PULITZER INC, 10-12B/A, 1999-01-22

PULITZER INC
10-12B/A, 1999-01-22
NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

-------------------------

AMENDMENT NO. 1

FORM 10/A

GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
EXCHANGE ACT OF 1934

PULITZER INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C>
DELAWARE 43-1819711
(State or other jurisdiction of incorporation (I.R.S. Employer Identification No.)
or organization)

900 North Tucker Boulevard, St. Louis, 63101
Missouri
(Address of principal executive offices) (Zip Code)
</TABLE>

Registrant's telephone number, including area code (314) 340-8000

Securities to be registered pursuant to Section 12(b) of the Act:

<TABLE>
<CAPTION>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
------------------- ------------------------------
<S> <C>
Common Stock, $0.01 par value per share New York Stock Exchange, Inc.
</TABLE>

Securities to be registered pursuant to Section 12(g) of the Act:

Not applicable
(Title of Class)

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ITEM 1. BUSINESS.

INTRODUCTION

Pulitzer Inc. ("New Pulitzer") was organized as a corporation in 1998 and
is a wholly-owned subsidiary of Pulitzer Publishing Company ("Pulitzer").
Pulitzer is engaged in newspaper publishing and television and radio
broadcasting.

As of May 25, 1998, Pulitzer, New Pulitzer and Hearst-Argyle Television,
Inc. ("Hearst-Argyle") entered into an Amended and Restated Agreement and Plan
of Merger (the "Merger Agreement") pursuant to which Hearst-Argyle will acquire
Pulitzer's television and radio broadcasting operations (collectively, the
"Broadcasting Business") in exchange for the issuance to Pulitzer's stockholders
of 37,096,774 shares of Hearst-Argyle's Series A common stock. The Broadcasting
Business consists of nine network-affiliated television stations and five radio
stations owned and operated by Pulitzer Broadcasting Company, a wholly-owned
subsidiary of Pulitzer, and its wholly-owned subsidiaries. The Broadcasting
Business will be acquired by Hearst-Argyle through the merger (the "Merger") of
Pulitzer into Hearst-Argyle. Pulitzer's newspaper publishing and related new
media businesses will continue as "New Pulitzer," which will be distributed in a
tax-free "spin-off" to Pulitzer stockholders (the "Spin-off") prior to the
Merger. The Merger and Spin-off are collectively referred to as the
"Transactions."

In connection with the Transactions, New Pulitzer will amend and restate
its Certificate of Incorporation to: (i) recapitalize its capital structure to
provide for common stock, par value $0.01 per share (the "Common Stock"), Class
B common stock, par value $0.01 per share (the "Class B Common Stock"), and
preferred stock, par value $0.01 per share (the "Preferred Stock" and together
with the Common Stock and Class B Common Stock, the "New Pulitzer Stock"); and
(ii) provide for substantially the same stockholder voting rights and other
terms and provisions as currently provided for in the Restated Pulitzer
Certificate of Incorporation, as amended. Prior to the Spin-off, New Pulitzer
will issue to Pulitzer: (i) that number of shares of Common Stock equal to the
number of shares of Pulitzer common stock then outstanding; and (ii) that number
of shares of Class B Common Stock equal to the number of shares of Pulitzer
Class B common stock then outstanding. Pulitzer will then distribute these
shares of New Pulitzer Common Stock and Class B Common Stock to its stockholders
in the Spin-off.

The closing of the Transactions is expected to occur in the first quarter
of 1999, subject to certain conditions and rights, including termination rights
described in the Joint Proxy Statement/Prospectus included in Hearst-Argyle's
registration statement on Form S-4 filed with the Securities and Exchange
Commission on , 1999. All information herein assumes consummation of
the Transactions.

Pulitzer's historical basis in its newspaper publishing and related new
media assets and liabilities will be carried over to New Pulitzer. The
Transactions will be recorded as a reverse-spin transaction and, accordingly,
New Pulitzer's results of operations for periods prior to the consummation of
the Transactions will be identical to the historical results previously reported
by Pulitzer.

The Board of Directors of New Pulitzer intends to continue to pay the same
quarterly dividend per share as Pulitzer. Future dividends will depend upon,
among other things, New Pulitzer's earnings, financial condition, cash flows,
capital requirements and other relevant considerations, including the
limitations under any credit agreement or other agreement to which New Pulitzer
may become a party in the future.

Following the consummation of the Transactions, New Pulitzer will continue
the newspaper publishing and related new media operations of Pulitzer. Set forth
below is a general description of the newspaper publishing and related new media
businesses of Pulitzer that will continue to operate through New Pulitzer.

GENERAL

Pulitzer is engaged in newspaper publishing and related "new media"
business. Its newspaper operations consist of two major metropolitan dailies:
the St. Louis Post-Dispatch (the "Post-Dispatch"), the only major daily
newspaper serving the St. Louis metropolitan area; and The Arizona Daily Star
(the "Star"), serving the Tucson metropolitan area. Each of these publications
also operates electronic news, information and

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communication web sites on the Internet. In addition, Pulitzer's Pulitzer
Community Newspaper group (the "PCN Group") includes 12 dailies which serve
smaller markets, primarily in the West and Midwest, as well as a number of
weekly and bi-weekly publications.

The Pulitzer Publishing Company was founded by the first Joseph Pulitzer in
1878 to publish the original St. Louis Post-Dispatch and has operated
continuously since that time under the direction of the Pulitzer family. Michael
E. Pulitzer, a grandson of the founder, currently serves as Chairman of the
Board, President and Chief Executive Officer of Pulitzer and Chairman of the
Board of New Pulitzer.

The following table sets forth certain historical financial information
regarding Pulitzer's operations for the periods and at the dates indicated.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------------------
1997 1996(4) 1995 1994(5) 1993(5)
---- ------- ---- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Publishing(1):
Operating revenues -- net............ $357,969 $309,096 $269,388 $304,779 $290,146
======== ======== ======== ======== ========
Operating income (loss):
Publishing operations.............. $ 66,994 $ 46,549 $ 37,895 $ 45,192 $ 34,362
St. Louis Agency adjustment........ (19,450) (13,972) (12,502) (14,706) (10,660)
General corporate expense.......... (6,007) (5,532) (4,666) (3,871) (3,692)
-------- -------- -------- -------- --------
Total...................... $ 41,537 $ 27,045 $ 20,727 $ 26,615 $ 20,010
======== ======== ======== ======== ========
Depreciation and amortization........ $ 13,007 $ 8,660 $ 4,307 $ 6,128 $ 6,938
======== ======== ======== ======== ========
Operating margins(2)................. 18.7% 15.1% 14.1% 14.8% 11.8%
Assets............................... $427,109 $424,737 $241,821 $213,902 $191,368
======== ======== ======== ======== ========
Broadcasting(3):
Operating revenues -- net............ $227,016 $224,992 $202,939 $180,800 $136,839
======== ======== ======== ======== ========
Operating income..................... $ 82,180 $ 83,246 $ 65,939 $ 47,963 $ 27,947
======== ======== ======== ======== ========
Depreciation and amortization........ $ 23,447 $ 22,442 $ 22,843 $ 24,358 $ 16,854
======== ======== ======== ======== ========
Operating margins.................... 36.2% 37.0% 32.5% 26.5% 20.4%
Assets............................... $255,847 $259,114 $253,252 $254,410 $270,250
======== ======== ======== ======== ========
Consolidated Pulitzer:
Operating revenues -- net............ $584,985 $534,088 $472,327 $485,579 $426,985
======== ======== ======== ======== ========
Operating income..................... $123,717 $110,291 $ 86,666 $ 74,578 $ 47,957
======== ======== ======== ======== ========
Depreciation and amortization........ $ 36,454 $ 31,102 $ 27,150 $ 30,486 $ 23,792
======== ======== ======== ======== ========
Assets............................... $682,956 $683,851 $495,073 $468,312 $461,618
======== ======== ======== ======== ========
</TABLE>

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(1) Publishing includes related new media businesses and general corporate
expense and represents the historical operations of Pulitzer that will
continue as New Pulitzer.

(2) Operating margins represent publishing operating income compared to
operating revenues. Publishing operating income used in margin calculations
excludes the St. Louis Agency adjustment (see "--Publishing -- Agency
Agreements.") and general corporate expense (which are recorded as operating
expenses for financial reporting purposes).

(3) Broadcasting includes the historical operations of Pulitzer that will be
acquired by Hearst-Argyle through the Merger.

(4) In 1996, publishing and consolidated amounts included a partial year of
operations for Scripps League Newspapers, Inc. (subsequently renamed
Pulitzer Community Newspapers, Inc.) following its acquisition on July 1,
1996.

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(5) On December 22, 1994, Pulitzer sold its Chicago publishing subsidiary; the
subsidiary's operating results are included in the publishing and
consolidated amounts for 1994 and 1993. In 1993, broadcasting and
consolidated amounts included a partial year of operations for WESH-TV and
KCCI-TV, acquired on June 30, 1993 and September 30, 1993, respectively.

OPERATING STRATEGY

Pulitzer's long-term operating strategy for its media assets has been, and
New Pulitzer's long-term operating strategy will be, to maximize each property's
growth and profitability through maintenance of editorial excellence, leadership
in locally-responsive news, and prudent control of costs. Management believes
that editorial excellence and leadership in locally-responsive news will, over
the long-term, allow New Pulitzer to maximize its market share in each of its
respective markets. Experienced local managers implement Pulitzer's strategy in
each media market, with centralized Pulitzer management providing oversight and
guidance in all areas of planning and operations.

Pulitzer complements its internal growth strategies with a disciplined and
opportunistic acquisition strategy that is focused on acquiring media properties
that Pulitzer believes are a good fit with its operating strategy, possess
attractive growth potential and meet Pulitzer's objectives for after-tax cash
flow. Management believes that Pulitzer's reputation, financial position, cash
flow and conservative capital structure, among other factors, will assist New
Pulitzer in pursuing acquisitions. New Pulitzer intends to seek out acquisition
opportunities, with particular emphasis on small-to medium-sized markets.

New Pulitzer believes that cost controls are an important tool in the
management of media properties which are subject to significant fluctuations in
advertising volume. New Pulitzer believes that prudent control of costs will
permit it to respond quickly when positive operating conditions offer
opportunities to expand market share and profitability and, alternatively, when
deteriorating operating conditions require cost reductions to protect
profitability. Pulitzer's disciplined budgeting process is one of the key
elements in controlling costs. Pulitzer employs, and New Pulitzer will continue
to employ, production technology in all of its media operations in order to
minimize production costs and produce an attractive and timely news product for
its readers.

Pulitzer's newspaper operations are geographically diverse, placing
Pulitzer in the Midwest, Southwest and Western regions of the United States. Due
to the close relationship between economic activity and advertising volume, New
Pulitzer believes that geographic diversity will provide New Pulitzer with
valuable protection from regional economic variances.

PUBLISHING

New Pulitzer intends to continue the tradition of reporting and editorial
excellence that has resulted in Pulitzer's receiving 17 Pulitzer Prizes* over
the years.

Pulitzer publishes two major metropolitan daily newspapers, the St. Louis
Post-Dispatch and The Arizona Daily Star. Both daily newspapers have weekly
total market coverage sections that provide advertisers with market saturation,
and both offer alternative delivery systems that provide advertisers with either
targeted or total market coverage.

The PCN Group's 12 daily community newspapers have a combined average daily
circulation of approximately 162,000. The smaller markets served by these
newspapers and their locations will provide New Pulitzer with further
diversification and participation in several higher growth areas of the western
United States. A strong focus on local reporting and editorial excellence is
also considered the key to long-term success in these markets.

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* Pulitzer Prizes are awarded annually at Columbia University by the Pulitzer
Prize Board, an independent entity affiliated with the Columbia University
School of Journalism, founded by the first Joseph Pulitzer.

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Pulitzer's publishing revenues are derived primarily from advertising and
circulation, which averaged approximately 87 percent of Pulitzer's total
publishing revenue over the last five years. Advertising rates and rate
structures and resulting revenues vary among publications based, among other
things, on circulation, type of advertising, local market conditions and
competition. The following table provides a breakdown of Pulitzer's publishing
revenues for the past five years.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------------------
1997 1996(1) 1995 1994(2) 1993(2)
---- ------- ---- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Advertising:
Retail............................. $107,916 $ 91,373 $ 78,362 $ 88,450 $ 85,860
General............................ 10,466 10,123 7,645 7,830 7,154
Classified......................... 109,435 90,443 75,925 84,738 75,670
-------- -------- -------- -------- --------
Total......................... 227,817 191,939 161,932 181,018 168,684
Circulation.......................... 87,611 81,434 76,349 77,941 78,661
Other................................ 42,541 35,723 31,107 45,820 42,801
-------- -------- -------- -------- --------
Total......................... $357,969 $309,096 $269,388 $304,779 $290,146
======== ======== ======== ======== ========
</TABLE>

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(1) Revenue amounts for 1996 included a partial year of operations of Scripps
League Newspapers, Inc. (subsequently renamed Pulitzer Community Newspapers,
Inc.) following its acquisition on July 1, 1996.

(2) On December 22, 1994, Pulitzer sold its Chicago publishing subsidiary; the
subsidiary's operating revenues are included in the above amounts for 1994
and 1993.

ST. LOUIS POST-DISPATCH

Founded in 1878 by the first Joseph Pulitzer, the Post-Dispatch has a long
history of reporting and editorial excellence and innovation in newspaper
publishing under the direction of the Pulitzer family. The Post-Dispatch is a
morning daily and Sunday newspaper serving primarily the greater St. Louis
metropolitan area. St. Louis is currently the 17th largest metropolitan
statistical area in the United States with a population of approximately 2.6
million.

Over the past several years, Pulitzer has taken a number of steps designed
to strengthen the market position of the Post-Dispatch. In 1997, the
Post-Dispatch completed an extensive redesign intended to make the newspaper
more accessible and relevant to readers, and Pulitzer is continuing to make
investments to enhance its news coverage capabilities and strengthen its
circulation and advertising operations.

The Post-Dispatch operates under an Agency Agreement, dated March 1, 1961,
as amended (the "St. Louis Agency Agreement"), between Pulitzer and The Herald
Company, Inc. (the "Herald Company") pursuant to which Pulitzer performs all
activities relating to the day-to-day operations of the newspaper, but pursuant
to which it must share one-half of the agency's operating income or one-half of
the agency's operating loss with the Herald Company (the "St. Louis Agency").
The following table sets forth for the past five years certain circulation and
advertising information for the Post-Dispatch and operating revenues for the

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St. Louis Agency, all of which are included in Pulitzer's consolidated financial
statements. See "Agency Agreements."

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Post-Dispatch:
Circulation(1):
Daily (including Saturday)...... 319,887 319,203 323,137 335,819 341,797
Sunday.......................... 530,442 540,434 545,882 555,488 564,761
Advertising linage (in thousands of
inches):
Retail............................. 841 819 880 912 913
General............................ 91 101 75 75 62
Classified......................... 1,003 1,007 1,057 1,039 977
-------- -------- -------- -------- --------
Total...................... 1,935 1,927 2,012 2,026 1,952
Part run(2)........................ 607 792 594 591 481
-------- -------- -------- -------- --------
Total inches............... 2,542 2,719 2,606 2,617 2,433
======== ======== ======== ======== ========
Operating revenues (in thousands):
Advertising........................ $147,770 $137,054 $130,600 $125,704 $116,951
Circulation........................ 63,216 63,858 64,862 61,207 62,345
Other(3)........................... 24,276 23,231 24,404 23,490 22,387
-------- -------- -------- -------- --------
Total...................... $235,262 $224,143 $219,866 $210,401 $201,683
======== ======== ======== ======== ========
</TABLE>

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(1) Amounts based on ABC Publisher's Statements for the twelve-month periods
ended September 30.

(2) Part run inches represent advertisements that are published in selected
copies (i.e., less than the full press run) of a daily edition of the
newspaper to specifically target certain geographic locations. The
advertisements typically appear in a special news and advertising section
designed specifically for the targeted geographic locations.

(3) Primarily revenues from preprinted inserts.

The Post-Dispatch has consistently been a leader in technological
innovation in the newspaper industry. Pulitzer's commitment to the ongoing
enhancement of its operating systems has enabled the Post-Dispatch to offer a
continually improving product to both readers and advertisers while also
realizing substantial savings in labor cost. New Pulitzer believes the
Post-Dispatch has adequate facilities to sustain up to at least a 35 percent
increase in daily circulation without incurring significant capital
expenditures. The Post-Dispatch is in the process of upgrading and modifying its
systems to make them "Year-2000" compatible, and expects to achieve full
compliance during 1999.

The Post-Dispatch is distributed primarily through independent home
delivery carriers and single copy dealers. Home delivery accounted for
approximately 76 percent of circulation for the daily Post-Dispatch and
approximately 55 percent of circulation for the Sunday edition during 1997.

THE ARIZONA DAILY STAR

Founded in 1877, the Star is published in Tucson, Arizona, by Pulitzer's
wholly-owned subsidiary, Star Publishing Company. Following the consummation of
the Transactions, Star Publishing Company will be a wholly-owned subsidiary of
New Pulitzer. The Star, a morning and Sunday newspaper, and the Tucson Citizen
(the "Citizen"), an afternoon newspaper owned by Gannett Co., Inc. ("Gannett"),
are southern Arizona's leading dailies. The Star and the Citizen are published
through an agency operation (the "Tucson Agency") pursuant to an Agency
Agreement, dated March 28, 1940, as amended and restated (the "Tucson Agency
Agreement"), and have a combined weekday circulation of approximately 140,000.
Tucson is currently the 69th largest metropolitan statistical area in the United
States with a population of approximately 781,000.

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The Tucson Agency operates through TNI Partners, an agency partnership
which is owned half by Pulitzer and half by Gannett. TNI Partners is responsible
for all aspects of the business of the two newspapers other than editorial
opinion and gathering and reporting news. Revenues and expenses are generally
shared equally by the Star and the Citizen. Unlike the St. Louis Agency,
Pulitzer's consolidated financial statements include only its share of the
combined operating revenues and operating expenses of the two newspapers. See
"Agency Agreements."

As a result of the Tucson Agency, the financial performance of Pulitzer's
Star Publishing Company subsidiary is directly affected by the operations and
performance of both the Star and the Citizen.

The following table sets forth certain information concerning circulation
and combined advertising linage of the Star and the Citizen and Pulitzer's share
of the operating revenues of the Star and the Citizen for the past five years.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Circulation(1):
Star daily.............................. 96,101 96,198 97,134 98,050 96,926
Citizen daily........................... 44,009 46,062 47,240 48,272 49,560
Star Sunday............................. 175,659 178,820 180,170 179,652 175,321
Combined advertising linage (in thousands
of inches):
Full run (all zones)
Retail............................... 1,587 1,499 1,565 1,565 1,675
General.............................. 51 45 49 50 45
Classified........................... 1,713 1,684 1,682 1,608 1,462
------- ------- ------- ------- -------
Total........................... 3,351 3,228 3,296 3,223 3,182
Part run(2).......................... 264 201 171 116 98
------- ------- ------- ------- -------
Total inches.................... 3,615 3,429 3,467 3,339 3,280
======= ======= ======= ======= =======
Operating revenues (in thousands):
Advertising............................. $34,302 $31,765 $31,332 $28,459 $25,562
Circulation............................. 11,023 11,194 11,487 11,434 11,065
Other(3)................................ 7,712 7,139 6,703 5,833 5,298
------- ------- ------- ------- -------
Total........................... $53,037 $50,098 $49,522 $45,726 $41,925
======= ======= ======= ======= =======
</TABLE>

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(1) Amounts for 1995 based on ABC Publisher's Statement for the 53 week period
ended December 31. All other years based on ABC Publisher's Statements for
the 52 week periods ended December 31.

(3) Primarily revenues from preprinted inserts.

In 1997, the Star's daily edition accounted for approximately 69 percent of
the combined daily circulation of the Tucson Agency publications. The Star's
daily and Sunday editions accounted for approximately 60 percent of the agency's
total advertising linage.

The Star and the Citizen are printed at TNI Partners' modern, computerized
facility equipped with two, eight-unit Metro offset presses. The writing,
editing and composing functions have been computerized, increasing efficiency
and reducing workforce requirements.

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PULITZER COMMUNITY NEWSPAPERS, INC.

On July 1, 1996, Pulitzer acquired for approximately $216 million all the
stock of Scripps League Newspapers, Inc. (subsequently renamed Pulitzer
Community Newspapers, Inc.), a privately owned publisher of community newspapers
which serve smaller markets, primarily in the West and Midwest. The PCN Group
now includes 12 daily newspapers which publish morning or afternoon editions
during the week and, generally, morning editions on the weekend. Home delivery
through independent contract carriers accounts for the significant portion of
each newspaper's circulation. With circulations ranging from approximately
31,000 to 5,000, the 12 daily newspapers in the PCN Group, ranked in order of
daily circulation, are:

<TABLE>
<S> <C>
The Daily Herald....................................... Provo, Utah
Santa Maria Times...................................... Santa Maria, California
The Napa Valley Register............................... Napa, California
The World.............................................. Coos Bay, Oregon
The Hanford Sentinel................................... Hanford, California
The Arizona Daily Sun.................................. Flagstaff, Arizona
Troy Daily News........................................ Troy, Ohio
The Daily Chronicle.................................... De Kalb, Illinois
The Daily Journal...................................... Park Hills, Missouri
The Garden Island...................................... Lihue, Hawaii
The Ravalli Republic................................... Hamilton, Montana
The Daily News......................................... Rhinelander, Wisconsin
</TABLE>

In addition, the PCN Group operates weekly newspapers in Petaluma,
California and Farmington and Fredericktown, Missouri and two weekly newspaper
groups in conjunction with the properties in Hanford and Santa Maria,
California.

The smaller markets served by the PCN Group are attractive because they
generally have desirable demographic characteristics and above-average growth
rates. Collectively, the PCN Group markets exceed U.S. averages in such key
measures as annual household growth rate, average household income and average
household wealth; in addition, the average median home value in these markets is
nearly double the U.S. median average.

Further, these markets, which are often not served by major metropolitan
media, tend to be characterized by less media competition, which gives New
Pulitzer an opportunity to sustain and expand market shares.

For the year ended December 31, 1997, the PCN Group had consolidated
operating revenues of approximately $69.7 million, of which advertising,
preprints and circulation accounted for approximately 66 percent, 12 percent and
19 percent, respectively. For the six-month period ended December 31, 1996, the
PCN Group had consolidated operating revenues of approximately $34.9 million, of
which advertising, preprints and circulation accounted for approximately 67
percent, 11 percent and 18 percent, respectively.

Pulitzer has recently made a significant investment in new computer systems
which handle typesetting, editing and web publishing, as well as financial and
statistical reporting, for its PCN Group properties. The standardized systems,
which are "Year-2000" compatible, permit centralized maintenance and support.

RELATED "NEW MEDIA" OPERATIONS

Pulitzer has developed "new media" operations that are designed to enhance,
complement and add value to its traditional newspaper publishing businesses by
providing subscriber and advertiser services through various forms of electronic
distribution, including electronic publishing, voice services delivered by
phone, and electronic dissemination of information via the world wide
web/Internet. Pulitzer's objective in these operations is to develop and expand
its ability to provide advertisers access to a large and attractive online
audience.

Pulitzer is an Internet service provider as a central element of its
strategy in both St. Louis and Tucson. Full access to each newspaper's
"electronic publication" web site, as well as full Internet access, is provided
on

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a subscription basis. The Star's service, StarNet (www.azstarnet.com), began
operations in May, 1995 and had approximately 12,500 subscribers as of December
31, 1998. The service provided by the Post-Dispatch, POSTnet (www.stlnet.com),
started in January 1996 and had approximately 16,400 subscribers as of December
31, 1998. The web sites provide access to current and archive material,
including news, editorials and classified advertising, from each newspaper, as
well as interactive Internet-specific enhancements such as message boards and
chat rooms. Pulitzer is currently developing enhanced online services featuring
the three major classified advertising categories -- automotive, real estate and
help wanted.

In addition, Pulitzer is a founding member of PAFET, a consortium of six
newspaper companies that is pursuing a program of research and investment
designed to help its members understand and participate in the opportunities and
challenges that the new media provide for newspaper properties.

ACQUISITION STRATEGY

One of Pulitzer's primary growth strategies has been a disciplined and
opportunistic acquisition program. In evaluating acquisition opportunities,
Pulitzer requires that candidates must: (i) be in businesses related to
Pulitzer's core publishing competencies; (ii) have strong cash flows; (iii)
reflect its preference for small-to medium-sized markets that possess good
growth or economic characteristics and, where possible, offer a clustering
opportunity with respect to present or future properties; (iv) provide an
opportunity for its disciplined management approach to add value; and (v) offer
an attractive return on investment. Management of New Pulitzer intends to pursue
a similar growth strategy.

AGENCY AGREEMENTS

Newspapers in approximately 15 cities operate under joint operating or
agency agreements. Agency agreements generally provide for newspapers servicing
the same market to share certain printing and other facilities and to pool
certain revenues and expenses in order to decrease aggregate expenses and
thereby allow the continuing operation of multiple newspapers serving the same
market. The Newspaper Preservation Act of 1970 permits joint operating
agreements between newspapers under certain circumstances without violation of
the Federal antitrust laws.

St. Louis Agency. An agency operation between Pulitzer and the Herald
Company is conducted under the provisions of the St. Louis Agency Agreement. For
many years, the Post-Dispatch was the afternoon and Sunday newspaper serving St.
Louis, and the Globe-Democrat was the morning paper and also published a weekend
edition. Although separately owned, from 1961 through February 1984, the
publication of both the Post-Dispatch and the Globe-Democrat was governed by the
St. Louis Agency Agreement. From 1961 to 1979, the two newspapers controlled
their own news, editorial, advertising, circulation, accounting and promotion
departments and Pulitzer managed the production and printing of both newspapers.
In 1979, Pulitzer assumed full responsibility for advertising, circulation,
accounting and promotion for both newspapers. In February 1984, after a number
of years of unfavorable financial results at the St. Louis Agency, the Globe-
Democrat was sold by the Herald Company and the St. Louis Agency Agreement was
revised to eliminate any continuing relationship between the two newspapers and
to permit the repositioning of the daily Post-Dispatch as a morning newspaper.

Following the renegotiation of the St. Louis Agency Agreement at the time
of the sale of the Globe-Democrat, the Herald Company retained the contractual
right to half the profits or losses (as defined) of the operations of the St.
Louis Agency, which from February 1984 forward consisted solely of the
publication of the Post-Dispatch. The St. Louis Agency Agreement generally
provides for the Herald Company to share half the cost of, and to share in a
portion of the proceeds from the sale of, capital assets used in the production
of the Post-Dispatch. Under the St. Louis Agency Agreement, Pulitzer supervises,
manages and performs all activities relating to the day-to-day publication of
the Post-Dispatch and is solely responsible for the news and editorial policies
of the newspaper.

The consolidated financial statements of Pulitzer include all the operating
revenues and expenses of the St. Louis Agency. An agency adjustment is provided
as an operating expense which reflects that portion of the operating income of
the St. Louis Agency allocated to the Herald Company. Under the St. Louis Agency

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Agreement, for fiscal 1997, 1996, 1995, 1994, and 1993, Pulitzer paid the Herald
Company $19,450,000, $13,972,000, $12,502,000, $14,706,000, and $10,660,000,
respectively, for the Herald Company's share of the operating income of the St.
Louis Agency. As a result of such agency adjustment, Pulitzer is, and during the
term of the St. Louis Agency New Pulitzer will continue to be, entitled to half
the profits (as defined) from the operations of the St. Louis Agency, the amount
of which cannot be determined until the end of each fiscal year.

The current term of the St. Louis Agency Agreement runs through December
31, 2034, following which either party may elect to renew the agreement for
successive periods of 30 years each.

Tucson Agency. The Tucson Agency Agreement has, since 1940, governed the
joint operations of the Star and Citizen. For financial reporting purposes, the
operations of the Tucson Agency are reflected in Pulitzer's consolidated
financial statements differently from the operations of the St. Louis Agency.
The consolidated financial statements of Pulitzer include only Pulitzer's share
of the combined revenues, operating expenses and income of the Star and Citizen.
TNI Partners, Inc. ("TNI Partners"), as agent for Pulitzer and Gannett, is
responsible for advertising and circulation, printing and delivery and
collection of all revenues of the Star and the Citizen. The Board of Directors
of TNI Partners presently consists of three directors chosen by Pulitzer and
three chosen by Gannett. Budgetary, personnel and other non-news and editorial
policy matters, such as advertising and circulation policies and rates or
prices, are determined by the Board of Directors of TNI Partners. Each newspaper
is responsible for its own news and editorial content. Revenues and expenses are
recorded by TNI Partners, and the resulting profit is generally split 50-50
between Pulitzer and Gannett. Both partners have certain administrative costs
which are borne separately. As a result of the Tucson Agency, the Star and the
Citizen benefit from increases and can be adversely affected by decreases in
each other's circulation.

The Tucson Agency Agreement runs through June 1, 2015, and contains renewal
provisions for successive periods of 25 years each.

COMPETITION

Pulitzer's publications compete for readership and advertising revenues in
varying degrees with other metropolitan, suburban, neighborhood and national
newspapers and other publications as well as with television, radio, cable,
Internet, online services and other new media technologies, direct mail, yellow
page directories, billboards and other news and advertising media. Competition
for advertising is based upon circulation levels, readership demographics, price
and advertiser results, while competition for circulation is generally based
upon the content, journalistic quality and price of the publication. In St.
Louis and its surrounding suburban communities, the Post-Dispatch's closest
print competition for circulation and advertising revenues includes paid
suburban daily newspapers as well as a chain of community newspapers and
shoppers. These community newspapers and shoppers target selected geographic
markets throughout the St. Louis metropolitan area.

Due to the agency relationship existing in Tucson, the Star and the Citizen
cannot be viewed as competitors for advertising or circulation revenues. The
Star and the Citizen compete primarily against other media and against
Phoenix-area and suburban, neighborhood and national newspapers and other
publications.

EMPLOYEE RELATIONS

The Post-Dispatch has contracts with substantially all of its production
unions, with expiration dates ranging from February 1999 through February 2010.
In addition, the Post-Dispatch has a multi-year contract with the St. Louis
Newspaper Guild which expires in January 2003. All of the Post-Dispatch labor
contracts contain no strike provisions.

TNI Partners' contract with Tucson Graphic Communications Union Local No.
212, covering certain pressroom employees, expired on December 31, 1998. While
negotiating a new contract, the union is operating under the provisions of the
old agreement. Historically, this contract has been renegotiated for a one-year
term each January. Pulitzer expects such a renewal for 1999.

9
<PAGE> 11

RAW MATERIALS

Pulitzer's newspaper operations are significantly impacted by the cost of
newsprint which accounted for approximately 20 percent of the total 1997
operating expenses. During 1997, Pulitzer used approximately 100,900 metric tons
of newsprint in its production process at a total cost of approximately $56.8
million. Consumption at the Post-Dispatch represented approximately 72,600
metric tons of Pulitzer's total newsprint usage in 1997. In the last five years,
Pulitzer's average cost per ton of newsprint has varied from a low of $452 per
metric ton in 1994 to a high of $675 per metric ton in 1995. For the first nine
months of 1998, Pulitzer's average cost for newsprint was approximately $590 per
metric ton, compared to approximately $555 per metric ton in 1997. A price
increase to $615 per metric ton on September 1, 1998 was subsequently rescinded
by all of Pulitzer's newsprint suppliers. As a result, Pulitzer expects its cost
of newsprint for the fourth quarter of 1998 to be in the range of $580 to $590
per metric ton. In the fourth quarter of 1997, Pulitzer's average cost of
newsprint was approximately $585 per metric ton.

The Post-Dispatch obtains the newsprint necessary for its operations from
five separate mills, three of which are located in Canada and two in the United
States. The Post-Dispatch has guaranteed the future supply of certain volume
levels through long-term agreements with two of its newsprint suppliers.
Pulitzer believes that the absence of long-term agreements with the remaining
three newsprint suppliers will not affect Pulitzer's ability to obtain newsprint
at competitive prices.

Pulitzer acquired five newsprint contracts with the purchase of the PCN
Group in 1996. Combined with the tonnage purchased for the Post-Dispatch,
Pulitzer has been able to leverage its pricing power to obtain the best price
available for the PCN Group, and to assure adequate supplies for all locations.

TNI Partners obtains the newsprint necessary for the Tucson Agency's
operations pursuant to an arrangement with Gannett, the owner of the Citizen.
Gannett purchases newsprint on behalf of TNI Partners under various contractual
arrangements and agreements. Newsprint is also purchased on the spot market.

