain  carriage on those  relevant cable
systems for the balance of this  triennial  period (i.e.,  through  December 31,
1999).  For  subsequent  elections  beginning  with the  election  to be made by
October 1, 1999, the must-carry  market will be the station's DMA, in general as
defined by the Nielsen DMA Market and Demographic Rank Report of the prior year.

     The must-carry rules have been subject to judicial scrutiny. In April 1993,
the United States District Court for the District of Columbia  summarily  upheld
the  constitutionality  of the legislative  must-carry  provisions under a First
Amendment challenge.  However, in June 1994, the Supreme Court remanded the case
to the  lower  court  with  instructions  to test the  constitutionality  of the
must-carry rules under an "intermediate scrutiny" standard. In a decision issued
in December 1995, a closely divided three-judge  District Court panel ruled that
the record showed that there was substantial evidence before Congress from which
it could  draw the  reasonable  inferences  that (1) the  must-carry  rules were
necessary to protect the local broadcast industry;  and (2) the burdens on cable
systems  with  rapidly   increasing  channel  capacity  would  be  quite  small.
Accordingly,  the District  Court panel ruled that Congress had not violated the
First  Amendment in enacting the  "must-carry"  provisions.  In March 1997,  the
Supreme Court,  by a 5-4 majority,  affirmed the District  Court's  decision and
thereby let stand the must-carry rules.

Syndicated Exclusivity/Territorial Exclusivity

     The FCC has imposed  syndicated  exclusivity  rules and  expanded  existing
network  nonduplication  rules.  The  syndicated  exclusivity  rules allow local
broadcast   television  stations  to  demand  that  cable  operators  black  out
syndicated  non-network  programming carried on "distant signals" (i.e., signals
of broadcast stations,  including so-called  "superstations,"  which serve areas
substantially  removed from the cable  system's  local  community).  The network
non-duplication  rules allow local broadcast  network  television  affiliates to
require that cable operators black out duplicating  network  programming carried
on distant signals. However, in a number of markets in which the Company owns or
programs stations  affiliated with a network,  a station that is affiliated with
the same network in a nearby market is carried on cable systems in the Company's
market.  This is not in violation  of the FCC's  network  nonduplication  rules.
However,  the  carriage of two network  stations on the same cable  system could
result in a decline  of  viewership  adversely  affecting  the  revenues  of the
Company owned or programmed station.

                                       20
Restrictions on Broadcast Advertising

     Advertising of cigarettes  and certain other tobacco  products on broadcast
stations has been banned for many years. Various states restrict the advertising
of  alcoholic  beverages.   Congressional   committees  have  recently  examined
legislation  proposals which may eliminate or severely  restrict the advertising
of beer and wine. Although no prediction can be made as to whether any or all of
the present  proposals will be enacted into law, the elimination of all beer and
wine advertising would have an adverse effect upon the revenues of the Company's
stations,  as well as the revenues of other  stations  which carry beer and wine
advertising.

     The FCC has imposed  commercial time  limitations in children's  television
programming pursuant to legislation. In television programs designed for viewing
by  children  of 12 years of age and under,  commercial  matter is limited to 12
minutes per hour on weekdays and 10.5 minutes per hour on weekends.  In granting
renewal of the  license  for  WBFF-TV,  the FCC imposed a fine of $10,000 on the
Company  alleging that the station had exceeded these  limitations.  The Company
has appealed this fine.

     The  Communications  Act and  FCC  rules  also  place  restrictions  on the
broadcasting  of  advertisements  by legally  qualified  candidates for elective
office.  Among other things, (i) stations must provide  "reasonable  access" for
the purchase of time by legally  qualified  candidates for federal office;  (ii)
stations  must provide  "equal  opportunities"  for the  purchase of  equivalent
amounts  of  comparable  broadcast  time by  opposing  candidates  for the  same
elective  office;  and (iii)  during the 45 days  preceding a primary or primary
run-off election and during the 60 days preceding a general or special election,
legally qualified candidates for elective office may be charged no more than the
station's  "lowest unit charge" for the same class of  advertisement,  length of
advertisement, and daypart.

Programming and Operation

     General. The Communications Act requires  broadcasters to serve the "public
interest."  The FCC  gradually  has  relaxed  or  eliminated  many  of the  more
formalized  procedures  it had developed in the past to promote the broadcast of
certain types of programming responsive to the needs of a station's community of
license. FCC licensees continue to be required,  however, to present programming
that is responsive to their communities' issues, and to maintain certain records
demonstrating  such   responsiveness.   Complaints  from  viewers  concerning  a
station's  programming  may be considered  by the FCC when it evaluates  renewal
applications  of a licensee,  although such  complaints may be filed at any time
and generally  may be considered by the FCC at any time.  Stations also must pay
regulatory and application  fees, and follow various rules promulgated under the
Communications  Act that regulate,  among other things,  political  advertising,
sponsorship  identifications,  the  advertisement  of  contests  and  lotteries,
obscene and indecent broadcasts,  and technical operations,  including limits on
radiofrequency  radiation.  In addition,  licensees  must develop and  implement
affirmative action programs designed to promote equal employment  opportunities,
and must submit  reports to the FCC with  respect to these  matters on an annual
basis and in connection with a renewal application.  Failure to observe these or
other rules and  policies  can result in the  imposition  of various  sanctions,
including monetary  forfeitures,  or the grant of a "short" (i.e., less than the
full) license renewal term or, for particularly egregious violations, the denial
of a license renewal application or the revocation of a license.

     Children's Television Programming. Pursuant to legislation enacted in 1991,
all  television  stations  have  been  required  to  broadcast  some  television
programming designed to meet the educational and informational needs of children
16 years of age and under.  In August  1996,  the FCC adopted new rules  setting
forth more stringent children's programming  requirements.  Specifically,  as of
September 1, 1997,  television  stations will be required to broadcast a minimum
of three hours per week of "core" children's educational programming,  which the
FCC  defines  as  programming   that  (i)  has  serving  the   educational   and
informational  needs of  children  16 years  of age and  under as a  significant
purpose;  (ii) is  regularly  scheduled,  weekly  and at  least  30  minutes  in
duration;  and (iii) is aired  between  the hours of 7:00  a.m.  and 10:00  p.m.
Furthermore,  as of January 2, 1997, "core" children's  educational programs, in
order to qualify as such,  are  required to be  identified  as  educational  and
informational  programs  over the air at the time  they are  broadcast,  and are
required to be identified in the children's  programming  reports required to be
placed in stations'  public  inspection  files.  Additionally,  as of January 2,
1997, television

                                       21
stations  are  required to identify and provide  information  concerning  "core"
children's programming to publishers of program guides and listings.

     Television Violence.  The 1996 Act contains a number of provisions relating
to television violence. First, pursuant to the 1996 Act, the television industry
has  developed  a ratings  system,  and the FCC has  recently  solicited  public
comment on that system.  Furthermore,  the 1996 Act provides that all television
sets larger than 13 inches that are manufactured one year after enactment of the
1996 Act must  include  the  so-called  "V-chip,"  a computer  chip that  allows
blocking of rated  programming.  In  addition,  the 1996 Act  requires  that all
television  license  renewal  applications  filed  after  May  1,  1995  contain
summaries of written  comments and suggestions  received by the station from the
public regarding violent programming.

     Closed  Captioning.  The 1996 Act directs the FCC to adopt rules  requiring
closed  captioning  of  all  broadcast  television  programming,   except  where
captioning would be "economically burdensome." The FCC has recently instituted a
rulemaking proceeding to implement such rules.

Digital Television

     The FCC has taken a number of steps to implement digital television ("DTV")
broadcasting  service in the United States.  In December 1996, the FCC adopted a
DTV broadcast  standard and, in April 1997, adopted decisions in several pending
rulemaking  proceedings that establish service rules and a plan for implementing
DTV. The FCC adopted a DTV Table of  Allotments  that  provides  all  authorized
television  stations  with a second  channel on which to broadcast a DTV signal.
The FCC has  attempted  to provide DTV  coverage  areas that are  comparable  to
stations'  existing service areas.  The FCC has ruled that television  broadcast
licensees may use their digital  channels for a wide variety of services such as
high-definition television, multiple standard definition television programming,
audio, data, and other types of communications,  subject to the requirement that
each broadcaster provide at least one free video channel equal in quality to the
current technical standard.

