decision pioneers will now have to pay the lesser of either 90 percent of the
winning bid for a similar license in the same market or 90 percent of the
weighted average price of the top 10 winning bids nationwide. Such cost for
APC will not be determinable until the conclusion of the auction process, but
it will be in addition to the company's initial estimate of construction costs,
which could approximate $200 million.
In February 1994, the FCC issued new rules related to pricing and the
reregulation of the cable industry, which took effect on July 14, 1994, and
which will reduce cable revenues. The company has evaluated the rules and does
not expect them to have a material effect on consolidated financial results.
Post-Newsweek Stations now has six television stations, two each
affiliated with ABC, CBS and NBC. Several of these stations have negotiated
long-term affiliation agreements during the past 15 months. As a result of
these agreements, Post-Newsweek Stations will receive significantly improved
network compensation over the life of the contracts, which together with the
acquisition of the Texas stations, is projected to increase materially
broadcast division operating income. The full effect of the increases will be
felt beginning in the third quarter of 1994 and in subsequent periods.
In July 1994, Katharine Graham, chairman of the executive committee,
announced her intention to resign as a trustee of certain trusts holding Class
A shares and to relinquish her right to vote certain other Class A shares held
in trust. These changes are subject to the approval of the FCC because of the
company's ownership of television properties. If effected these changes will
reduce the percentage of Class A shares voted by Mrs. Graham, from 52.4 percent
to 29.1 percent and the combined percentage of Class A shares voted by Mrs.
Graham and Donald E. Graham, chairman and chief executive officer, from 66.6
percent to 56.8 percent.
During the first half of 1994 the company repurchased 224,600 shares
of its Class B common stock at a cost of approximately $52.3 million.
The company has experienced no other significant changes in its
financial condition since the end of 1993.