EMPLOYEES

At December 31, 1998, Pulitzer's publishing operations had approximately
2,200 full-time employees. In St. Louis, a majority of the approximately 1,200
full-time employees engaged in publishing are represented by unions. Pulitzer
considers its relationship with its employees to be good.

10
<PAGE> 12

ITEM 2. FINANCIAL INFORMATION.

SELECTED FINANCIAL DATA

Selected Historical Financial Data of Pulitzer. The following table sets
forth selected consolidated historical financial data for each of the five years
in the period ended December 31, 1997 and for the nine-month periods ended
September 30, 1998 and 1997 for Pulitzer. Such data have been derived from, and
should be read in conjunction with, Pulitzer's consolidated financial statements
and notes thereto included in Item 13 of this Registration Statement on Form
10/A. The historical amounts below include the operations of both the publishing
and related new media businesses that will continue as New Pulitzer after the
Spin-off and the Broadcasting Business that will be acquired by Hearst-Argyle
through the Merger.

<TABLE>
<CAPTION>
FOR THE
NINE MONTHS ENDED
OR
AS OF SEPTEMBER 30, FOR THE YEARS ENDED OR AS OF DECEMBER 31,
-------------------- ----------------------------------------------------------
1998 1997 1997 1996(E) 1995(G) 1994(A) 1993(A)(H)
---- ---- ---- ------- ------- ------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED INCOME STATEMENT
DATA:
Operating revenues -- net... $448,888 $428,648 $584,985 $534,088 $472,327 $485,579 $426,985
-------- -------- -------- -------- -------- -------- --------
OPERATING EXPENSES:
Operations.................. 165,980 157,939 214,935 205,885 190,013 191,570 180,998
Selling, general and
administrative............ 144,720 140,447 190,429 172,838 155,996 174,239 163,578
St. Louis Agency
adjustment................ 15,926 14,749 19,450 13,972 12,502 14,706 10,660
Depreciation and
amortization.............. 26,750 27,435 36,454 31,102 27,150 30,486 23,792
-------- -------- -------- -------- -------- -------- --------
Total operating
expenses................ 353,376 340,570 461,268 423,797 385,661 411,001 379,028
-------- -------- -------- -------- -------- -------- --------
Operating income............ 95,512 88,078 123,717 110,291 86,666 74,578 47,957
Interest income............. 3,541 3,476 4,652 4,522 5,203 1,971 1,090
Interest expense............ (10,255) (12,553) (16,081) (13,592) (10,171) (12,009) (9,823)
Gain on sale of
properties(a)............. 2,791
Net other expense(b)........ (1,303) (867) (1,203) (5,449) (2,330) (1,461) (1,011)
-------- -------- -------- -------- -------- -------- --------
Income before provision for
income taxes and
cumulative effects of
changes in accounting
principles................ 87,495 78,134 111,085 95,772 79,368 65,870 38,213
Provision for income
taxes..................... 35,422 31,735 45,057 38,272 30,046 25,960 15,260
-------- -------- -------- -------- -------- -------- --------
Income before cumulative
effects of changes in
accounting principles..... 52,073 46,399 66,028 57,500 49,322 39,910 22,953
Cumulative effects of
changes in accounting
principles, net of
tax(c).................... (719) 360
-------- -------- -------- -------- -------- -------- --------
Net income................ $ 52,073 $ 46,399 $ 66,028 $ 57,500 $ 49,322 $ 39,191 $ 23,313
======== ======== ======== ======== ======== ======== ========
PER SHARE DATA(D)(F):
BASIC EARNINGS PER SHARE OF
STOCK:
Earnings per share before
cumulative effects of
changes in accounting
principles................ $ 2.33 $ 2.10 $ 2.99 $ 2.62 $ 2.26 $ 1.84 $ 1.13
Cumulative effects of
changes in accounting
principles(c)............. (0.03) 0.02
-------- -------- -------- -------- -------- -------- --------
Earnings per share.......... $ 2.33 $ 2.10 $ 2.99 $ 2.62 $ 2.26 $ 1.81 $ 1.15
======== ======== ======== ======== ======== ======== ========
Weighted average number of
shares outstanding........ 22,343 22,088 22,110 21,926 21,800 21,655 20,371
======== ======== ======== ======== ======== ======== ========
</TABLE>

11
<PAGE> 13

- -------------------------

(a) In 1994, the gain on the sale of Pulitzer's Chicago publishing subsidiary
added $1,051 (after tax) to net income ($0.05 per share); the subsidiary's
operating results are included in 1993 and 1994 through the sale on December
22, 1994.

(b) In 1996, a joint venture investment of $2,700 was written off resulting in
an after-tax charge of $1,600 or $0.07 per share.

(c) Effective January 1, 1994, Pulitzer adopted the provisions of Statement of
Financial Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits." Effective January 1, 1993, Pulitzer adopted the
provisions of Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," which recalculated deferred income taxes at
the lower 34% federal statutory rate as opposed to the higher tax rates
which were in effect when the deferred income taxes originated.

(d) In 1996, shares outstanding, dividends per share and earnings per share were
adjusted for 1996 and restated for 1995, 1994 and 1993 to reflect the impact
of a four-for-three stock split (payable in the form of a 33 1/3% Pulitzer
common stock and Pulitzer Class B common stock dividend) declared by
Pulitzer on September 12, 1996.

(e) The year 1996 included a partial year of operation of Scripps League
Newspapers, Inc. (subsequently renamed Pulitzer Community Newspapers, Inc.)
following its acquisition on July 1, 1996.

(f) In 1994, shares outstanding, dividends per share and earnings per share were
adjusted for 1994 and restated for 1993 to reflect the impact of a
five-for-four stock split (payable in the form of a 25% Pulitzer common
stock and Pulitzer Class B common stock dividend) declared by Pulitzer on
January 4, 1995.

(g) Pulitzer's fiscal year ends on the last Sunday of the calendar year, which
in 1995 resulted in a 53-week year.

(h) The year 1993 included a partial year of operations for WESH-TV and KCCI-TV,
acquired on June 30, 1993 and September 9, 1993, respectively.

Unaudited Pro Forma Condensed Consolidated Financial Statements. The
following unaudited pro forma condensed statement of consolidated financial
position as of September 30, 1998 and the unaudited pro forma condensed
statements of consolidated income for the nine months ended September 30, 1998
and for the year ended December 31, 1997 give effect to the Spin-off, the Merger
and related transactions described in this Registration Statement on Form 10/A.
See "Item 1 -- Business -- Introduction". The pro forma

12
<PAGE> 14

condensed statement of consolidated financial position is presented as if the
Spin-off, the Merger and related transactions had occurred on September 30,
1998, and the pro forma condensed statements of consolidated income are
presented as if the Spin-off, the Merger and related transactions had occurred
as of the beginning of the periods presented. The "Pulitzer As Adjusted" amounts
show the effects on reported results of operations and financial position of
Pulitzer assuming the proposed Spin-off and Merger were consummated, and, as a
result, the Broadcasting Business was presented as discontinued operations.
These financial statements are presented on a pro forma basis pending the
occurrence of the event that would establish the measurement date for treatment
of the Broadcasting Business as discontinued operations, namely the approval of
the Spin-off, Merger and related stockholder proposals by Pulitzer's
stockholders. The pro forma information is presented for illustrative purposes
only and may not be indicative of the results that would have been obtained had
the Spin-off, the Merger and related transactions actually occurred on the dates
assumed nor is it necessarily indicative of the future consolidated results of
operations.

Several of the pro forma adjustments included herein are computed based
upon the closing share prices for Pulitzer's common stock and, in one
adjustment, Hearst-Argyle's Series A common stock. Depending on the share prices
of Pulitzer's common stock and Hearst-Argyle's Series A common stock near and/or
on the dates of the Spin-off and Merger, the actual amounts may differ
significantly from the pro forma adjustments. Disclosures are included in each
of the notes to these pro forma adjustments to provide a range of possible
results for changes in the share prices of Pulitzer's common stock and
Hearst-Argyle's Series A common stock.

The unaudited pro forma condensed consolidated financial statements should
be read in conjunction with the historical consolidated financial statements and
the related notes thereto of Pulitzer, included in Item 13 of this Registration
Statement on Form 10/A.

13
<PAGE> 15

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED STATEMENT OF

CONSOLIDATED FINANCIAL POSITION

AS OF SEPTEMBER 30, 1998

(IN THOUSANDS)

<TABLE>
<CAPTION>
PRO FORMA
---------------------------------------------------
DIVESTITURE OF
PULITZER ADDITIONS PULITZER
HISTORICAL (DEDUCTIONS) BROADCASTING(J) NEW PULITZER
---------- ------------ --------------- ------------
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents.................... $ 107,291 $ 700,000(a) $ (7,625)(k) $526,109
(174,793)(b)
(21,800)(b)
(33,600)(c)
5,000(d)
0(e)
(40,369)(f)
(7,995)(g)
Accounts receivable -- net................... 78,663 -- (41,770)(k) 36,893
Other........................................ 21,474 -- (11,688)(k) 9,786
--------- --------- --------- --------
Total Current Assets....................... 207,428 426,443 (61,083) 572,788
--------- --------- --------- --------
Properties -- net.............................. 163,663 -- (82,806) 80,857
Intangibles -- net............................. 277,148 -- (96,744) 180,404
Receivable from The Herald Company............. 37,339 -- -- 37,339
Other assets................................... 29,308 (3,400)(c) (2,756) 49,004
(5,000)(d)
30,852(h)
--------- --------- --------- --------
Total Assets............................... $ 714,886 $ 448,895 $(243,389) $920,392
========= ========= ========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt.............. $ 12,705 $ (12,705)(b) $ -- $ --
Interest payable............................... 2,088 (2,088)(b) -- --
Other.......................................... 57,754 -- (20,083)(k) 37,671
--------- --------- --------- --------
Total Current Liabilities.................. 72,547 (14,793) (20,083) 37,671
--------- --------- --------- --------
Long-term Debt................................. 160,000 700,000(a) (700,000) --
(160,000)(b)
Postretirement and Postemployment
Benefit Obligations.......................... 91,495 -- (2,711) 88,784
Other Long-term Liabilities.................... 34,906 4,838(f) (9,134) 34,715
4,105(g)
Commitments and contingencies(l)............... --
Stockholders' Equity:
Common stock................................. 71 -- -- 71
Class B common stock......................... 271 (117)(i) -- 154
Additional paid-in capital................... 142,077 (37,000)(c) 488,539 405,760
0(e)
(187,856)(i)
Retained earnings.............................. 401,492 (21,800)(b) -- 353,237
(45,207)(f)
(12,100)(g)
30,852(h)
Treasury stock................................. (187,973) 187,973(i) -- --
--------- --------- --------- --------
Total Stockholders' Equity................. 355,938 (85,255) 488,539 759,222
--------- --------- --------- --------
Total Liabilities and Equity............... $ 714,886 $ 448,895 $(243,389) $920,392
========= ========= ========= ========
</TABLE>

See Notes to Unaudited Pro Forma Condensed Statement of

Consolidated Financial Position on the following pages.

14
<PAGE> 16

NOTES TO UNAUDITED PRO FORMA CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL
POSITION

(a) To record the borrowing of $700 million of new debt by Pulitzer. This new
debt will be assumed by Hearst-Argyle in the Merger.

(b) To record the prepayment of Pulitzer's existing debt ($172.7 million) and
related interest payable ($2.1 million). In connection with the debt
prepayment, a prepayment penalty based on current interest rates and
remaining years to maturity will be payable to the lender. For purposes of
this pro forma, a prepayment penalty of $21.8 million was computed assuming
a prepayment date of December 31, 1998. This will be reflected as an
extraordinary charge in Pulitzer's financial statements in the period
incurred. The actual prepayment penalty may be higher or lower depending
primarily on interest rate levels on the date of the debt prepayment.

(c) To record the payment of estimated professional fees of $37 million related
to the Spin-off and Merger. These fees will be recorded as a reduction in
the contribution to New Pulitzer at the time of the Spin-off and Merger. As
of September 30, 1998, approximately $3.4 million of fees had been paid and
recorded as a deferred charge in "Other Assets."

(d) To record Hearst-Argyle's acquisition, separate from the Merger, of
Pulitzer's investment in the Arizona Diamondbacks Major League Baseball
franchise for $5 million.

(e) To the extent a gain is generated by the Spin-off and Merger, a
corporate-level income tax ("Spin-off Tax") will be due. The gain is
measured by the excess, if any, of the fair market value of the New Pulitzer
Stock distributed by Pulitzer to its stockholders in the Spin-off over
Pulitzer's adjusted tax basis in such New Pulitzer Stock immediately prior
to the distribution. For purposes of this pro forma, the fair market value
of the New Pulitzer Stock was estimated as the difference between the
closing price of Pulitzer's common stock on December 31, 1998 ($86.63) and
an estimate of the fair market value for the Broadcasting Business of $54.32
per share. The fair market value for the Broadcasting Business was estimated
based upon the fixed number of shares of Hearst-Argyle's Series A common
stock (37,096,774 shares) that will be exchanged for Pulitzer's common stock
and Class B common stock (22,536,412 shares at December 31, 1998) and the
closing price of Hearst-Argyle's Series A common stock on December 31, 1998
($33.00) (i.e., 37,096,774 shares multiplied by $33.00 per share divided by
22,536,412 shares equals $54.32). Using a fair market value of $32.31 (the
excess of $86.63 over $54.32) per common share for the New Pulitzer Stock,
no gain (or tax) would result from the Spin-off and the Merger because the
adjusted tax basis of the New Pulitzer Stock would be approximately $34.20
per share.

15
<PAGE> 17

The following table illustrates the calculation of several Spin-off Tax
estimates under various common stock closing prices for Pulitzer and
Hearst-Argyle:

<TABLE>
<CAPTION>
FOR THE MONTH ENDED DECEMBER 31,
1998
AS OF --------------------------------
JANUARY 19, 1999 HIGH LOW
---------------- ---- ---
<S> <C> <C> <C>
Closing price of Pulitzer's common stock.... $ 85.19 $ 86.63 $ 76.63
-------------- -------------- ------------
Estimated fair market value for Broadcasting
Business:
Hearst-Argyle shares to be exchanged for
Pulitzer shares........................ 37,096,774 37,096,774 37,096,774
Closing price of Hearst-Argyle common
stock.................................. $ 30.94 $ 33.00 $ 24.38
-------------- -------------- ------------
Estimated fair market value............... $1,147,774,188 $1,224,193,542 $904,419,350
Divide by the number of shares of Pulitzer
common stock outstanding on December
31, 1998............................... 22,536,412 22,536,412 22,536,412
-------------- -------------- ------------
Estimated fair market value per share for
Broadcasting Business.................. $ 50.93 $ 54.32 $ 40.13
-------------- -------------- ------------
Estimated fair market value per share for
New Pulitzer Stock........................ $ 34.26 $ 32.31 $ 36.50
Estimated tax basis per share for New
Pulitzer Stock............................ $ 34.25 $ 34.20 $ 34.52
-------------- -------------- ------------
Estimated gain (loss) per share from
Spin-off.................................. $ 0.01 $ (1.89) $ 1.98
Estimated number of shares of New Pulitzer
Stock at the time of the Spin-off (based
upon the number of shares of Pulitzer's
common stock outstanding on December 31,
1998)..................................... 22,536,412 22,536,412 22,536,412
-------------- -------------- ------------
Estimated gain (loss) from Spin-off......... $ 225,364 $ (42,593,819) $ 44,622,096
Estimated U.S. federal and state income tax
rate...................................... 39% 39% 39%
-------------- -------------- ------------
Estimated Spin-off Tax...................... $ 87,892 N/A $ 17,402,617
============== ============== ============
</TABLE>

The above amounts are estimates provided to show the range of possible
results based upon historical price per share data for Pulitzer and
Hearst-Argyle. The actual gain and related income tax will depend on the
fair market value of, and Pulitzer's adjusted tax basis in, the New
Pulitzer Stock at the time of the Spin-off.

(f) To record the redemption of all outstanding stock options, whether or not
vested, at the time of the Merger. The cash-out value ("Cash-out Value")
will be equal to the difference between the option exercise price and the
average daily closing price of Pulitzer's common stock for the 10 trading
days immediately prior to the date of the Merger (the "Cash-Out Measurement
Period"). The pro forma adjustment was computed using data as of December
31, 1998 including 876,873 options outstanding, a weighted average exercise
price of $35.07 and a closing price of $86.63 for Pulitzer's common stock.
Payment of approximately $4.8 million of the approximate total $45.2 million
cash-out value will be deferred and has been recorded in "Other Long-term
Liabilities." Based upon the number of options

16
<PAGE> 18

outstanding on December 31, 1998, for every $1.00 change in the Cash-out
Value, the total cash-out value of all outstanding stock options will change
by approximately $877,000. The actual cash-out value may be higher or lower
depending on the closing price of Pulitzer's common stock over the Cash-Out
Measurement Period and the number of shares of Pulitzer's common stock
underlying stock options then outstanding.

(g) To record management bonuses related to the Merger. The pro forma adjustment
includes both fixed payments (approximately $9.9 million) that are
contractually due upon the closing of the Merger and discretionary payments
(approximately $2.2 million) that may be awarded by the Compensation
Committee of Pulitzer's Board of Directors. Payment of approximately $4.1
million of the total $12.1 million pro forma adjustment will be deferred and
has been recorded in "Other Long-term Liabilities."

(h) To record changes in deferred tax assets, assuming a U.S. federal and state
income tax rate of 39%, due to the impact of the following adjustments:

Prepayment penalty (note
(b)) $21,800

Stock option cash-out (note
(f)) 45,207

Management bonuses (note
(g)) 12,100

(i) To record the elimination of Pulitzer's common stock and Class B common
stock held in treasury, as such shares will be cancelled without the payment
of consideration therefor in connection with the Spin-off.

(j) To record the divestiture of the net liabilities of the Broadcasting
Business, including the new debt of $700 million which will be assumed by
Hearst-Argyle and the working capital adjustment related to the Merger (see
note (k) below).

(k) To record the estimated working capital adjustment related to the Merger.
Pursuant to the Merger Agreement, a cash payment is required by either
Hearst-Argyle or Pulitzer for the difference between $41 million and the
working capital balance of the Broadcasting Business on the date of the
Merger. Based upon the Broadcasting Business' working capital balance of
approximately $33.4 million as of September 30, 1998, a payment of
approximately $7.6 million would be due Hearst-Argyle from Pulitzer. The
actual working capital adjustment may be higher or lower depending on the
Broadcasting Business' working capital balance on the date of the Merger.
For tax purposes, a payment by either Pulitzer or Hearst-Argyle to the other
will be treated as having been made immediately prior to the Spin-off and
thus may reduce or increase Pulitzer's taxable gain upon the Spin-off (see
note (e) above).

(l)In connection with the September 1986 purchase of Pulitzer's Class B common
stock from certain selling stockholders (the "1986 Selling Stockholders"),
Pulitzer agreed, under certain circumstances, to make an additional payment
to the 1986 Selling Stockholders in the event of a Gross-Up Transaction (as
defined herein). A "Gross-Up Transaction" was defined to mean, among other
transactions, (i) any merger, in any transaction or series of related
transactions, of more than 85% of the voting securities or equity of Pulitzer
pursuant to which holders of Pulitzer's common stock receive securities other
than Pulitzer common stock and (ii) any recapitalization, dividend or
distribution, or series of related recapitalizations, dividends or
distributions, in which holders of Pulitzer's common stock receive securities
(other than Pulitzer common stock) having a Fair Market Value (as defined
herein) of not less than 33 1/3% of the Fair Market Value of the shares of
Pulitzer common stock immediately prior to such transaction. The amount of
the additional payment, if any, would equal (x) the product of (i) the amount
by which the Transaction Proceeds (as defined herein) exceeds the Imputed
Value (as defined herein) multiplied by (ii) the applicable percentage (i.e.,
50% for the period from May 13, 1996 through May 12, 2001) multiplied by
(iii) the number of shares of Pulitzer common stock issuable upon conversion
of the shares of Pulitzer Class B common stock owned by the 1986 Selling
Stockholders, adjusted for, among other things, stock dividends and stock
splits; less (y) the sum of any additional payments previously received by
the 1986 Selling Stockholders; provided, however, that in the event of any
recapitalization, dividend or distribution, the amount by which the
Transaction Proceeds exceeds the Imputed Value shall not exceed the amount
paid or distributed pursuant to such recapitalization, dividend or
distribution in respect of one share of Pulitzer common stock. The term
"Transaction Proceeds" was defined to mean, in the case of a merger, the
aggregate Fair Market Value (as defined herein) of the consideration received

17
<PAGE> 19

pursuant thereto by the holder of one share of Pulitzer common stock, and, in
the case of a recapitalization, dividend or distribution, the aggregate Fair
Market Value of the amounts paid or distributed in respect of one share of
Pulitzer common stock plus the aggregate Fair Market Value of one share of
Pulitzer common stock following such transaction. The "Imputed Value" for one
share of Pulitzer common stock on a given date was defined to mean an amount
equal to $28.82 compounded annually from May 12, 1986 to such given date at
the rate of 15% per annum, the result of which is $154.19 at May 12, 1998.
There was no specific provision for adjustment of the $28.82 amount, but if
it were adjusted to reflect all stock dividends and stock splits of Pulitzer
since September 30, 1986, it would now equal $15.72, which if compounded
annually from May 12, 1986 at the rate of 15% per annum would now equal
$84.11. "Fair Market Value," in the case of any consideration other than cash
received in a Gross-Up Transaction, was defined to mean the fair market value
thereof as agreed to by a valuation firm selected by Pulitzer and a valuation
firm selected by the 1986 Selling Stockholders, or, if the two valuation
firms do not agree on the fair market value, the fair market value of such
consideration as determined by a third valuation firm chosen by the two
previously selected valuation firms. Any such agreement or determination
shall be final and binding on the parties. As a result of the foregoing, the
amount of additional payments, if any, that may be payable by New Pulitzer
with respect to the Merger and the distribution of New Pulitzer Stock in the
Spin-off (the "Distribution") cannot be determined at this time. However, if
the Distribution were determined to be a Gross-Up Transaction and if the Fair
Market Value of the Transaction Proceeds with respect to the Merger and the
Distribution were determined to exceed the Imputed Value, then the additional
payments to the 1986 Selling Stockholders would equal approximately $5.9
million for each $1.00 by which the Transaction Proceeds exceed the Imputed
Value. Accordingly, depending on the ultimate resolution of the meaning and
application of various provisions of the Gross-Up Transaction agreements,
including the determination of Imputed Value and Fair Market Value of the
Transaction Proceeds, in the opinion of Pulitzer's management, the amount of
an additional payment, if any, could be material to the consolidated
financial statements of Pulitzer.

The following table illustrates the calculation of potential additional
payments under the Gross-up Transaction agreements, assuming, among other
things, a determination of a Gross-up Transaction, an Imputed Value of
$84.11 and a Fair Market Value of Transaction Proceeds of various amounts
above and below $84.11.

18
<PAGE> 20

<TABLE>
<CAPTION>
FOR THE PERIOD MAY 25, 1998
FOR THE MONTH ENDED (DATE OF MERGER PRESS RELEASE)
DECEMBER 31, 1998 THROUGH DECEMBER 31, 1998
---------------------------- ------------------------------
HIGH LOW HIGH LOW
---- --- ---- ---
<S> <C> <C> <C> <C>
Fair Market Value of Transaction
Proceeds (using high and low
closing prices of Pulitzer's
common stock)................... $ 86.63 $ 76.63 $ 89.25 $ 64.94
Less Imputed Value (assumes
adjustment to reflect stock
dividends and stock splits since
1986)........................... $ 84.11 $ 84.11 $ 84.11 $ 84.11
----------- ----------- ----------- -----------
Transaction Proceeds in excess of
Imputed Value................... $ 2.52 n/a $ 5.14 n/a
Multiply by applicable
percentage...................... 50% 50% 50% 50%
Multiply by the number of shares
of Pulitzer's common stock
issuable upon conversion of the
shares of Pulitzer's Class B
common stock owned by the 1986
Selling Stockholders, adjusted
for stock dividends and stock
splits since 1986............... 11,700,850 11,700,850 11,700,850 11,700,850
----------- ----------- ----------- -----------
Additional payment to the 1986
Selling Stockholders............ $14,743,071 $ 0 $30,071,185 $ 0
=========== =========== =========== ===========
</TABLE>

If the Imputed Value is determined to be $154.19 instead of $84.11, no
additional payment to the 1986 Selling Stockholders would be required under
any of the above calculations.

19
<PAGE> 21

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED STATEMENT OF CONSOLIDATED INCOME

YEAR ENDED DECEMBER 31, 1997

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
------------------------------------------------------------------- ------------------------
DISCONTINUED OPERATIONS(A)
----------------------------------------
PULITZER ADDITIONS PULITZER ADDITIONS NEW
PULITZER BROADCASTING (DEDUCTIONS) SUBTOTAL AS ADJUSTED (DEDUCTIONS) PULITZER
-------- ------------ ------------ -------- ----------- ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Operating revenues -- net..... $584,985 $227,016 $227,016 $357,969 $357,969
Operating expenses:
Operations.................. 214,935 69,205 69,205 145,730 145,730
Selling, general and
administrative............ 190,429 55,885 (3,701)(b) 52,184 138,245 45,207(c) 195,552
12,100(d)
St. Louis Agency
adjustment................ 19,450 -- -- 19,450 19,450
Depreciation and
amortization.............. 36,454 23,447 23,447 13,007 13,007
-------- -------- ------ -------- -------- -------- --------
Total operating
expenses.............. 461,268 148,537 (3,701) 144,836 316,432 57,307 373,739
-------- -------- ------ -------- -------- -------- --------
Operating income.............. 123,717 78,479 3,701 82,180 41,537 (57,307) (15,770)
Interest income............... 4,652 10 10 4,642 4,642
Interest expense.............. (16,081) (16,081) (16,081) -- --
Net other expense............. (1,203) -- (1,203) (1,203)
-------- -------- ------ -------- -------- -------- --------
Income from continuing
operations before provision
for income taxes............ 111,085 62,408 3,701 66,109 44,976 (57,307) (12,331)
Provision for income taxes
(benefits).................. 45,057 24,387 1,444(e) 25,831 19,226 (22,350)(e) (3,124)
-------- -------- ------ -------- -------- -------- --------
Income from continuing
operations.................. 66,028 38,021 2,257 40,278 25,750 (34,957) (9,207)
Income from discontinued
operations.................. -- 40,278 (40,278)
-------- -------- -------- --------
Net income (loss)............. $ 66,028 $ 66,028 $(75,235) $ (9,207)
======== ======== ======== ========
Basic earnings per share of
stock:
Income from continuing
operations................ $ 2.99 $ 1.17 $ (0.42)
Income from discontinued
operations................ -- 1.82 --
-------- -------- --------
Earnings (loss) per share... $ 2.99 $ 2.99 $ (0.42)
======== ======== ========
Weighted average number of
shares outstanding........ 22,110 22,110 22,110
======== ======== ========
Diluted earnings per share of
stock:
Income from continuing
operations................ $ 2.94 $ 1.15 $ (0.41)
Income from discontinued
operations................ -- 1.79 --
-------- -------- --------
Earnings (loss) per share... $ 2.94 $ 2.94 $ (0.41)
======== ======== ========
Weighted average number of
shares outstanding........ 22,452 22,452 22,452
======== ======== ========
</TABLE>

See Notes to Unaudited Pro Forma Condensed Statements of

Consolidated Income on the following pages.

20
<PAGE> 22

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED STATEMENT OF CONSOLIDATED INCOME

NINE MONTHS ENDED SEPTEMBER 30, 1998

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
--------------------------------------------------------------------- --------------------------
DISCONTINUED OPERATIONS(A)
------------------------------------------
PULITZER ADDITIONS PULITZER ADDITIONS NEW
PULITZER BROADCASTING (DEDUCTIONS) SUBTOTAL AS ADJUSTED (DEDUCTIONS) PULITZER
-------- ------------ ------------ -------- ----------- ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Operating
revenues -- net......... $448,888 $173,681 $173,681 $275,207 $275,207
Operating expenses:
Operations.............. 165,980 54,313 54,313 111,667 111,667
Selling, general and
administrative........ 144,720 41,633 (2,863)(b) 38,770 105,950 45,207(c) 163,257
12,100(d)
St. Louis Agency
adjustment............ 15,926 -- -- 15,926 15,926
Depreciation and
amortization.......... 26,750 16,512 16,512 10,238 10,238
-------- -------- ------ -------- -------- -------- --------
Total operating
expenses............ 353,376 112,458 (2,863) 109,595 243,781 57,307 301,088
-------- -------- ------ -------- -------- -------- --------
Operating income.......... 95,512 61,223 2,863 64,086 31,426 (57,307) (25,881)
Interest income........... 3,541 11 11 3,530 3,530
Interest expense.......... (10,255) (10,255) (10,255) -- --
Net other expense......... (1,303) -- -- (1,303) (1,303)
-------- -------- ------ -------- -------- -------- --------
Income from continuing
operations before
provision for income
taxes................... 87,495 50,979 2,863 53,842 33,653 (57,307) (23,654)
Provision for income taxes
(benefits).............. 35,422 19,918 1,117(e) 21,035 14,387 (22,350)(e) (7,963)
-------- -------- ------ -------- -------- -------- --------
Income from continuing
operations.............. 52,073 31,061 1,746 32,807 19,266 (34,957) (15,691)
Income from discontinued
operations.............. -- 32,807 (32,807) --
-------- -------- -------- --------
Net income (loss)......... $ 52,073 $ 52,073 $(67,764) $(15,691)
======== ======== ======== ========
Basic earnings per share
of stock:
Income from continuing
operations............ $ 2.33 $ 0.86 $ (0.70)
Income from discontinued
operations............ -- 1.47 --
-------- -------- --------
Earnings (loss) per
share................. $ 2.33 $ 2.33 $ (0.70)
======== ======== ========
Weighted average number
of shares
outstanding........... 22,343 22,343 22,343
======== ======== ========
Diluted earnings per share
of stock:
Income from continuing
operations............ $ 2.29 $ 0.85 $ (0.69)
Income from discontinued
operations............ -- 1.44 --
-------- -------- --------
Earnings (loss) per
share................. $ 2.29 $ 2.29 $ (0.69)
======== ======== ========
Weighted average number
of shares
outstanding........... 22,726 22,726 22,726
======== ======== ========
</TABLE>

See Notes to Unaudited Pro Forma Condensed Statements of

Consolidated Income on the following pages.

21
<PAGE> 23

NOTES TO UNAUDITED PRO FORMA CONDENSED STATEMENTS OF CONSOLIDATED INCOME:

- -------------------------

(a) The "Discontinued Operations" columns in the unaudited pro forma condensed
statements of consolidated income represent the historical results of
operations of the Broadcasting Business and the effects of certain
adjustments, which are reasonable in the opinion of Pulitzer's management,
to properly present such results as discontinued operations.

(b) To reverse the historical allocation of Pulitzer general corporate expense
because such amounts will no longer be allocated after the Spin-off and
Merger. For purposes of the historical Broadcasting Business financial
statements, the allocation was computed using a formula that considered
revenues, payroll expense and operating profits of the Broadcasting
Business.

(c) To record the redemption of all outstanding stock options, whether or not
vested, at the time of the Merger. The Cash-out Value will be equal to the
difference between the option exercise price and the average daily closing
price of Pulitzer's common stock during the Cash-Out Measurement Period. The
pro forma adjustment was computed using data as of December 31, 1998
including 876,873 options outstanding, a weighted average exercise price of
$35.07 and a closing price of $86.63 for Pulitzer's common stock. Based upon
the number of options outstanding on December 31, 1998, for every $1.00
change in the Cash-out Value, the total cash-out value of all outstanding
stock options will change by approximately $877,000. The actual cash-out
value may be higher or lower depending on the closing price of Pulitzer's
common stock over the Cash-Out Measurement Period and the number of shares
of Pulitzer's common stock underlying stock options then outstanding.

(d) To record management bonuses related to the Merger. The pro forma adjustment
includes both fixed payments (approximately $9.9 million) that are
contractually due upon the closing of the Merger and discretionary payments
(approximately $2.2 million) that may be awarded by the Compensation
Committee of Pulitzer's Board of Directors.

(e) To record the income tax provision (benefit), assuming a U.S. federal and
state income tax rate of 39%, due to the impact of the adjustments included
herein.