     Initially,  DTV  channels  will be  located in the range of  channels  from
channel 2 through  channel 51. The FCC is requiring that affiliates of ABC, CBS,
Fox and NBC in the top 10 television  markets begin digital  broadcasting by May
1, 1999 (the stations  affiliated with these networks in the top 10 markets have
voluntarily  committed to begin digital broadcasting within 18 months), and that
affiliates of these networks in markets 11 through 30 begin digital broadcasting
by November 1999.  The FCC's plan calls for the DTV transition  period to end in
the year  2006,  at which time the FCC  expects  that (i) DTV  channels  will be
clustered either in the range of channels 2 through 46 or channels 7 through 51;
and  (ii)  television  broadcasters  will  have  ceased  broadcasting  on  their
non-digital  channels,  allowing that spectrum to be recovered by the government
for other uses.  The FCC has stated that it will open a separate  proceeding  to
consider  the  recovery  of  television  channels  60  through  69 and how those
frequencies  will be used after they are eventually  recovered  from  television
broadcasters.  Additionally, the FCC will open a separate proceeding to consider
to what extent the cable must-carry requirements will apply to DTV signals.

     Implementation of digital  television will improve the technical quality of
television signals received by viewers.  Under certain  circumstances,  however,
conversion to digital operation may reduce a station's  geographic coverage area
or result in some increased interference.  The FCC's DTV allotment plan may also
result in UHF  stations  having  considerably  less signal  power  within  their
service areas than present VHF stations  that move to DTV channels.  The Company
has  filed  with the FCC,  a  petition  for  reconsideration  of the  FCC's  DTV
allotment plan,  because of its concerns with respect to the relative DTV signal
powers of VHF/UHF and UHF/UHF  stations.  Implementation  of digital  television
will also impose substantial  additional costs on television stations because of
the need to replace  equipment and because some stations will need to operate at
higher utility costs. The FCC is also  considering  imposing new public interest
requirements  on  television  licensees  in  exchange  for their  receipt of DTV
channels. The Company cannot predict what future actions the FCC might take with
respect  to DTV,  nor  can it  predict  the  effect  of the  FCC's  present  DTV
implementation plan or such future actions on the Company's business.

                                       22
Proposed Changes

     The  Congress and the FCC have under  consideration,  and in the future may
consider and adopt, new laws,  regulations and policies regarding a wide variety
of matters that could affect, directly or indirectly,  the operation,  ownership
and  profitability of the Company's  broadcast  stations,  result in the loss of
audience share and advertising  revenues for the Company's  broadcast  stations,
and affect the ability of the Company to acquire  additional  broadcast stations
or finance such  acquisitions.  In addition to the changes and proposed  changes
noted above, such matters may include, for example, the license renewal process,
spectrum use fees, political  advertising rates,  potential  restrictions on the
advertising of certain products (beer, wine and hard liquor,  for example),  and
the rules and  policies to be applied in  enforcing  the FCC's equal  employment
opportunity regulations. Other matters that could affect the Company's broadcast
properties  include   technological   innovations  and  developments   generally
affecting competition in the mass communications  industry, such as direct radio
and television  broadcast  satellite  service,  the continued  establishment  of
wireless cable systems and low power television stations, digital television and
radio  technologies,  and the advent of telephone  company  participation in the
provision of video programming service.

Other Considerations

     The foregoing  summary does not purport to be a complete  discussion of all
provisions  of the  Communications  Act or  other  congressional  acts or of the
regulations and policies of the FCC. For further  information,  reference should
be made to the Communications Act, other congressional acts, and regulations and
public  notices  promulgated  from time to time by the FCC. There are additional
regulations  and  policies  of the FCC and other  federal  agencies  that govern
political broadcasts, public affairs programming,  equal employment opportunity,
and other matters affecting the Company's business and operations.

ENVIRONMENTAL REGULATION

     Prior to the Company's ownership or operation of its facilities, substances
or  waste  that  are  or  might  be  considered   hazardous   under   applicable
environmental  laws may have been  generated,  used,  stored or  disposed  of at
certain of those facilities.  In addition,  environmental conditions relating to
the soil and groundwater at or under the Company's facilities may be affected by
the proximity of nearby properties that have generated, used, stored or disposed
of hazardous  substances.  As a result,  it is possible  that the Company  could
become subject to  environmental  liabilities  in the future in connection  with
these facilities under applicable  environmental laws and regulations.  Although
the  Company   believes  that  it  is  in  substantial   compliance   with  such
environmental  requirements,  and have not in the past  been  required  to incur
significant  costs in connection  therewith,  there can be no assurance that the
Company's  costs to  comply  with such  requirements  will not  increase  in the
future.  The Company  presently  believes that none of its  properties  have any
condition  that is likely to have a  material  adverse  effect on the  Company's
financial condition or results of operations.

COMPETITION

     The Company's  television and radio stations compete for audience share and
advertising revenue with other television and radio stations in their respective
DMAs, as well as with other advertising  media,  such as newspapers,  magazines,
outdoor advertising,  transit advertising,  yellow page directories, direct mail
and local cable and wireless cable systems.  Some competitors are part of larger
organizations  with  substantially   greater  financial,   technical  and  other
resources than the Company.

     Television Competition. Competition in the television broadcasting industry
occurs  primarily in  individual  DMAs.  Generally,  a  television  broadcasting
station in one DMA does not compete with  stations in other DMAs.  The Company's
television stations are located in highly competitive DMAs. In addition, certain
of the Company's DMAs are overlapped by both  over-the-air and cable carriage of
stations in adjacent  DMAs,  which tends to spread  viewership  and  advertising
expenditures over a larger number of television stations.

                                       23
Broadcast  television  stations compete for advertising  revenues primarily
with other  broadcast  television  stations,  radio  stations  and cable  system
operators serving the same market. Major Network programming  generally achieves
higher household audience levels than Fox, UPN and WB programming and syndicated
programming  aired  by  independent  stations.  This  can  be  attributed  to  a
combination of factors, including the Major Networks' efforts to reach a broader
audience,  generally better signal carriage available when broadcasting over VHF
channels 2 through 13 versus  broadcasting  over UHF  channels 14 through 69 and
the higher number of hours of Major Network  programming being broadcast weekly.
However,  greater amounts of advertising time are available for sale during Fox,
UPN and WB programming and non-network syndicated  programming,  and as a result
the Company believes that the Company's  programming  typically achieves a share
of television market advertising revenues greater than its share of the market's
audience.

     Television  stations  compete for audience share  primarily on the basis of
program  popularity,  which has a direct effect on  advertising  rates.  A large
amount of the  Company's  prime time  programming  is  supplied  by Fox and to a
lesser extent UPN, WB, ABC and CBS. In those periods,  the Company's  affiliated
stations are totally dependent upon the performance of the networks' programs in
attracting  viewers.  Non-network  time  periods are  programmed  by the station
primarily  with  syndicated  programs  purchased for cash,  cash and barter,  or
barter-only,  and also  through  self-produced  news,  public  affairs and other
entertainment programming.

     Television  advertising rates are based upon factors which include the size
of the DMA in which the  station  operates,  a  program's  popularity  among the
viewers  that an  advertiser  wishes  to  attract,  the  number  of  advertisers
competing for the available  time, the  demographic  makeup of the DMA served by
the  station,  the  availability  of  alternative  advertising  media in the DMA
(including radio and cable), the aggressiveness and knowledge of sales forces in
the DMA and  development of projects,  features and programs that tie advertiser
messages to  programming.  The Company  believes that its sales and  programming
strategies allow it to compete effectively for advertising within its DMAs.

     Other  factors  that are  material to a  television  station's  competitive
position include signal coverage, local program acceptance, network affiliation,
audience  characteristics and assigned broadcast  frequency.  Historically,  the
Company's UHF broadcast  stations  have suffered a competitive  disadvantage  in
comparison   to  stations  with  VHF   broadcast   frequencies.   This  historic
disadvantage has gradually declined through (i) carriage on cable systems,  (ii)
improvement   in  television   receivers,   (iii)   improvement   in  television
transmitters, (iv) wider use of all channel antennae, (v) increased availability
of  programming,  and (vi) the  development of new networks such as Fox, UPN and
WB.

