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The Honolulu Advertiser
Posted on: Wednesday, February 21, 2007

TV station KGMB attracts Mainland buyer

By Rick Daysog
Advertiser Staff Writer

TV station KGMB, which sits on a prime Kapi'olani Boulevard site, will be sold to a Mainland investment firm.

DEBORAH BOOKER | The Honolulu Advertiser

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Local CBS affiliate KGMB TV will be sold to a Mainland investment company that has never operated a television station.

Emmis Communications Corp., which is getting out of the television broadcast business, said HITV Operating Co. will pay $40 million for KGMB and its 41,000-square-foot offices on Kapi'olani Boulevard.

"The sale of KGMB will bring us one step closer to completing the orderly divestiture of our television assets," Emmis chairman Jeff Smulyan said in a news release.

HITV officials could not be reached for immediate comment.

Rick Blangiardi, general manager and senior vice president of KGMB, said HITV officials in past discussions said they were interested in expanding KGMB's staffing and investing in new technologies.

KGMB employs 101 people.

"If anything, they've talked about growth opportunities," Blangiardi said.

The deal comes as KGMB has improved its ratings. The station's news team, led by anchors Kim Gennaula and Keahi Tucker, bypassed longtime No. 1 KHON in the November Nielsen ratings for the 10 p.m. slot. KHON, with Joe Moore as its news anchor, remains the top-rated news station for the 6 p.m. time period.

HITV is a newly created unit of Arlington, Va.-based MCG Capital Corp., which finances small- to mid-sized companies.

With assets of about $1.3 billion, MCG has provided funding for a Massachusetts pharmaceutical instruments maker, a San Antonio-based catalog company specializing in baseball and softball gear and a Texas-based maker of equestrian sports equipment.

KGMB will be the company's first investment in a television station.

Indianapolis-based Emmis owns dozens of radio stations on the Mainland and interests in magazine publishing. The company announced in 2005 that it was selling its television stations to concentrate on its radio holdings.

Last year, the company sold KGMB's sister station, KHON, to California-based Montecito Broadcast Corp. Montecito caused an uproar when it announced it was laying off 35 employees, or nearly a third of its 112-person staff.

MCG was just one of at least four investment groups that bid on the local television station. A local group that included Blangiardi submitted a bid, and the Office of Hawaiian Affairs also expressed an interest in KGMB.

OHA abandoned its efforts in July after it failed to get the backing of its full board.

Several potential bidders were attracted by KGMB's office building near Ala Moana Center, which could fetch anywhere between $12 million and $16 million in today's real estate market.

The sale likely will close in the first half of this year, pending regulatory approval.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.