22
<PAGE> 24

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Statements in this Registration Statement on Form 10/A concerning New
Pulitzer's business outlook or future economic performance; anticipated
profitability, revenues, expenses or other financial items, together with other
statements that are not historical facts, are forward-looking statements.
Forward-looking statements are subject to risks, uncertainties and other factors
which could cause actual results to differ materially from those stated in such
statements. Such risks, uncertainties and factors include, but are not limited
to, industry cyclicality, the seasonal nature of the business, changes in
pricing or other actions by competitors or suppliers, and general economic
conditions, as well as other risks detailed in either Pulitzer's or New
Pulitzer's filings with the Securities and Exchange Commission including this
Registration Statement on Form 10/A.

GENERAL

Pulitzer's operating revenues are significantly influenced by a number of
factors, including overall advertising expenditures, the appeal of newspapers in
comparison to other forms of advertising, the performance of Pulitzer in
comparison to its competitors in specific markets, the strength of the national
economy and general economic conditions and population growth in the markets
served by Pulitzer.

Pulitzer's business tends to be seasonal, with peak revenues and profits
generally occurring in the fourth and, to a lesser extent, second quarters of
each year as a result of increased advertising activity during the Christmas and
spring holiday periods. The first quarter is historically the weakest quarter
for revenues and profits.

RECENT EVENTS

As of May 25, 1998, Pulitzer, New Pulitzer, and Hearst-Argyle entered into
the Merger Agreement pursuant to which Hearst-Argyle will acquire the
Broadcasting Business in exchange for the issuance to Pulitzer's stockholders of
37,096,774 shares of Hearst-Argyle's Series A common stock. The Merger is
subject to the satisfaction or waiver of certain closing conditions enumerated
in the Merger Agreement. Pulitzer's newspaper publishing and related new media
businesses will continue as New Pulitzer, which will be distributed in the
Spin-off prior to the Merger.

Pulitzer's historical basis in its non-broadcasting assets and liabilities
will be carried over to New Pulitzer. The Merger, the Spin-off and the related
transactions will be recorded as a reverse-spin transaction, and, accordingly,
New Pulitzer's results of operations for periods reported prior to the
consummation of the Merger, the Spin-off and related transactions will represent
the historical results of operations previously reported by Pulitzer. (See Note
2 to the Consolidated Financial Statements included in Item 13 of this
Registration Statement on Form 10/A.)

As discussed in the notes to the consolidated financial statements included
in Item 13 of this Registration Statement on Form 10/A, Pulitzer's consolidated
financial statements have been restated to reflect the Broadcasting Business,
which had previously been reported as discontinued operations, as a part of
Pulitzer's continuing operations. Such restatement results in the
reclassification of amounts related to the Broadcasting Business previously
reflected as discontinued operations in the consolidated financial statements
but does not change Pulitzer's previously reported amounts for consolidated net
income, total earnings per share and stockholders' equity.

NINE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED WITH 1997

Consolidated

Operating revenues for the first nine months of 1998 increased 4.7 percent
compared to the corresponding period in the prior year. The increase included
gains in both publishing and broadcasting revenues.

23
<PAGE> 25

Operating expenses, excluding the St. Louis Agency adjustment, for the
first nine months of 1998 increased 3.6 percent compared to the corresponding
period in the prior year. The higher expenses in 1998 reflected increases in
overall personnel costs of $7.4 million and newsprint costs of $2.6 million.

Operating income for the first nine months of 1998 increased 8.4 percent to
$95.5 million. The increase reflected the current year revenue gains in both the
publishing and broadcasting segments.

Interest expense declined $2.3 million in the first nine months due to a
lower average debt level. Pulitzer's average debt level for first nine months of
1998 decreased to $182.6 million from $229.6 million in the prior year.
Pulitzer's average interest rate for first nine months of 1998 increased to 7.5
percent from 7.3 percent in the prior year period. The lower average debt level
and higher average interest rate in 1998 reflected the payment of variable rate
credit agreement borrowings during the last three quarters of 1997.

Interest income for the first nine months of 1998 increased $65,000 (1.9
percent), due to a higher average balance of invested funds in the current year.

Net other expense for the first nine months of 1998 increased $436,000 due
to a one-time charge of $869,000 related to the sale of the Haverhill Gazette on
June 1, 1998. The sale charge was partially offset by current year capital gains
related to limited partnership investments.

The effective income tax rate for the first nine months of 1998 was 40.5
percent compared to 40.6 percent in the prior year. Pulitzer expects that its
effective tax rate will be in the 40 to 41 percent range for the full year of
1998 (exclusive of any non-recurring items related to the Spin-off and Merger).

Net income for the first nine months of 1998 increased 12.2 percent to
$52.1 million, or $2.29 per diluted share, compared with $46.4 million, or $2.07
per diluted share, a year ago. The gain reflected increased operating profits
for both publishing and broadcasting, higher interest income and lower interest
expense in the current year period.

Publishing

Operating revenues for the first nine months of 1998 increased 4.4 percent
compared to the prior year. The gain primarily reflected higher advertising
revenues.

Newspaper advertising revenues increased $10 million (5.9 percent) in the
first nine months of 1998 compared to the corresponding period in the prior
year. The current year increase resulted from advertising gains at the
Post-Dispatch, the Star and the PCN Group. In general, the current year
advertising gains reflected higher advertising rates at all newspaper properties
and increases in advertising volume at the Star. For the first nine months of
1998, full run advertising volume (linage in inches) increased 0.3 percent at
the Post-Dispatch and 4 percent at the Star. In the fourth quarter of 1997 and
the first quarter of 1998, varying rate increases were implemented at the
Post-Dispatch, the Star and most of the PCN Group properties.

Circulation revenues increased $432,000 (0.7 percent) in the first nine
months of 1998. The year-to-date increase resulted primarily from gains at the
PCN Group properties during the first half of 1998.

Other publishing revenues increased $1.1 million (3.8 percent) in the first
nine months of 1998. The increase for the nine-month period resulted primarily
from higher preprint revenues and Internet subscriber fees.

Operating expenses (including selling, general and administrative expenses,
and depreciation and amortization), excluding the St. Louis Agency adjustment,
for the first nine months of 1998 increased 4.8 percent compared to the
corresponding period in the prior year. The year-to-date increase reflected
higher overall personnel costs ($4.4 million) and higher newsprint costs ($2.6
million).

Operating income in the first nine months of 1998 increased 0.6 percent to
$35.4 million. The increase reflected the current year revenue gains.

Fluctuations in the price of newsprint significantly impact the results of
Pulitzer's newspaper operations, where newsprint expense accounts for
approximately 20 percent of total operating costs. For the first

24
<PAGE> 26

nine months of 1998, Pulitzer's average cost for newsprint was approximately
$590 per metric ton, compared to approximately $555 per metric ton in 1997. A
price increase to $615 per metric ton on September 1, 1998 was subsequently
rescinded by all of the Company's newsprint suppliers. As a result, the Company
expects its cost of newsprint for the fourth quarter of 1998 to be in the range
of $580 to $590 per metric ton. In the fourth quarter of 1997, Pulitzer's
average cost of newsprint was approximately $585 per metric ton.

Broadcasting

Broadcasting operating revenues for the first nine months of 1998 increased
5.3 percent over the comparable 1997 period. Local and national spot advertising
increased 5.6 percent and 5.8 percent, respectively, for the first nine months
of 1998. The current year comparison reflected the impact of increased political
advertising of approximately $6.6 million in the first nine months of 1998.

Broadcasting operating expenses (including selling, general and
administrative expenses and depreciation and amortization) for the first nine
months of 1998 increased to $109.6 million (1.6 percent) compared to the prior
year period. The increase for the 1998 nine-month period was primarily
attributable to higher overall personnel costs of $2.9 million which were
partially offset by declines in depreciation and amortization expense of $1.1
million and promotion costs of $436,000.

Broadcasting operating income in the first nine months of 1998 increased
12.2 percent to $64.1 million. The increase reflected the higher advertising
revenues in the current year.

1997 COMPARED WITH 1996

Consolidated

Operating revenues for the year ended December 31, 1997 increased 9.5
percent to $585 million from $534.1 million in 1996. The revenue comparison was
affected by the acquisition of Scripps League Newspapers, Inc. ("Scripps League"
which was subsequently renamed Pulitzer Community Newspapers, Inc.) on July 1,
1996. On a comparable basis, excluding the PCN Group from the first six months
of 1997, consolidated revenues increased 3.2 percent. The increase reflected
gains in both publishing and broadcasting revenues.

Operating expenses, excluding the St. Louis Agency adjustment, were $441.8
million compared to $409.8 million in 1996, an increase of 7.8 percent. Prior
year operating expenses included approximately $1.8 million of non-recurring
costs related to the acquisition of Scripps League. On a comparable basis,
excluding the PCN Group from the first six months of 1997 and the non-recurring
costs from 1996, operating expenses increased 1.4 percent. Major increases in
comparable expenses were overall personnel costs of $10.9 million, circulation
distribution expenses of $1.5 million and promotion expenses of $1.3 million.
Partially offsetting these increases were declines in newsprint expense of $6
million and purchased supplements of $3.1 million.

Operating income for fiscal 1997 increased 12.2 percent to $123.7 million
from $110.3 million in 1996. On a comparable basis, excluding the PCN Group from
the first six months of 1997 and the non-recurring costs from 1996, operating
income increased 5.6 percent. The 1997 increase reflected improvements in
publishing segment profits.

Interest expense increased $2.5 million in 1997 compared to 1996 due to
higher average debt levels in 1997. Pulitzer's average debt level for 1997
increased to $220 million from $186.9 million in the prior year due to new
long-term borrowings related to the July 1, 1996 acquisition of Scripps League.
Pulitzer's average interest rate for 1997 was unchanged from the prior year's
rate of 7.3 percent.

Net other expense (non-operating) decreased $4.2 million in 1997 compared
to 1996. The decrease resulted from a 1996 non-recurring charge of approximately
$2.7 million for the write-down in value of a joint venture investment and lower
joint venture losses in 1997.

The effective income tax rate for 1997 increased to 40.6 percent from 40
percent in the prior year, due to an additional $2.1 million of nondeductible
goodwill amortization related to the Scripps League acquisition.

25
<PAGE> 27

Pulitzer expects its effective tax rate for 1998 to be similar to its 1997 rate
(exclusive of any non-recurring items related to the Spin-off and Merger).

For the year ended December 31, 1997, Pulitzer reported net income of $66
million, or $2.94 per diluted share, compared with net income of $57.5 million,
or $2.58 per diluted share, in the prior year. Comparability of the earnings
results was affected by the joint venture write-off in 1996 ($1.6 million
after-tax) and non-recurring costs related to the Scripps League acquisition
($1.1 million after-tax) in 1996. Excluding the non-recurring items from 1996,
1997 net income would have increased 9.5 percent to $66 million, or $2.94 per
diluted share, from $60.3 million, or $2.71 per diluted share, for the prior
year. The gain in net income reflected increased publishing profits, resulting
primarily from higher advertising revenue and lower newsprint costs.

Publishing

Operating revenues from Pulitzer's publishing segment for 1997 increased
15.8 percent to $358 million from $309.1 million in 1996. On a comparable basis,
excluding the PCN Group from the first six months of 1997, publishing revenues
increased 4.9 percent. The comparable increase reflected higher advertising
revenues in 1997.

Newspaper advertising revenues, on a comparable basis, increased $13.8
million, or 7.2 percent, in 1997. A significant portion of the current year
increase resulted from higher classified and retail advertising revenue at both
the Post-Dispatch and the Star. Full run advertising volume (linage in inches)
increased 0.4 percent at the Post-Dispatch and 3.8 percent at the Star for 1997.
Varying rate increases were implemented at the Post-Dispatch and most of the PCN
Group properties in the first quarter of 1997 while the Star increased
advertising rates in the fourth quarters of 1996 and 1997.

Circulation revenues, on a comparable basis, decreased approximately
$390,000, or 0.5 percent, in 1997. The decline reflected slight fluctuations in
paid circulation and average rates at the Post-Dispatch and the Star in 1997
compared to the prior year.

Other publishing revenues, on a comparable basis, increased $1.8 million,
or 5.1 percent, in 1997, resulting primarily from higher preprint revenue at the
Post-Dispatch.

Operating expenses (including selling, general and administrative expenses
and depreciation and amortization) for the publishing segment, excluding the St.
Louis Agency adjustment, increased to $291 million in 1997 from $262.5 million
in 1996, an increase of 10.8 percent. On a comparable basis, excluding the PCN
Group from the first six months of 1997 and the non-recurring costs from 1996,
operating expenses increased 0.8 percent. Major increases in comparable expenses
were overall personnel costs of $7.4 million, promotion expense of $1.6 million,
and circulation distribution expenses of $1.5 million. Partially offsetting
these increases were declines in newsprint expense of $6 million and purchased
supplement costs of $3.1 million.

Operating income from Pulitzer's publishing activities increased 45.9
percent to $47.5 million in 1997 from $32.6 million in 1996. On a comparable
basis, excluding the PCN Group from the first six months of 1997 and the
non-recurring costs from 1996, operating income from the publishing segment
increased 22.7 percent. The increase resulted primarily from higher advertising
revenues and lower newsprint costs.

Fluctuations in the price of newsprint significantly impact the results of
Pulitzer's publishing segment, where newsprint expense accounts for
approximately 20 percent of the segment's total operating costs. During the
first three quarters of 1997, the publishing segment benefited from newsprint
prices below prior year levels. However, as a result of 1997 price increases and
declining prices in late 1996, Pulitzer's 1997 fourth quarter newsprint expense
increased over the comparable prior year period. For the full year of 1997,
Pulitzer's newsprint cost and metric tons consumed, after giving effect to the
St. Louis Agency adjustment, were approximately $36.5 million and 64,600 tons
respectively.

26
<PAGE> 28

Broadcasting

Broadcasting operating revenues for 1997 increased 0.9 percent to $227
million from $225 million in 1996. For the year, a 1.6 percent increase in
national spot advertising and a 6.1 percent increase in network compensation
were partially offset by a 0.5 percent decline in local spot advertising. The
modest increases in current year advertising revenues reflect the impact of
decreased political advertising of approximately $12 million in 1997. In
addition, Pulitzer's five NBC affiliated television stations benefited from
significant Olympic related advertising in the prior year third quarter.

Broadcasting operating expenses (including selling, general and
administrative expenses and depreciation and amortization) increased 2.2 percent
to $144.8 million in 1997 from $141.7 million in 1996. The increase was
attributable to higher overall personnel costs of $3.2 million and higher
depreciation and amortization of $1 million. These increases were partially
offset by decreases in program rights costs of $493,000, promotion costs of
$333,000 and license fees of $246,000.

Operating income from the broadcasting segment in 1997 decreased 1.3
percent to $82.2 million from $83.2 million in the prior year. The 1997 decrease
reflected the modest overall revenue gain, resulting primarily from the effect
of significant political and Olympic related advertising revenue in the prior
year.

1996 COMPARED WITH 1995

Consolidated

Operating revenues for the year ended December 31, 1996 increased 13.1
percent to $534.1 million from $472.3 million in 1995. The revenue comparison
was affected by the acquisition of the PCN Group on July 1, 1996. In addition,
the revenue comparison was affected by an extra week of operations in 1995;
fiscal 1995 contained 53 weeks, versus 52 weeks in fiscal 1996. On a comparable
basis (i.e., excluding the PCN Group from 1996 and the extra week from 1995),
consolidated revenues increased 7.6 percent. The increase reflected gains in
both broadcasting and publishing revenues.

Operating expenses, excluding the St. Louis Agency adjustment, were $409.8
million compared to $373.2 million in 1995, an increase of 9.8 percent. On a
comparable basis, excluding the PCN Group from 1996 and the extra week from
1995, operating expenses increased 3.2 percent. Major increases in comparable
expenses were overall personnel costs of $5.2 million, promotion expenses of
$1.2 million, national advertising commissions of $951,000 and circulation
distribution expenses of $611,000. Partially offsetting these increases were
declines in newsprint expense of $1.1 million and inducement costs of $798,000.

Operating income for fiscal 1996 increased 27.3 percent to $110.3 million
from $86.7 million in 1995. On a comparable basis, excluding the PCN Group from
1996 and the extra week from 1995, operating income increased 25.9 percent. The
1996 increase reflected improvements in both the broadcasting and publishing
segments, resulting from increased revenues.

Interest expense increased $3.4 million in 1996 compared to 1995 due to
higher debt levels in the second half of 1996. New long-term borrowings related
to the acquisition of Scripps League added approximately $4.8 million to 1996
interest expense. Pulitzer's average debt level for 1996 increased to $186.9
million from $133.2 million in the prior year. Pulitzer's average interest rate
for 1996 decreased slightly to 7.3 percent from 7.5 percent in the prior year.
Interest income for the year decreased $681,000, due to both lower average
balances of invested funds and lower interest rates in 1996.

Pulitzer's 1996 non-operating expenses included a non-recurring charge of
approximately $2.7 million ($1.6 million after-tax) for the write-down in value
of a joint venture investment.

The effective income tax rate for 1996 increased to 40 percent from 37.9
percent in the prior year, due to approximately $2.1 million of nondeductible
goodwill amortization related to the Scripps League acquisition. The prior year
rate was affected by the settlement of a state tax examination which reduced
income tax expense by $911,000 in 1995. Excluding the non-recurring tax
settlement from the prior year, the effective income tax rate for 1995 would
have been 39 percent.

27
<PAGE> 29

For the year ended December 31, 1996, Pulitzer reported net income of $57.5
million, or $2.58 per diluted share, compared with net income of $49.3 million,
or $2.23 per diluted share, in the prior year. Comparability of the earnings
results was affected by the joint venture write-off in 1996, non-recurring costs
related to the Scripps League acquisition ($1.1 million after tax) in 1996, and
the positive income tax adjustment in 1995. Excluding the non-recurring items
from both years, 1996 net income would have increased to $60.3 million, or $2.71
per diluted share, from $48.4 million, or $2.19 per diluted share, for the prior
year. The gain in net income reflected a significant increase in the
broadcasting segment's operating profits.

Publishing

Operating revenues from Pulitzer's publishing segment for 1996 increased
14.7 percent to $309.1 million from $269.4 million in 1995. On a comparable
basis, excluding the PCN Group from 1996 and the extra week from 1995,
publishing revenues increased 3.5 percent. The comparable increase reflected
higher advertising revenues in 1996.

Newspaper advertising revenues, on a comparable basis, excluding the PCN
Group from 1996 and the extra week from 1995, increased $9.5 million, or 6
percent, in 1996. The significant portion of the current year increase resulted
from higher classified advertising revenue at the Post-Dispatch. Increases in
advertising rates for most categories and higher volume for zoned advertising
were the primary factors in the 1996 revenue increase. In the fourth quarter of
1996 and the first quarter of 1997, varying rate increases were implemented at
the Post-Dispatch, the Star and most of the PCN Group properties.

Circulation revenues, on a comparable basis, excluding the PCN Group from
1996 and the extra week from 1995, increased approximately $100,000, or 0.2
percent, in 1996. The Post-Dispatch and the Star experienced only slight
fluctuations in paid circulation and average rates in 1996 compared to the prior
year.

Operating expenses (including selling, general and administrative expenses
and depreciation and amortization) for the publishing segment, excluding the St.
Louis Agency adjustment, increased to $262.5 million in 1996 from $231.5 million
in 1995, an increase of 13.4 percent. On a comparable basis, excluding the PCN
Group from 1996 and the extra week from 1995, operating expenses increased 2.1
percent. Major increases in comparable expenses were promotion expense of $1.5
million, circulation distribution expenses of $611,000 and overall personnel
costs of $574,000. Partially offsetting these increases were declines in
newsprint expense of $1.1 million and inducement costs of $798,000.

Operating income from Pulitzer's publishing activities increased 28.3
percent to $32.6 million in 1996 from $25.4 million in 1995. On a comparable
basis, excluding the PCN Group from 1996 and the extra week from 1995, operating
income from the publishing segment increased 12 percent. The increase resulted
from higher advertising revenues on a comparable basis.

Broadcasting

Broadcasting operating revenues for 1996 increased 10.9 percent to $225
million from $202.9 million in 1995. On a comparable basis, excluding the extra
week from 1995, operating revenues increased 12.9 percent. Local spot
advertising increased 14.2 percent and national spot advertising increased 14.7
percent. The current year increases reflected strong Olympic-related advertising
at Pulitzer's five NBC affiliated stations and significant political advertising
of $13.2 million, an increase of $10.3 million.

Broadcasting operating expenses (including selling, general and
administrative expenses and depreciation and amortization) increased 3.5 percent
to $141.7 million in 1996 from $137 million in 1995. On a comparable basis,
excluding the extra week from 1995, operating expenses increased 4.5 percent.
This increase was primarily attributable to higher overall personnel costs of
$4.2 million and higher national advertising commissions of $951,000.

Operating income from the broadcasting segment in 1996 increased 26.2
percent to $83.2 million from $65.9 million in the prior year. On a comparable
basis, excluding the extra week from 1995, operating income

28
<PAGE> 30

from the broadcasting segment increased 30.9 percent. The 1996 gain resulted
from the significant increases in both local and national advertising revenues.

LIQUIDITY AND CAPITAL RESOURCES

Outstanding debt, inclusive of the short-term portion of long-term debt, as
of September 30, 1998, was $172.7 million compared to $185.4 million at December
31, 1997. The decrease since the prior year end reflects a scheduled repayment
of $12.5 million in the third quarter of 1998. Pulitzer's borrowings consist
primarily of fixed-rate senior notes with The Prudential Insurance Company of
America (the "Prudential Senior Note Agreements"). Under a variable rate credit
agreement with The First National Bank of Chicago, as Agent, for a group of
lenders, Pulitzer has a $50 million line of credit available through June, 2001
(the "FNBC Credit Agreement"). No amount is currently borrowed under the FNBC
Credit Agreement.

The Prudential Senior Note Agreements and the FNBC Credit Agreement require
Pulitzer to maintain certain financial ratios, place restrictions on the payment
of dividends and prohibit new borrowings, except as permitted thereunder.
Borrowings pursuant to the Prudential Senior Note Agreements will be repaid with
new borrowings prior to the Merger, and the Prudential Senior Note Agreements
and FNBC Credit Agreement will be terminated. Pulitzer's new borrowings will be
assumed by Hearst-Argyle at the time of the Merger. Accordingly, New Pulitzer
will have no long-term borrowings immediately after the Spin-off and Merger.

As of September 30, 1998, commitments for capital expenditures were
approximately $12.3 million, relating to normal capital equipment replacements
at both publishing and broadcasting locations (including Year 2000 projects
in-process). Commitments for capital expenditures at Pulitzer's publishing
locations represented approximately $10.3 million of Pulitzer's total commitment
at September 30. At the time of the Spin-off and Merger, capital commitments
related to publishing locations will be assumed by New Pulitzer and capital
commitments of the Broadcasting Business will be assumed by Hearst-Argyle.
Capital expenditures to be made in fiscal 1998 are estimated to be in the range
of $25 to $30 million. Commitments for film contracts and license fees at
broadcasting locations as of September 30, 1998 were approximately $17.9
million. In addition, as of September 30, 1998, Pulitzer had capital
contribution commitments of approximately $9.1 million related to investments in
two limited partnerships.

At September 30, 1998, Pulitzer had working capital of $134.9 million and a
current ratio of 2.86 to 1. This compares to working capital of $99.3 million
and a current ratio of 2.32 to 1 at December 31, 1997.

On October 30, 1998, Pulitzer acquired, in a purchase transaction, Troy
Daily News, Inc., the publisher of a daily afternoon and Sunday morning
newspaper located in Troy, Ohio, for approximately $20 million. Pulitzer expects
to consider further acquisitions of newspaper properties when favorable
investment opportunities are identified. In the event an investment opportunity
is identified, management expects that it would be able to arrange financing, if
necessary, on terms and conditions satisfactory to Pulitzer.

Pulitzer generally expects to generate sufficient cash from operations to
cover ordinary capital expenditures, film contract and license fees, working
capital requirements, debt installments and dividend payments.

Spin-off and Merger

Prior to the Spin-off and Merger (collectively referred to as the
"Transactions"), Pulitzer intends to borrow $700 million which will provide
sufficient funds to pay the existing Company debt and the costs of the
Transactions discussed below. Pursuant to the Merger Agreement, Hearst-Argyle
will assume the new debt following the consummation of the Transactions. (See
Note 2 to the consolidated financial statements included in Item 13 of this
Registration Statement on Form 10/A.)

In connection with the Transactions, Pulitzer will incur new borrowings,
prepay existing Company debt and make several one-time payments near the dates
of the Transactions. Pulitzer will incur a prepayment penalty related to the
prepayment of the existing borrowings under the Prudential Senior Note
Agreements. Based upon December 31, 1998 interest rates, the prepayment penalty
would be approximately $21.8 million. Professional fees to be incurred related
to the Transactions are estimated in the range of $37 million. Management
bonuses to be paid at the date of the Merger are estimated at approximately
$12.1 million.

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<PAGE> 31

Pursuant to the Merger Agreement, Pulitzer will cash-out all outstanding stock
options at the date of the Merger. Based upon outstanding options (876,873) and
Pulitzer's common stock market price ($86.63) as of December 31, 1998, payments
to employee option holders of approximately $45.2 million would have been
required. It is anticipated that a portion of the option cash-out and bonus
payments will be deferred at the time of the Merger and paid at a future date.
Pulitzer expects to realize tax benefits related to the long-term debt
prepayment penalty, stock option cash-out payments and bonus payments. The
preceding amounts represent estimates based upon current information available
to management of Pulitzer. The final actual amounts will likely differ from the
estimates.

To the extent a gain is generated by the Transactions, a corporate-level
income tax ("Spin-off Tax") will be due. The gain is measured by the excess, if
any, of the fair market value of New Pulitzer Stock distributed by Pulitzer to
its stockholders in the Spin-off over Pulitzer's adjusted tax basis in such New
Pulitzer Stock immediately prior to the distribution of New Pulitzer Stock in
the spin-off (the "Distribution"). On December 31, 1998, the fair market value
of New Pulitzer Stock would be estimated as the difference between the closing
price of Pulitzer's common stock on December 31, 1998 ($86.63) and the fair
market value for the Broadcasting Business of $54.32 per share. The fair market
value for the Broadcasting Business was estimated based upon the fixed number of
shares of Hearst-Argyle's Series A common stock (37,096,774 shares) that will be
exchanged for Pulitzer's common stock and Class B common stock (22,536,412
shares at December 31, 1998) and the closing price of Hearst-Argyle's Series A
common stock on December 31, 1998 ($33.00) (i.e., 37,096,774 shares multiplied
by $33.00 per share divided by 22,536,412 shares equals $54.32). Using a fair
market value of $32.31 (the excess of $86.63 over $54.32) per common share for
the New Pulitzer Stock, no gain (or tax) would result from the Transactions
because the adjusted tax basis of the New Pulitzer Stock would be approximately
$34.20 per share.

30
<PAGE> 32

The following table illustrates the calculation of several Spin-off Tax
estimates under various common stock closing prices for Pulitzer and
Hearst-Argyle:

31
<PAGE> 33

(i.e., 50 percent for the period from May 13, 1996 through May 12, 2001)
multiplied by (iii) the number of shares of Pulitzer common stock issuable upon
conversion of the shares of Pulitzer Class B common stock owned by the 1986
Selling Stockholders, adjusted for, among other things, stock dividends and
stock splits; less (y) the sum of any additional payments previously received by
the 1986 Selling Stockholders; provided, however, that in the event of any
recapitalization, dividend or distribution, the amount by which the Transaction
Proceeds exceeds the Imputed Value shall not exceed the amount paid or
distributed pursuant to such recapitalization, dividend or distribution in
respect of one share of Pulitzer common stock.

The term "Transaction Proceeds" was defined to mean, in the case of a
merger, the aggregate Fair Market Value (as defined herein) of the consideration
received pursuant thereto by the holder of one share of Pulitzer common stock,
and, in the case of a recapitalization, dividend or distribution, the aggregate
Fair Market Value of the amounts paid or distributed in respect of one share of
Pulitzer common stock plus the aggregate Fair Market Value of one share of
Pulitzer common stock following such transaction. The "Imputed Value" for one
share of Pulitzer common stock on a given date was defined to mean an amount
equal to $28.82 compounded annually from May 12, 1986 to such given date at the
rate of 15 percent per annum, the result of which is $154.19 at May 12, 1998.
There was no specific provision for adjustment of the $28.82 amount, but if it
were adjusted to reflect all stock dividends and stock splits of Pulitzer since
September 30, 1986, it would now equal $15.72, which if compounded annually from
May 12, 1986 at the rate of 15 percent per annum would now equal $84.11.

"Fair Market Value," in the case of any consideration other than cash
received in a Gross-Up Transaction, was defined to mean the fair market value
thereof as agreed to by a valuation firm selected by Pulitzer and a valuation
firm selected by the 1986 Selling Stockholders, or, if the two valuation firms
do not agree on the fair market value, the fair market value of such
consideration as determined by a third valuation firm chosen by the two
previously selected valuation firms. Any such agreement or determination shall
be final and binding on the parties.

As a result of the foregoing, the amount of additional payments, if any,
that may be payable by New Pulitzer with respect to the Merger and the
Distribution cannot be determined at this time. However, if the Distribution
were determined to be a Gross-Up Transaction and if the Fair Market Value of the
Transaction Proceeds with respect to the Merger and the Distribution were
determined to exceed the Imputed Value, then the additional payments to the 1986
Selling Stockholders would equal approximately $5.9 million for each $1.00 by
which the Transaction Proceeds exceed the Imputed Value. Accordingly, depending
on the ultimate resolution of the meaning and application of various provisions
of the Gross-Up Transaction agreements, including the determination of Imputed
Value and Fair Market Value of the Transaction Proceeds, in the opinion of
Pulitzer's management, the amount of an additional payment, if any, could be
material to the consolidated financial statements of Pulitzer.

32
<PAGE> 34

The following table illustrates the calculation of potential additional
payments under the Gross-up Transaction agreements, assuming, among other
things, a determination of a Gross-up Transaction, an Imputed Value of $84.11
and a Fair Market Value of Transaction Proceeds of various amounts above and
below $84.11.

<TABLE>
<CAPTION>
FOR THE PERIOD MAY 25, 1998
FOR THE MONTH ENDED (DATE OF MERGER PRESS RELEASE)
DECEMBER 31, 1998 THROUGH DECEMBER 31, 1998
---------------------------- ------------------------------
HIGH LOW HIGH LOW
---- --- ---- ---
<S> <C> <C> <C> <C>
Fair Market Value of Transaction
Proceeds (using high and low closing
prices of Pulitzer's common
stock).............................. $ 86.63 $ 76.63 $ 89.25 $ 64.94
Less Imputed Value (assumes adjustment
to reflect stock dividends and stock
splits since 1986).................. $ 84.11 $ 84.11 $ 84.11 $ 84.11
----------- ----------- ----------- -----------
Transaction Proceeds in excess of
Imputed Value....................... $ 2.52 n/a $ 5.14 n/a
Multiply by applicable percentage..... 50% 50% 50% 50%
Multiply by the number of shares of
Pulitzer's common stock issuable
upon conversion of the shares of
Pulitzer's Class B common stock
owned by the 1986 Selling
Stockholders, adjusted for stock
dividends and stock splits since
1986................................ 11,700,850 11,700,850 11,700,850 11,700,850
----------- ----------- ----------- -----------
Additional payment to the 1986 Selling
Stockholders........................ $14,743,071 $ 0 $30,071,185 $ 0
=========== =========== =========== ===========
</TABLE>

If the Imputed Value is determined to be $154.19 instead of $84.11, no
additional payment to the 1986 Selling Stockholders would be required under any
of the above calculations.

Pursuant to the Merger Agreement, New Pulitzer will indemnify Hearst-Argyle
against losses related to: (i) on an after tax basis, certain tax liabilities,
including (A) any transfer tax liability attributable to the Spin-off, (B) with
certain exceptions, any tax liability of Pulitzer or any subsidiary of Pulitzer
attributable to any tax period (or portion thereof) ending on or before the
closing date of the Merger, including tax liabilities resulting from the
Spin-off, and (C) any tax liability of New Pulitzer or any subsidiary of New
Pulitzer; (ii) liabilities and obligations under any employee benefit plans not
assumed by Hearst-Argyle; (iii) any liabilities for payments made pursuant to a
Gross-Up Transaction; and (iv) certain other matters as set forth in the Merger
Agreement.

Information Systems and the Year 2000

The Year 2000 Issue is the result of information systems being designed
using two digits rather than four digits to define the applicable year. As the
year 2000 approaches, such information systems may be unable to accurately
process certain date-based information.