     The broadcasting  industry is continuously faced with technical changes and
innovations, the popularity of competing entertainment and communications media,
changes in labor conditions, and governmental restrictions or actions of federal
regulatory  bodies,  including  the FCC,  any of  which  could  possibly  have a
material  effect on a television  station's  operations  and profits.  There are
sources of video service other than conventional  television stations,  the most
common being cable  television,  which can increase  competition for a broadcast
television station by bringing into its market distant  broadcasting signals not
otherwise available to the station's audience,  serving as a distribution system
for national satellite-delivered programming and other non-broadcast programming
originated on a cable system and selling  advertising time to local advertisers.
Other  principal   sources  of  competition   include  home  video   exhibition,
direct-to-home broadcast satellite television ("DBS") entertainment services and
multichannel  multipoint  distribution services ("MMDS").  Moreover,  technology
advances and regulatory  changes  affecting  programming  delivery through fiber
optic telephone lines and video  compression  could lower entry barriers for new
video channels and encourage the development of increasingly specialized "niche"
programming.   The  1996  Act  permits  telephone  companies  to  provide  video
distribution  services via radio  communication,  on a common carrier basis,  as
"cable  systems"  or  as  "open  video  systems,"  each  pursuant  to  different
regulatory   schemes.   The  Company  is  unable  to  predict  the  effect  that
technological  and  regulatory  changes  will have on the  broadcast  television
industry and on the future  profitability  and value of a  particular  broadcast
television station.

     The FCC  authorizes DBS services  throughout the United States.  Currently,
two FCC permitees,  DirecTV and United States  Satellite  Broadcasting,  provide
subscription DBS services via high-power

                                       24
communications  satellites and small dish receivers, and other companies provide
direct-to-home   video  service  using  lower  powered   satellites  and  larger
receivers.   Additional  companies  are  expected  to  commence   direct-to-home
operations in the near future.  DBS and MMDS, as well as other new technologies,
will further increase competition in the delivery of video programming.

     The Company  cannot  predict what other  matters might be considered in the
future,  nor can it judge in advance what impact, if any, the  implementation of
any of these proposals or changes might have on its business.

     The  Company  is  exploring  ways in which it might take  advantage  of new
technology,  including the delivery of  additional  content and services via the
broadcast spectrum.  There can be no assurance that any such efforts will result
in the development of technology or services that are commercially successful.

     The Company also competes for programming,  which involves negotiating with
national  program  distributors  or  syndicators  that sell  first-run and rerun
packages of programming.  The Company's stations compete for exclusive access to
those programs against in-market  broadcast  station  competitors for syndicated
products.  Cable  systems  generally  do not  compete  with local  stations  for
programming,  although  various  national  cable networks from time to time have
acquired  programs that would have  otherwise  been offered to local  television
stations.   Public  broadcasting  stations  generally  compete  with  commercial
broadcasters for viewers but not for advertising dollars.

     Historically,  the cost of programming has increased because of an increase
in the number of new Independent stations and a shortage of quality programming.
However,  the Company believes that over the past five years program prices have
stabilized and, in some instances, have declined as a result of recent increases
in the supply of programming and the failure of some Independent stations.

     The  Company  believes  it  competes  favorably  against  other  television
stations  because of its  management  skill and  experience,  the ability of the
Company  historically to generate revenue share greater than its audience share,
the network  affiliations  and its local program  acceptance.  In addition,  the
Company  believes  that it benefits  from the  operation  of multiple  broadcast
properties,   affording  it  certain  nonquantifiable  economies  of  scale  and
competitive advantages in the purchase of programming.

     Radio Competition. Radio broadcasting is a highly competitive business, and
each of the radio stations  operated by the Company  competes for audience share
and  advertising  revenue  directly with other radio  stations in its geographic
market,  as well as with other media,  including  television,  cable television,
newspapers,  magazines,  direct mail and  billboard  advertising.  The  audience
ratings and advertising  revenue of each of such stations are subject to change,
and any adverse  change in a  particular  market  could have a material  adverse
effect on the revenue of such radio stations  located in that market.  There can
be no assurance  that any one of the  Company's  radio  stations will be able to
maintain or increase its current audience ratings and radio advertising  revenue
market share.

     The  Company  will  attempt to improve  each  radio  station's  competitive
position  with  promotional  campaigns  designed  to enhance and  reinforce  its
identities with the listening public.  Extensive market research is conducted in
order to identify specific  demographic  groups and design a programming  format
for those groups.  The Company seeks to build a strong listener base composed of
specific  demographic  groups in each market,  and thereby  attract  advertisers
seeking to reach these listeners.  Aside from building its stations'  identities
and  targeting  its  programming  at  specific  demographic  groups,  management
believes  that the Company  also  obtains a  competitive  advantage by operating
duopolies or multiple stations in the nation's larger mid-size markets.

     The radio  broadcasting  industry is also subject to  competition  from new
media technologies that are being developed or introduced,  such as the delivery
of  audio  programming  by  cable  television   systems  and  by  digital  audio
broadcasting  ("DAB"). DAB may provide a medium for the delivery by satellite or
terrestrial  means of  multiple  new  audio  programming  formats  to local  and
national audiences.  Historically,  the radio broadcasting industry has grown in
terms of total revenues  despite the  introduction of new  technologies  for the
delivery of  entertainment  and  information,  such as television  broadcasting,
cable  television,  audio tapes and compact  disks.  There can be no  assurance,
however,  that the  development or  introduction  in the future of any new media
technology will not have an adverse effect on the radio broadcast industry.

                                       25
EMPLOYEES

     As of May 31, 1997, the Company had approximately 2,740 employees. With the
exception of certain of the employees of KOVR-TV,  KDNL-TV,  WBEN-AM and WWL-AM,
none of the  employees  are  represented  by labor unions  under any  collective
bargaining agreement. No significant labor problems have been experienced by the
Company, and the Company considers its overall labor relations to be good.

LEGAL PROCEEDINGS

     The  Company  currently  and from time to time is  involved  in  litigation
incidental  to the  conduct  of its  business.  The  Company is not party to any
lawsuit or proceeding that, in the opinion of the Company,  will have a material
adverse effect on the Company.

                           GLOSSARY OF DEFINED TERMS

     "ABC" means Capital Cities/ABC, Inc.

     "Adjusted EBITDA" means broadcast cash flow less corporate overhead expense
and is a commonly used measure of performance for broadcast companies.  Adjusted
EBITDA does not purport to represent  cash  provided by operating  activities as
reflected  in the  Company's  consolidated  statements  of cash flows,  is not a
measure of financial  performance under generally accepted accounting principles
and should not be  considered  in isolation  or as a substitute  for measures of
performance   prepared  in  accordance   with  generally   accepted   accounting
principles.

     "Adjusted EBITDA margin" means the Adjusted EBITDA divided by net broadcast
revenues.

     "Amended   Certificate"   means   the  Amended  and  Restated  Articles  of
Incorporation of the Company.

     "Arbitron" means Arbitron, Inc.

     "Broadcast  cash flow  margin"  means  broadcast  cash flow  divided by net
broadcast revenues.

     "Broadcast  Cash Flow"  means  operating  income  plus  corporate  overhead
expenses,  special  bonuses  paid  to  executive  officers,   non-cash  deferred
compensation,   depreciation  and  amortization,  including  both  tangible  and
intangible assets and program rights, less cash payment for program rights. Cash
program  payments  represent cash payments made for current program payables and
sports  rights  and do not  necessarily  correspond  to program  usage.  Special
bonuses paid to executive officers are considered unusual and non-recurring. The
Company has presented  broadcast cash flow data,  which the Company believes are
comparable to the data provided by other companies in the industry, because such
data are commonly  used as a measure of  performance  for  broadcast  companies.
However,  broadcast cash flow (i) does not purport to represent cash provided by
operating  activities as reflected in the Company's  consolidated  statements of
cash  flow,  (ii) is not a measure  of  financial  performance  under  generally
accepted  accounting  principles and (iii) should not be considered in isolation
or as a  substitute  for measures of  performance  prepared in  accordance  with
generally accepted accounting principles.

     "CBS" means CBS, Inc.

     "Cincinnati/Kansas  City Acquisitions"  means the Company's  acquisition of
the assets and liabilities of WSTR-TV (Cincinnati, OH) and KSMO-TV (Kansas City,
MO).

     "Class A Common Stock" means the Company's Class A Common Stock,  par value
$.01 per share.

     "Class B Common Stock" means the Company's Class B Common Stock,  par value
$.01 per share.

     "Columbus   Option"  means  the  Company's  option  to  purchase  both  the
Non-License  Assets and the License Assets relating to WSYX-TV (ABC),  Columbus,
OH.

     "Commission" means the Securities and Exchange Commission.

     "Common  Securities"  means the common  securities of Sinclair  Capital,  a
subsidiary trust of the Company.

                                       26
"Common  Stock"  means  the  Class  A  Common  Stock and the Class B Common
Stock.

     "Communications Act" means the Communications Act of 1934, as amended.

     "Company"  means  Sinclair  Broadcast  Group,  Inc.  and  its  wholly owned
subsidiaries.

