Grant Nears Deal to Ease TV Show Debt

Grant Broadcasting System, embroiled in a federal bankruptcy case that has drawn wide attention in the television industry, is near an agreement with Viacom International that would allow it to shed about 10% of the $36 million it owes the TV program distributor, sources said Wednesday.

Milton Grant, chief executive of the three-station chain, has told a federal bankruptcy court in Philadelphia that the proposed deal would allow Grant to repay its debts to Viacom over 5 1/2 years, rather than the 3 1/2 years stipulated in the contracts, sources said.

Viacom officials did not return telephone calls seeking comment.

Grant hopes to improve its financial condition by canceling many of its contracts to buy programming, which represent debts of about $200 million over the next five years. The Miami-based firm, which filed for Chapter 11 reorganization under the U.S. Bankruptcy Code on Dec. 8, is now looking over its program inventory, deciding which shows to keep and which to try to return unused to distributors.

Milton Grant testified last week that the company would like to reduce debts for future programming by about 50%.

Grant’s desire to escape such contracts has been strongly resisted by some program distributors, who assert that such abrogations would invite other customers to try to renege on contracts. They fear that other broadcasters--particularly the many troubled non-network stations--might try to use a bankruptcy court reorganization to shed some of their contracts as well.

While any deal between Viacom and Grant would need bankruptcy court approval, its signing might be a prelude to agreements between Grant and other programmers, some industry officials said. “Once one breaks the ice, others may follow,” said Steven Pruett, a station broker with Blackburn & Co. in Chicago. “They might feel they will do better in a voluntary deal than in one the judge cut for them.” Sources said Grant is holding talks with other distributors as well.