In 1995, Pulitzer began reviewing and preparing its computer systems for
the Year 2000. Generally, at Pulitzer's newspaper publishing locations, the
following categories of computer systems were identified for assessment of Year
2000 compliance: pre-press systems, press systems, post-press systems, business
systems, network systems, desktop PC systems, telecommunication systems and
building systems. Significant sub-systems within these categories which were
identified as non-compliant during the assessment phase represented aging
hardware and software which would have required replacement in the near term
irrespective

33
<PAGE> 35

of the Year 2000 Issue. Consequently, Pulitzer adopted a Year 2000 strategy
which will replace its significant non-compliant systems with new compliant
systems prior to December 31, 1999.

Pulitzer's strategy for achieving Year 2000 compliance was developed using
a five phase plan as follows: (1) educate and plan; (2) assess; (3) replace and
renovate; (4) validate/test; and (5) implement. As of September 30, 1998,
Pulitzer has completed the planning and assessment phases and is in the process
of replacing, testing and implementing new compliant systems (with some systems
already implemented). Pulitzer and New Pulitzer expect to have substantially all
of the Year 2000 system changes implemented by January 31, 1999 at the Star,
March 31, 1999 at the Post-Dispatch and September 30, 1999 at the PCN Group
properties.

Pulitzer's current estimate of capital expenditures for new hardware and
software to address Year 2000 issues, as well as to replace aging systems, is
approximately $11.6 million for its newspaper publishing locations. At September
30, 1998, approximately $4.6 million of the total capital expenditure estimate
remains to be spent through the projected implementation dates. These amounts do
not include either the internal staff costs of Pulitzer's information technology
department or the cost of minor Year 2000 system modifications, both of which
are recorded as expense in the period incurred. Year 2000 modification costs for
minor system issues are not expected to be significant. The Year 2000 related
capital expenditures have been considered in Pulitzer's normal capital budgeting
process and will be funded through operating cash flows.

In addition to addressing internal system issues, Pulitzer is communicating
with its major suppliers (including but not limited to newsprint, ink,
telecommunication services and utilities) and selected customers to obtain
assurance of their preparedness for the Year 2000. In general, questionnaires
are being used to identify potential Year 2000 issues at these third parties
which may impact Pulitzer's business operations and require a remedy. Pulitzer
has received some responses explaining the status of compliance and will make
follow-up inquiries where appropriate.

As of December 31, 1998, Pulitzer believes that its plan for achieving Year
2000 compliance will be fully implemented by September 30, 1999. However, as it
is not possible to anticipate all future outcomes, especially where third
parties are involved, Pulitzer is in the process of developing Year 2000
contingency plans for mission critical business and production systems.

In the event that either Pulitzer or Pulitzer's suppliers and customers do
not successfully implement their Year 2000 plans on a timely basis, Pulitzer
could experience business losses. In the most extreme case, publication of
Pulitzer's newspapers and on-line products, as well as the sale of advertising,
could be interrupted and/or delayed. The extent of losses under such a scenario
have not been estimated by Pulitzer.

The preceding discussion relates to Pulitzer's publishing operations only.
Pulitzer does not expect to incur significant costs to address Year 2000 issues
at its broadcasting locations prior to the Merger.

Digital Television

Pulitzer's Orlando television station, WESH, is required to construct
digital television facilities in order to broadcast digitally by November 1,
1999 and comply with Federal Communications Commission ("FCC") rules. The
deadline for constructing digital facilities at Pulitzer's other television
stations is May 1, 2002. Pulitzer is currently considering available options to
comply with the FCC's timetable but does not expect to incur significant capital
expenditures to construct digital facilities prior to the Merger.

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<PAGE> 36

ITEM 3. PROPERTIES.

The corporate headquarters of New Pulitzer is located at 900 North Tucker
Boulevard, St. Louis, Missouri. The general character, location and approximate
size of the principal physical properties used by Pulitzer for its publishing
business segment at December 31, 1998, are set forth below. Leases on the
properties indicated as leased by Pulitzer expire at various dates through April
2007.

New Pulitzer believes that all of Pulitzer's owned and leased properties
used in connection with its publishing business segment are in good condition,
well maintained and adequate for New Pulitzer's current and immediately
foreseeable operating needs.

<TABLE>
<CAPTION>
APPROXIMATE AREA IN
SQUARE FEET
--------------------
GENERAL CHARACTER OF PROPERTY OWNED LEASED
----------------------------- ----- ------
<S> <C> <C>
Printing plants, business and editorial offices, and
warehouse space located in:
St. Louis, Missouri(1).................................... 585,600 138,700
St. Louis, Missouri....................................... 5,600
Tucson, Arizona(2)........................................ 265,000 41,800
Washington, D.C........................................... 2,250
Provo, Utah............................................... 22,900 9,600
Santa Maria, California................................... 20,800 2,200
Napa, California.......................................... 21,000
Coos Bay, Oregon.......................................... 15,200
Hanford, California....................................... 16,500 3,600
Flagstaff, Arizona........................................ 23,200
Troy, Ohio................................................ 43,000 772
DeKalb, Illinois.......................................... 15,900
Park Hills, Missouri...................................... 9,100
Lihue, Hawaii............................................. 8,500 20,900
Hamilton, Montana......................................... 2,900
Rhinelander, Wisconsin.................................... 6,400
Petaluma, California...................................... 9,000
Farmington, Missouri...................................... 11,800
Fredericktown, Missouri................................... 1,800 650
</TABLE>

- -------------------------
(1) Property is subject to the provisions of the St. Louis Agency Agreement.

(2) The 265,000 square foot facility in Tucson, Arizona is used in the
production of the Star and the Citizen and is jointly owned with Gannett
pursuant to the Tucson Agency.

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<PAGE> 37

ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of Pulitzer's common stock and Class B common stock as of December 31,
1998, (i) by each director of Pulitzer, (ii) by each person known by New
Pulitzer to own beneficially more than 5% of Pulitzer's common stock, (iii) by
the executive officers named in the Summary Compensation Table set forth in
"Item 6 -- Executive Compensation," and (iv) by all directors and officers of
Pulitzer as a group. Assuming that the Spin-off had occurred as of December 31,
1998, the information in the table below would also reflect the number of shares
of Common Stock and Class B Common Stock of New Pulitzer, and the respective
percentages thereof, beneficially owned by the persons named in such table.

<TABLE>
<CAPTION>
PERCENT OF
CLASS B AGGREGATE
COMMON STOCK COMMON STOCK VOTING POWER OF
-------------------- --------------------- COMMON STOCK
DIRECTORS, OFFICERS AND NUMBER NUMBER AND CLASS B
5% STOCKHOLDERS OF SHARES PERCENT OF SHARES PERCENT COMMON STOCK
----------------------- --------- ------- --------- ------- ---------------
<S> <C> <C> <C> <C> <C>
Trustees of Pulitzer Voting Trust(1)....... -- --% 15,274,749 99.7% 94.9%
Emily Rauh Pulitzer(2)(3).................. -- -- 6,780,667 44.3 42.1
Michael E. Pulitzer(2)(4).................. -- -- 3,800,146 24.8 23.6
David E. Moore(2)(5)....................... 182 * 3,927,035 25.6 24.4
James M. Snowden, Jr.(6)................... 10,333 * -- -- **
William Bush(7)............................ 1,667 * -- -- **
Alice B. Hayes(8).......................... 6,667 * -- -- **
Ronald H. Ridgway(2)(9).................... 186,434 2.4 -- -- **
Ken J. Elkins(2)(10)....................... 174,360 2.3 -- -- **
Nicholas G. Penniman IV(2)(11)............. 117,501 1.5 -- -- **
Terrance C.Z. Egger(12).................... 4,765 * -- -- **
C. Wayne Godsey(13)........................ 30,695 * -- -- **
John C. Kueneke............................ 501 * -- -- **
Gabelli Funds, Inc.(14).................... 595,009 7.7 -- -- **
One Corporate Center
Rye, New York 10580-1434
Nicholas Company, Inc.(15)................. 415,466 5.4
701 North Water Street
Milwaukee, Wisconsin 53202
Oak Value Capital Management, Inc.(16)..... 682,123 8.9
3100 Tower Boulevard
Durham, North Carolina 27707
Morgan Stanley Dean Witter & Co.(17)....... 711,899 9.3
1585 Broadway
New York, New York 10036
All directors and officers as a group
(14 persons)(2)(18)...................... 557,222 7.2% 14,507,848 94.7% 90.2%
</TABLE>

- -------------------------
* Represents less than 1% of the outstanding Pulitzer common stock.

** Represents less than 1% of the aggregate voting power of Pulitzer common
stock and Class B common stock.

(1) The Trustees of the Pulitzer Voting Trust are Michael E. Pulitzer, David E.
Moore, Emily Rauh Pulitzer, Ken J. Elkins, Nicholas G. Penniman IV, Ronald
H. Ridgway and Cole C. Campbell. The

36
<PAGE> 38

Pulitzer Voting Trust and each of the individual Trustees may be reached at
900 North Tucker Boulevard, St. Louis, Missouri 63101.

(2) Excludes shares which may be deemed to be beneficially owned solely as a
trustee of the Pulitzer Voting Trust.

(3) Includes 6,716,693 shares held in trusts, and 22,860 shares held in a
private operating foundation. These shares are beneficially owned by Mrs.
Pulitzer.

(4) Includes 3,684,760 shares held in trusts, and 51,113 shares held in a
private foundation. These shares are beneficially owned by Mr. Pulitzer.
Also includes 64,273 shares held in a trust for the benefit of the wife of
Michael E. Pulitzer. Mr. Pulitzer disclaims beneficial ownership of these
shares.

(5) Includes 366 shares of Class B common stock and 182 shares of common stock
beneficially owned by the wife of David E. Moore. Mr. Moore disclaims
beneficial ownership of these shares. Also includes 651,231 shares held in
trust. These shares are beneficially owned by Mr. Moore.

(6) Includes 6,667 shares which may be acquired upon the exercise of options
granted under the Pulitzer 1994 Stock Option Plan which are exercisable
within 60 days of the date hereof.

(7) Consists of 1,667 shares which may be acquired upon the exercise of options
granted under the Pulitzer 1994 Stock Option Plan which are exercisable
within 60 days of the date hereof.

(8) Consists of 6,667 shares which may be acquired upon the exercise of options
granted under the Pulitzer 1994 Stock Option Plan which are exercisable
within 60 day as of the date hereof.

(9) Includes 157,449 shares which may be acquired upon the exercise of options
granted under the Pulitzer 1986 Employee Stock Option Plan and the Pulitzer
1994 Stock Option Plan which are exercisable within 60 days of the date
hereof.

(10) Includes 156,332 shares which may be acquired upon the exercise of options
granted under the Pulitzer 1986 Employee Stock Option Plan and the Pulitzer
1994 Stock Option Plan which are exercisable within 60 days of the date
hereof.

(11) Includes 92,501 shares which may be acquired upon the exercise of options
granted under the Pulitzer 1986 Employee Stock Option Plan and the Pulitzer
1994 Stock Option Plan which are exercisable within 60 days of the date
hereof.

(12) Includes 3,778 shares which may be acquired upon the exercise of options
granted under the Pulitzer 1994 Stock Option Plan which are exercisable
within 60 days of the date hereof. Also includes 185 shares subject to the
terms of the Pulitzer Publishing Company 1994 Key Employees' Restricted
Stock Purchase Plan (76 shares will vest on January 24, 1999; 55 shares on
February 13, 1999; and 54 shares on February 13, 2000).

(13) Includes 29,467 shares which may be acquired upon the exercise of options
granted under the Pulitzer 1986 Employee Stock Option Plan and the Pulitzer
1994 Stock Option Plan which are exercisable within 60 days of the date
hereof.

(14) This figure is based on information set forth in Amendment No. 8 to
Schedule 13D dated September 24, 1997, filed by Gabelli Funds, Inc., and
its investment adviser, GAMCO, with the Securities and Exchange Commission.
The Schedule 13D, as amended, states that (i) Gabelli Funds, Inc. has the
sole power to vote, or direct the vote of, and the sole power to dispose or
direct the disposition of 92,000 of such shares, and (ii) GAMCO has the
sole power to vote, or direct the vote of, 463,011 of such shares, and the
sole power to dispose or direct the disposition of, 501,676 of such shares,
and (iii) Gabelli Asset Management Company International Advisory Services
Ltd. has the sole power to vote, or direct the vote of, and the sole power
to dispose or direct the disposition of, 1,333 of such shares.

(15) This figure is based on information set forth in Amendment No. 2 to
Schedule 13G dated January 22, 1998, filed by Nicholas Company, Inc.,
investment advisor to Nicholas Fund, Inc., with the Securities and Exchange
Commission. The Schedule 13G states that (i) Nicholas Fund, Inc., has the
sole power to vote, or direct the vote of such shares, and (ii) that
Nicholas Company, Inc. has the sole power to dispose or direct the
disposition of such shares.

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<PAGE> 39

(16) This figure is based on information set forth in Amendment 2 to Schedule
13G dated January 31, 1998, filed by Oak Value Capital Management, Inc.
with the Securities and Exchange Commission. The Schedule 13G states that
Oak Value Capital Management, Inc. has the sole power to vote, or direct
the vote of 598,629 shares, and the sole power to dispose or direct the
disposition of 682,123 shares.

(17) This figure includes 662,400 shares which Morgan Stanley Asset Management
Inc. has the shared power to dispose or direct the disposition of and is
based on information set forth in the joint Schedule 13G, dated September
10, 1998, filed by Morgan Stanley Dean Witter & Co. and Morgan Stanley
Asset Management Inc., a wholly-owned subsidiary of Morgan Stanley Dean
Witter & Co., with the Securities and Exchange Commission. The joint
Schedule 13G states that (i) Morgan Stanley Dean Witter & Co. has the
shared power to vote or direct the vote of 511,499 shares, and the shared
power to dispose or direct the disposition of 711,899 shares and (ii)
Morgan Stanley Asset Management Inc. has the shared power to vote or direct
the vote of 462,000 shares, and the shared power to dispose or direct the
disposition of 662,400 shares.

(18) Includes 477,801 shares which may be acquired upon the exercise of options
granted under the Pulitzer 1986 Employee Stock Option Plan and the Pulitzer
1994 Stock Option Plan which are exercisable within 60 days of the date
hereof.

VOTING TRUST

It is contemplated that the beneficial owners of more than 90% of
Pulitzer's Class B common stock currently outstanding, representing more than
88% of the combined voting power of Pulitzer's outstanding common stock and
Class B common stock will enter into an agreement to be effective immediately
following the consummation of the Spin-off (the "New Pulitzer Voting Trust
Agreement") providing for the creation of a new voting trust (the "New Pulitzer
Voting Trust") and will deposit their shares of New Pulitzer Class B Common
Stock into that trust. A description of the terms and provisions of the New
Pulitzer Voting Trust Agreement is set forth in "Item 11. -- Description of
Registrant's Securities to be Registered -- New Pulitzer Voting Trust
Agreement." The Pulitzer Voting Trust will be terminated in connection with the
Transactions.

38
<PAGE> 40

ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS.

MANAGEMENT

The following table sets forth certain information concerning New
Pulitzer's executive officers and directors.

<TABLE>
<CAPTION>
NAME, AGE AND CLASS POSITIONS WITH NEW PULITZER
- ------------------- ---------------------------
<S> <C>
CLASS A DIRECTORS
Emily Rauh Pulitzer; 65(1)........................... Director
James M. Snowden, Jr.; 55............................ Director
Nicholas G. Penniman IV; 60(2)....................... Director, Senior Vice President --
Newspaper Operations
CLASS B DIRECTORS
Michael E. Pulitzer; 68(1)........................... Director, Chairman of the Board
Ronald H. Ridgway; 60................................ Director, Senior Vice
President -- Finance
William Bush; 52..................................... Director
CLASS C DIRECTORS
David E. Moore; 75(1)................................ Director
Ken J. Elkins; 61.................................... Director
Alice B. Hayes; 61................................... Director
OTHER EXECUTIVE OFFICERS
Robert C. Woodworth; 51(3)........................... President and Chief Executive Officer
Terrance C.Z. Egger; 41.............................. Vice President
James V. Maloney; 49................................. Secretary
</TABLE>

- -------------------------
(1) Michael E. Pulitzer is a cousin of David E. Moore and a brother-in-law of
Emily Rauh Pulitzer.

(2) Following consummation of the Transactions, Mr. Penniman will cease to serve
as a director and executive officer of New Pulitzer but will continue with
New Pulitzer as a consultant.

(3) Robert C. Woodworth will be named to the Board of Directors of New Pulitzer
as a Class A Director following consummation of the Transactions.

EMILY RAUH PULITZER is the widow of Joseph Pulitzer, Jr. Mrs. Pulitzer was
a curator of the St. Louis Art Museum from 1964 through 1973. She currently
serves certain St. Louis and national charitable, civic and arts organizations
and as a director of Pulitzer. It is contemplated that following the
consummation of the Transactions, Mrs. Pulitzer will enter into a consulting
agreement with New Pulitzer. The terms of this consulting agreement will be
substantially similar to Mrs. Pulitzer's existing consulting agreement with
Pulitzer and will include an agreement by New Pulitzer to use its best efforts
to cause Mrs. Pulitzer to be a member of its Board of Directors.

JAMES M. SNOWDEN, JR. has been an Executive Vice President of Huntleigh
Securities Corporation ("Huntleigh") since November 6, 1995. Mr. Snowden was a
Vice President of A.G. Edwards & Sons, Inc. from June 1984 through November 3,
1995 and was a director of A.G. Edwards & Sons, Inc. from March 1988 through
February 1994. Mr. Snowden serves as a director of Pulitzer. Pulitzer has
retained, and New Pulitzer intends to retain in the future, Huntleigh as a
financial advisor in connection with such financial matters as it deems
appropriate.

NICHOLAS G. PENNIMAN IV, has served as New Pulitzer's Senior Vice
President -- Newspaper Operations since May 1998 and has served as Pulitzer's
Senior Vice President -- Newspaper Operations since April 1986. Prior to that
time, Mr. Penniman served as Pulitzer's Vice President -- Newspaper Operations
and General Manager of the Post Dispatch from April 1984 through March 1986 and
as Assistant General Manager of the Post-Dispatch from January 1978 through
March 1984. Mr. Penniman is a director of Pulitzer and also serves as Publisher
of the Post-Dispatch. Following consummation of the Transactions,

39
<PAGE> 41

Mr. Penniman will cease to serve as a director and executive officer of New
Pulitzer but will continue with New Pulitzer as a consultant.

MICHAEL E. PULITZER was elected Chairman of the Board of New Pulitzer in
May 1998, and served as its President and Chief Executive Officer from May 1998
through December 1998. Mr. Pulitzer was elected Chairman of the Board of
Pulitzer on June 11, 1993, and has served as its President and Chief Executive
Officer since April 1986. Mr. Pulitzer served as Vice Chairman of the Board of
Pulitzer from April 1984 through March 1986 and as President and Chief Operating
Officer of Pulitzer from April 1979 through March 1984. It is contemplated that
following the consummation of the Transactions, Mr. Pulitzer will enter into an
employment agreement with New Pulitzer. Mr. Pulitzer is expected to become a
director of Hearst-Argyle following the closing of the Transactions.

RONALD H. RIDGWAY, has served as Senior Vice President -- Finance of New
Pulitzer since May 1998 and as Pulitzer's Senior Vice President -- Finance since
March 1986. Prior thereto, Mr. Ridgway served as Pulitzer's Vice
President -- Finance from April 1984 through March 1986, as Treasurer from April
1979 through March 1986, and as Secretary and Assistant Treasurer from January
1978 through March 1979. Mr. Ridgway serves as a director of Pulitzer.

WILLIAM BUSH has been a partner in the law firm of Fulbright & Jaworski
L.L.P. (and its predecessor firm, Reavis & McGrath) since 1977. He is the
partner in charge of the New York office and a member of the Executive Committee
of the firm. Pulitzer has retained, and New Pulitzer intends to retain in the
future, Fulbright & Jaworski L.L.P. as attorneys in connection with such legal
matters as it deems appropriate. Mr. Bush serves as a director of Pulitzer.

DAVID E. MOORE, lifelong journalist, founded Harrison Independent
(Westchester County, NY), Connecticut Business Journal in association with
Westchester Business Journal, and International Business magazine. Mr. Moore
remains chairman of International Business Network, Inc., an electronic gateway
service, and serves as a director of Pulitzer. It is contemplated that following
the consummation of the Transactions, Mr. Moore will enter into a consulting
agreement with New Pulitzer. The terms of this consulting agreement will be
substantially similar to Mr. Moore's existing consulting agreement with Pulitzer
and will include an agreement by New Pulitzer to use its best efforts to cause
Mr. Moore to be a member of its Board of Directors.

KEN J. ELKINS, has served as Pulitzer's Senior Vice
President -- Broadcasting Operations since April 1986 and prior thereto, from
April 1984 through March 1986, served as Pulitzer's Vice President --
Broadcasting Operations. Mr. Elkins is a director of Pulitzer and Commerce Bank
of St. Louis and is expected to become a senior advisor and director of
Hearst-Argyle following the closing of the Transactions.

ALICE B. HAYES has been President of the University of San Diego since July
1995. From July 1989 through May 1995, Dr. Hayes was Executive Vice President
and Provost of St. Louis University, St. Louis, Missouri, and for over five
years prior thereto held various academic positions at Loyola University of
Chicago. Dr. Hayes serves as a director of Pulitzer.

ROBERT C. WOODWORTH has served as New Pulitzer's President and Chief
Executive Officer since January 1, 1999. Mr. Woodworth was a Vice President --
Newspapers of Knight Ridder, Inc. from May 1997 until December 1998. Prior to
that, Mr. Woodworth worked for Capital Cities/ABC, most recently as Publisher of
The Kansas City Star and Senior Vice President -- Metro Newspapers. Mr.
Woodworth, who joined Capital Cities in 1973, previously served in various
capacities at a number of Capital Cities properties, including Executive Vice
President and General Manager of The Fort-Worth Star-Telegram and Vice
President -- Operations of The Belleville News-Democrat. Mr. Woodworth will be
named to the Board of Directors of New Pulitzer as a Class A Director following
the consummation of the Transactions.

TERRANCE C.Z. EGGER has served as a Vice President of New Pulitzer since
May 1998 and as a Vice President of Pulitzer and General Manager of the
Post-Dispatch since March 1996. Prior to joining Pulitzer, Mr. Egger served as
Vice President and Advertising Director for TNI Partners.

40
<PAGE> 42

JAMES V. MALONEY has served as Secretary of New Pulitzer since May 1998 and
has served as Secretary of Pulitzer since January 1984 and was appointed
Pulitzer's Director of Shareholder Relations in June 1987.

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors of Pulitzer has, and after the Spin-off the New
Pulitzer Board of Directors will have, an Audit Committee, Compensation
Committee, Executive Committee, Finance Committee, Nominating Committee and
Planning Committee. The functions of each of these committees are described and
the members of each are listed below. The functions of these committees will not
change as a result of the Spin-off, and it is expected that the members of the
New Pulitzer committees following the Spin-off will be the same, with certain
exceptions, as those currently serving on the Pulitzer committees.

The Audit Committee of Pulitzer consists of the two directors who are
determined to be independent directors under the corporate responsibility
requirements for companies listed on the New York Stock Exchange. The Audit
Committee is responsible to the Board of Directors for overseeing and reviewing
audit results and monitoring the effectiveness of internal audit functions.
James M. Snowden, Jr. and Alice B. Hayes currently serve as members of this
Committee of Pulitzer.

The Compensation Committee of Pulitzer consists of Michael E. Pulitzer, who
is Chairman, President and Chief Executive Officer of Pulitzer, and three
directors who are not officers of Pulitzer. The Board of Directors may at its
discretion appoint a fourth person, who, if he is not a director, shall be an
advisory member of the Compensation Committee. The Compensation Committee
renders advice with respect to compensation matters and administers, among other
things, Pulitzer's equity and incentive compensation plans. In addition to
Michael E. Pulitzer, David E. Moore, William Bush and James M. Snowden, Jr.
currently serve as members of this Committee of Pulitzer.

The Executive Committee of Pulitzer consists of the four directors who hold
the positions of President, Senior Vice President -- Finance, Senior Vice
President -- Newspaper Operations and Senior Vice President -- Broadcasting
Operations and one or more directors who are not officers of Pulitzer. The
Executive Committee exercises the power and authority of the Board of Directors
during the period between Board meetings, subject to certain limitations.
Michael E. Pulitzer, Ronald H. Ridgway, Nicholas G. Penniman IV, Ken J. Elkins
and David E. Moore currently serve as members of this Committee of Pulitzer.

The Finance Committee of Pulitzer consists of the three directors who hold
the positions of President, Senior Vice President -- Finance and Senior Vice
President -- Newspaper Operations and, in the discretion of the Board of
Directors, a fourth person, designated by resolution adopted by a majority of
the whole Board of Directors, who, if he is not a director, shall be an advisory
member. The Finance Committee may exercise, in general, the authority of the
Board with respect to approval or disapproval of contracts obligating Pulitzer
for more than $50,000 but not more than $500,000 ($1,000,000 with respect to the
Post-Dispatch). Michael E. Pulitzer, Ronald H. Ridgway and Nicholas G. Penniman
IV currently serve as members of this Committee of Pulitzer.

The Nominating Committee of Pulitzer consists of two or more directors who
are designated by resolution adopted by a majority of the whole Board. The
Nominating Committee recommends qualified candidates to the Board of Directors
and/or the stockholders for election as directors of Pulitzer. Michael E.
Pulitzer, David E. Moore and James M. Snowden, Jr. currently serve as members of
this Committee of Pulitzer.

The Planning Committee of Pulitzer consists of the four directors who hold
the positions of President, Senior Vice President -- Finance, Senior Vice
President -- Newspaper Operations and Senior Vice President -- Broadcasting
Operations and, in the discretion of the Board of Directors, up to six
additional persons, designated by resolution adopted by a majority of the whole
Board of Directors, each of whom, if he or she is not a director, shall be an
advisory member. The Planning Committee may consider and develop short and
long-term plans and strategies for Pulitzer for presentation to the Board of
Directors for consideration and appropriate action. Michael E. Pulitzer, Ronald
H. Ridgway, Nicholas G. Penniman IV, Ken J. Elkins,

41
<PAGE> 43

William Bush, David E. Moore, Alice B. Hayes, Emily Rauh Pulitzer and James M.
Snowden, Jr. currently serve as members of this Committee of Pulitzer.

DIRECTOR COMPENSATION

Compensation for non-employee directors of Pulitzer is set at $5,000 per
year. In addition, each non-employee director receives $750 for each meeting of
the Pulitzer Board of Directors or any of its committees he or she attends in
person or by telephone, a $1,000 travel allowance if he or she attends in
person, and a per diem payment of $150 for each day he or she stays overnight in
St. Louis or elsewhere in connection with any meeting of the Board of Directors
or any of its Committees. It is expected that New Pulitzer will compensate
directors following the Spin-off substantially in accordance with the foregoing
practices.

New Pulitzer has adopted, subject to stockholder approval, the Pulitzer
Inc. 1999 Stock Option Plan which is substantially similar to the Pulitzer
Publishing Company 1994 Stock Option Plan. Under this stock option plan, New
Pulitzer will grant options to purchase 1,250 shares of Common Stock to each
non-employee director (other than directors who beneficially own 1% or more of
any class of capital stock of New Pulitzer) following each Annual Meeting of
Stockholders. The exercise price per share would be equal to the fair market
value per share of the Common Stock on the date of grant, and unless sooner
terminated, each option would expire ten years after the date of grant. At
present, Dr. Hayes and Messrs. Bush and Snowden are the only non-employee
directors who would be eligible to receive these annual option grants. The
Pulitzer Inc. 1999 Stock Option Plan will be presented for approval by the
stockholders of New Pulitzer at their first annual meeting following the
consummation of the Transactions.

David E. Moore, a director of Pulitzer and member of the Compensation
Committee, is party to a consulting agreement with Pulitzer, dated October 21,
1986, pursuant to which Mr. Moore provides, at the request of the President,
managerial advice regarding the business operations of Pulitzer and its
subsidiaries and general business advice regarding long-term strategic planning.
For his services under the agreement, Mr. Moore was paid $131,200 in 1997,
$140,000 in 1998, and Mr. Moore will be paid $140,000 in 1999. The consulting
agreement provides for automatic renewals unless terminated by either party not
later than December 1 of any calendar year.

Emily Rauh Pulitzer, a director of Pulitzer, is party to a consulting
agreement with Pulitzer, dated January 26, 1998, pursuant to which Mrs. Pulitzer
provides, at the request of the Chairman, advice regarding the business
operations of Pulitzer and its subsidiaries, particularly their newspaper
operations, and general advice regarding long-term strategic planning. For her
services under the agreement, Pulitzer paid Mrs. Pulitzer $43,733.33 on March
11, 1998 for September through December of 1997, $140,000 for the 1998 fiscal
year, and Mrs. Pulitzer will be paid $140,000 for the 1999 fiscal year. The
consulting agreement provides for automatic renewals unless terminated by either
party not later than December 1 of any calendar year.

It is contemplated that in connection with the Spin-off and Merger, Mr.
Moore and Mrs. Pulitzer's consulting agreements with Pulitzer will be terminated
and that following the consummation of the Transactions, New Pulitzer will enter
into a substantially similar consulting agreement with each of Mr. Moore and
Mrs. Pulitzer.

42
<PAGE> 44

ITEM 6. EXECUTIVE COMPENSATION.

Prior to the Spin-off, Pulitzer's executive officers will not have received
any compensation from New Pulitzer for serving as executive officers thereof. On
December 18, 1998, New Pulitzer entered into an employment agreement with Robert
C. Woodworth pursuant to which Mr. Woodworth will serve as President and Chief
Executive Officer of New Pulitzer for an initial term of three years, beginning
January 1, 1999. At the end of each year, the agreement automatically renews for
an additional year. Mr. Woodworth will be entitled to receive an annual base
salary of $575,000 and an annual incentive bonus target of 100% of salary. Mr.
Woodworth will receive initial stock option and restricted stock awards in New
Pulitzer valued at approximately $2,500,000, subject to vesting conditions. If
Mr. Woodworth terminates his employment for "good reason" or New Pulitzer
terminates his employment without "cause," then Mr. Woodworth will be entitled
to severance equal to three years' salary plus accelerated vesting of the
initial option and restricted stock awards. In the event the Transactions do not
occur, the Company will assume all provisions of the employment agreement with
Mr. Woodworth, including the provisions relating to his position, rights and
entitlements. New Pulitzer has also agreed to make an additional cash payment to
Mr. Woodworth of $200,000 in 1999 to compensate him for lost bonus opportunities
with his previous employer. New Pulitzer also has entered into employment
agreements with Messrs. Cole C. Campbell, Terrance C.Z. Egger and James V.
Maloney that become effective upon consummation of the Merger. Messrs. Campbell
and Egger are currently employed as the Editor of the Post-Dispatch and General
Manager of the Post-Dispatch, respectively, and Mr. Maloney is currently
employed as a corporate officer of Pulitzer. Each of these agreements is for a
term of three years, and each agreement includes salary and bonus opportunities
that are substantially similar to what is currently provided by Pulitzer, except
that the agreement with Mr. Egger includes a provision for a restricted stock
grant that would vest if his employment with New Pulitzer continues until the
end of the three-year term.

Following the consummation of the Transactions, it is anticipated that the
Board of Directors of New Pulitzer, acting upon the recommendation of outside
compensation consultants, will approve the terms and conditions of new
employment agreements to be made by New Pulitzer with Messrs. Michael E.
Pulitzer and Ronald H. Ridgway. It is anticipated that Mr. Pulitzer's agreement
will be for a term of seven years and that Mr. Pulitzer will serve as Chairman
of the Board of Directors of New Pulitzer. Initially, Mr. Pulitzer's salary and
bonus opportunities would be substantially the same as is currently provided to
him by Pulitzer. It is also expected that Mr. Pulitzer would become a
participant in the Pulitzer Inc. 1999 Stock Option Plan, and that the annual
retirement pension payable to him under the qualified and nonqualified pension
and retirement plans of New Pulitzer will be increased to approximately 50%
(from 40%) of his final average compensation.

It is anticipated that the term of Mr. Ridgway's agreement will be between
two and three years. Mr. Ridgway would serve as Senior Vice President - Finance
- -- the same position he currently holds with Pulitzer. His salary and bonus
opportunities would be substantially the same as is currently provided to him by
Pulitzer. It is anticipated that, upon completion of the terms of his agreement,
New Pulitzer will waive any early retirement reduction factor that would
otherwise apply to Mr. Ridgway in determining the annual retirement pension to
which he would then be entitled under the nonqualified pension plan of New
Pulitzer (which is expected to be similar to the Supplemental Executive Benefit
Pension Plan presently maintained by Pulitzer).