     "Controlling  Stockholders"  means  David  D. Smith, Frederick G. Smith, J.
Duncan Smith and Robert E. Smith.

     "DAB" means digital audio broadcasting.

     "DBS" means direct-to-home broadcast satellite television.

     "Designated Market Area" or "DMA" means one of the 211 generally-recognized
television market areas.

     "DOJ" means the United States Justice Department.

     "DTV" means digital television.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "FCC" means the Federal Communications Commision.

     "FCN" means the Fox Children's Network.

     "Flint  Acquisition"  means  the  Company's  acquisition  of  the assets of
WSMH-TV (Flint, Michigan).

     "Fox" means Fox Broadcasting Company.

     "Glencairn" means Glencairn, Ltd. and its subsidiaries.

     "Greenville  Stations"  means radio  stations  WFBC-FM,  WORD-AM,  WFBC-AM,
WSPA-AM,  WSPA-FM,  WOLI-FM, and WOLT-FM located in the  Greenville/Spartanburg,
South Carolina area.

     "HSR" means the Hart-Scott-Rodino Antitrust Improvements Act, as amended.

     "Incremental  Facility"  means the loan by the Banks of up to an additional
$200.0 million to the Company  pursuant to the Bank Credit Agreement at any time
prior to September 29, 1997.

     "Independent"  means a station that is not affiliated with any of ABC, CBS,
NBC, FOX, UPN or Warner Brothers.

     "JSAs"  means  joint sales  agreements  pursuant to which an entity has the
right,  for a fee  paid  to  the  owner  and  operator  of a  station,  to  sell
substantially all of the commercial advertising on the station.

     "KSC" means Keymarket of South Carolina, Inc.

     "License  Assets" means the television  and radio station assets  essential
for  broadcasting  a television  or radio signal in compliance  with  regulatory
guidelines,  generally consisting of the FCC license, transmitter,  transmission
lines, technical equipment, call letters and trademarks,  and certain furniture,
fixtures and equipment.

     "License Assets Option" means the Company's  option to purchase the License
Assets of KDNL-TV (ABC), St. Louis, MO; KOVR-TV (CBS),  Sacramento,  CA; WTTV-TV
(UPN) and WTTK-TV (UPN), Indianapolis, IN; WLOS-TV (ABC), Asheville, NC; KABB-TV
(Fox), San Antonio, TX; and KDSM-TV (Fox), Des Moines, IA.

     "LMAs" means program  services  agreements,  time  brokerage  agreements or
local  marketing  agreements  pursuant to which an entity  provides  programming
services to television or radio stations that are not owned by the entity.

     "Major Networks" means each of ABC, CBS or NBC, singly or collectively.

     "MSA" means the Metro Survey Area as defined by Arbitron.

     "MMDS" means multichannel multipoint distribution services.

     "NBC" means the National Broadcasting Company.

                                       27
"Nielsen" means the A.C. Nielsen Company Station Index dated May 1996.

     "1996 Act" means the Telecommunications Act of 1996.

     "Non-License Assets" means the assets relating to operation of a television
or radio station other than License Assets.

     "Parent  Preferred"  means  the  $206,200,000  liquidation  amount  of  the
Company's  12 5/8% Series C Preferred Stock,  par value $.01 per share purchased
by KDSM, Inc.

     "Peoria/Bloomington  Acquisition"  means the  acquisition by the Company of
the assets of WYZZ-TV on July 1, 1996.

     "Permitted  Transferee"  means (i) any  Controlling  Stockholder,  (ii) the
estate of a  Controlling  Stockholder,  (iii) the  spouse or former  spouse of a
Controlling   Stockholder,   (iv)  any  lineal   descendant   of  a  Controlling
Stockholder,   any  spouse  of  any  such  lineal   descendant,   a  Controlling
Stockholder's   grandparent,   parent,  brother  or  sister,  or  a  Controlling
Stockholder's  spouse's  brother  or  sister,  (v)  any  guardian  or  custodian
(including a custodian for purposes of the Uniform Gift to Minors Act or Uniform
Transfers to Minors Act) for, or any  conservator or other legal  representative
of, one or more Permitted  Transferees,  (vi) any trust or savings or retirement
account,  including  an  individual  retirement  account for purposes of federal
income tax laws,  whether or not involving a trust,  principally for the benefit
of one or more Permitted Transferees,  including any trust in respect of which a
Permitted   Transferee  has  any  general  or  special   testamentary  power  of
appointment or general or special non-testamentary power of appointment which is
limited  to any other  Permitted  Transferee,  (vii)  the  Company,  (viii)  any
employee benefit plan or trust thereunder sponsored by the Company or any of its
subsidiaries,  (ix) any trust  principally for the benefit of one or more of the
persons referred to in (i) through (iii) above, (x) any corporation, partnership
or other entity if all of the beneficial ownership is held by one or more of the
persons  referred to in (i) through (iv) above, and (xi) any broker or dealer in
securities, clearing house, bank, trust company, savings and loan association or
other financial  institution which holds Class B Common Stock for the benefit of
a Controlling Stockholder or Permitted Transferee thereof.

     "Preferred Securities Offering" means the private placement of $200 million
aggregate  liquidation  value of 11 5/8%  High  Yield  Trust  Offered  Preferred
Securities (the "Preferred  Securities") of Sinclair Capital, a subsidiary trust
of the Company, completed in March 1997.

     "Revolving  Credit  Facility" means the reducing  revolving credit facility
under the Bank Credit Agreement in the principal amount of $250.0 million.

     "River City" means River City Broadcasting, L.P.

     "River City  Acquisition"  means the Company's  acquisition from River City
and the owner of KRRT of certain Non-License Assets,  options to acquire certain
License and  Non-License  Assets and rights to provide  programming or sales and
marketing for certain stations, which was completed May 31, 1996.

     "SCI" means Sinclair Communications, Inc., a wholly owned subsidiary of the
Company that will hold all of the broadcast operations of the Company.

     "Securities Act" means the Securities Act of 1933, as amended.

     "Series A  Preferred  Stock"  means  the  Company's  Series A  Exchangeable
Preferred  Stock,  par value $.01,  each share of which has been exchanged for a
share of the Company's Series B Convertible Preferred Stock.

     "Series  B  Convertible  Preferred  Stock"  means  the  Company's  Series B
Convertible Preferred Stock, par value $.01.

     "Series C Preferred  Stock" means the Company's  Series C Preferred  Stock,
par value $.01.

     "Sinclair"  means  Sinclair  Broadcast  Group,  Inc.  and  its wholly owned
subsidiaries.

     "Sinclair  Capital" means Sinclair Capital, a Delaware Business Trust, 100%
of the common  securities of which are held by KDSM,  Inc.,  an indirect  wholly
owned subsidiary of the Company.

                                       28
"Superior  Acquisition"  means  the  Company's  acquisition of the stock of
Superior Communications, Inc. ("Superior").

     "TBAs" means time brokerage agreements; see definition of "LMAs."

     "UHF" means ultra-high frequency.

     "UPN" means United Paramount Television Network Partnership.

     "VHF" means very-high frequency.

     "WB" or "Warner Brothers" means Warner Brothers, Inc.

                                       29
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND
        EXHIBITS

     The Company is filing certain  financial  information about itself relating
to a $200 million private offering (the "Offering" or the "Debt Offering") of 9%
Senior Subordinated Notes due 2007 (the "Notes").

                        USE OF PROCEEDS OF THE OFFERING

     Net proceeds of the Offering of  approximately  $195.3 million will be used
to reduce  outstanding  borrowings  under  the Bank  Credit  Agreement  with the
remainder  retained for general corporate  purposes.  The Company plans to repay
all amounts  outstanding  under its  revolving  credit  facility  under the Bank
Credit Agreement (which amounts may be reborrowed)  which as of May 31, 1997 had
an outstanding  principal balance of $160 million. Such amounts were borrowed to
fund acquisitions and for general corporate purposes.  The remaining proceeds of
the Offering,  estimated at $35.3  million,  will be retained by the Company and
used for general corporate purposes including acquisitions, or the repurchase of
shares  of Class A Common  Stock.  The  interest  rate on the  revolving  credit
facility  that will be repaid is  variable  and  averaged  6.7% per year for the
month ended May 31, 1997.

