WITH THE EXCEPTION OF A FEW SPORADIC, framed, network promotional posters, there are no pictures in Granite Broadcasting Corp's New York offices. The walls are completely bare in the company's conference room where Granite founder and CEO W. Don Cornwell, 47, and key staff members plan strategy. "We have been moving so fast and so hard that, frankly, we haven't had a chance to stop and say, 'how do we want this office to look,'" Cornwell says. "We are running full [speed] all the time."
Full-speed ahead may be the best way to describe the 1994 performance of Granite, which will probably own nine television stations before year-end. The company's stock, which in the past failed to impress Wall Street pundits, rose 70% last year and became the country's top performing media stock. Net revenues jumped 75% to nearly $63 million in 1994, from $37.5 million in 1993. The company's gross revenues for 1994 were $76.2 million, up from $45.2 million in 1993.
Some analysts predict that Granite's path to acquiring more stations will be hampered by Congress' action to eliminate the tax break for broadcast owners who sell to minorities. But few doubt that Granite, the 1995 BE Company of the Year and No. 18 on this year's BE INDUSTRIAL/SERVICE 100, will continue to grow in station numbers and stock value.
"These guys are pretty good at what they do," says Brian E. Cobb, TV station broker at Media Venture Partners in Washington. "They have a strong base from which to operate."
Cornwell is similarly optimistic about the company's future. "Is Granite going to continue to prosper? Yes. We've run real hard and real fast in a short period of time. I don't think we saw [the tax break] as a window of opportunity, but thank God we didn't let grass grow under our feet."
1994: THE YEAR IN REVIEW
Granite owns stations in San Jose and Fresno, Calif.; Fort Wayne, Ind.; Peoria, Ill.; Duluth, Minn.; Syracuse, N.Y., and Austin, Texas. The company recently signed an agreement to buy a station in Kalamazoo, Mich., and owns a minority interest in a Buffalo, N.Y., station.
Andrew Marcus, an analyst at Alex, Brown & Sons, told Crain's New York Business that Granite has achieved a critical triumph in the television business by buying stations below-market and turning them around.
Cornwell credits the company's tremendous increase in revenues in 1994 to several factors, including the acquisition of the Fresno and Syracuse stations, and good financial performances from the other stations in the group. "Those stations [Fresno and Syracuse] were truly underperforming in terms of revenue and cash flow," Cornwell explains. "[In general], 1994 was a terrific year to be in the television business because of a combination of the economy being on the upswing and advertisers rediscovering the value of television."
Throw in a year in which political ads intensified the competition for commercial advertising space, and you have a formula for broadcasting success. But Granite's achievements, industry insiders say, is attributable to more than just sound ledger decisions and the whims of seasonal advertisers.
Another key to its success is the leeway Granite gives its local managers, who are allowed to make market-specific...