43
<PAGE> 45

The following Summary Compensation Table shows the compensation paid each
of the last three fiscal years of Pulitzer to the seven most highly compensated
executive officers of Pulitzer for 1997:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------------ ------------------------ -------
(A) (B) (C) (D) (F)
(E) RESTRICTED (G) (H) (I)
OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
NAME AND COMPENSATION AWARDS SARS(3) PAYOUTS COMPENSATION(4)
PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($) ($) (#) ($) ($)
------------------ ---- --------- -------- ------------ ---------- -------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michael E. Pulitzer........... 1997 $918,115 $554,972 $0 $ 0 0 $0 $37,951
Chairman of the Board, 1996 850,000 597,676 0 0 0 0 6,135
President and 1995 800,000 441,072 0 0 0 0 8,775
Chief Executive Officer
Ken J. Elkins................. 1997 420,000 206,273 0 0 35,000 0 26,716
Senior Vice President -- 1996 390,000 220,326 0 0 32,000 0 15,077
Broadcasting Operations 1995 364,000 204,589 0 51,081(1) 30,000 0 15,986
Nicholas G. Penniman IV....... 1997 324,435 167,779 0 0 17,500 0 14,617
Senior Vice President -- 1996 304,000 139,880 0 0 15,000 0 5,500
Newspaper Operations 1995 292,000 130,624 0 51,081(1) 16,667 0 6,452
Ronald H. Ridgway............. 1997 318,950 154,856 0 0 27,500 0 13,259
Senior Vice President -- 1996 281,000 158,505 0 0 20,000 0 5,464
Finance 1995 255,000 137,658 0 51,081(1) 20,000 0 6,413
John C. Kueneke............... 1997 233,000 87,496 0 0 8,000 0 3,945
Executive Vice President 1996 212,827 91,593 0 0 4,000 0 0
Pulitzer Broadcasting
Company 1995 0 0 0 0 0 0 0
C. Wayne Godsey............... 1997 233,000 84,349 0 0 8,000 0 5,260
Executive Vice President 1996 217,000 91,843 0 0 4,000 0 4,818
Pulitzer Broadcasting
Company 1995 201,552 95,551 0 0 12,000 0 5,100
Terrance C.Z. Egger........... 1997 174,327 68,250 0 13,134(2) 5,000 0 3,074
Vice President 1996 121,731 61,750 0 3,465(2) 3,000 0 61,379
1995 0 0 0 3,333 0 0
</TABLE>

- -------------------------
(1) The grant was for 2,083 shares representing a value of $51,081 based on the
closing price of the Pulitzer common stock of $24.525 on the date of grant.
At December 31, 1997, the value of each of the grants was $131,880. All of
the stock vested upon grant, and dividends have been paid thereon. None of
the named executive officers holds restricted stock which did not fully vest
upon grant.

(2) Income related to the vesting of stock grants issued while employed by TNI
Partners.

(3) Stock options have been adjusted for 1995 to reflect the impact of a common
stock and Class B common stock split, effected in the form of a 25% stock
dividend, declared by Pulitzer's Board of Directors on January 4, 1995 and a
common stock and Class B common stock split, effected in the form of a 33.3%
stock dividend, declared by Pulitzer's Board of Directors on September 12,
1996.

(4) Includes (i) Pulitzer's contributions to the Pulitzer Retirement Savings
Plan, in the amount of $5,350, $5,350, $5,350, $5,350, $3,945, $5,260 and
$3,074, respectively, in the cases of Messrs. Pulitzer, Elkins, Penniman,
Ridgway, Kueneke, Godsey and Egger, (ii) income assessed which was related
to split dollar life insurance of $32,601, $11,866, $9,267, and $7,909,
respectively, in the cases of Messrs. Pulitzer, Elkins, Penniman, and
Ridgway (iii) Pulitzer's payment of an annual auto allowance to Ken J.
Elkins of $9,500 in 1997, 1996 and 1995 and (iv) payment of moving expenses
for Terrance C.Z. Egger of $61,379 in 1996.

44
<PAGE> 46

Stock Compensation. Pulitzer has maintained three different equity
incentive compensation plans: (i) a stock option plan, (ii) a restricted stock
plan and (iii) a broad-based employee stock purchase plan (participation in
which was suspended as of September 30, 1998). All three plans are administered
by the Compensation Committee of the Board of Directors of Pulitzer. New
Pulitzer's Board of Directors has adopted similar equity incentive compensation
plans.

New Pulitzer's stock option plan, which is subject to stockholder approval,
provides for the granting of options to purchase shares of New Pulitzer Common
Stock to key personnel at an exercise price equal to the fair market value of
the Common Stock on the option grant date. Unlike Pulitzer's present plan,
Michael E. Pulitzer is eligible to receive stock option grants under the New
Pulitzer plan. At the time the Merger is consummated, all options previously
granted under Pulitzer's stock option plans will have been exercised, cancelled
or cashed-out.

New Pulitzer's restricted stock plan, which is subject to stockholder
approval, provides for the issuance of "restricted" shares of New Pulitzer
Common Stock to key personnel. The shares are restricted in the sense that New
Pulitzer is entitled to recover the shares issued to individuals whose
employment or service with New Pulitzer terminates before the specified vesting
date(s). At the time of the consummation of the Merger, all restricted shares
issued under the corresponding Pulitzer restricted stock plan will have become
unrestricted or will have been re-acquired by Pulitzer.

New Pulitzer's employee stock purchase plan provides for the purchase of
shares of New Pulitzer Common Stock by participating employees at the end of
each of four quarterly plan cycles for a purchase price equal to 85% of the then
fair market value of the Common Stock. In general, all employees of New Pulitzer
and its subsidiary corporations are eligible to become participants in this
plan. Stock purchases will be made with money withheld from pay at the election
of the participating employees. In contemplation of the Merger, participation in
Pulitzer's employee stock purchase plan was suspended at the end of the third
cycle for 1998 (i.e., as of September 30, 1998).

The following table provides information on option grants in fiscal 1997 by
Pulitzer to the named executive officers:

OPTION GRANTS IN LAST FISCAL YEAR

INDIVIDUAL GRANTS

<TABLE>
<CAPTION>
(A) (B) (D) (E) (G)
(C) (F)
% OF TOTAL POTENTIAL REALIZABLE VALUE
OPTIONS AT END OF OPTION TERM
OPTIONS GRANTED TO EXERCISE ASSUMING ANNUAL STOCK
GRANTED EMPLOYEES PRICE PRICE APPRECIATION RATES OF:
(SHARES) IN FISCAL (PER EXPIRATION ----------------------------
NAME (1) 1997(2) SHARE) DATE 5%($) 10%($)
---- -------- ---------- -------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Michael E. Pulitzer.......... 0 0% $ .00 -- $ 0 $ 0
Ken J. Elkins................ 35,000 16.6 58.81 12/18/07 1,294,563 3,280,463
Nicholas G. Penniman IV...... 17,500 8.3 58.81 12/18/07 647,281 1,640,231
Ronald H. Ridgway............ 27,500 13.0 58.81 12/18/07 1,017,156 2,577,506
John C. Kueneke.............. 8,000 3.8 58.81 12/18/07 295,900 749,820
C. Wayne Godsey.............. 8,000 3.8 58.81 12/18/07 295,900 749,820
Terrence C.Z. Egger.......... 5,000 2.4 58.81 12/18/07 184,938 468,638
</TABLE>

- -------------------------
(1) Each option becomes exercisable in one-third increments over a three-year
period on the anniversary date of the grants.

(2) Based on an aggregate of 211,231 stock options granted to all employees in
fiscal 1997.

45
<PAGE> 47

The following table provides information on option/SAR exercises in
Pulitzer's fiscal 1997 by the named executive officers and the value of such
officers' unexercised options/SARs at December 31, 1997:

AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND DECEMBER 31, 1997 OPTION VALUES

<TABLE>
<CAPTION>
EXERCISES DURING YEAR FISCAL YEAR-END
- --------------------------------------------------------- ------------------------------------------------------------------
(A) (C)
(D) (E)
(B) NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS/SARS IN-THE-MONEY
ACQUIRED (SHARES) OPTIONS/SARS($)(1)
ON VALUE ------------------------------ ------------------------------
NAME EXERCISE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael E. Pulitzer...... 0 $ 0 0 0 $ 0 $ 0
Ken J. Elkins............ 0 0 153,998 66,334 6,469,845 810,574
Nicholas G. Penniman
IV..................... 8,500 284,969 94,444 33,056 3,906,579 409,978
Ronald H. Ridgway........ 7,225 269,165 134,998 47,501 5,860,661 543,390
John C. Kueneke.......... 0 0 4,888 12,445 129,061 134,679
C. Wayne Godsey.......... 0 0 35,556 16,446 1,483,165 249,680
Terrence C.Z. Egger...... 0 0 3,222 8,111 81,292 88,740
</TABLE>

- -------------------------
(1) Computed based upon the difference between the closing price of Pulitzer's
common stock on December 31, 1997, and the exercise price. Stock options and
stock prices have been adjusted to reflect the impact of a common stock and
a Class B common stock split, effected in the form of a 25% stock dividend,
declared by Pulitzer's Board of Directors on January 4, 1995 and a common
stock and Class B common stock split, effected in the form of a 33.3% stock
dividend, declared by Pulitzer's Board of Directors on September 12, 1996.

Pulitzer Retirement Savings Plan. Pulitzer maintains the Pulitzer
Retirement Savings Plan (the "Retirement Savings Plan") for the benefit of
eligible employees of Pulitzer and certain subsidiaries. The Retirement Savings
Plan is intended to be a qualified plan under Section 401(a) of the Internal
Revenue Code of 1986, as amended (the "Code") and contains a qualified cash or
deferred arrangement as described in Section 401(k) of the Code. The Retirement
Savings Plan is funded through Pulitzer's contributions and participating
employees' elective 401(k) deferrals. Each participant's elective deferrals are
made through payroll deductions and are subject to the annual 401(k) limit
which, for 1999, is $10,000 and other legal limitations. Pulitzer makes annual
matching contributions (limited to 2% of pay) at the rate of 50% of an executive
officer's elective contributions. In addition, Pulitzer makes a $50 monthly
profit sharing contribution to each participating executive's Retirement Savings
Plan account.

New Pulitzer will assume sponsorship of Pulitzer's Retirement Savings Plan
in connection with the consummation of the Transactions. It is anticipated that
New Pulitzer will continue to maintain the Retirement Savings Plan on
substantially the same basis for the benefit of its eligible employees.
Following the Merger, the Retirement Savings Plan account balances of the
continuing Broadcasting Business employees and the liabilities for payment
thereof will be transferred to and assumed by a similar plan that is or will be
maintained by Hearst-Argyle and/or its affiliates.

Pulitzer's contributions under the Retirement Saving Plan for the accounts
of the seven most highly compensated executive officers of Pulitzer are included
in the amount of cash compensation set forth opposite their names on the Summary
Compensation Table set forth on page 40.

Pulitzer Publishing Company Pension Plan. The Pulitzer Publishing Company
Pension Plan (the "Pension Plan") is a defined benefit plan that is intended to
be a qualified plan under Section 401(a) of the Code. Generally, the Pension
Plan provides retirement benefits to non-union employees of Pulitzer and all
employees of the Broadcasting Business. Pulitzer's executive officers are also
covered under the Pension Plan.

The Pension Plan provides for the payment of monthly retirement income to
participating employees. The amount of the monthly benefit, expressed as a
single life annuity beginning at normal retirement age (later of age 65 or the
completion of five years of participation), is approximately equal to the sum of
(i) 1.5%

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<PAGE> 48

of "monthly earnings" for each year of service up to 25 years, (ii) 1% of
"monthly earnings" for each year of service beyond 25 years, (iii) .5% of
"monthly earnings" in excess of "covered compensation" for each year of service
up to a total of 35 years (subject to certain limitations), and (iv) the
benefit, if any, earned under a predecessor plan as of December 31, 1988.
Generally, monthly earnings means the monthly average of an employee's base
earnings in the specified years, and covered compensation means base
compensation with respect to which social security benefits are earned. Pension
Plan benefits become vested upon completion of five years of service. A covered
employee may retire with reduced benefits after attaining age 55 and completing
five years of service.

New Pulitzer will assume sponsorship of the Pension Plan in connection with
the consummation of the Transactions. It is anticipated that New Pulitzer will
continue to maintain the Pension Plan after the Merger for the benefit of its
eligible employees. Following the Merger, the Pension Plan liabilities
attributable to continuing Broadcasting Business employees, together with
Pension Plan assets associated with those liabilities, will be transferred to
and assumed by a similar plan maintained or to be maintained by Hearst-Argyle
and/or its affiliates for the benefit of those employees.

As of December 31, 1997, total estimated annual retirement benefits for
Michael E. Pulitzer, Ken J. Elkins, Nicholas G. Penniman IV, Ronald H. Ridgway,
John C. Kueneke, C. Wayne Godsey and Terrance C.Z. Egger under the Pension Plan,
assuming they continue in their current positions at their current levels of
compensation and retire at age 65 (or at the present date if older than 65), are
$63,963, $71,786, $70,322, $65,624, $46,644, $64,124 and $74,810, respectively.
The following table shows the estimated annual pension payable under the Pension
Plan to persons retiring at age 65. The table reflects the fact that the
benefits provided by the Pension Plan's formula are subject to certain
limitations under the Code.

<TABLE>
<CAPTION>
ESTIMATED ANNUAL PENSION BENEFITS FOR YEARS OF SERVICE INDICATED
ANNUAL COMPENSATION --------------------------------------------------------------------
AT RETIREMENT 15 YRS. 20 YRS. 25 YRS. 30 YRS. 35 YRS.
------------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$150,000..... $30,361 $36,143 $40,506 $41,736 $42,447
200,000..... 41,260 49,228 55,304 57,205 58,412
250,000..... 45,685 60,887 70,102 72,673 74,377
300,000..... 45,665 60,887 76,109 87,331 90,342
350,000..... 45,665 60,887 76,109 87,331 98,553
400,000..... 45,665 60,887 76,109 87,331 98,553
450,000..... 45,665 60,887 76,109 87,331 98,553
500,000..... 45,665 60,887 76,109 87,331 98,553
</TABLE>

- -------------------------
This table reflects the fact that the benefit provided by the Pension Plan's
formula is subject to certain constraints under the Code. For 1988, the maximum
annual benefit is $130,000 under Code Section 415. Furthermore, under Code
Section 401(a)(17), the maximum annual compensation that may be reflected in
1998 is $160,000. These dollar limits are subject to cost of living increases in
future years.

Supplemental Executive Benefit Pension Plan. The Pulitzer Publishing
Company Supplemental Executive Benefit Pension Plan ("SERP") is an unfunded
defined benefit plan. The SERP provides for the payment of a minimum annual
retirement benefit to executive officers and other designated highly compensated
employees of Pulitzer, taking into account the employer provided benefits earned
by the participant under Pulitzer's Retirement Savings Plan and Pension Plan.
The retirement pension payable to a SERP participant, expressed as an annual
single life annuity beginning at the participant's normal retirement date (age
65 and 10 years of service), is equal to 40% of the participant's final
three-year average compensation multiplied by a fraction, the numerator of which
is the number of the participant's years of credited service, and the
denominator of which is 25. The amount of the benefit, as so determined, is
payable by Pulitzer to the extent it is not covered by the employer-provided
benefits payable to the participant under Pulitzer's Retirement Savings Plan and
Pension Plan. Participants become vested in their SERP benefits after the
completion of ten years of service with Pulitzer and its affiliates. Vested
participants who retire between age 55 and 65 may elect to begin receiving
reduced annual payments before they reach age 65 (their normal retirement age).
Subject to certain conditions, the SERP also provides for the payment of a 50%
survivor annuity to the

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<PAGE> 49

surviving spouse of a deceased participant. The estimated years of credited
service for Michael E. Pulitzer, Ken J. Elkins, Nicholas G. Penniman IV, Ronald
H. Ridgway, John C. Kueneke, C. Wayne Godsey and Terrance C. Z. Egger under the
SERP are 37 years, 36 years, 22 years, 26 years, 2 years, 10 years and 2 years,
respectively.

In connection with the Transactions, New Pulitzer will assume Pulitzer's
obligations under the SERP other than obligations accrued with respect to
employees of the Broadcasting Business who continue to be employed by
Hearst-Argyle and/or its affiliates after the consummation of the Transactions.
In connection with the assumption of the SERP obligations to Mr. Ken J. Elkins,
New Pulitzer will be required to waive the application of any early retirement
reduction factor if Mr. Elkins elects to begin receiving his SERP payments
before reaching age 65 but after reaching age 63. It is anticipated that New
Pulitzer will adopt a similar plan for the benefit of its executive officers and
other designated highly compensated employees. Benefits payable under the SERP
formula after the Merger to a New Pulitzer employee who was also a participant
in Pulitzer's SERP before the Merger will not be lower than the SERP benefits
earned by the employee under Pulitzer's SERP immediately prior to the Merger.

The following table shows the estimated annual pension benefits that would
be payable under the existing SERP formula, without regard to offsets for
employer-provided benefits payable under the Retirement Savings Plan and the
Pension Plan to persons retiring at age 65 in the specified compensation and
years-of-service classifications. The SERP benefit is the difference between the
total benefit shown in the following table and the employer-provided benefit
earned under the Pension Plan and the Retirement Savings Plan. As of December
31, 1997, total estimated annual retirement benefits for Michael E. Pulitzer,
Ken J. Elkins, Nicholas G. Penniman IV, Ronald H. Ridgway, John C. Kueneke, C.
Wayne Godsey and Terrance C. Z. Egger under the SERP, assuming they continue in
their current positions at their current levels of compensation and retire at 65
(or at the present date if older than 65), are $483,247, $156,723, $100,379,
$91,008, $20,316, $43,354 and $0, respectively.

<TABLE>
<CAPTION>
ESTIMATED ANNUAL PENSION BENEFITS
FOR YEARS OF SERVICE INDICATED
FINAL THREE-YEAR --------------------------------------------------------------------
AVERAGE COMPENSATION 15 YRS. 20 YRS. 25 YRS. 30 YRS. 35 YRS.
- -------------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$150,000... $ 36,000 $ 48,000 $ 60,000 $ 60,000 $ 60,000
200,000... 48,000 64,000 80,000 80,000 80,000
250,000... 60,000 80,000 100,000 100,000 100,000
300,000... 72,000 96,000 120,000 120,000 120,000
350,000... 84,000 112,000 140,000 140,000 140,000
400,000... 96,000 128,000 160,000 160,000 160,000
450,000... 108,000 144,000 180,000 180,000 180,000
500,000... 120,000 160,000 200,000 200,000 200,000
</TABLE>

Deferred Compensation Plan. Pulitzer presently maintains a deferred
compensation plan (the "Deferred Compensation Plan") pursuant to which its
senior executive officers are required to defer annual incentive compensation
the payment of which would not be currently deductible by Pulitzer because of
the $1 million executive compensation deduction limitation of Section 162(m) of
the Code. The Deferred Compensation Plan also permits eligible executives to
make elective deferrals of annual bonus awards. Amounts deferred under the
Deferred Compensation Plan are credited with interest based on the one-year
treasury bill rate in effect at the beginning of each year. The Deferred
Compensation Plan is not a qualified plan under Section 401(a) of the Code and
the obligations of Pulitzer under the Deferred Compensation Plan are unfunded.
To date, the only deferrals that have been made under the Deferred Compensation
Plan are mandatory deferrals of annual incentive compensation earned by Michael
E. Pulitzer.

New Pulitzer will assume the obligations to Michael E. Pulitzer under the
Deferred Compensation Plan. It is anticipated that the Board of Directors of New
Pulitzer will adopt a new deferred compensation plan and that New Pulitzer will
make contributions to a grantor trust equal to the amounts deferred under the
plan. It is anticipated that the amounts deferred under the new plan (including
the amount credited to Michael E. Pulitzer under Pulitzer's Deferred
Compensation Plan) would be credited with earnings based upon several

48
<PAGE> 50

hypothetical investment alternatives that may be designated by the plan
participants. A substantial portion of Pulitzer's payment obligations to the
executive officers (including Mr. Ken J. Elkins) arising at the closing of the
Transactions, including, for example, transaction and retention incentive awards
and amounts payable for the cancellation of certain stock options, will be
assumed by New Pulitzer and deferred under New Pulitzer's deferred compensation
plan. It is expected that the trust will be funded by New Pulitzer soon after
the closing of the Merger. All obligations of New Pulitzer under the deferred
compensation plan will be unsecured. Assets of the trust to be maintained as
part of the plan will be subject to the claims of creditors of New Pulitzer in
the event of its insolvency.

Split Dollar Life Insurance Agreements. In December 1996, Pulitzer entered
into so-called split dollar life insurance agreements in connection with life
insurance policies issued on the lives of Michael E. Pulitzer, Ken J. Elkins,
Nicholas G. Penniman IV and Ronald H. Ridgway. These agreements require Pulitzer
to make annual premium deposits under the policies and give Pulitzer an economic
interest in the policies. Pulitzer is entitled to receive the value of its
interest in each policy upon the death of the insured executive or, if earlier,
upon termination of the split dollar agreement associated with that policy.
Pulitzer has received a collateral assignment of each of the policies covered by
the split dollar agreements in order to secure the payment of its interest
therein. New Pulitzer will assume the obligations of Pulitzer under and is
anticipated to continue to maintain in force all four split dollar agreements.
The agreements would be amended accordingly.

Other Insurance Benefits. In 1986, the Board of Directors of Pulitzer
adopted an insurance benefit program for certain of its executive officers and
key employees to provide group life, accidental death and dismemberment and
long-term disability insurance coverage in addition to the group life and
accidental death and dismemberment insurance coverage maintained by Pulitzer for
its employees generally. The group life insurance benefit was increased to a
multiple of the executive's total annual compensation, but in no event may it
exceed $250,000. Upon retirement, the group life insurance coverage is reduced
to $50,000. The accidental death and dismemberment coverage equals the amount of
the group life insurance benefit and terminates upon retirement.

Long-term disability insurance coverage was instituted to provide a salary
replacement equal to 60% of total compensation, subject to a maximum monthly
benefit payment of $10,000. Benefits are payable after the ninetieth day of
total disability and continue for the duration of the disability or until age
65. Executives who become disabled after age 60 are entitled to reduced
benefits. Benefits are integrated with other sources of disability income, such
as Social Security Disability Income.

It is contemplated that New Pulitzer will provide certain of its executive
officers and key employees with similar benefits programs.

ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Retention and Participation Agreements. In connection with the
Transactions, Pulitzer entered into agreements with Messrs. Michael E. Pulitzer,
Ken J. Elkins, Nicholas G. Penniman IV, Ronald H. Ridgway, C. Wayne Godsey and
John Kueneke (collectively, the "Pulitzer Executives") pursuant to which
Pulitzer agreed to pay each Pulitzer Executive a retention award on the earlier
of (a) January 1, 2000, or (b) the date of the closing of the Transactions,
provided the Pulitzer Executive remains in the continuous employ of Pulitzer
until such earlier date. The amounts of the retention awards are $900,000,
$600,000, $150,000, $450,000, $250,000 and $250,000, respectively. These
agreements also provide for transaction completion bonuses payable on or after
the closing of the Transactions. The amounts of the transaction completion
bonuses are $1,000,000, $1,000,000, $150,000, $450,000, $375,000, and $375,000,
respectively. It is anticipated that Pulitzer's Compensation Committee will
award additional, discretionary transaction completion bonuses to each Pulitzer
Executive (except Messrs. Elkins, Godsey and Kueneke) and certain other
management personnel. The agreements for Messrs. Elkins, Godsey and Kueneke
provide for cash separation payments of approximately $380,000, $200,000 and
$200,000, respectively. The exact amount payable to each of these individuals
will depend in large part upon the value assigned for federal income tax
purposes to the accelerated vesting of their unvested stock options and other
non-cash benefits. Each of the agreements provides for full payment to the
Pulitzer Executive's estate if the Pulitzer Executive dies before the closing of

49
<PAGE> 51

the Transactions. Pulitzer has entered into similar agreements with certain of
its other corporate, newspaper and new media officers and executives who will be
entitled to receive transaction completion bonuses aggregating approximately
$984,000. Certain of these individuals will also be entitled to receive, among
other things, retention awards aggregating approximately $289,000. In addition,
pursuant to the Merger Agreement, Hearst-Argyle has agreed to assume the
obligation to make payments of certain retirement or other benefits that have
been earned as of the effective time of the Merger (which will become fully
vested at that time) to certain broadcasting executives of Pulitzer under
Pulitzer's supplemental executive retirement plan. New Pulitzer has agreed to
pay to Hearst-Argyle an amount equal to the aggregate amount of such payments
net of a deferred tax benefit. The net amount has been estimated to be $100,000,
although the actual amount may be higher or lower depending on the final
actuarial calculations at the effective time of the Merger.

James M. Snowden, Jr., a member of the Compensation Committee, is an
executive vice president of Huntleigh Securities Corporation ("Huntleigh").
Since November 6, 1995, Huntleigh has had a retainer relationship with Pulitzer
with respect to general financial advisory services. In addition, in December
1997, Pulitzer entered into an engagement letter with Huntleigh pursuant to
which Huntleigh has acted as a financial adviser to Pulitzer with respect to
various alternatives regarding Pulitzer's broadcasting operations. Pursuant to
this engagement letter, Pulitzer has paid Huntleigh $200,000 in financial
advisory fees. In addition, Pulitzer will be obligated to pay Huntleigh a fee of
$1.5 million upon consummation of the Spin-off and additional fees aggregating
approximately $9.8 million (based on the closing price of Hearst-Argyle's Series
A common stock on January 19, 1999) upon consummation of the Merger. New
Pulitzer intends to retain Huntleigh in the future as a financial advisor in
connection with such financial matters as it deems appropriate. Pulitzer has
agreed to reimburse Huntleigh, and its affiliates, partners, directors, agents,
employees and control persons for certain legal and other expenses and to
indemnify Huntleigh against certain liabilities, including certain liabilities
under the federal securities laws.

For a discussion of David E. Moore and Emily Rauh Pulitzer's consulting
agreements with Pulitzer, see "Item 5. Directors and Executive
Officers -- Director Compensation."

For a discussion of Messrs. Pulitzer, Woodworth, Ridgway and Egger's
employment agreements with New Pulitzer, see "Item 6. Executive Compensation."

Pursuant to the terms of the late Joseph Pulitzer Jr.'s employment
agreement, Pulitzer pays Emily Rauh Pulitzer, as the beneficiary of Joseph
Pulitzer Jr.'s deferred compensation balance, a monthly annuity of $15,000
(including interest). Pulitzer will assign this employment agreement to New
Pulitzer in the Spin-off and the annuity payments to Mrs. Pulitzer are expected
to terminate in 2003.

William Bush, a director of Pulitzer and New Pulitzer, is a partner in
Fulbright & Jaworski L.L.P. Pulitzer has retained, and New Pulitzer intends to
retain in the future, Fulbright & Jaworski L.L.P. as attorneys in connection
with such legal matters as it deems appropriate.

ITEM 8. LEGAL PROCEEDINGS.

Subsequent to the Scripps League acquisition, Barry H. Scripps commenced an
action against Edward W. Scripps, Betty Knight Scripps and Pulitzer Community
Newspapers, Inc. Barry H. Scripps is the child of Edward W. Scripps and Betty
Knight Scripps. Barry Scripps, a former minority shareholder and executive
employee of Scripps League, alleges that the defendant Betty Knight Scripps
formed and implemented a wrongful scheme to transfer the ownership of Scripps
League outside the Scripps family in violation of the Scripps League corporate
mission by (i) inducing the defendant Edward W. Scripps to breach their
life-long promises to Barry Scripps to retain the ownership of Scripps League
Newspapers in the family and ultimately turn over its management and control to
Barry Scripps; (ii) engineering an unlawful freeze-out of Barry Scripps as a
minority shareholder from Scripps League and its subsidiaries; and (iii)
tortiously causing Scripps League to breach its promise to Barry Scripps of
permanent employment. The claims asserted are for breach of promise against
Edward W. Scripps and Betty Knight Scripps, breach of employment contract
against Pulitzer Community Newspapers, Inc. as successor to Scripps League,
interference with contract against Betty Knight Scripps, breach of fiduciary
duty against Betty Knight Scripps, and promissory estoppel against Edward W. and
Betty Knight Scripps. Barry Scripps seeks (i) money damages, together with
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<PAGE> 52

interest and counsel fees in the amount to be proven at trial against Edward and
Betty Scripps; (ii) judgment rescinding each of the actions that Betty Knight
Scripps caused to be taken that allegedly froze out Barry Scripps as a
stockholder in Scripps League; and (iii) damages against Pulitzer Community
Newspapers, Inc. for loss of income plus interest and counsel fees in an amount
to be proven at trial for breach of the purported employment agreement. Edward
W. Scripps and Betty Knight Scripps, jointly and severally, agreed to indemnify
Pulitzer and its affiliates, officers, directors, stockholders, employees,
agents, successors and assigns at all times after the closing for any and all
losses arising from Barry Scripps' claims. On March 26, 1998, the Court issued
an order granting defendants' motion for summary judgment and dismissed all of
Barry Scripps' charges and claims against all defendants, and on April 29, 1998,
a final judgment was entered with respect to that order. Barry Scripps filed a
notice of appeal on May 21, 1998, and Barry Scripps' brief in connection with
that appeal is due March 18, 1999.

Pulitzer has been involved, from time to time, in various claims and
lawsuits incidental to the ordinary course of its business, including such
matters as libel, slander and defamation actions and complaints alleging
discrimination. While the results of litigation cannot be predicted, management
of Pulitzer and New Pulitzer believe the ultimate outcome of such existing
litigation will not have a material adverse effect on the consolidated financial
statements of New Pulitzer and its subsidiaries.

ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS.

Prior to the Spin-off, New Pulitzer Common Stock and New Pulitzer Class B
Common Stock will not have traded in a public market. Pulitzer's common stock is
listed and traded on the New York Stock Exchange, Inc. (the "NYSE") under the
symbol "PTZ."

At December 31, 1998, there were approximately 373 record holders of
Pulitzer's common stock and 2 record holders of its class B common stock.

The following table sets forth, for the periods indicated, the range of
high and low sales prices and dividends paid by Pulitzer for each quarterly
fiscal period through January 14, 1999:

<TABLE>
<CAPTION>
1999 HIGH LOW DIVIDEND(1)
---- ---- --- -----------
<S> <C> <C> <C>
First Quarter (as of January 14)................... $88.88 $84.00 $ --
</TABLE>

<TABLE>
<CAPTION>
1998 HIGH LOW DIVIDEND(1)
---- ---- --- -----------
<S> <C> <C> <C>
First Quarter...................................... $87.44 $57.44 $0.1500
Second Quarter..................................... 92.13 77.75 0.1500
Third Quarter...................................... 89.63 74.38 0.1500
Fourth Quarter..................................... 85.69 64.38 0.3000
</TABLE>

<TABLE>
<CAPTION>
1997 HIGH LOW DIVIDEND(1)
---- ---- --- -----------
<S> <C> <C> <C>
First Quarter...................................... $50.63 $43.38 $0.1300
Second Quarter..................................... 54.25 40.88 0.1300
Third Quarter...................................... 57.50 49.75 0.1300
Fourth Quarter..................................... 63.31 51.81 0.1300
</TABLE>

- -------------------------

(1) In 1998, Pulitzer declared cash dividends of $0.75 per share of common stock
and Class B common stock including a cash dividend of $0.15 per share of
common stock and Class B common stock which was declared in December 1998
and paid to stockholders in January 1999. The dividend declared in December
1998 represents the acceleration of Pulitzer's dividend historically
declared in the first quarter of each fiscal year. As a result, Pulitzer
will not declare a quarterly dividend in the first quarter of 1999. In 1997,
Pulitzer declared and paid cash dividends of $0.5200 per share of common
stock and Class B common stock. (For restrictions on dividends see Note 6 to
Audited Annual Consolidated Financial Statements included in Item 13 of this
Registration Statement on Form 10/A.)

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<PAGE> 53

Upon completion of the Transactions, the separate existence of Pulitzer
will cease. The shares of New Pulitzer's Common Stock issued in the Spin-off are
expected to be listed on the NYSE and to trade under the symbol "PTZ." The Board
of Directors of New Pulitzer intends to maintain the same quarterly dividend per
share as Pulitzer. Future dividends will depend upon, among other things, New
Pulitzer's earnings, financial condition, cash flows, capital requirements and
other relevant considerations, including limitations under any credit agreement
or other agreement to which New Pulitzer may become a party in the future.

ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.

The following paragraph sets forth certain information with respect to all
securities sold by New Pulitzer within the past three years without registration
under the Securities Act of 1933, as amended (the "Securities Act"). The
information includes the names of the purchasers, the dates of issuance, the
title and number of securities sold and the consideration received by New
Pulitzer for the issuance of these securities.

The following shares of Common Stock were issued by New Pulitzer without
registration under the Securities Act by reason of the exemption from
registration afforded by the provisions of Section 4(2) thereof, as transactions
by an issuer not involving a public offering:

1. In May 1998, New Pulitzer issued 100 shares of Common Stock to Pulitzer
for $10,000.

ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.

Pulitzer now owns all 100 issued and outstanding shares of Common Stock of
New Pulitzer. Prior to the Spin-off, Pulitzer will cause the Certificate of
Incorporation of New Pulitzer to be amended and restated (the "New Pulitzer
Charter") and to contain provisions substantially similar to Pulitzer's Restated
Certificate of Incorporation as proposed to be amended. The New Pulitzer Charter
will provide New Pulitzer with the authority to issue 100,000,000 shares of
Common Stock, 100,000,000 shares of Class B Common Stock and 100,000,000 shares
of Preferred Stock.

COMMON STOCK AND CLASS B COMMON STOCK

Dividends. Each share of Common Stock and Class B Common Stock of New
Pulitzer will be entitled to dividends if, as and when dividends may be declared
by the Board of Directors of New Pulitzer and paid. Under Delaware General
Corporation Law, New Pulitzer may declare and pay dividends only out of its
surplus, or in case there shall be no such surplus, out of its net profits for
the fiscal year in which the dividend is declared and/or the preceding year. No
dividends may be declared, however, if the capital of New Pulitzer has been
diminished by depreciation, losses or otherwise to an amount less than the
aggregate amount of capital represented by any issued and outstanding stock
having a preference on distribution. Dividends must be paid on both the Common
Stock and the Class B Common Stock at any time that dividends are paid on
either. Any dividend so declared and payable in cash, capital stock of New
Pulitzer (other than Common Stock or Class B Common Stock) or other property
will be paid equally, share for share, on the Class B Common Stock and Common
Stock, except under certain circumstances. Dividends and distributions payable
in shares of Class B Common Stock may be paid only on or to shares of Class B
Common Stock, and dividends and distributions payable in shares of Common Stock
may be paid only on or to shares of Common Stock. If a dividend or distribution
payable in Common Stock is made on the Common Stock, New Pulitzer must also make
a simultaneous dividend or distribution payable in Class B Common Stock on the
Class B Common Stock. If a dividend or distribution payable in Class B Common
Stock is made on the Class B Common Stock, New Pulitzer must also make a
simultaneous dividend or distribution payable in Common Stock on the Common
Stock. Pursuant to any such dividend or distribution, each share of Class B
Common Stock will receive a number of shares of Class B Common Stock equal to
the number of shares of Common Stock payable on each share of Common Stock.
Notwithstanding the foregoing, in the case of any dividend or other distribution
payable in stock of any corporation which immediately prior to the time of such
dividend or other distribution is a wholly-owned subsidiary of New Pulitzer and
which possesses authority to issue shares of capital stock with voting
characteristics substantially similar to those of the shares of New Pulitzer's
Common Stock and Class B Common Stock, respectively, including a distribution
pursuant to a stock

52
<PAGE> 54

dividend or division or split-up of the shares of New Pulitzer, (i) only shares
of capital stock of such a subsidiary with voting characteristics substantially
similar to those of the Class B Common Stock shall be distributed with respect
to shares of New Pulitzer's Class B Common Stock and only shares of capital
stock of such a subsidiary with voting characteristics substantially similar to
those of the Common Stock shall be distributed with respect to shares of New
Pulitzer's Common Stock; (ii) the number of shares of such subsidiary's Class B
common stock payable on each share of New Pulitzer Class B Common Stock pursuant
to such dividend or other distribution shall be equal to the number of shares of
such subsidiary's common stock payable on each share of New Pulitzer Common
Stock pursuant to such dividend or other distribution; and (iii) such dividends
or other distributions of shares of such subsidiary's common stock and Class B
common stock shall be made simultaneously.

Voting Rights. Each share of Common Stock will be entitled to one vote, and
each share of Class B Common Stock will be entitled to ten votes, on all
matters. Except as described below, the Common Stock and the Class B Common
Stock will vote together as a single class on all matters presented for a vote
of the stockholders, including the election of directors. The holders of a
majority of the outstanding shares of Common Stock or Class B Common Stock,
voting as separate classes, must approve certain amendments affecting shares of
such class. Specifically, if there is any proposal to amend the New Pulitzer
Charter in a manner that would increase or decrease the number of authorized
shares of Common Stock or Class B Common Stock, increase or decrease the par
value of the shares of Common Stock or Class B Common Stock or alter or change
the powers, preferences or special rights of the shares of Common Stock or Class
B Common Stock so as to affect them adversely, such an amendment must be
approved by a majority of the outstanding shares of the affected class, voting
separately as a class. In addition, any merger or consolidation in which each
share of Common Stock receives consideration that is not of the same type or is
less than the amount of the consideration to be received by each share of Class
B Common Stock must be approved by a majority of the outstanding shares of
Common Stock, voting separately as a class. Shares of Common Stock and Class B
Common Stock do not have cumulative voting rights.

Terms of Conversion. Each share of Class B Common Stock will be convertible
at any time, at the option of and without cost to the stockholder, into one
share of Common Stock. If at any time (i) the aggregate voting power of all
outstanding shares of Class B Common Stock represents less than 20% of the
aggregate voting power of all issued and outstanding shares of Common Stock and
Class B Common Stock, or (ii) the Board of Directors and the holders of a
majority of the outstanding shares of Class B Common Stock approve the
conversion of all of the Class B Common Stock into Common Stock, then each
outstanding share of Class B Common Stock shall be converted automatically into
one share of Common Stock without any action by the holder. In the event of such
a conversion, certificates formerly representing outstanding shares of Class B
Common Stock will thereafter be deemed to represent an equal number of shares of
Common Stock.

Restrictions on Transfers of Class B Common Stock. The transfer of the
Class B Common Stock, except upon its conversion into Common Stock as described
above, will be restricted by the New Pulitzer Charter to Permitted Transferees
(as defined therein), which, in general, will include only (A) as to holders of
Class B Common Stock who are natural persons, the original holders of such
stock, their spouses or former spouses, their lineal descendants and any spouse
or former spouse of such lineal descendants, and entities (such as trusts,
corporations, partnerships, limited liability companies and charitable
organizations) controlled by the holders of such Class B Common Stock or their
Permitted Transferees, or by New Pulitzer's executive officers or directors and
(B) as to holders of Class B Common Stock that are (i) corporations,
partnerships, limited liability companies or charitable organizations, any
person who transferred such shares of Class B Common Stock to such entity and
such person's Permitted Transferees or (ii) trusts, any person who established
the trust and any person who would be a Permitted Transferee thereof, any
original holder or Permitted Transferee thereof, and any person to whom or for
whose benefit any portion of the principal of the trust may be distributed
either during or at the end of the term of such trust. Stockholders who desire
to sell their shares of Class B Common Stock to other than Permitted Transferees
may convert their shares of Class B Common Stock into shares of Common Stock and
sell the shares of Common Stock, subject, however, to the limitations imposed by
the proposed New Pulitzer Voting Trust with respect to the shares of Class B
Common Stock that will be deposited thereunder.

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<PAGE> 55

Liquidation Rights. In the event of the liquidation, dissolution or winding
up of New Pulitzer, holders of the shares of Common Stock and Class B Common
Stock will be entitled to share equally, share for share, in the net assets
available for distribution.

Other. Following the Spin-off, additional shares of Class B Common Stock
may only be issued upon stock splits of, or stock dividends on, the existing
Class B Common Stock. No stockholder of New Pulitzer will have preemptive or
other rights to subscribe for additional shares of New Pulitzer.

PREFERRED STOCK

The Board of Directors of New Pulitzer will be authorized to issue, by
resolution, without any action by the stockholders, up to 100,000,000 shares of
Preferred Stock and will have the authority to establish the designations,
dividend rights, dividend rate, conversion rights, voting rights, terms of
redemption, liquidation preference, sinking fund terms and all other preferences
and rights of any series of Preferred Stock.

ADDITIONAL PROVISIONS OF NEW PULITZER'S CHARTER

Following the Distribution, New Pulitzer will have a substantial number of
unissued and unreserved shares of Common Stock and unissued and undesignated
shares of Preferred Stock. These additional shares may be utilized for a variety
of corporate purposes, including future public offerings to raise additional
capital or to facilitate corporate acquisitions and could be utilized, under
certain circumstances, as a method of preventing or making more difficult a
takeover or change in control of New Pulitzer.

In addition, certain other charter provisions, which are described below,
may have the effect, alone or in combination with each other or with the
existence of authorized but unissued stock, of rendering more difficult or
discouraging an acquisition of New Pulitzer deemed undesirable by the Board of
Directors.

Classification of the Board of Directors. The Board of Directors of New
Pulitzer will consist initially of nine directors. The New Pulitzer Charter will
provide for a classified Board divided into three equal classes serving
staggered three-year terms. If at any time the size of the Board is changed, the
increase or decrease in the number of directors would be apportioned among the
three classes to make all classes as nearly equal as possible.

Business Combination Provision. The New Pulitzer Charter will require the
affirmative vote of the holders of at least 66 2/3% of the aggregate voting
power of all outstanding shares of New Pulitzer voting stock, voting together as
a single class, (with each share of Class B Common Stock entitled to ten votes)
as a condition for any merger (other than certain mergers with subsidiaries),
consolidation or sale of all or substantially all the property and assets of New
Pulitzer and for certain Business Combinations (as defined herein) with, or
proposed by or on behalf of, any Interested Stockholder (as defined herein)
unless such transaction shall have been approved by a majority of the entire
Board of Directors. This voting requirement will apply even though the Delaware
General Corporation Law requires a simple majority or no stockholder vote to
approve the transaction. An Interested Stockholder will be defined as any person
or group (other than New Pulitzer or any of its subsidiaries or employee benefit
plans) (i) that is, or was at any time within the two-year period immediately
prior to the date in question, the beneficial owner of 10% or more of the voting
stock of New Pulitzer, but excludes any person (including any Permitted
Transferee of such person) who or which, immediately prior to the effective time
of the Merger, is the beneficial owner of 10% or more of the outstanding Class B
Common Stock, or (ii) is an assignee of, or has otherwise succeeded to, any
shares of New Pulitzer voting stock of which an Interested Stockholder was the
beneficial owner at any time within the two year period immediately prior to the
date in question, provided such assignment or succession shall not have occurred
in the course of a transaction or series of transactions involving a public
offering. The term "beneficial owner" will include persons directly and
indirectly owning or having the right to acquire or vote shares. Under certain
circumstances, an Interested Stockholder could include persons or entities
affiliated or associated with the Interested Stockholder. A Business Combination
will include: (i) a merger or consolidation of New Pulitzer or any subsidiary
with an Interested Stockholder or an affiliate or associate of an Interested
Stockholder; (ii) the sale, lease, exchange, mortgage, pledge, transfer or other
disposition by New Pulitzer or a subsidiary to or with, or proposed by or on
behalf of, an Interested Stockholder or an affiliate or

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<PAGE> 56

associate of an Interested Stockholder of assets having an aggregate fair market
value equal to or greater than 1% of the total assets of New Pulitzer; (iii) the
issuance or transfer of stock or other securities of New Pulitzer or of a
subsidiary to, or proposed by or on behalf of, an Interested Stockholder or an
affiliate or associate of an Interested Stockholder in exchange for cash or
property (including stock or other securities) having an aggregate fair market
value equal to or greater than 1% of the total assets of New Pulitzer; (iv) the
adoption of any plan or proposal for the liquidation or dissolution of New
Pulitzer, or any spin-off or split-up of any kind of New Pulitzer or any
subsidiary, proposed by or on behalf of an Interested Stockholder or an
affiliate or associate of an Interested Stockholder; (v) any reclassification of
securities, recapitalization of New Pulitzer, or merger or consolidation with a
subsidiary or other transaction that has the effect, directly or indirectly, of
increasing the percentage of the outstanding stock of any class of New Pulitzer
or a subsidiary owned, directly or indirectly, by an Interested Stockholder or
an affiliate or an associate of an Interested Stockholder; (vi) any other
transaction with an Interested Stockholder or an affiliate or an associate of an
Interested Stockholder that requires the approval of the stockholders under
Delaware law; or (vii) any agreement, contract or other arrangement providing
for any one or more of the foregoing actions.

The New Pulitzer Charter will provide that the Board of Directors, when
evaluating any offer of another party to make a tender or exchange offer for any
equity security of New Pulitzer, to merge or consolidate New Pulitzer with
another company or to purchase or otherwise acquire all or substantially all the
properties and assets of New Pulitzer, shall, in connection with the exercise of
its judgment in determining what is in the best interest of New Pulitzer and its
stockholders, give due consideration to the effect of such a transaction on the
editorial and publishing integrity and the character and quality of New
Pulitzer's newspaper and other operations, all other relevant factors,
including, without limitation, the social, legal and economic effects on the
employees, customers, suppliers and other affected persons, firms and companies
and on the communities and geographical areas in which New Pulitzer and its
subsidiaries operate or are located and on any of the businesses and properties
of New Pulitzer or any of its subsidiaries, as well as such other factors as the
directors deem relevant.

Supermajority Voting Provision. The affirmative vote of the holders of
record of at least 66 2/3% of the aggregate voting power of all outstanding
voting stock, voting together as a single class, will be required for the
amendment or repeal of, or the adoption of any provision inconsistent with the
provisions of the New Pulitzer Charter relating to: (i) Business Combinations,
(ii) the specific voting rights of the Common Stock and Preferred Stock and the
required stockholder approval necessary to effect (A) the consolidation or
merger of New Pulitzer with or into another corporation or of a corporation with
or into New Pulitzer (other than with a corporation of which at least 90% of the
outstanding capital stock is owned by New Pulitzer) and (B) the sale, lease or
exchange of all or substantially all of New Pulitzer's property and assets,
(iii) the power, number, qualification, classification, nomination and removal
of directors, (iv) the terms of the Common Stock and the Class B Common Stock,
(v) the terms of the Preferred Stock, (vi) meetings of stockholders, (vii) the
indemnification of directors, officers, employees and agents for liability
incurred as a result of their activities on behalf of New Pulitzer, (viii) the
amendment of the New Pulitzer Charter or By-laws or (ix) issuance of the Common
Stock and the Preferred Stock. This supermajority provision, however, will be
inapplicable where the proposed amendment is approved by a majority of the
entire Board of Directors. The By-laws will only be able to be amended by a
majority of the entire Board of Directors or by the affirmative vote of the
holders of record of at least 66 2/3% of the aggregate voting power of all
outstanding voting stock, voting together as a single class.

Liability of Directors. The New Pulitzer Charter will limit a director's
liability for monetary damages for breach of fiduciary duty to the fullest
extent permitted by Delaware law as now in effect or hereafter amended,
including breach of fiduciary duty of care and a breach resulting from gross
negligence, except in circumstances involving certain wrongful acts, such as the
breach of a director's duty of loyalty or acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law. The Delaware
statute does not eliminate a director's duty of care and has no effect on the
availability of equitable remedies such as injunction or rescission based upon a
director's breach of the duty of care.

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<PAGE> 57

NEW PULITZER VOTING TRUST AGREEMENT

Immediately following the consummation of the Spin-off and pursuant to the
New Pulitzer Voting Trust Agreement, certain holders of New Pulitzer Class B
Common Stock, including David E. Moore, Emily Rauh Pulitzer and Michael E.
Pulitzer, individually or as trustees of certain holders of New Pulitzer Class B
Common Stock, will deposit their shares of New Pulitzer Class B Common Stock
into the New Pulitzer Voting Trust and will receive from the New Pulitzer Voting
Trust certificates (each, a "New Pulitzer Voting Trust Certificate") evidencing
their interests in the shares so deposited.

It is contemplated that the trustees of the New Pulitzer Voting Trust will
be Cole C. Campbell, David E. Moore, Emily Rauh Pulitzer, Michael E. Pulitzer,
Ronald H. Ridgway and Robert C. Woodworth (collectively, the "New Pulitzer
Trustees"). It is contemplated that pursuant to the New Pulitzer Voting Trust
Agreement, the New Pulitzer Trustees will generally have all voting rights with
respect to the shares of New Pulitzer Stock subject to the New Pulitzer Voting
Trust; however, in connection with certain matters, including any proposal for a
merger, consolidation, recapitalization or dissolution of New Pulitzer or
disposition of all or substantially all New Pulitzer's assets, the calling of a
special meeting of stockholders and the removal of directors, the New Pulitzer
Trustees will not vote the shares of New Pulitzer Stock deposited in the New
Pulitzer Voting Trust except in accordance with written instructions from the
holders of the New Pulitzer Voting Trust Certificates. It is contemplated that
the New Pulitzer Voting Trust Agreement will also permit the conversion of the
New Pulitzer Class B Common Stock deposited in the New Pulitzer Voting Trust
into New Pulitzer Common Stock in connection with certain permitted events,
including, without limitation, sales exempt from the registration requirements
of the Securities Act, which meet the volume and manner of sale requirements of
Rule 144 promulgated thereunder, and sales pursuant to registered public
offerings. It is contemplated that the New Pulitzer Voting Trust will terminate
with the written consent of holders of two-thirds in interest of all outstanding
New Pulitzer Voting Trust Certificates. Unless extended or terminated by the
parties thereto, the New Pulitzer Voting Trust Agreement will expire on or about
the tenth anniversary of the Spin-off.

NEW PULITZER REGISTRATION RIGHTS AGREEMENT

It is contemplated that upon consummation of the Transactions, New Pulitzer
will enter into a registration rights agreement (the "New Pulitzer Registration
Rights Agreement") with certain holders of its Class B Common Stock, including
David E. Moore, Emily Rauh Pulitzer and Michael E. Pulitzer, individually or as
trustees or controlling persons of certain holders of New Pulitzer Stock.
Subject to certain terms and conditions, the New Pulitzer Registration Rights
Agreement will grant the parties thereto the right to cause New Pulitzer to
register under the Securities Act for sale to the public all or part of the
shares of New Pulitzer Common Stock issuable upon conversion of their shares of
New Pulitzer Class B Common Stock. The New Pulitzer Registration Rights
Agreement will also grant the parties thereto the right, subject to certain
terms and conditions, to include such shares of New Pulitzer Common Stock in
other registrations made by New Pulitzer. New Pulitzer will bear the
Registration Expenses (as defined therein) related to any such registrations.

TRANSFER AGENT

The transfer agent for the Common Stock of New Pulitzer is First Chicago
Trust Company of New York.

ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145 of the General Corporation Law of the State of Delaware grants
corporations the power to indemnify their directors, officers, employees and
agents in accordance with the provisions set forth therein.

Article XI of the New Pulitzer Charter will provide for indemnification of
directors, officers, employees and agents of New Pulitzer to the fullest extent
provided by law and is set forth in its entirety as Exhibit 3.1.2

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<PAGE> 58

to this Form 10/A. New Pulitzer does not currently maintain any directors' and
officers' liability insurance. Sections 1, 2 and 11 of Article XI will include
the basic indemnification provisions and will provide as follows:

(1) Action Not By or on Behalf of Corporation. The Corporation shall
indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an
action by or in the right of the Corporation) by reason of the fact that
the person is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by the person in connection with such action, suit
or proceeding if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe the person's conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which the person reasonably believed
to be in or not opposed to the best interests of the Corporation, and, with
respect to any criminal action or proceeding, had reasonable cause to
believe that the person's conduct was unlawful.

(2) Action By or on Behalf of the Corporation. The Corporation shall
indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the
right of the Corporation to procure a judgment in its favor by reason of
the fact that the person is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by the person
in connection with the defense or settlement of such action or suit if the
person acted in good faith and in a manner the person reasonably believed
to be in or not opposed to the best interests of the Corporation, except
that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
Corporation unless and only to the extent that the Delaware Court of
Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but
in view of all of the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Delaware Court
of Chancery or such other court shall deem proper.

(11) A director's liability to the Corporation for breach of duty to
the Corporation or its stockholders shall be limited to the fullest extent
permitted by Delaware law as now in effect or hereafter amended. In
particular, no director of the Corporation shall be personally liable to
the Corporation or any of its stockholders for monetary damages for breach
of fiduciary duty as a director, except for liability (A) for any breach of
the director's duty of loyalty to the Corporation or its stockholders; (B)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law; (C) under Section 174 of the
Delaware General Corporation Law, as the same exists or hereafter may be
amended; or (D) for any transaction from which the director derived an
improper personal benefit. If the Delaware General Corporation Law
hereafter is amended to authorize the further elimination or limitation of
the liability of directors, then the liability of a director of the
Corporation, in addition to the limitation on personal liability provided
herein, shall be limited to the fullest extent permitted by the amended
Delaware General Corporation Law. Any repeal or modification of this
Article by the stockholders of the Corporation shall be prospective only,
and shall not adversely affect any limitation on the personal liability of
a director of the Corporation existing at the time of such repeal or
modification.

ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The Financial Statements and Supplementary Data required by this Item are
filed as part of this Form 10/A. See Index to Financial Statement Information at
page F-1 of this Form 10/A.

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<PAGE> 59

ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

Not applicable.

ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.

(a) Financial Statements and Supplemental Schedule

(i) The consolidated financial statements of Pulitzer are filed as
part of this Registration Statement on Form 10/A. See Index to
Financial Statement Information at page F-1.

The report of Deloitte & Touche LLP, Independent Auditors, dated
February 6, 1998 (July 17, 1998 as to paragraphs 1, 2, 3 and 5 of
Note 2 and paragraphs 3 through 7 of Note 13; November 25, 1998 as
to paragraph 4 of Note 2; and December 11, 1998 as to Note 17), is
filed as part of this Registration Statement on Form 10/A. See
Index to Financial Statement Information at page F-1.

(ii) The consolidated supplemental schedule of Pulitzer is filed as
part of this Registration Statement on Form 10/A. See Index to
Financial Statement Information at page F-1.

The report of Deloitte & Touche LLP, Independent Auditors, dated
February 6, 1998 (July 17, 1998 as to paragraphs 1, 2, 3 and 5 of
Note 2 and paragraphs 3 through 7 of Note 13; November 25, 1998
as to paragraph 4 of Note 2; and December 11, 1998 as to Note
17), is filed as part of this Registration Statement on Form
10/A. See Index to Financial Statement Information at page F-1.

(b) The following exhibits are filed as part of this Registration Statement
on Form 10/A:

EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------
<C> <S> <C>
3.1.1** -- Certificate of Incorporation of Pulitzer Inc.
3.1.2* -- Amended and Restated Certificate of Incorporation of
Pulitzer Inc.
3.2.1** -- By-laws of Pulitzer Inc.
3.2.2* -- Amended and Restated By-laws of Pulitzer Inc.
4.1** -- Form of Pulitzer Inc. Common Stock Certificate.
9.1* -- Form of Pulitzer Inc. Voting Trust Agreement between the
holders of voting trust certificates and Michael E.
Pulitzer, Emily Rauh Pulitzer, Ronald H. Ridgway, Nicholas
G. Penniman IV, Ken J. Elkins, Cole C. Campbell and David
Moore.
10.1** -- Agreement, dated March 1, 1961, effective January 1, 1961,
between The Pulitzer Publishing Company, a Missouri
corporation, and the Globe-Democrat Publishing Company, as
amended on September 4, 1975, April 12, 1979 and December
22, 1983.
10.2.1** -- Amended and Restated Joint Operating Agreement, dated
December 22, 1988, between Star Publishing Company and
Citizen Publishing Company.
10.2.2** -- Partnership Agreement, dated December 22, 1988, between Star
Publishing Company and Citizen Publishing Company.
10.3** -- Agreement, dated as of May 12, 1986, among The Pulitzer
Publishing Company, Clement C. Moore, II, Gordon C. Weir,
William E. Weir, James R. Weir, Kenward G. Elmslie, Stephen
E. Nash and Manufacturers Hanover Trust Company, as
Trustees, and Christopher Mayer.
</TABLE>

58
<PAGE> 60

<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------
<C> <S> <C>
10.4** -- Letter Agreement, dated September 29, 1986, among The
Pulitzer Publishing Company, Trust Under Agreement Made by
David E. Moore, Frederick D. Pulitzer, Michael E. Pulitzer,
Jr., Robert S. Pulitzer, Joseph Pulitzer, IV, Joseph
Pulitzer, Jr., Michael E. Pulitzer, Stephen E. Nash and
Manufacturers Hanover Trust Company, as Trustees, Kenward G.
Elmslie, Gordon C. Weir, William E. Weir, James R. Weir,
Peter W. Quesada, T. Ricardo Quesada, Elinor P. Hempelmann,
The Moore Foundation, Inc., Mariemont Corporation, Z Press
Inc. and Clement C. Moore, II.
10.5** -- Letter Agreement, dated May 12, 1986, among The Pulitzer
Publishing Company, Peter W. Quesada, T. Ricardo Quesada,
Kate Davis Pulitzer Quesada and Elinor P. Hempelmann.
10.6** -- Agreement, dated as of September 29, 1986, among The
Pulitzer Publishing Company, Peter W. Quesada, T. Ricardo
Quesada, Kate Davis Pulitzer Quesada and Elinor Hempelmann.
10.7.1** -- Amendment, dated March 9, 1992, to the Pulitzer Publishing
Company Annual Incentive Compensation Plan.
10.7.2** -- The Pulitzer Publishing Company Annual Incentive
Compensation Plan.
10.7.3** -- Pulitzer Publishing Company Newspaper Operations Annual
Incentive Plan.
10.8.1 -- Amendment, dated September 16, 1997, to Pulitzer Retirement
Savings Plan.(v)
10.8.2 -- Amendment, dated January 28, 1997, to Pulitzer Retirement
Savings Plan.(iv)
10.8.3 -- Amendment, dated October 30, 1996, to Pulitzer Retirement
Savings Plan.(iv)
10.8.4 -- Amendment, dated July 31, 1996, to Pulitzer Retirement
Savings Plan.(iv)
10.8.5 -- Amendment, dated October 25, 1995, to Pulitzer Retirement
Savings Plan.(iv)
10.8.6 -- Amendment, dated October 25, 1995, to Pulitzer Retirement
Savings Plan.(ii)
10.8.7 -- Amendment, dated January 24, 1995, to Pulitzer Retirement
Savings Plan.(i)
10.8.8 -- Amended and Restated Pulitzer Retirement Savings Plan.(i)
10.9.1 -- Amendment, dated October 25, 1995, to Pulitzer Publishing
Company Pension Plan.(iv)
10.9.2 -- Amended and Restated Pulitzer Publishing Company Pension
Plan.(i)
10.10.1** -- Amendment, dated October 29, 1997, to Pulitzer Publishing
Company Supplemental Executive Benefit Pension Plan.
10.10.2** -- Amendment, dated June 23, 1992, to Pulitzer Publishing
Company Supplemental Executive Benefit Pension Plan.
10.10.3** -- Amendment, dated January 1, 1992, to Pulitzer Publishing
Company Supplemental Executive Benefit Pension Plan.
10.10.4** -- Amendment, dated January 18, 1990, to Pulitzer Publishing
Company Supplemental Executive Benefit Pension Plan.
10.10.5** -- Amendment, dated October 26, 1989, to Pulitzer Publishing
Company Supplemental Executive Benefit Pension Plan.
10.10.6** -- Amendment, dated November 6, 1987, to Pulitzer Publishing
Company Supplemental Executive Benefit Pension Plan.
10.10.7** -- Pulitzer Publishing Company Supplemental Executive Benefit
Pension Plan dated March 18, 1986.
10.11** -- Employment Agreement, dated October 1, 1986, between the
Pulitzer Publishing Company and Joseph Pulitzer, Jr.
10.12** -- Employment Agreement, dated January 1, 1986, between the
Pulitzer Publishing Company and Michael E. Pulitzer.
10.13 -- Pulitzer Publishing Company Senior Executive Deferred
Compensation Plan.(ii)
10.14** -- Letter Agreement, dated October 21, 1986, between Pulitzer
Publishing Company and David E. Moore.
</TABLE>

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<PAGE> 61

<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------
<C> <S> <C>
10.15 -- Stock Purchase Agreement by and among Pulitzer Publishing
Company and Mr. Edward W. Scripps, Mrs. Betty Knight
Scripps, and the Edward W. Scripps and Betty Knight Scripps
Charitable Remainder Unitrust dated as of May 4, 1996.(iii)
10.16 -- Split Dollar Life Insurance Agreement, dated December 27,
1996, between Pulitzer Publishing Company and Richard A.
Palmer, Trustee of the Michael E. Pulitzer 1996 Life
Insurance Trust.(iv)
10.17 -- Split Dollar Life Insurance Agreement, dated December 31,
1996, between Pulitzer Publishing Company and Rose M.
Elkins, Trustee of the Kennie J. Elkins Insurance Trust.(iv)
10.18 -- Split Dollar Life Insurance Agreement, dated December 30,
1996, between Pulitzer Publishing Company and Rebecca H.
Penniman and Nicholas G. Penniman V, Trustees of the
Nicholas G. Penniman IV Irrevocable 1996 Trust.(iv)
10.19 -- Split Dollar Life Insurance Agreement, dated December 30,
1996, between Pulitzer Publishing Company and Doris D.
Ridgway and Boatmen's Trust Company, Trustees of The Ronald
H. Ridgway Insurance Trust.(iv)
10.20 -- Letter Agreement, dated January 26, 1998, between Pulitzer
Publishing Company and Emily Rauh Pulitzer.(v)
10.21 -- Amended and Restated Agreement and Plan of Merger by and
among Pulitzer Publishing Company, Pulitzer Inc. and
Hearst-Argyle Television, Inc., dated as of May 25,
1998.(vi)
10.22** -- Form of Contribution and Assumption Agreement by and between
Pulitzer Publishing Company and Pulitzer Inc.
10.23** -- Letter Agreement, dated May 25, 1998, by and among Pulitzer
Publishing Company, Pulitzer Inc. and Hearst-Argyle
Television, Inc.
10.24* -- Form of Letter Agreement between Pulitzer Inc. and Emily
Rauh Pulitzer.
10.25* -- Form of Letter Agreement between Pulitzer Inc. and David E.
Moore.
10.26* -- Form of Pulitzer Inc. Registration Rights Agreement.
10.27 -- Pulitzer Inc. 1999 Key Employees' Restricted Stock Purchase
Plan.
10.28 -- Pulitzer Inc. 1999 Stock Option Plan.
10.29 -- Pulitzer Inc. 1999 Employee Stock Purchase Plan.
10.30* -- Form of Employment Agreement between Pulitzer Inc. and
Michael E. Pulitzer.
10.31* -- Form of Consulting Agreement between Pulitzer Inc. and
Nicholas G. Penniman IV.
10.32* -- Form of Employment Agreement between Pulitzer Inc. and
Ronald H. Ridgway.
10.33 -- Employment Agreement, dated December 18, 1998, between
Pulitzer Inc. and Robert C. Woodworth (vii).
10.34 -- Employment Agreement, dated August 26, 1998 between Pulitzer
Inc. and Terrance C.Z. Egger.
10.35 -- Participation Agreement, dated May 25, 1998, by and between
Pulitzer Publishing Company and Michael E. Pulitzer.
10.36 -- Participation and Severance Agreement, dated May 25, 1998,
by and between Pulitzer Publishing Company and Ken J.
Elkins.
10.37 -- Participation Agreement, dated May 25, 1998, by and between
Pulitzer Publishing Company and Nicholas G. Penniman IV.
10.38 -- Participation Agreement, dated May 25, 1998, by and between
Pulitzer Publishing Company and Ronald H. Ridgway.
</TABLE>

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<PAGE> 62

<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------
<C> <S> <C>
10.39 -- Participation and Severance Agreement, dated May 25, 1998,
by and between Pulitzer Publishing Company and C. Wayne
Godsey.
10.40 -- Participation and Severance Agreement, dated May 25, 1998,
by and between Pulitzer Publishing Company and John Kueneke.
21** -- Subsidiaries of Pulitzer Inc.
</TABLE>

- -------------------------
* To be filed by amendment.

** Previously filed.

(i) Incorporated by reference to Pulitzer Publishing Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1994.

(ii) Incorporated by reference to Pulitzer Publishing Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995.

(iii) Incorporated by reference to Pulitzer Publishing Company's Quarterly
Report on Form 10-Q for the quarterly period ended March 31, 1996.