            PRO FORMA CONSOLIDATED FINANCIAL INFORMATION OF SINCLAIR

     The following Pro Forma  Consolidated  Financial Data include the unaudited
pro  forma  consolidated  balance  sheet as of March 31,  1997  (the "Pro  Forma
Consolidated Balance Sheet") and the unaudited pro forma consolidated statements
of  operations  for the year ended  December 31, 1996 and the three months ended
March 31, 1997 (the "Pro Forma  Consolidated  Statements  of  Operations").  The
unaudited Pro Forma Consolidated Balance Sheet is adjusted to give effect to the
Offering as if it occurred on March 31,  1997 and  assuming  application  of the
proceeds  of the  Offering  as set forth in "Use of  Proceeds  of the  Offering"
above. The unaudited Pro Forma Consolidated Statement of Operations for the year
ended December 31, 1996 is adjusted to give effect to the 1996 Acquisitions, the
Preferred  Securities  Offering (as defined in the  "Glossary of Defined  Terms"
above in Item 5) and the Offering as if each  occurred at the  beginning of such
period and  assuming  application  of the proceeds of the  Preferred  Securities
Offering and the Offering as set forth in "Use of Proceeds of the Offering." The
unaudited Pro Forma  Consolidated  Statement of Operations  for the three months
ended March 31, 1997 is adjusted to give effect to the Old  Securities  Offering
and the  Offering  as if each  occurred  at the  beginning  of such  period  and
assuming  application  of the  proceeds of the Old  Securities  Offering and the
Offering  as set  forth in "Use of  Proceeds  of the  Offering."  The pro  forma
adjustments are based upon available  information and certain  assumptions  that
the Company believes are reasonable.  The Pro Forma Consolidated  Financial Data
should  be  read  in  conjunction  with  the  Company's  Consolidated  Financial
Statements  as of and for the year ended  December  31, 1996 and  related  notes
thereto, the Company's unaudited consolidated financial statements for the three
months ended March 31, 1997 and related notes thereto,  the historical financial
data of Flint  T.V.,  Inc.,  the  historical  financial  data of  Superior,  the
historical financial data of KSMO and WSTR, and the historical financial data of
River City,  all of which have been filed with the Commission as part of (i) the
Company's  Annual  Report on Form 10-K for the year ended  December 31, 1996 (as
amended), together with the report of Arthur Andersen LLP, independent certified
public  accountants;  (ii) the Company's  Quarterly  Report on Form 10-Q for the
quarter ended March 31, 1997; or (iii) the Company's Current Reports on Form 8-K
and Form 8-K/A filed May 10,  1996,  May 13, 1996,  May 17,  1996,  May 29, 1996
August 30, 1996 and  September 5, 1996.  The  unaudited  Pro Forma  Consolidated
Financial  Data do not  purport  to  represent  what the  Company's  results  of
operations  or  financial  position  would have been had any of the above events
occurred  on  the  dates  specified  or to  project  the  Company's  results  of
operations or financial  position for or at any future  period or date.  The Pro
Forma  Consolidated  Financial  Data does not give effect to the  acquisition of
KUPN-TV  which  was  consumated  on May 30,  1997.  The Pro  Forma  Consolidated
Financial  Data  reflects the  repayment of $103 million  which  represents  all
amounts outstanding under the revolving credit facility as of March 31, 1997. As
of May 31, 1997,  $160 million was  outstanding.  Such  additional  amounts were
incurred in part to finance the acqusition of KUPN-TV and in part as a result of
the restructuring of the Bank Credit Facility.

                                       30
SINCLAIR BROADCAST GROUP, INC.
           PRO FORMA CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1997
POST DEBT
                                                                           CONSOLIDATED      DEBT OFFERING         OFFERING
                                                                           HISTORICAL        ADJUSTMENTS(a)       ADJUSTMENTS
                                                                           --------------   -------------------   -------------
                                                                                          (DOLLARS IN THOUSANDS)
                                                                                               (UNAUDITED)
ASSETS
CURRENT ASSETS:
 Cash, including cash equivalents   ....................................     $    36,705         $   92,125(b)      $   128,830
 Accounts receivable, net of allowance for doubtful accounts   .........          89,079                                 89,079
 Current portion of program contract costs   ...........................          37,741                                 37,741
 Prepaid expenses and other current assets   ...........................           3,757                                  3,757
 Deferred barter costs  ................................................           4,490                                  4,490
 Deferred tax asset  ...................................................           1,445                                  1,445
                                                                              -----------        -----------         ----------
   Total current assets ................................................         173,217             92,125             265,342
PROGRAM CONTRACT COSTS, less current portion ...........................          35,511                                 35,511
LOANS TO OFFICERS AND AFFILIATES .......................................          11,411                                 11,411
PROPERTY AND EQUIPMENT, net   ..........................................         152,554                                152,554
NON-COMPETE AND CONSULTING AGREEMENTS, net   ...........................           5,493                                  5,493
DEFERRED TAX ASSET   ...................................................           7,771                                  7,771
OTHER ASSETS   .........................................................          79,100              4,750(c)           83,850
ACQUIRED INTANGIBLE BROADCASTING ASSETS, net ...........................       1,244,874                              1,244,874
                                                                              -----------        -----------        -----------
   Total Assets   ......................................................      $1,709,931            $96,875          $1,806,806
                                                                              ===========        ============        ===========
                    LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Accounts payable ......................................................     $     4,791                            $     4,791
 Income taxes payable   ................................................             733                                    733
 Accrued liabilities ...................................................          36,842                                 36,842
 Current portion of long-term liabilities-
  Notes payable and commercial bank financing   ........................          64,000                                 64,000
  Capital leases payable   .............................................              11                                     11
  Notes and capital leases payable to affiliates   .....................           1,476                                  1,476
  Program contracts payable   ..........................................          51,573                                 51,573
 Deferred barter revenues  .............................................           4,218                                  4,218
                                                                              -----------        -----------        -----------
   Total current liabilities  ..........................................         163,644                                163,644
LONG-TERM LIABILITIES:
  Notes payable and commercial bank financing   ........................       1,039,125         $   96,875(d)        1,136,000
  Capital leases payable   .............................................              33                                     33
  Notes and capital leases payable to affiliates   .....................          12,007                                 12,007
  Program contracts payable   ..........................................          50,986                                 50,986
  Other long-term liabilities ..........................................           2,892                                  2,892
                                                                              -----------        -----------         -----------
   Total liabilities ...................................................       1,268,687             96,875           1,365,562
                                                                              -----------        ------------        -----------
MINORITY INTEREST IN CONSOLIDATED
 SUBSIDIARIES  .........................................................           3,928                                  3,928
                                                                              -----------        -----------         -----------
COMMITMENTS AND CONTINGENCIES
COMPANY OBLIGATED MANDATORILY REDEEMABLE SECUITY
 OF SUBSIDIARY TRUST HOLDING SOLELY KDSM SENIOR
 DEBENTURES ............................................................         200,000                                200,000
                                                                              -----------        -----------        -----------
STOCKHOLDERS' EQUITY:
  Preferred stock, $.01 par value, 10,000,000 shares authorized and
   1,138,138 and 1,115,370 shares issued and outstanding, respectively.               11                                     11
  Class A Common stock, $.01 par value, 100,000,000 shares authorized
   and 6,911,880 and 6,937,827 shares issued and outstanding, respec-
   tively ..............................................................              70                                     70
  Class B Common stock, $.01 par value, 35,000,000 shares authorized
   and 27,850,581 shares issued and outstanding ........................             279                                    279
  Additional paid-in capital  ..........................................         255,576                                255,576
  Accumulated deficit   ................................................         (26,546)                               (26,546)
  Additional paid-in capital - equity put options  .....................           8,938                                  8,938
  Additional paid-in capital - deferred compensation  ..................          (1,012)                                (1,012)
                                                                              -----------        -----------         -----------
   Total stockholders' equity ..........................................         237,316                                237,316
                                                                              -----------        -----------         -----------
   Total Liabilities and Stockholders' Equity   ........................      $1,709,931            $96,875          $1,806,806
                                                                              ===========        ============        ===========
(Continued on following page)

                                       31
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET

(a)  To reflect the  proceeds  of the  Offering,  net of offering  costs and the
     application of the net proceeds  therefrom as set forth in "Use of Proceeds
     of the Offering."

(b)  To record net proceeds of the Offering after giving effect to the repayment
     of the  revolving  credit  facility  under  the Bank  Credit  Agreement  as
     follows:

     Offering proceeds ...........................................   $  200,000
     Underwriting discounts, commissions and estimated expenses ..       (4,750)
     Repayment of revolving credit facility under the Bank Credit
     Agreement ...................................................     (103,125)
                                                                      ----------
     Pro forma adjustment  .......................................   $   92,125
                                                                     ==========

(c)  To record  underwriting  discounts,  commissions and estimated  expenses of
     $4.75 million.

