KHON Fox 2
station may be sold

A buyer may be announced soon
for the isle station and three
mainland stations

By Rick Daysog
Star-Bulletin

The owner of KHON Fox 2 is close to announcing a buyer for the local television station and three mainland stations.

Kent Baker, KHON's vice president and general manager, said yesterday that representatives of the potential buyer have visited during the past several weeks to conduct due-diligence reviews of KHON, the state's top-rated news station. He declined to identify the buyer but said KHON's owner, USA Networks Inc., could announce the transaction soon.

Terms of the proposed deal, which would require federal regulatory approvals, were not disclosed.

USA Networks is headed by media mogul Barry Diller, who announced last year that he planned to spin off KHON, local production company McHale Videofilm, and TV stations WLUK in Green Bay, Wis., WVUE in New Orleans and WALA in Mobile, Ala.

Baker said all four stations are profitable and are the top-rated or among the

But he noted that the smaller stations didn't fit well with USA Network's plan to build a national broadcast network.

For the 115 employees at KHON and McHale Video, the ownership change would be their fifth since 1995.

Diller's HSN Inc. acquired KHON and McHale Video when it bought Universal Studios Inc.'s television operations from Seagram Co. last October. HSN later changed its name to USA Network.

In 1995, SF Broadcasting Co. - a joint venture between Savoy Pictures Entertainment Inc. and News Corp.'s Fox Television Stations Inc. - acquired KHON, WVUE and WALA from Chicago-based Burnham Broadcasting Co. for $229 million.

"We've been through the ringer for the past few years," said Baker.

Baker said he didn't expect major changes under a new ownership.

But he noted that KHON has been looking to relocate and upgrade its facilities.

KHON, headquartered in Kakaako on land leased from Victoria Ward Ltd., has held talks to acquire space in the soon-to-be built Hawaiki Tower condominium complex across from Ala Moana Center, real estate sources have said.

The move could cost that station between $15 million and $18 million.

Like other media companies in Hawaii, Baker noted that KHON has felt the impact of Hawaii's economic downturn, although it remains very profitable.

The weak economy has prompted the company to recently revise its profit forecasts for the coming year, he said.

"It's certainly not a fun year, but it's still a strong franchise and it's very profitable," Baker said.