(iv) Incorporated by reference to Pulitzer Publishing Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996.

(v) Incorporated by reference to Pulitzer Publishing Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997.

(vi) Incorporated by reference to Pulitzer Publishing Company's Current Report
on Form 8-K filed on January 22, 1999.

(vii) Incorporated by reference to Pulitzer Publishing Company's Registration
Statement (File No. 333-69701) on Form S-3.

61
<PAGE> 63

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this Amendment No. 1 to its Registration
Statement on Form 10/A to be signed on its behalf by the undersigned, thereunto
duly authorized.

PULITZER INC.

By: /s/ RONALD H. RIDGWAY

------------------------------------
Ronald H. Ridgway
Senior Vice President -- Finance

Dated: January 22, 1999

62
<PAGE> 64

INDEX TO FINANCIAL STATEMENT INFORMATION

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
Audited Annual Consolidated Financial Statements
Independent Auditors' Report................................ F-2
Statements of Consolidated Income for each of the Three
Years in the Period Ended December 31, 1997............... F-3
Statements of Consolidated Financial Position at December
31, 1997 and 1996......................................... F-4
Statements of Consolidated Stockholders' Equity for each of
the Three Years in the Period Ended December 31, 1997..... F-5
Statements of Consolidated Cash Flows for each of the Three
Years in the Period Ended December 31, 1997............... F-7
Notes to Consolidated Financial Statements for the Three
Years in the Period Ended December 31, 1997............... F-8
Consolidated Supplemental Financial Schedule
Independent Auditors' Report................................ F-27
Financial Schedule II for Each of the Three Years in the
Period Ended December 31, 1997............................ F-28
Unaudited Interim Consolidated Financial Statements
Statements of Consolidated Income for the Nine-Month Periods
Ended September 30, 1998 and 1997......................... F-29
Statements of Consolidated Financial Position at September
30, 1998 and December 31, 1997............................ F-30
Statements of Consolidated Cash Flows for the Nine-Month
Periods Ended September 30, 1998 and 1997................. F-31
Notes to Consolidated Financial Statements.................. F-32
</TABLE>

F-1
<PAGE> 65

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of

Pulitzer Publishing Company:

We have audited the accompanying statements of consolidated financial
position of Pulitzer Publishing Company and subsidiaries as of December 31, 1997
and 1996, and the related consolidated statements of income, stockholders'
equity, and cash flows for each of the three years in the period ended December
31, 1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of the companies at December 31,
1997 and 1996, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 1997 in conformity with
generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Saint Louis, Missouri

February 6, 1998

(July 17, 1998 as to paragraphs

1, 2, 3 and 5 of Note 2 and

paragraphs 3 through 7 of

Note 13; November 25, 1998

as to paragraph 4 of Note 2; and

December 11, 1998 as to

Note 17)

F-2
<PAGE> 66

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

STATEMENTS OF CONSOLIDATED INCOME

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------
1997 1996 1995
---- ---- ----
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
Operating Revenues -- Net:
Publishing:
Advertising............................................ $227,817 $191,939 $161,932
Circulation............................................ 87,611 81,434 76,349
Other.................................................. 42,541 35,723 31,107
Broadcasting.............................................. 227,016 224,992 202,939
-------- -------- --------
Total operating revenues.......................... 584,985 534,088 472,327
-------- -------- --------
Operating Expenses:
Publishing operations..................................... 145,730 139,259 125,811
Broadcasting operations................................... 69,205 66,626 64,202
Selling, general and administrative....................... 190,429 172,838 155,996
St. Louis Agency adjustment (Note 3)...................... 19,450 13,972 12,502
Depreciation and amortization............................. 36,454 31,102 27,150
-------- -------- --------
Total operating expenses.......................... 461,268 423,797 385,661
-------- -------- --------
Operating income............................................ 123,717 110,291 86,666
Interest income............................................. 4,652 4,522 5,203
Interest expense............................................ (16,081) (13,592) (10,171)
Net other expense........................................... (1,203) (5,449) (2,330)
-------- -------- --------
Income before provision for income taxes.................... 111,085 95,772 79,368
Provision for income taxes (Note 9)......................... 45,057 38,272 30,046
-------- -------- --------
Net Income.................................................. $ 66,028 $ 57,500 $ 49,322
======== ======== ========
Basic earnings per share of stock (Note 12):
Earnings per share........................................ $ 2.99 $ 2.62 $ 2.26
======== ======== ========
Weighted average number of shares outstanding............. 22,110 21,926 21,800
======== ======== ========
Diluted earnings per share of stock (Note 12):
Earnings per share........................................ $ 2.94 $ 2.58 $ 2.23
======== ======== ========
Weighted average number of shares outstanding............. 22,452 22,273 22,097
======== ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE> 67

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

STATEMENTS OF CONSOLIDATED FINANCIAL POSITION

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1997 1996
---- ----
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 62,749 $ 73,052
Trade accounts receivable (less allowance for doubtful
accounts of $2,411 and $2,576).......................... 85,882 80,010
Inventory................................................. 5,265 4,976
Prepaid expenses and other................................ 12,847 5,650
Program rights............................................ 7,866 8,452
-------- --------
Total current assets.................................. 174,609 172,140
-------- --------
Properties:
Land...................................................... 16,154 14,692
Buildings................................................. 84,215 78,733
Machinery and equipment................................... 225,113 209,854
Construction in progress.................................. 7,324 2,071
-------- --------
Total................................................. 332,806 305,350
Less accumulated depreciation............................. 170,992 149,418
-------- --------
Properties -- net..................................... 161,814 155,932
-------- --------
Intangible and Other Assets:
Intangible assets -- net of applicable amortization (Notes
4 and 5)................................................ 287,617 298,305
Receivable from The Herald Company (Notes 3 and 8)........ 39,733 39,955
Other..................................................... 19,183 17,519
-------- --------
Total intangible and other assets..................... 346,533 355,779
-------- --------
Total................................................. $682,956 $683,851
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable.................................... $ 16,158 $ 13,355
Current portion of long-term debt (Note 6)................ 12,705 14,705
Salaries, wages and commissions........................... 15,232 14,897
Income taxes payable...................................... 3,070 1,267
Program contracts payable................................. 7,907 8,916
Interest payable.......................................... 5,677 7,177
Pension obligations (Note 7).............................. 348 2,123
Acquisition payable....................................... 9,804 9,804
Other..................................................... 4,386 4,566
-------- --------
Total current liabilities............................. 75,287 76,810
-------- --------
Long-Term Debt (Note 6)..................................... 172,705 235,410
-------- --------
Pension Obligations (Note 7)................................ 26,709 23,415
-------- --------
Postretirement and Postemployment Benefit Obligations (Note
8)........................................................ 91,906 92,252
-------- --------
Other Long-Term Liabilities................................. 5,572 6,027
-------- --------
Commitments and Contingencies (Note 13).....................
Stockholders' Equity (Note 10):
Preferred stock, $.01 par value; 25,000,000 shares
authorized; issued and outstanding -- none Common stock,
$.01 par value; 100,000,000 shares authorized;
issued -- 6,797,895 in 1997 and 6,498,215 in 1996....... 68 65
Class B common stock, convertible, $.01 par value;
50,000,000 shares authorized; issued -- 27,125,247 in
1997 and 27,214,842 in 1996............................. 271 272
Additional paid-in capital................................ 135,542 129,173
Retained earnings......................................... 362,828 308,283
-------- --------
Total................................................. 498,709 437,793
Treasury stock -- at cost; 24,660 and 22,811 shares of
common stock in 1997 and 1996, respectively, and
11,700,850 shares of Class B common stock in 1997 and
1996.................................................... (187,932) (187,856)
-------- --------
Total stockholders' equity............................ 310,777 249,937
-------- --------
Total................................................. $682,956 $683,851
======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE> 68

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
CLASS B ADDITIONAL TOTAL
COMMON COMMON PAID-IN RETAINED TREASURY STOCKHOLDERS'
STOCK STOCK CAPITAL EARNINGS STOCK EQUITY
------ ------- ---------- -------- -------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
BALANCES AT JANUARY 1, 1995........ $44 $206 $ 122,070 $220,322 $(187,623) $155,019
Issuance of common stock grants.... 218 218
Common stock options exercised..... 2 2,327 2,329
Conversion of Class B common stock
to common stock.................. 1 (1)
Tax benefit from stock options
exercised........................ 924 924
Net income......................... 49,322 49,322
Cash dividends declared and paid
$.41 per share of common and
Class B common................... (8,828) (8,828)
Purchase of treasury stock......... (213) (213)
--- ---- ---------- -------- --------- --------
BALANCES AT DECEMBER 31, 1995...... 47 205 125,539 260,816 (187,836) 198,771
Issuance of common stock grants.... 76 76
Common stock options exercised..... 1 2,166 2,167
Conversion of Class B common stock
to common stock.................. 1 (1)
Tax benefit from stock options
exercised........................ 1,476 1,476
Net income......................... 57,500 57,500
Cash dividends declared and paid
$.46 per share of common and
Class B common................... (10,033) (10,033)
Purchase of treasury stock......... (20) (20)
Four for three stock split in the
form of a 33.3 percent stock
dividend (Note 10)............... 16 68 (84)
--- ---- ---------- -------- --------- --------
BALANCES AT DECEMBER 31, 1996...... 65 272 129,173 308,283 (187,856) 249,937
Issuance of common stock grants.... 70 70
Common stock options exercised..... 2 3,297 3,299
Conversion of Class B common stock
to common stock.................. 1 (1)
Common stock issued under Employee
Stock Purchase Plan.............. 322 322
Tax benefit from stock options
exercised........................ 2,680 2,680
Net income......................... 66,028 66,028
Cash dividends declared and paid
$.52 per share of common and
Class B common................... (11,483) (11,483)
Purchase of treasury stock......... (76) (76)
--- ---- ---------- -------- --------- --------
BALANCES AT DECEMBER 31, 1997...... $68 $271 $ 135,542 $362,828 $(187,932) $310,777
=== ==== ========== ======== ========= ========
</TABLE>

(Continued)

See accompanying notes to consolidated financial statements.

F-5
<PAGE> 69

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
CLASS B
COMMON STOCK COMMON STOCK
------------------ ------------------
HELD IN HELD IN
ISSUED TREASURY ISSUED TREASURY
------ -------- ------ --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
SHARE ACTIVITY:
BALANCES AT JANUARY 1, 1995................................ 4,444 (11) 20,609 (8,776)
Issuance of common stock grants............................ 6
Common stock options exercised............................. 119
Conversion of Class B common stock to common stock......... 135 (135)
Purchase of treasury stock................................. (6)
----- --- ------ -------
BALANCES AT DECEMBER 31, 1995.............................. 4,704 (17) 20,474 (8,776)
Issuance of common stock grants............................ 2
Common stock options exercised............................. 140
Conversion of Class B common stock to common stock......... 84 (84)
Four for three split in the form of a 33.3 percent stock
dividend (Note 10)....................................... 1,568 (6) 6,825 (2,925)
----- --- ------ -------
BALANCES AT DECEMBER 31, 1996.............................. 6,498 (23) 27,215 (11,701)
Issuance of common stock grants............................ 1
Common stock options exercised............................. 202
Conversion of Class B common stock to common stock......... 90 (90)
Common stock issued under Employee Stock Purchase Plan..... 7
Purchase of treasury stock................................. (2)
----- --- ------ -------
BALANCES AT DECEMBER 31, 1997.............................. 6,798 (25) 27,125 (11,701)
===== === ====== =======
</TABLE>

(Concluded)

See accompanying notes to consolidated financial statements.

F-6
<PAGE> 70

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

STATEMENTS OF CONSOLIDATED CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------
1997 1996 1995
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income................................................ $ 66,028 $ 57,500 $ 49,322
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation............................................ 22,884 20,434 19,281
Amortization of intangibles............................. 13,570 10,668 7,869
Deferred income taxes................................... (3,367) (1,943) (1,847)
Gain on sale of assets.................................. (421)
Changes in assets and liabilities (net of the effects of
the purchase and sale of properties) which provided
(used) cash:
Trade accounts receivable............................. (5,872) (9,737) (1,581)
Inventory............................................. (289) 3,017 (3,121)
Other assets.......................................... (3,766) 7,842 1,150
Trade accounts payable and other liabilities.......... 2,494 3,659 1,594
Income taxes payable.................................. 1,803 (239) (3,713)
-------- --------- --------
Net cash provided by operating activities................... 93,485 90,780 68,954
-------- --------- --------
Cash flows from investing activities:
Capital expenditures...................................... (28,191) (17,787) (22,934)
Purchase of publishing properties, net of cash acquired... (203,306)
Purchase of broadcast assets.............................. (3,141) (5,187)
Investment in joint ventures and limited partnerships..... (4,792) (2,983) (3,637)
Sale of assets, net of cash sold.......................... 4,150
(Increase) decrease in notes receivable................... 4,979 (4,904) 1,875
-------- --------- --------
Net cash used in investing activities....................... (31,145) (230,017) (24,696)
-------- --------- --------
Cash flows from financing activities:
Proceeds from issuance of long-term debt.................. 135,000
Repayments on long-term debt.............................. (64,705) (15,205) (14,250)
Dividends paid............................................ (11,483) (10,033) (8,828)
Proceeds from exercise of stock options................... 3,299 2,167 2,329
Proceeds from employee stock purchase plan................ 322
Purchase of treasury stock................................ (76) (20) (213)
-------- --------- --------
Net cash provided by (used in) financing activities......... (72,643) 111,909 (20,962)
-------- --------- --------
Net (decrease) increase in cash and cash equivalents........ (10,303) (27,328) 23,296
Cash and cash equivalents at beginning of year.............. 73,052 100,380 77,084
-------- --------- --------
Cash and cash equivalents at end of year.................... $ 62,749 $ 73,052 $100,380
======== ========= ========
Supplemental disclosure of cash flow information:
Cash paid (received) during the year for:
Interest paid........................................... $ 17,469 $ 9,716 $ 10,147
Interest received....................................... (4,574) (4,872) (4,805)
Income taxes............................................ 45,110 38,530 35,862
Income tax refunds...................................... (1,108) (195) (1,280)
Supplemental disclosure of noncash investing and financing
activity:
Increase (decrease) in minimum pension liability and
related intangible asset................................ $ 402 $ (1,059) $ (227)
</TABLE>

See accompanying notes to consolidated financial statements.

F-7
<PAGE> 71

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation -- The consolidated financial statements include the
accounts of Pulitzer Publishing Company (the "Company" or "Pulitzer") and its
subsidiary companies, all of which are wholly-owned. All significant
intercompany transactions have been eliminated from the consolidated financial
statements.

Fiscal Year -- The Company's fiscal year ends on the last Sunday of the
calendar year, which in 1995 resulted in a 14-week fourth quarter and a 53-week
year. In 1997 and 1996, the fourth quarter was 13 weeks and the year was 52
weeks. For ease of presentation, the Company has used December 31 as the
year-end.

Cash Equivalents -- For purposes of reporting cash flows, the Company
considers all highly liquid investments purchased with an original maturity of
three months or less to be cash equivalents.

Inventory Valuation -- Inventory, which consists primarily of newsprint, is
stated at the lower of cost (determined primarily using the last-in, first-out
method) or market. If the first-in, first-out cost method had been used,
inventory would have been $805,000 and $874,000 higher than reported at December
31, 1997 and 1996, respectively. Ink and other miscellaneous supplies are
expensed as purchased.

Program Rights -- Program rights represent license agreements for the right
to broadcast feature programs, program series and other syndicated programs over
limited license periods and are presented in the consolidated balance sheet at
the lower of unamortized cost or estimated net realizable value. The total gross
cost of each agreement is recorded as an asset and liability when the license
period begins and all of the following conditions have been met: (a) the cost of
the agreement is known or reasonably determinable, (b) the program material has
been accepted in accordance with the conditions of the license agreement and (c)
the program is available for broadcast. Payments are made in installments as
provided for in the license agreements. Program rights expected to be amortized
in the succeeding year and payments due within one year are classified as
current assets and current liabilities, respectively.

Program rights covering periods of less than one year are amortized on a
straight-line basis as the programs are broadcast. Program rights covering
periods greater than one year are generally amortized as a package or series
over the license period using an accelerated method. When a determination is
made that either the unamortized cost of a program exceeds its estimated net
realizable value or a program will not be used prior to the expiration of the
license agreement, appropriate adjustments are made to charge unamortized
amounts to operations.

Property and Depreciation -- Property is recorded at cost. Depreciation is
computed using the straight-line method over the estimated useful lives of the
individual assets. Buildings are depreciated over 20 to 50 years and all other
property over lives ranging from 3 to 15 years.

Intangible Assets -- Intangibles consisting of goodwill, FCC licenses and
network affiliations acquired subsequent to the effective date of Accounting
Principles Board Opinion No. 17 ("Opinion No. 17") are being amortized over
lives of either 15 or 40 years while all other intangible assets are being
amortized over lives ranging from 4 to 23 years. Intangibles in the amount of
$1,520,000, related to acquisitions prior to the effective date of Opinion No.
17, are not being amortized because, in the opinion of management, their value
is of undeterminable duration. In addition, the intangible asset relating to the
Company's additional minimum pension liability under Statement of Financial
Accounting Standards No. 87 is adjusted annually, as necessary, when a new
determination of the amount of the additional minimum pension liability is made.

Long-Lived Assets -- The Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, in
March 1995. This statement became effective for the Company's 1996 fiscal year.
The general requirements of this statement are applicable to the properties and
intangible assets of the Company

F-8
<PAGE> 72

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

and require impairment to be considered whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Management periodically evaluates the recoverability of long-lived
assets by reviewing the current and projected cash flows of each of its
properties. If a permanent impairment is deemed to exist, any write-down would
be charged to operations. For the periods presented, there has been no
impairment.

Employee Benefit Plans -- The Company and its subsidiaries have several
noncontributory defined benefit pension plans covering a significant portion of
their employees. Benefits under the plans are generally based on salary and
years of service. The Company's liability and related expense for benefits under
the plans are recorded over the service period of active employees based upon
annual actuarial calculations. Plan funding strategies are influenced by tax
regulations. Plan assets consist primarily of government bonds and corporate
equity securities.

The Company provides retiree medical and life insurance benefits under
varying postretirement plans at several of its operating locations. In addition,
the Company provides postemployment disability benefits to certain former
employee groups prior to retirement. The significant portion of these benefits
results from plans at the St. Louis Post-Dispatch. The Company's liability and
related expense for benefits under the postretirement plans are recorded over
the service period of active employees based upon annual actuarial calculations.
The Company accrues postemployment disability benefits when it becomes probable
that such benefits will be paid and when sufficient information exists to make
reasonable estimates of the amounts to be paid. All of the Company's
postretirement and postemployment benefits are funded on a pay-as-you-go basis.

Income Taxes -- Deferred tax assets and liabilities are recorded for the
expected future tax consequences of events that have been included in either the
financial statements or tax returns of the Company. Under this asset and
liability approach, deferred tax assets and liabilities are determined based on
temporary differences between the financial statement and tax bases of assets
and liabilities by applying enacted statutory tax rates applicable to future
years in which the differences are expected to reverse.

Stock-Based Compensation Plans -- Effective January 1, 1996, the Company
adopted the disclosure requirements of Statement of Financial Accounting
Standards No. 123 ("SFAS 123"), Accounting for Stock-Based Compensation. The new
standard defines a fair value method of accounting for stock options and similar
equity instruments. Under the fair value method, compensation cost is measured
at the grant date based on the fair value of the award and is recognized over
the service period, which is usually the vesting period. Pursuant to the new
standard, companies are encouraged, but not required, to adopt the fair value
method of accounting for employee stock-based transactions. Companies are also
permitted to continue to account for such transactions under Accounting
Principles Board Opinion No. 25 ("APB 25"), Accounting for Stock Issued to
Employees, but are required to disclose pro forma net income and, if presented,
earnings per share as if the Company had applied the new method of accounting.
The accounting requirements of the new method are effective for all employee
awards granted after the beginning of the fiscal year of adoption, whereas the
disclosure requirements apply to all awards granted subsequent to December 31,
1994. The Company continues to recognize and measure compensation for its
restricted stock and stock option plans in accordance with the existing
provisions of APB 25.

Earnings Per Share of Stock -- Effective December 15, 1997, the Company
adopted Statement of Financial Accounting Standards No. 128, Earnings per Share
("SFAS 128"). This statement simplifies the standards for computing earnings per
share ("EPS"), making them comparable to international standards, and supersedes
Accounting Principles Board Opinion No. 15, Earnings Per Share ("APB 15"). SFAS
128 replaces the presentation of primary EPS with a presentation of basic EPS.
The statement also requires dual presentation of basic and diluted EPS on the
face of the income statement for all entities with complex capital structures
and requires a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS computation. As
required by SFAS 128, diluted EPS has been computed for all prior periods
presented to conform to the provisions of the new statement.

F-9
<PAGE> 73
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Basic earnings per share of stock is computed using the weighted average
number of common and Class B common shares outstanding during the applicable
period, adjusted for the stock splits described in Note 10. Diluted earnings per
share of stock is computed using the weighted average number of common and Class
B common shares outstanding and potential common shares. (see Note 12)

Use of Management Estimates -- The preparation of financial statements in
conformity with generally accepted accounting principles requires that
management make certain estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements. The reported amounts of
revenues and expenses during the reporting period may also be affected by the
estimates and assumptions management is required to make. Actual results may
differ from those estimates.

Reclassifications -- Certain reclassifications have been made to the 1996
and 1995 consolidated financial statements to conform with the 1997
presentation.

2. SPIN-OFF AND MERGER

On May 25, 1998, the Company, Pulitzer Inc., (a wholly-owned subsidiary of
the Company ("New Pulitzer")), and Hearst-Argyle Television, Inc.
("Hearst-Argyle") entered into an Agreement and Plan of Merger (the "Merger
Agreement") pursuant to which Hearst-Argyle will acquire the Company's
television and radio broadcasting operations (collectively, the "Broadcasting
Business"). The Broadcasting Business consists of nine network-affiliated
television stations and five radio stations owned and operated by Pulitzer
Broadcasting Company ("PBC"), a wholly-owned subsidiary of the Company, and its
wholly-owned subsidiaries. The Broadcasting Business will be acquired by
Hearst-Argyle through the merger ("Merger") of the Company into Hearst-Argyle.

Prior to the Spin-off (as defined below), the Company intends to borrow
$700 million, which may be secured by the assets and/or stock of PBC and its
subsidiaries. Out of the proceeds of this new debt, the Company will pay the
existing Company debt and any costs arising as a result of the Merger and
related transactions. Prior to the Merger, the balance of the proceeds of this
new debt, together with the Company's publishing assets and liabilities, will be
contributed by the Company to New Pulitzer pursuant to a Contribution and
Assumption Agreement (the "Contribution"). Pursuant to the Merger Agreement,
Hearst-Argyle will assume the new debt following the consummation of the
Spin-off and Merger.

Immediately following the Contribution, the Company will distribute to each
holder of Company Common Stock one fully-paid and nonassessable share of New
Pulitzer Common Stock for each share of Company Common Stock held and to each
holder of Company Class B Common Stock one fully-paid and nonassessable share of
New Pulitzer Class B Common Stock for each share of Company Class B Common Stock
held (the "Distribution"). The Contribution and Distribution are collectively
referred to as the "Spin-off." The Spin-off and the Merger are collectively
referred to as the "Transactions."

Consummation of the Transactions is subject, among other things, to the
receipt of various regulatory approvals, Pulitzer stockholder approval of the
Charter Amendment (as defined in Note 17) and approval of the Merger by the
stockholders of both the Company and Hearst-Argyle. The Company has received a
favorable letter ruling from the Internal Revenue Service confirming that the
Spin-off will be tax-free to Pulitzer stockholders. Early termination of the
initial waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of
1976 has also been granted. In addition, the Federal Communications Commission
(the "FCC") has published notice of its grant of the application for the
transfer of FCC licenses, including related waiver requests, from the Company to
Hearst-Argyle. The Company anticipates that its special stockholders meeting to
consider the Charter Amendment and the Merger will be held in the first quarter
of 1999 and that the Transactions will be completed shortly after the meeting.

F-10
<PAGE> 74
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Following the consummation of the Transactions, New Pulitzer will be
engaged primarily in the business of newspaper publishing and related new media
businesses. For financial reporting purposes, New Pulitzer is the continuing
stockholder interest and will retain the Pulitzer name.

3. AGENCY AGREEMENTS

An agency operation between the Company and The Herald Company is conducted
under the provisions of an Agency Agreement, dated March 1, 1961, as amended.
For many years, the St. Louis Post-Dispatch (published by the Company) was the
afternoon and Sunday newspaper serving St. Louis, and the Globe-Democrat
(formerly published by The Herald Company) was the morning paper and also
published a weekend edition. Although separately owned, from 1961 through
February 1984, the publication of both the Post-Dispatch and the Globe-Democrat
was governed by the St. Louis Agency Agreement. From 1961 to 1979, the two
newspapers controlled their own news, editorial, advertising, circulation,
accounting and promotion departments and Pulitzer managed the production and
printing of both newspapers. In 1979, Pulitzer assumed full responsibility for
advertising, circulation, accounting and promotion for both newspapers. In
February 1984, after a number of years of unfavorable financial results at the
St. Louis Agency, the Globe-Democrat was sold by The Herald Company and the St.
Louis Agency Agreement was revised to eliminate any continuing relationship
between the two newspapers and to permit the repositioning of the daily Post-
Dispatch as a morning newspaper. Following the renegotiation of the St. Louis
Agency Agreement at the time of the sale of the Globe-Democrat, The Herald
Company retained the contractual right to receive one-half the profits (as
defined), and the obligation to share one-half the losses (as defined), of the
operations of the St. Louis Agency, which from February 1984 forward consisted
solely of the publication of the Post-Dispatch. The St. Louis Agency Agreement
also provides for The Herald Company to share one-half the cost of, and to share
in a portion of the proceeds from the sale of, capital assets used in the
production of the Post-Dispatch. Under the St. Louis Agency Agreement, Pulitzer
supervises, manages and performs all activities relating to the day-to-day
publication of the Post-Dispatch and is solely responsible for the news and
editorial policies of the newspaper. The consolidated financial statements of
the Company include all the operating revenues and expenses of the St. Louis
Agency relating to the Post-Dispatch.

In Tucson, Arizona, a separate partnership, TNI Partners, ("TNI"), acting
as agent for the Star (a newspaper owned by the Company) and the Citizen (a
newspaper owned by Gannett Co., Inc.), is responsible for printing, delivery,
advertising, and circulation of the Star and the Citizen. TNI collects all of
the receipts and income relating to the Star and the Citizen and pays all
operating expenses incident to the partnership's operations and publication of
the newspapers. Each newspaper is solely responsible for its own news and
editorial content. Net income or net loss of TNI is generally allocated equally
to the Star and the Citizen. The Company's consolidated financial statements
include its share of TNI's revenues and expenses.

4. ACQUISITION AND DISPOSITION OF PROPERTIES

During 1996, the Company acquired in a purchase transaction all of the
stock of Scripps League Newspapers, Inc. ("Scripps League"), a privately owned
publisher of community newspapers serving smaller markets, primarily in the West
and Midwest. The purchase price of approximately $216 million (including
acquisition costs) includes all of the operating assets of the newspapers,
working capital of approximately $6 million and intangibles. The acquisition was
financed by long-term borrowings of $135 million (see Note 6) and cash of
approximately $81 million (approximately $69 million net of cash acquired). The
results of the operations of Scripps League for the period subsequent to June
30, 1996 are included in the Company's Statements of Consolidated Income.

F-11
<PAGE> 75

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following supplemental unaudited pro forma information shows the
results of operations of the Company for the years ended December 31, 1996 and
1995 adjusted for the acquisition of Scripps League, assuming such transaction
and the related debt financing had been consummated at the beginning of each
year presented. The unaudited pro forma financial information is not necessarily
indicative either of results of operations that would have occurred had the
transaction occurred at the beginning of each year presented or of future
results of operations.

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1996 1995
---- ----
(UNAUDITED)
<S> <C> <C>
In thousands, except per share data:
Operating revenues -- net.............................. $566,915 $536,803
Operating income....................................... $113,660 $ 93,896
Net income............................................. $ 54,519 $ 44,203
Earnings per share of stock:
Basic earnings per share............................... $ 2.49 $ 2.03
Diluted earnings per share............................. $ 2.45 $ 2.00
</TABLE>

In December 1996, the Company acquired in a purchase transaction the assets
of an AM radio station in Phoenix, Arizona for approximately $5,187,000.

5. INTANGIBLE ASSETS

Intangible assets consist of:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1997 1996
---- ----
(IN THOUSANDS)
<S> <C> <C>
FCC licenses and network affiliations.................... $114,376 $112,161
Goodwill................................................. 178,355 178,327
Intangible pension asset (Note 7)........................ 2,320 1,918
Other.................................................... 63,924 63,914
-------- --------
Total............................................... 358,975 356,320
Less accumulated amortization............................ 71,358 58,015
-------- --------
Total intangible assets -- net...................... $287,617 $298,305
======== ========
</TABLE>

F-12
<PAGE> 76

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

6. FINANCING ARRANGEMENTS

Long-term debt consists of:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1997 1996
---- ----
(IN THOUSANDS)
<S> <C> <C>
Credit Agreement......................................... $ -- $ 50,000
Senior notes maturing in substantially equal annual
installments:
8.8% due through 1997.................................. 14,500
6.76% due 1998-2001.................................... 50,000 50,000
7.22% due 2002-2005.................................... 50,000 50,000
7.86% due 2001-2008.................................... 85,000 85,000
Other.................................................. 410 615
-------- --------
Total............................................. 185,410 250,115
Less current portion..................................... 12,705 14,705
-------- --------
Total long-term debt.............................. $172,705 $235,410
======== ========
</TABLE>

The Company's fixed-rate senior note borrowings are with The Prudential
Insurance Company of America ("Prudential"). The Senior Note Agreements with
Prudential provide for the payment of certain fees, depending on current
interest rates and remaining years to maturity, in the event of repayment prior
to the notes' scheduled maturity dates (as anticipated by the Spin-off and
Merger discussed in Note 2).

The credit agreement with The First National Bank of Chicago, as Agent, for
a group of lenders ("FNBC"), provides for a $50,000,000 variable rate revolving
credit facility ("Credit Agreement"). Loans may be borrowed, repaid and
reborrowed by the Company until the Credit Agreement terminates on July 2, 2001.
The Company has the option to repay any borrowings and terminate the Credit
Agreement, without penalty, prior to its scheduled maturity. As of December 31,
1997, the Company had no borrowings under the Credit Agreement.

The Credit Agreement allows the Company to elect an interest rate with
respect to each borrowing under the facility equal to a daily floating rate or
the Eurodollar rate plus 0.225 percent. As of December 31, 1996, the interest
rate on the Credit Agreement borrowings with FNBC was 5.875 percent.

The terms of the various senior note agreements contain certain covenants
and conditions including the maintenance of cash flow and various other
financial ratios, limitations on the incurrence of other debt and limitations on
the amount of restricted payments (which generally includes dividends, stock
purchases and redemptions).

Under the terms of the most restrictive borrowing covenants, in general,
the Company may pay annual dividends not to exceed the sum of $10,000,000, plus
75% of consolidated net earnings commencing January 1, 1993, less the sum of all
dividends paid or declared and redemptions in excess of sales of Company stock
after December 31, 1992. Pursuant to this calculation, approximately
$138,938,000 is available for distribution as dividends at December 31, 1997.

F-13
<PAGE> 77

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Approximate annual maturities of long-term debt for the five years
subsequent to December 31, 1997 are as follows:

<TABLE>
<S> <C>
Fiscal Year (In thousands):
1998...................................................... $ 12,705
1999...................................................... 12,705
2000...................................................... 12,500
2001...................................................... 23,125
2002...................................................... 23,125
Thereafter................................................ 101,250
--------
Total................................................ $185,410
========
</TABLE>

7. PENSION PLANS

The pension cost components were as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
1997 1996 1995
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Service cost for benefits earned during the
year.......................................... $ 3,966 $ 4,154 $ 3,834
Interest cost on projected benefit obligation... 8,470 8,185 8,057
Actual return on plan assets.................... (18,785) (12,507) (17,541)
Net amortization and deferrals.................. 10,001 4,833 11,365
-------- -------- --------
Net periodic pension cost....................... $ 3,652 $ 4,665 $ 5,715
======== ======== ========
</TABLE>

The funded status of the Company's pension plans was as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1997 1996
---- ----
(IN THOUSANDS)
<S> <C> <C>
Actuarial present value of:
Vested benefit obligation.............................. $117,854 $107,637
======== ========
Accumulated benefit obligation......................... $118,735 $108,380
======== ========
Projected benefit obligation............................. $128,690 $118,414
Plan assets at fair value................................ 119,353 104,046
-------- --------
Plan assets less than projected benefit obligation....... 9,337 14,368
Unrecognized transition obligation, net.................. (1,318) (1,539)
Unrecognized net gain.................................... 16,507 10,557
Unrecognized prior service cost.......................... 211 234
Additional minimum liability............................. 2,320 1,918
-------- --------
Pension obligations...................................... $ 27,057 $ 25,538
======== ========
</TABLE>

The projected benefit obligation was determined using assumed discount
rates of 7%, 7.5% and 7.25% at December 31, 1997, 1996 and 1995, respectively.
The expected long-term rate of return on plan assets was 8.5% for 1997, 1996 and
1995. For those plans that pay benefits based on final compensation levels, the
actuarial assumptions for overall annual rate of increase in future salary
levels was 4.5% for 1997 and 5% for both 1996 and 1995.