(d)  To reflect the repayment of the revolving  credit  facility  under the Bank
     Credit  Agreement  as set forth in "Use of  Proceeds of the  Offering,"  as
     follows:

     Indebtedness incurred .......................................   $  200,000
     Repayment of revolving credit facility under the Bank Credit
     Agreement ...................................................     (103,125)
                                                                      ----------
     Pro forma adjustment  .......................................   $   96,875
                                                                      ==========

                                       32
SINCLAIR BROADCAST GROUP, INC.
                 PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                     FOR THE YEAR ENDED DECEMBER 31, 1996
                 (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
                                  (UNAUDITED)
SUPERIOR
                                                    CONSOLIDATED      FLINT      COMMUNICATIONS
                                                     HISTORICAL    TV, INC.(a)   GROUP, INC.(b)    KSMO(c)    WSTR(d)
                                                    -------------- ------------- ---------------- ---------- ----------
                                                                                                       (UNAUDITED)
REVENUES:
  Station broadcast revenues, net of agency commis-
    sions .........................................    $ 346,459        $1,012        $ 4,431       $ 7,694    $  7,488
  Revenues realized from station barter arrange-
    ments  ........................................       32,029             -              -         2,321       1,715
                                                         ---------    --------        -------        -------    --------
    Total revenues  ...............................      378,488         1,012          4,431        10,015       9,203
                                                         ---------    --------        -------        -------    --------
OPERATING EXPENSES:
  Program and production  .........................       66,652           101            539         1,550         961
  Selling, general and administrative .............       75,924           345          2,002         2,194       2,173
  Expenses realized from barter arrangements   ....       25,189                                      2,276       1,715
  Amortization of program contract costs and net
    realizable value adjustments ..................       47,797           125            736           601       1,011
  Amortization of deferred compensation  ..........          739
  Depreciation and amortization of property and
    equipment  ....................................       11,711             4            373           374         284
  Amortization of acquired intangible broadcasting
    assets, non-compete and consulting agreements
    and other assets ..............................       58,530             -            529             -          39
  Amortization of excess syndicated programming ...        3,043             -              -             -           -
                                                         ---------    -------         -------        -------    --------
  Total operating expenses ........................      289,585           575          4,179         6,995       6,183
                                                         ---------    -------         -------        -------    --------
 Broadcast operating income (loss)  ...............       88,903           437            252         3,020       3,020
                                                         ---------    -------         -------        -------    --------
OTHER INCOME (EXPENSE):
  Interest and amortization of debt discount expense     (84,314)            -           (457)         (823)     (1,127)
  Interest income   ...............................        3,136             -              -             -          15
  Subsidiary trust minority interest expense   ....            -             -              -             -           -
  Other income (expense)  .........................          342            19              4             7           -
                                                         ---------    -------         -------        -------    --------
  Income (loss) before provision (benefit) for
    income taxes ..................................        8,067           456           (201)        2,204       1,908
PROVISION (BENEFIT) FOR INCOME
  TAXES ...........................................        6,936             -              -             -           -
                                                         ---------    -------         -------        -------    --------
NET INCOME (LOSS) .................................    $   1,131        $  456        $  (201)      $ 2,204    $  1,908
                                                         =========    =======         =======        =======    ========
NET INCOME (LOSS) AVAILABLE TO COMMON
  STOCKHOLDERS  ...................................    $   1,131
                                                         =========
NET INCOME (LOSS) PER COMMON AND
  COMMON EQUIVALENT SHARE .........................    $    0.03
                                                         =========
WEIGHTED AVERAGE COMMON AND COMMON 
  EQUIVALENT SHARES OUTSTANDING  ..................       37,381
                                                         =========
RIVER CITY (e)                     1996                 POST
                                                      ----------------------                ACQUISITIONS            1996    
                                                      RIVER CITY      WSYX     WYZZ(f)      ADJUSTMENTS         ACQUISITIONS
                                                      ----------   ---------   -------      -----------         ------------
REVENUES:
  Station broadcast revenues, net of agency commis-
    sions .........................................   $  86,869   $  (10,783)   $1,838                          $445,008
  Revenues realized from station barter arrange-
    ments .........................................           -            -         -                            36,065
                                                       ---------   ---------   -------      -------------       ----------
    Total revenues  ...............................      86,869      (10,783)    1,838                           481,073
                                                       ---------   ----------  -------      -------------       ----------
OPERATING EXPENSES:
  Program and production  .........................      10,001         (736)      214                            79,282
  Selling, general and administrative .............      39,786       (3,950)      702      $  (3,577)(g)        115,599
  Expenses realized from barter arrangements   ....                                                               29,180
  Amortization of program contract costs and net
     realizable value adjustments .................       9,721         (458)      123              -             59,656
  Amortization of deferred compensation  ..........                                               194(h)             933
  Depreciation and amortization of property and
    equipment  ....................................       6,294       (1,174)        6           (943)(i)         16,929
  Amortization of acquired intangible broadcasting
    assets, non-compete and consulting agreements
    and other assets ..............................      14,041       (3,599)        3          4,034(j)          73,577
  Amortization of excess syndicated programming ...           -            -         -              -              3,043
                                                       ---------   ----------  -------      -----------         ----------
    Total operating expenses ......................      79,843       (9,917)    1,048           (292)           378,199
                                                       ---------   ----------  -------      -----------         ----------
  Broadcast operating income (loss)  ..............       7,026         (866)      790            292            102,874
                                                       ---------   ----------  -------      -----------         ----------
OTHER INCOME (EXPENSE):
  Interest and amortization of debt discount 
      expense .....................................     (12,352)           -         -        (17,409)(k)       (116,482)
  Interest income   ...............................         195            -         -         (1,636)(l)          1,710
  Subsidiary trust minority interest expense ......           -            -         -              -                  -
  Other income (expense)  .........................        (149)          (8)        -              -                215
                                                       ---------   ----------  -------      -----------         ----------
  Income (loss) before provision (benefit) for
     income taxes .................................      (5,280)        (874)      790        (18,753)           (11,683)
PROVISION (BENEFIT) FOR INCOME
  TAXES ...........................................           -            -         -         (7,900)(m)           (964)
                                                       ---------   ----------  -------      -----------         ----------
NET INCOME (LOSS) .................................   $  (5,280)  $     (874)   $  790      $ (10,853)          $(10,719)
                                                       =========   ==========  =======      ===========         ==========
NET INCOME (LOSS) AVAILABLE TO COMMON
  STOCKHOLDERS ....................................                                                             $(10,719)
                                                                                                                ==========
NET INCOME (LOSS) PER COMMON AND
  COMMON EQUIVALENT SHARE .........................                                                             $  (0.27)
                                                                                                                ==========
WEIGHTED AVERAGE COMMON AND COMMON
  EQUIVALENT SHARES OUTSTANDING ...................                                                               39,058 (n)
                                                                                                                ==========
PREFERRED         POST PREFERRED                          POST DEBT AND
                                                         SECURITIES          SECURITIES             DEBT       PREFERRED SECURITIES
                                                         OFFERING        OFFERING AND 1996        OFFERING       OFFERINGS AND 1996
                                                        ADJUSTMENTS         ACQUISITIONS         ADJUSTMENTS         ACQUISITONS
                                                        -----------         ----------           -----------         -----------
REVENUES:
  Station broadcast revenues, net of agency commis-
    sions .........................................                         $445,008                                 $  445,008  
  Revenues realized from station barter arrange-                                                                                   
    ments  ........................................                           36,065                                     36,065  
                                                        -----------         ----------           ----------          ----------  
     Total revenues  ...............................                          481,073                                    481,073  
                                                        -----------         ----------           ----------          ----------  
OPERATING EXPENSES:                                                                                                              
  Program and production  .........................                           79,282                                     79,282  
  Selling, general and administrative .............                          115,599                                    115,599  
  Expenses realized from barter arrangements   ....                           29,180                                     29,180  
  Amortization of program contract costs and net                                                                                 
    realizable value adjustments ..................                           59,656                                     59,656  
  Amortization of deferred compensation  ..........                              933                                        933  
  Depreciation and amortization of property and                                                                                  
    equipment  ....................................                           16,929                                     16,929  
  Amortization of acquired intangible broadcasting                                                                                 
    assets, non-compete and consulting agreements                                                                                   
    and other assets ..............................     $     500(o)          74,077             $     475(r)            74,552  
  Amortization of excess syndicated programming ...             -              3,043                                      3,043  
                                                        -----------         ----------           -----------         ----------  
    Total operating expenses ......................           500            378,699                   475              379,174  
                                                        -----------         ----------           -----------         ----------  
  Broadcast operating income (loss)  ..............          (500)           102,374                  (475)             101,899  
                                                        -----------         ----------           -----------         ----------  
OTHER INCOME (EXPENSE):                                                                                                          
  Interest and amortization of debt discount
    expense .......................................        11,820(p)        (104,662)              (18,000)(s)         (122,662) 
  Interest income   ...............................                            1,710                                      1,710  
  Subsidiary trust minority interest expense ......       (23,250)(q)        (23,250)                                   (23,250) 
  Other income (expense)  .........................             -                215                                        215  
                                                        -----------         ----------           -----------         ---------- 
  Income (loss) before provision (benefit) for                                                                                    
    income taxes ..................................       (11,930)           (23,613)              (18,475)             (42,088) 
PROVISION (BENEFIT) FOR INCOME                                                                                                   
  TAXES ...........................................        (4,772)(m)         (5,736)               (7,390)(m)          (13,126) 
                                                        -----------         ----------           -----------         ----------  
NET INCOME (LOSS) .................................     $  (7,158)          $(17,877)            $ (11,085)          $  (28,962) 
                                                        ===========         ==========           ===========         ==========  
NET INCOME (LOSS) AVAILABLE TO COMMON                                                                                              
  STOCKHOLDERS ....................................                         $(17,877)                                $  (28,962) 
                                                                            ==========                               ==========  
NET INCOME (LOSS) PER COMMON AND                                                                                                 
  COMMON EQUIVALENT SHARE .........................                         $  (0.46)                                $    (0.74) 
                                                                            ==========                               ==========  
WEIGHTED AVERAGE COMMON AND COMMON                                                                                                 
  EQUIVALENT SHARES OUTSTANDING ...................                           39,058(n)                                  39,058  
                                                                            ==========                               ==========
(Continued on following page)

                                       33
SINCLAIR BROADCAST GROUP, INC.
                 PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                   FOR THE THREE MONTHS ENDED MARCH 31, 1997
                 (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
                                  (UNAUDITED)
PREFERRED
                                                                                                                      SECURITIES   
                                                                                             CONSOLIDATED             OFFERING      
                                                                                              HISTORICAL             ADJUSTMENTS    
                                                                                           -----------------       ---------------- 
REVENUES:                                                                                                                           
  Station broadcast revenues, net of agency commissions    .................................    $ 98,909                            
  Revenues realized from station barter arrangements .......................................       9,315                            
                                                                                                ----------              ----------  
   Total revenues ..........................................................................     108,224                            
                                                                                                ----------              ----------  
OPERATING EXPENSES:                                                                                                                 
  Program and production  ..................................................................      22,507                            
  Selling, general and administrative ......................................................      25,241                            
  Expenses realized from station barter arrangements .......................................       7,444                            
  Amortization of program contract costs and net realizable value adjustments   ............      17,518                            
  Amortization of deferred compensation  ...................................................         117                            
  Depreciation and amortization of property and equipment  .................................       4,161                            
  Amortization of acquired intangible broadcasting assets, non-compete and consulting                                               
    agreements and other assets ............................................................      19,021                $    125(t)
                                                                                                ----------              ----------  
   Total operating expenses   ..............................................................      96,009                     125    
                                                                                                ----------              ----------  
  Broadcast operating income (loss) ........................................................      12,215                    (125)   
                                                                                                ----------              ----------  
OTHER INCOME (EXPENSE):                                                                                                             
  Interest and amortization of debt discount expense .......................................     (27,065)                  2,022(u)
  Interest income   ........................................................................         402                            
  Subsidiary trust minority interest expense   .............................................      (1,210)                 (4,603)(v)
  Other income   ...........................................................................         144                       -    
                                                                                                ----------              ----------  
  Loss before provision (benefit) for income taxes    ......................................     (15,514)                 (2,706)   
PROVISION (BENEFIT) FOR INCOME TAXES   .....................................................      (7,900)                 (1,082)(m)
                                                                                                ----------              ----------  
NET INCOME (LOSS) ..........................................................................    $ (7,614)               $ (1,624)   
                                                                                                ==========              ==========  
NET LOSS AVAILABLE TO COMMON                                                                                                        
  STOCKHOLDERS  ............................................................................    $ (7,614)                           
                                                                                                ==========                          
NET LOSS PER COMMON AND COMMON EQUIVALENT SHARE ............................................    $  (0.22)                           
                                                                                                ==========                          
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES                                                                                
  OUTSTANDING    ...........................................................................      34,769(n)                        
                                                                                                ==========
POST                                 POST DEBT AND    
                                                                    PREFERRED SECURITIES           DEBT      PREFERRED SECURITIES
                                                                      OFFERING AND 1996          OFFERING      OFFERINGS AND 1996
                                                                         ACQUISITIONS           ADJUSTMENTS       ACQUISITIONS   
                                                                        ----------              -----------       -----------
REVENUES:
  Station broadcast revenues, net of agency commissions    ...........  $ 98,909                                   $ 98,909      
  Revenues realized from station barter arrangements .................     9,315                                      9,315      
                                                                        ----------              -----------        ----------    
   Total revenues ....................................................   108,224                                    108,224      
                                                                        ----------              -----------        ----------    
OPERATING EXPENSES:                                                                                                              
  Program and production  ............................................    22,507                                     22,507      
  Selling, general and administrative ................................    25,241                                     25,241      
  Expenses realized from station barter arrangements .................     7,444                                      7,444      
  Amortization of program contract costs and net realizable                                        
    value adjustments   ..............................................    17,518                                     17,518      
  Amortization of deferred compensation  .............................       117                                        117      
  Depreciation and amortization of property and equipment  ...........     4,161                                      4,161      
  Amortization of acquired intangible broadcasting assets,                                                                         
    non-compete and consulting agreements and other assets ...........    19,146                 $    119(w)         19,265      
                                                                        ----------               ----------        ----------    
   Total operating expenses   ........................................    96,134                      119            96,253      
                                                                        ----------               ----------        ----------    
  Broadcast operating income (loss) ..................................    12,090                     (119)           11,971      
                                                                        ----------               ----------        ----------    
OTHER INCOME (EXPENSE):                                                                                                          
  Interest and amortization of debt discount expense .................   (25,043)                  (4,500)(x)       (29,543)    
  Interest income   ..................................................       402                                        402     
  Subsidiary trust minority interest expense   .......................    (5,813)                                    (5,813)    
  Other income   .....................................................       144                                        144     
                                                                        ----------               ----------        ----------   
  Loss before provision (benefit) for income taxes    ................   (18,220)                  (4,619)          (22,839)    
PROVISION (BENEFIT) FOR INCOME TAXES   ...............................    (8,982)                  (1,848)(m)       (10,830)    
                                                                        ----------               ----------        ----------   
NET INCOME (LOSS) ....................................................  $ (9,238)                $ (2,771)         $(12,009)    
                                                                        ==========               ==========        ==========   
NET LOSS AVAILABLE TO COMMON                                                                                                    
  STOCKHOLDERS   .....................................................  $ (9,238)                                  $(12,009)   
                                                                        ==========                                 ==========   
NET LOSS PER COMMON AND COMMON EQUIVALENT SHARE ......................  $  (0.27)                                  $  (0.35)   
                                                                        ==========                                 ==========   
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES                                                                            
  OUTSTANDING    .....................................................    34,769(n)                                  34,769(n)
                                                                        ==========                                 ==========
(Continued on following page)

                                       34
SINCLAIR BROADCAST GROUP, INC.
            NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                            (DOLLARS IN THOUSANDS)

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

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

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

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

(e)  The River City column  reflects  the results of  operations  for River City
     (including KRRT, Inc.) for the period from January 1, 1996 to May 31, 1996,
     the date the  River  City  Acquisition  was  consummated.  The WSYX  column
     removes the results of WSYX from the results of River City for the period.

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

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

(h)  To  record  compensation  expense  related  to  options  granted  under the
     Long-Term Incentive Plan:

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

(i)  To record  depreciation  expense  related to acquired  tangible  assets and
     eliminate depreciation expense recorded by Flint-TV,  Superior, KSMO, WSTR,
     River  City(e) and WYZZ from the period of January 1, 1996  through date of
     acquisition.  Tangible assets are to be depreciated over lives ranging from
     5 to 29.5 years, calculated as follows:
YEAR ENDED
                                                                                       DECEMBER 31, 1996
                                                          --------------------------------------------------------------------------
                                                          FLINT-TV   SUPERIOR     KSMO      WSTR    RIVER CITY    WYZZ       TOTAL  
                                                          ---------- ---------- --------- --------- ------------ -------  ----------
Depreciation expense on acquired tangible assets    ...    $  32     $   315   $   240    $  507    $    3,965  $ 159    $  5,218 
  Less: Depreciation expense recorded by Flint-TV,                                                                                  
   Superior, KSMO, WSTR, River City(e) and WYZZ .........       (4)       (373)     (374)     (284)       (5,120)    (6)     (6,161)
                                                               -----    -------  --------    ------    ---------  ------    --------
  Pro forma adjustment  .................................    $  28     $   (58)  $  (134)   $  223    $   (1,155) $ 153    $   (943)
                                                               =====    =======  ========    ======    =========  ======    ========
(j)  To record  amortization  expense related to acquired  intangible assets and
     deferred  financing costs and eliminate  amortization  expense  recorded by
     Flint-TV,  Superior,  KSMO, WSTR, River City(e) and WYZZ from the period of
     January 1, 1996 through date of  acquisition.  Intangible  assets are to be
     amortized over lives ranging from 1 to 40 years, calculated as follows:
YEAR ENDED
                                                                                      DECEMBER 31, 1996
                                                            ----------------------------------------------------------------------
                                                            FLINT-TV   SUPERIOR    KSMO    WSTR   RIVER CITY   WYZZ      TOTAL
                                                            ---------- ---------- ------- ------- ------------ ------ ------------
Amortization expense on acquired intangible assets    ...     $ 167     $  827   $ 180   $ 285    $  12,060   $  99   $  13,618
  Deferred financing costs   ..............................                                             1,429               1,429
  Less: Amortization expense recorded by Flint-TV, Su-
   perior, KSMO, WSTR, River City(e) and WYZZ .............         -       (529)      -     (39)     (10,442)     (3)    (11,013) 
                                                               ------       -----  ------  ------    ---------   -----   -------- 
  Pro forma adjustment    .................................     $ 167     $  298   $ 180   $ 246    $   3,047   $  96   $   4,034
                                                               ======       =====  ======  ======    =========   =====   ========
35
(k)  To  record  interest  expense  for the  year  ended  December  31,  1996 on
     acquisition  financing  relating  to  Superior  of $59,850  (under the Bank
     Credit  Agreement  at 8.0% for four  months),  KSMO and WSTR of $10,425 and
     $7,881,  respectively (both under the Bank Credit Agreement at 8.0% for six
     months),  River City  (including  KRRT) of $868,300  (under the Bank Credit
     Agreement  at 8.0% for five  months)  and of $851  for  hedging  agreements
     related to the River  City  financing  and WYZZ of $20,194  (under the Bank
     Credit  Agreement at 8.0% for six months) and  eliminate  interest  expense
     recorded. No interest expense has been recorded for Flint-TV as it has been
     assumed  that the  proceeds  from  the 1995  Notes  were  used to  purchase
     Flint-TV.
YEAR ENDED
                                                                                   DECEMBER 31, 1996
                                                       --------------------------------------------------------------------------
                                                        SUPERIOR     KSMO       WSTR     RIVER CITY      WYZZ         TOTAL
                                                       ----------- --------- ----------- ------------ ----------- --------------
Interest expense adjustment as noted above    ......  $  (1,596)   $ (417)   $   (315)  $  (29,032)  $   (808)   $   (32,168)
  Less: Interest expense recorded by, Superior, KSMO,
   WSTR, River City (e) and WYZZ .....................        457       823       1,127       12,352          -         14,759
                                                        ---------- --------     --------   ---------    --------    -----------
  Pro forma adjustment  ..............................  $  (1,139)  $   406    $    812   $  (16,680)  $   (808)   $   (17,409)
                                                        ========== ========     ========   =========    ========    ===========
(l)  To eliminate interest income for the year ended December 31, 1996 on public
     debt proceeds relating to Flint-TV, KSMO and WSTR and WYZZ of $34,400 (with
     a commercial bank at 5.7% for two months),  $10,425 and $7,881 (both with a
     commercial bank at 5.7% for six months) and $20,194 (with a commercial bank
     at 5.7% for six months),  respectively due to assumed utilization of excess
     cash for those acquisitions.
YEAR ENDED
                                                                              DECEMBER 31, 1996
                                                     --------------------------------------------------------------------
                                                     FLINT-TV     KSMO      WSTR     RIVER CITY     WYZZ       TOTAL
                                                     ---------- --------- --------- ------------ --------- -------------
Interest income adjustment as noted above   ......   $   (327) $  (297)  $  (226)   $      -   $  (576)   $   (1,426)
  Less: Interest income recorded by Flint-TV, KSMO,
   WSTR, River City(e) and WYZZ   ..................          -        -       (15)       (195)        -          (210)
                                                        -------  --------  --------     -------  --------    ----------
  Pro forma adjustment   ...........................   $   (327) $  (297)  $  (241)   $   (195)  $  (576)   $   (1,636)
                                                        =======  ========  ========     =======  ========    ==========
(m)  To  record  tax  provision  (benefit)  for the 1996  Acquisitions,  the Old
     Securities  Offering and the Debt Offering  adjustments  at the  applicable
     statutory tax rates.

(n)  Weighted  average shares  outstanding on a pro forma basis assumes that the
     1,150,000 shares of Series B Convertible  Preferred Stock were converted to
     4,181,818  shares of $.01 par value Class A Common Stock and the  Incentive
     Stock Options and Long-Term  Incentive Plan Options were  outstanding as of
     the beginning of the period.

(o)  To record  amortization  expense on other  assets for one year ($6  million
     over 12 years).

(p)  To  record  the  net  interest  expense   reduction  for  1996  related  to
     application  of the Old  Securities  Offering  proceeds to the  outstanding
     balance  under the  revolving  credit  facility  offset by an  increase  in
     commitment  fees for the  available  but unused  portion  of the  revolving
     credit facility for the year ended December 31, 1996.
Interest on adjusted borrowing on term loans   ..............................     $ 12,600
     Commitment fee on available but unused borrowings of $250,000 of revolving 
      credit facility at 1/2 of 1% for 12 months   ...............................       (1,250)
     Commitment fee on available borrowings recorded by the Company   ............          470
                                                                                        --------
     Pro forma adjustment   ......................................................     $ 11,820
                                                                                        ========
(q)  To record  subsidiary trust minority  interest  expense  for the year ended
     December 31, 1996 ($200 million  aggregate  Liquidation  Value of Preferred
     Securities at a distribution rate of 11.625%).

(r)  To record amortization  expense on other assets for one year ($4.75 million
     over 10 years).

(s)  To record interest expense on the Notes for one year ($200 million at 9%)

(t)  To record amortization expenses on other assets for one quarter ($6 million
     over 12 years).

                                       36
(u)  To  record  the  net  interest  expense   reduction  for  1997  related  to
     application  of the Old  Securities  Offering  proceeds to the  outstanding
     balance  under the  revolving  credit  facility  offset by an  increase  in
     commitment  fees for the  available  but unused  portion  of the  revolving
     credit facility for the quarter ended March 31, 1997.
Interest on adjusted borrowing on term loans   ..............................    $   2,162
     Commitment fee on available but unused borrowings of $250,000 of revolving 
       credit facility at 1/2 of 1% for three months   ...........................         (313)
     Commitment fee on available borrowings recorded by the Company   ............          173
                                                                                      ---------
     Pro forma adjustment   ......................................................    $   2,022
                                                                                      =========

(v)  To record subsidiary trust minority interest expense  for the quarter ended
     March 31,  1997 ($200  million  aggregate  Liquidation  Value of  Preferred
     Securities at a distribution rate of 11.625%).

     Subsidiary trust minority interest expense for 
      one quarter  ............ ............................                          $  (5,813)  
     Subsidiary trust minority interest expense made by the                                       
      Company during the quarter ...........................                              1,210   
                                                                                       ---------  
     Pro forma adjustment  .................................                          $  (4,603)  
                                                                                       =========
(w)  To record  amortization  expense  on other  assets for one  quarter  ($4.75
     million over 10 years).

(x)  To record  interest  expense on the Notes for one quarter  ($200 million at
     9%).

                                       37
SIGNATURE

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                        SINCLAIR BROADCAST GROUP, INC.

                                        BY: /s/ David B. Amy
                                           ------------------------------------
                                           David B. Amy
                                           Chief Financial Officer/
                                           Principal Accounting Officer

Dated: June 27, 1997
EXHIBIT INDEX
SUBSEQUENTLY
EXHIBIT NO.                                                                         NUMBERED PAGE
-------------                                                                       --------------
99      Press Release by Sinclair Broadcast Group, Inc. dated June 23, 1997