F-14
<PAGE> 78

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Certain of the Company's employees participate in multi-employer retirement
plans sponsored by their respective unions. Amounts charged to operations,
representing the Company's required contributions to these plans in 1997, 1996
and 1995, were approximately $844,000, $781,000, and $731,000, respectively.

The Company also sponsors an employee savings plan under Section 401(k) of
the Internal Revenue Code. This plan covers substantially all employees.
Contributions by the Company amounted to approximately $1,899,000, $1,668,000
and $1,494,000 for 1997, 1996 and 1995, respectively.

8. POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS

The net periodic postretirement benefit cost components were as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1997 1996 1995
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Service cost (for benefits earned during the year).......... $ 970 $ 926 $ 933
Interest cost on accumulated postretirement benefit
obligation................................................ 4,632 4,683 5,799
Net amortization, deferrals and other components............ (2,538) (2,308) (1,787)
------- ------- -------
Net periodic postretirement benefit cost.................... $ 3,064 $ 3,301 $ 4,945
======= ======= =======
</TABLE>

The Company funds its postretirement benefit obligation on a pay-as-you-go
basis, and, for 1997, 1996 and 1995 made payments of $4,118,000, $4,207,000 and
$4,071,000, respectively.

The status of the Company's postretirement benefit plans was as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1997 1996
---- ----
(IN THOUSANDS)
<S> <C> <C>
Retirees and surviving beneficiaries........................ $39,549 $37,734
Actives eligible to retire.................................. 14,418 13,516
Other actives............................................... 12,756 11,142
------- -------
Accumulated postretirement benefit obligation............... 66,723 62,392
Unrecognized prior service gain............................. 6,658 7,990
Unrecognized net gain....................................... 15,351 19,404
------- -------
Accrued postretirement benefit cost......................... $88,732 $89,786
======= =======
</TABLE>

The preceding amounts for the December 31, 1997 and 1996 accrued
postretirement benefit cost and the 1997, 1996 and 1995 net periodic
postretirement benefit expense have not been reduced for The Herald Company's
share of the respective amounts. However, pursuant to the St. Louis Agency
Agreement (see Note 3), the Company has recorded a receivable for The Herald
Company's share of the accrued postretirement benefit cost as of December 31,
1997 and 1996.

For 1997 and 1996 measurement purposes, health care cost trend rates of 9%,
7% and 5% were assumed for indemnity plans, PPO plans and HMO plans,
respectively. For 1997, these rates were assumed to decrease gradually to 5%
through the year 2010 and remain at that level thereafter. For 1996, the
indemnity and PPO rates were assumed to decrease gradually to 5.5% through the
year 2010 and remain at that level thereafter. A 1% increase in the annual
health care cost trend rate assumptions would have increased the accrued
postretirement benefit cost at December 31, 1997 by approximately $1,162,000 and
the 1997 annual net periodic postretirement benefit cost by approximately
$1,164,000.

F-15
<PAGE> 79

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Administrative costs related to indemnity plans were assumed to increase at
a constant annual rate of 6% for 1997, 1996 and 1995. The assumed discount rate
used in estimating the accumulated postretirement benefit obligation was 7%,
7.5% and 8% for 1997, 1996 and 1995, respectively.

The Company's postemployment benefit obligation, representing certain
disability benefits at the St. Louis Post-Dispatch, was $3,174,000 and
$2,466,000 at December 31, 1997 and 1996, respectively.

9. INCOME TAXES

Provisions for income taxes (benefits) consist of the following:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1997 1996 1995
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal................................................... $41,389 $33,465 $28,352
State and local........................................... 7,035 5,750 $ 3,541
Deferred:
Federal................................................... (2,878) (805) (1,641)
State and local........................................... (489) (138) (206)
------- ------- -------
Total................................................ $45,057 $38,272 $30,046
======= ======= =======
</TABLE>

Factors causing the effective tax rate to differ from the statutory Federal
income tax rate were:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Statutory rate.............................................. 35% 35% 35%
Favorable resolution of prior year federal and state tax
issues.................................................... (1)
Amortization of intangibles................................. 2 1
State and local income taxes, net of U.S. Federal income tax
benefit................................................... 4 4 3
Other-net................................................... 1
-- -- --
Effective rate....................................... 41% 40% 38%
== == ==
</TABLE>

The Company's deferred tax assets and liabilities, net, which have been
included in other assets in the statements of consolidated financial position
consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1997 1996
---- ----
(IN THOUSANDS)
<S> <C> <C>
Deferred tax assets:
Pensions and employee benefits............................ $11,403 $ 9,575
Postretirement benefit costs.............................. 19,248 19,284
Other..................................................... 1,561 2,110
------- -------
Total................................................ 32,212 30,969
------- -------
Deferred tax liabilities:
Depreciation.............................................. 19,583 19,590
Amortization.............................................. 7,765 9,882
------- -------
Total................................................ 27,348 29,472
------- -------
Net deferred tax asset...................................... $ 4,864 $ 1,497
======= =======
</TABLE>

F-16
<PAGE> 80

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company had no valuation allowance for deferred tax assets as of
December 31, 1997, 1996 and 1995.

10. STOCKHOLDERS' EQUITY

Each share of the Company's common stock is entitled to one vote and each
share of Class B common stock is entitled to ten votes on all matters. As of
December 31, 1997, holders of outstanding shares of Class B common stock
representing 95.5% of the combined voting power of the Company have deposited
their shares in a voting trust (the "Voting Trust"). Each share of the Company's
Class B common stock is convertible into one share of the Company's common stock
at the holder's option subject to the limitations imposed by the Voting Trust on
the shares of Class B common stock deposited thereunder. The Voting Trust
permits the conversion of the Class B common stock deposited in the Voting Trust
into common stock in connection with certain permitted transfers, including,
without limitation, sales which are exempt from the registration requirements of
the Securities Act of 1933, as amended, sales which meet the volume and manner
of sale requirements of Rule 144 promulgated thereunder and sales which are made
pursuant to registered public offerings.

The trustees generally hold all voting rights with respect to the shares of
Class B common stock subject to the Voting Trust; however, in connection with
certain matters, including any proposal for a merger, consolidation,
recapitalization or dissolution of the Company or disposition of all or
substantially all its assets, the calling of a special meeting of stockholders
and the removal of directors, the Trustees may not vote the shares deposited in
the Voting Trust except in accordance with written instructions from the holders
of the Voting Trust Certificates. The Voting Trust may be terminated with the
written consent of holders of two-thirds in interest of all outstanding Voting
Trust Certificates. Unless extended or terminated by the parties thereto, the
Voting Trust expires on January 16, 2001.

On September 12, 1996, the Board of Directors declared a four-for-three
stock split of the Company's common and Class B common stock payable in the form
of a 33.3% stock dividend. The dividend was distributed on November 1, 1996 to
stockholders of record on October 10, 1996. The Company's capital balances and
share amounts were adjusted in 1996 to reflect the split.

On January 4, 1995, the Board of Directors declared a five-for-four stock
split of the Company's common and Class B common stock payable in the form of a
25% stock dividend. The dividend was distributed on January 24, 1995 to
stockholders of record on January 13, 1995. Even though this stock split was
declared subsequent to December 31, 1994, the Company's capital balances and
share amounts were adjusted in 1994 to reflect the split.

11. COMMON STOCK PLANS

On May 11, 1994, the Company's stockholders adopted the Pulitzer Publishing
Company 1994 Stock Option Plan (the "1994 Plan"), replacing the Pulitzer
Publishing Company 1986 Employee Stock Option Plan (the "1986 Plan"). The 1994
Plan provides for the issuance to key employees and outside directors of
incentive stock options to purchase up to a maximum of 2,500,000 shares of
common stock. Under the 1994 Plan, options to purchase 1,667 shares of common
stock will be automatically granted to outside directors on the date following
each annual meeting of the Company's stockholders and will vest on the date of
the next annual meeting of the Company's stockholders. Total shares available
for issue to outside directors under this automatic grant feature are limited to
a maximum of 166,667. The issuance of all other options will be administered by
the Compensation Committee of the Board of Directors, subject to the 1994 Plan's
terms and conditions. Specifically, the exercise price per share may not be less
than the fair market value of a share of common stock at the date of grant. In
addition, exercise periods may not exceed ten years and the minimum vesting
period is established at six months from the date of grant. Option awards to an
individual employee may not exceed 250,000 shares in a calendar year.

F-17
<PAGE> 81

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Prior to 1994, the Company issued incentive stock options to key employees
under the 1986 Plan. As provided by the 1986 Plan, certain option awards were
granted with tandem stock appreciation rights which allow the employee to elect
an alternative payment equal to the appreciation of the stock value instead of
exercising the option. Outstanding options issued under the 1986 Plan have an
exercise term of ten years from the date of grant and vest in equal installments
over a three-year period.

Stock option transactions are summarized as follows:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
SHARES PRICE RANGE PRICE
------ ----------- --------
<S> <C> <C> <C>
Common Stock Options:
Outstanding, January 1, 1995............................. 1,198,371 $ 9.27 - $21.98 $16.69
Granted (weighted average value at grant date of
$13.99)............................................. 192,853 $30.47 - $34.41 $34.31
Canceled............................................... (39,632) $11.73 - $21.98 $16.69
Exercised.............................................. (158,304) $ 9.27 - $21.98 $14.71
---------
Outstanding, December 31, 1995........................... 1,193,288 $ 9.27 - $34.41 $19.80
Granted (weighted average value at grant date of
$16.01)............................................. 179,809 $41.91 - $46.25 $46.03
Canceled............................................... (2,146) $21.53 - $34.41 $28.77
Exercised.............................................. (140,096) $ 9.27 - $21.98 $15.47
---------
Outstanding, December 31, 1996........................... 1,230,855 $ 9.27 - $46.25 $24.11
Granted (weighted average value at grant date of
$20.23)............................................. 211,231 $45.63 - $58.81 $58.41
Canceled............................................... (14,235) $21.53 - $47.38 $38.91
Exercised.............................................. (201,920) $ 9.27 - $46.25 $16.34
---------
Outstanding, December 31, 1997........................... 1,225,931 $ 9.27 - $58.81 $31.13
=========
Exercisable at:
December 31, 1996...................................... 855,445 $ 9.27 - $34.41 $18.19
=========
December 31, 1997...................................... 849,565 $ 9.27 - $46.25 $22.21
=========
Shares Available for Grant at December 31, 1997.......... 1,712,004
=========
</TABLE>

Stock appreciation right transactions are summarized as follows:

<TABLE>
<CAPTION>
SHARES PRICE
------ -----
<S> <C> <C>
Common Stock Appreciation Rights:
Outstanding, January 1, 1995.............................. 37,584 $14.87
Canceled.................................................. (10,183) $14.87
Exercised................................................. (27,401) $14.87
-------
Outstanding, December 31, 1995, 1996 and 1997............. --
=======
</TABLE>

On May 11, 1994, the Company's stockholders also adopted the Pulitzer
Publishing Company 1994 Key Employees' Restricted Stock Purchase Plan (the "1994
Stock Plan") which replaced the Pulitzer Publishing Company 1986 Key Employees'
Restricted Stock Purchase Plan ("1986 Stock Plan"). The 1994 Stock Plan provides
that an employee may receive, at the discretion of the Compensation Committee, a
grant or right to purchase at a particular price, shares of common stock subject
to restrictions on transferability. A maximum of 416,667 shares of common stock
may be granted or purchased by employees. In addition, no more than 83,333
shares of common stock may be issued to an employee in any calendar year.

F-18
<PAGE> 82

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Prior to 1994, the Company granted stock awards under the 1986 Stock Plan.
For grants awarded under both the 1994 and 1986 Stock Plans, compensation
expense is recognized over the vesting period of the grants. Stock Purchase Plan
transactions are summarized as follows:

<TABLE>
<CAPTION>
WEIGHTED
SHARES PRICE RANGE AVERAGE PRICE
------ ----------- -------------
<S> <C> <C> <C>
Common Stock Grants:
Outstanding, January 1, 1995........... 4,236 $20.25 - $21.38 $20.89
Granted................................ 8,880 $24.53 $24.53
Vested................................. (7,460) $20.25 - $24.53 $23.93
-------
Outstanding, December 31, 1995......... 5,656 $20.25 - $24.53 $22.60
Granted................................ 2,093 $36.70 $36.70
Vested................................. (1,864) $20.25 - $24.53 $22.12
-------
Outstanding, December 31, 1996......... 5,885 $20.25 - $36.70 $27.78
Granted................................ 1,468 $47.44 $47.44
Canceled............................... (1,393) $20.25 - $47.44 $33.13
Vested................................. (2,272) $20.25 - $36.70 $25.56
-------
Outstanding, December 31, 1997......... 3,688 $21.38 - $47.44 $34.95
=======
Shares Available for Grant at December
31, 1997............................... 400,776
=======
</TABLE>

As required by SFAS 123, the Company has estimated the fair value of its
option grants since December 31, 1994 by using the binomial options pricing
model with the following assumptions:

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Expected Life (years).................................... 7 7 7
Risk-free interest rate.................................. 5.8% 6.4% 5.7%
Volatility............................................... 23.6% 22.5% 19.6%
Dividend yield........................................... 1.1% 1.2% 1.3%
</TABLE>

As discussed in Note 1, the Company accounts for its stock option grants in
accordance with APB 25, resulting in the recognition of no compensation expense
in the consolidated statements income. Had compensation expense been computed on
the fair value of the option awards at their grant date, consistent

F-19
<PAGE> 83

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

with the provisions of SFAS 123, the Company's income from continuing operations
and earnings per share would have been reduced to the pro forma amounts below:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1997 1996 1995
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Net income:
As reported............................................... $66,028 $57,500 $49,322
Pro forma................................................. $64,487 $56,820 $49,288
Basic earnings per share:
As reported............................................... $ 2.99 $ 2.62 $ 2.26
Pro forma................................................. $ 2.92 $ 2.59 $ 2.26
Diluted earnings per share:
As reported............................................... $ 2.94 $ 2.58 $ 2.23
Pro forma................................................. $ 2.87 $ 2.55 $ 2.23
</TABLE>

Because the provisions of SFAS 123 have not been applied to options granted
prior to January 1, 1995, the pro forma compensation cost may not be
representative of compensation cost to be incurred on a pro forma basis in
future years.

On April 24, 1997, the Company's stockholders approved the adoption of the
Pulitzer Publishing Company 1997 Employee Stock Purchase Plan (the "Plan"). The
Plan allows eligible employees to authorize payroll deductions for the quarterly
purchase of the Company's Common Stock ("Common Stock") at a price generally
equal to 85 percent of the Common Stock's fair market value at the end of each
quarter. The Plan began operations as of July 1, 1997. In general, other than
Michael E. Pulitzer, all employees of the Company and its subsidiaries are
eligible to participate in the Plan after completing at least one year of
service. Subject to appropriate adjustment for stock splits and other capital
changes, the Company may sell a total of 500,000 shares of its Common Stock
under the Plan. Shares sold under the Plan may be authorized and unissued or
held by the Company in its treasury. The Company may purchase shares for resale
under the Plan.

12. EARNINGS PER SHARE

Weighted average shares of common and Class B common stock and potential
common shares used in the calculation of basic and diluted earnings per share
are summarized as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------
1997 1996 1995
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Weighted average shares outstanding (Basic EPS)............. 22,110 21,926 21,800
Stock options............................................... 342 347 297
------ ------ ------
Weighted average shares outstanding and stock options
(Diluted EPS)............................................. 22,452 22,273 22,097
====== ====== ======
</TABLE>

Stock options included in the Diluted EPS calculation were determined using
the treasury stock method. Under the treasury stock method and SFAS 128,
outstanding stock options are dilutive when the average market price of the
Company's common stock exceeds the option price during a period. In addition,
proceeds from the assumed exercise of dilutive options along with the related
tax benefit are assumed to be used to repurchase common shares at the average
market price of such stock during the period.

F-20
<PAGE> 84

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. COMMITMENTS AND CONTINGENCIES

At December 31, 1997, the Company and its subsidiaries had construction and
equipment commitments of approximately $13,779,000 and commitments for program
contracts payable and license fees of approximately $30,025,000.

The Company is an investor in three limited partnerships requiring future
capital contributions. As of December 31, 1997, the Company's unfunded capital
contribution commitment related to these investments was approximately
$13,863,000.

The Company and its subsidiaries are involved, from time to time, in
various claims and lawsuits incidental to the ordinary course of its business,
including such maters as libel, slander and defamation actions and complaints
alleging discrimination. While the results of litigation cannot be predicted,
management believes the ultimate outcome of such existing litigation will not
have a material adverse effect on the consolidated financial statements of the
Company and its subsidiaries.

In connection with the September 1986 purchase of Pulitzer Class B common
stock from certain selling stockholders (the "1986 Selling Stockholders"),
Pulitzer agreed, under certain circumstances, to make an additional payment to
the 1986 Selling Stockholders in the event of a Gross-Up Transaction (as defined
herein). A "Gross-Up Transaction" was defined to mean, among other transactions,
(i) any merger, in any transaction or series of related transactions, of more
than 85 percent of the voting securities or equity of Pulitzer pursuant to which
holders of Pulitzer common stock receive securities other than Pulitzer common
stock and (ii) any recapitalization, dividend or distribution, or series of
related recapitalizations, dividends or distributions, in which holders of
Pulitzer common stock receive securities (other than Pulitzer common stock)
having a Fair Market Value (as defined herein) of not less than 33 1/3 percent
of the Fair Market Value of the shares of Pulitzer common stock immediately
prior to such transaction. The amount of the additional payment, if any, would
equal (x) the product of (i) the amount by which the Transaction Proceeds (as
defined herein) exceeds the Imputed Value (as defined herein) multiplied by (ii)
the applicable percentage (i.e., 50 percent for the period from May 13, 1996
through May 12, 2001) multiplied by (iii) the number of shares of Pulitzer
common stock issuable upon conversion of the shares of Pulitzer Class B common
stock owned by the 1986 Selling Stockholders, adjusted for, among other things,
stock dividends and stock splits; less (y) the sum of any additional payments
previously received by the 1986 Selling Stockholders; provided, however, that in
the event of any recapitalization, dividend or distribution, the amount by which
the Transaction Proceeds exceeds the Imputed Value shall not exceed the amount
paid or distributed pursuant to such recapitalization, dividend or distribution
in respect of one share of Pulitzer common stock.

F-21
<PAGE> 85

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

firm chosen by the two previously selected valuation firms. Any such agreement
or determination shall be final and binding on the parties.

14. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company has estimated the following fair value amounts for its
financial instruments using available market information and appropriate
valuation methodologies. However, considerable judgment is required in
interpreting market data to develop the estimates of fair value. Accordingly,
the estimates presented herein are not necessarily indicative of the amounts
that the Company could realize in a current market exchange. The use of
different market assumptions and/or estimation methodologies may have a material
effect on the estimated fair value amounts.

Cash and Cash Equivalents, Accounts Receivable, Accounts Payable and
Program Contracts Payable -- The carrying amounts of these items are a
reasonable estimate of their fair value.

Long-Term Debt -- Interest rates that are currently available to the
Company for issuance of debt with similar terms and remaining maturities are
used to estimate fair value. The fair value estimates of the Company's long-term
debt as of December 31, 1997 and 1996 were $195,969,000 and $259,958,000,
respectively.

The fair value estimates presented herein are based on pertinent
information available to management as of December 31, 1997 and 1996. Although
management is not aware of any facts that would significantly affect the
estimated fair value amounts, such amounts have not been comprehensively
revalued for purposes of these financial statements since that date, and current
estimates of fair value may differ from the amounts presented herein.

F-22
<PAGE> 86

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

15. BUSINESS SEGMENTS

The Company's operations are divided into two business segments, publishing
and broadcasting. The following is a summary of operations, assets and other
data.

<TABLE>
<CAPTION>
AS OF AND FOR THE YEARS
ENDED DECEMBER 31,
--------------------------------
1997 1996 1995
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Operating Revenues:
Publishing(a)............................................. $357,969 $309,096 $269,388
Broadcasting.............................................. 227,016 224,992 202,939
-------- -------- --------
Total............................................. $584,985 $534,088 $472,327
======== ======== ========
Operating Income (Loss):
Publishing(a)............................................. $ 47,544 $ 32,577 $ 25,393
Broadcasting.............................................. 82,180 83,246 65,939
Corporate................................................. (6,007) (5,532) (4,666)
-------- -------- --------
Total............................................. $123,717 $110,291 $ 86,666
======== ======== ========
Total Assets:
Publishing(a)............................................. $364,360 $351,685 $141,441
Broadcasting.............................................. 255,847 259,114 253,252
Corporate................................................. 62,749 73,052 100,380
-------- -------- --------
Total............................................. $682,956 $683,851 $495,073
======== ======== ========
Capital Expenditures:
Publishing(a)............................................. $ 15,215 $ 6,433 $ 6,627
Broadcasting.............................................. 12,976 11,354 16,307
-------- -------- --------
Total............................................. $ 28,191 $ 17,787 $ 22,934
======== ======== ========
Depreciation & Amortization:
Publishing(a)............................................. $ 13,007 $ 8,660 $ 4,307
Broadcasting.............................................. 23,447 22,442 22,843
-------- -------- --------
Total............................................. $ 36,454 $ 31,102 $ 27,150
======== ======== ========
Operating Margins
(Operating income to revenues):
Publishing(a)(b).......................................... 18.7% 15.1% 14.1%
Broadcasting.............................................. 36.2% 37.0% 32.5%
</TABLE>

- -------------------------

(a) Publishing information for 1997 and 1996 includes Scripps League Newspapers,
Inc. (subsequently renamed Pulitzer Community Newspapers, Inc.), which was
acquired on July 1, 1996. (see Note 4)

(b) Operating margins for publishing are stated with St. Louis Agency adjustment
(which is recorded as an operating expense in the accompanying consolidated
financial statements) added back to publishing operating income.

F-23
<PAGE> 87
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

16. QUARTERLY FINANCIAL DATA (UNAUDITED)

Operating results for the years ended December 31, 1997 and 1996 by
quarters are as follows:

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
------- ------- ------- ------- -----
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
1997
Operating Revenues -- Net:................. $136,006 $151,398 $141,244 $156,337 $584,985
======== ======== ======== ======== ========
Net income................................. $ 12,495 $ 19,681 $ 14,223 $ 19,629 $ 66,028
======== ======== ======== ======== ========
Basic earnings per share of stock (Note
12):
Earnings per share....................... $ 0.57 $ 0.89 $ 0.64 $ 0.88 $ 2.99
======== ======== ======== ======== ========
Weighted average shares outstanding...... 22,029 22,081 22,151 22,185 22,110
======== ======== ======== ======== ========
Diluted earnings per share of stock (Note
12):
Earnings per share....................... $ 0.56 $ 0.88 $ 0.63 $ 0.87 $ 2.94
======== ======== ======== ======== ========
Weighted average shares outstanding...... 22,378 22,413 22,489 22,526 22,452
======== ======== ======== ======== ========
</TABLE>

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
------- ------- ------- ------- -----
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
1996
Operating revenues -- net:................. $115,706 $127,574 $138,865 $151,943 $534,088
======== ======== ======== ======== ========
Net income................................. $ 10,241 $ 16,185 $ 12,964 $ 18,110 $ 57,500
======== ======== ======== ======== ========
Basic earnings per share of stock (Note
12):
Earnings per share....................... $ 0.47 $ 0.74 $ 0.59 $ 0.82 $ 2.62
======== ======== ======== ======== ========
Weighted average shares outstanding...... 21,864 21,912 21,949 21,978 21,926
======== ======== ======== ======== ========
Diluted earnings per share of stock (Note
12):
Earnings per share....................... $ 0.46 $ 0.73 $ 0.58 $ 0.81 $ 2.58
======== ======== ======== ======== ========
Weighted average shares outstanding...... 22,191 22,271 22,291 22,291 22,273
======== ======== ======== ======== ========
</TABLE>

In the fourth quarter of 1996, the Company determined that the carrying
value of one of its joint venture investments had been impaired. Accordingly,
the investment was reduced by a $2.7 million adjustment resulting in an
after-tax charge of $1.6 million or $0.07 per share.

Subsequent to the second quarter of 1996, the results of operations of
Scripps League, acquired on July 1, 1996, are included in the Company's
Statements of Consolidated Income (see Note 4).

In the fourth quarter of 1995, a state tax examination was settled
favorably resulting in a reduction of income tax expense of approximately
$900,000, or $0.04 per share for the quarter.

Earnings per share are computed independently for each of the quarters
presented. Therefore, the sum of the quarterly earnings per share may not equal
the total for the year.

17. RESTATEMENT

F-24
<PAGE> 88
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

regardless of the vote of any other holders of the Company's Common Stock and
Class B Common Stock. In addition, on May 25, 1998 the principal stockholders of
the Company entered into a voting agreement with Hearst-Argyle (the "Pulitzer
Voting Agreement"), in which they agreed to direct the vote of all their shares
in favor of the Merger and the transactions contemplated by it (including the
Charter Amendment defined below). Consummation of the Merger is also conditioned
upon the passage of an amendment to the Company's restated certificate of
incorporation (the "Charter Amendment"), the approval of which requires the
affirmative vote of the holders of a majority of the outstanding shares of the
Company's Common Stock and the Class B Common Stock voting together as a single
class and the vote of the holders of a majority of the outstanding shares of the
Company's Common Stock voting as a separate class. On May 25, 1998, at the time
of the execution and delivery of the Merger Agreement and the Pulitzer Voting
Agreement, the principal stockholders of the Company had stated to the Company
that they were committed to take such actions as they deemed necessary to
effectuate the Transactions, including (i), on or before the record date for the
Special Meeting of Stockholders of the Company (the "Special Stockholders
Meeting") to be called for the purpose of voting upon the Merger and the Charter
Amendment, the conversion of that number of their shares of Class B Common Stock
into shares of Common Stock as would constitute a majority of the Company's then
issued and outstanding shares of Common Stock and (ii) to vote those shares of
Common Stock at the Special Stockholders Meeting in accordance with the
provisions of the Pulitzer Voting Agreement. Based upon the facts that existed
on May 25, 1998, and continued to exist through October 21, 1998, the Company
determined that it was appropriate to report the Broadcasting Business as
discontinued operations under Accounting Principles Board Opinion 30, "Reporting
the Results of Operations -- Reporting the Effects of Disposal of a Segment of a
Business and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions" ("APB 30"). On October 22, 1998, the principal stockholders
advised the Company that they had not converted, and did not deem it necessary
to convert on or before the record date for the Special Stockholders Meeting,
that number of shares of the Company's Class B Common Stock as would constitute
a majority of the then issued and outstanding shares of the Company's Common
Stock. Accordingly, based upon this change in facts (i.e., even though the
principal stockholders of the Company intend to vote all their shares in favor
of the Charter Amendment upon which the Spin-off and Merger are conditioned,
they alone will not be in a position at the Special Stockholders Meeting to
approve the Charter Amendment), the Company determined that it would no longer
be appropriate under APB 30 to report the Broadcasting Business as discontinued
operations in the Company's consolidated financial statements. As a result, the
Company's financial statements as of December 31, 1997 and 1996 and for the
years ended December 31, 1997, 1996 and 1995 have been restated from the amounts
previously reported (in Exhibit 99-1 to the Company's Current Report on Form 8-K
dated September 4, 1998) to now reflect the Broadcasting Business as a part of
continuing operations of the Company. Such restatement results in the
reclassification of amounts related to the Broadcasting Business previously
reflected as discontinued operations in the consolidated financial statements
but does not change the Company's previously reported amounts for consolidated
net income, total earnings per share and stockholders' equity.

F-25
<PAGE> 89

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

A summary of the significant effects of the restatement if as follows:

<TABLE>
<CAPTION>
AT DECEMBER 31, 1997 AT DECEMBER 31, 1996
--------------------- ---------------------
AS AS
PREVIOUSLY AS PREVIOUSLY AS
REPORTED RESTATED REPORTED RESTATED
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
Total current assets............................... $114,603 $174,609 $114,711 $172,140
Properties -- net.................................. 74,797 161,814 67,038 155,932
Total intangibles and other assets................. 274,911 346,533 245,433 355,779
Total assets....................................... 464,311 682,956 427,182 683,851
Total current liabilities.......................... 38,733 75,287 35,783 76,810
Long-term debt..................................... -- 172,705 -- 235,410
Pension obligations................................ 21,165 26,709 19,266 23,415
Postretirement and postemployment benefit
obligations...................................... 89,350 91,906 89,634 92,252
Other long-term obligations........................ 4,246 5,572 3,795 6,027
</TABLE>

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------
1997 1996 1995
--------------------- --------------------- ---------------------
AS AS AS
PREVIOUSLY AS PREVIOUSLY AS PREVIOUSLY AS
REPORTED RESTATED REPORTED RESTATED REPORTED RESTATED
---------- -------- ---------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Total operating revenues............. $357,969 $584,985 $309,096 $534,088 $269,388 $472,327
Total operating expenses............. 316,432 461,268 282,051 423,797 248,661 385,661
Operating income..................... 41,537 123,717 27,045 110,291 20,727 86,666
Income from continuing operations.... 25,750 66,028 14,792 57,500 14,455 49,322
Income from discontinued
operations......................... 40,278 -- 42,708 -- 34,867 --
BASIC EARNINGS PER SHARE OF STOCK:
Continuing operations............ $1.17 $2.99 $0.67 $2.62 $0.66 $2.26
Discontinued operations.......... 1.82 -- 1.95 -- 1.60 --
DILUTED EARNINGS PER SHARE OF STOCK:
Continuing operations............ $1.15 $2.94 $0.66 $2.58 $.65 $2.23
Discontinued operations.......... 1.79 -- 1.92 -- 1.58 --
</TABLE>

* * * * * *

F-26
<PAGE> 90

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of

Pulitzer Publishing Company:

We have audited the consolidated financial statements of Pulitzer
Publishing Company and its subsidiaries as of December 31, 1997 and 1996, and
for each of the three years in the period ended December 31, 1997, and have
issued our report thereon dated February 6, 1998 (July 17, 1998 as to paragraphs
1, 2, 3 and 5 of Note 2 and paragraphs 3 through 7 of Note 13; November 25, 1998
as to paragraph 4 of Note 2; and December 11, 1998 as to Note 17); such report
is included elsewhere in this Registration Statement on Form 10/A. Our audits
also included the consolidated financial statement schedule II of Pulitzer
Publishing Company and its subsidiaries. This financial statement schedule is
the responsibility of the Company's management. Our responsibility is to express
an opinion based on our audits. In our opinion, such consolidated financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.

DELOITTE & TOUCHE LLP

Saint Louis, Missouri

February 6, 1998

(July 17, 1998 as to

paragraphs 1, 2, 3 and 5 of

Note 2 and paragraphs 3 through

7 of Note 13; November 25,

1998 as to paragraph 4 of Note 2;

and December 11, 1998 as to Note 17)

F-27
<PAGE> 91

SCHEDULE II

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

SCHEDULE II -- VALUATION & QUALIFYING ACCOUNTS & RESERVES

FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 & 1995

<TABLE>
<CAPTION>
BALANCE AT CHARGED TO CHARGED TO BALANCE
BEGINNING COSTS & OTHER AT END
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS OF PERIOD
----------- ---------- ---------- ---------- ---------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1997
Valuation Accounts:
Allowance for Doubtful Accounts........ $2,576 $1,468 $178(a) $1,811(b) $2,411
Reserves:
Accrued Medical Plan................... 389 4,714 0 4,060(c) 1,043
Workers Compensation................... 2,126 1,199 0 1,368 1,957
YEAR ENDED DECEMBER 31, 1996
Valuation Accounts:
Allowance for Doubtful Accounts........ $2,009 $2,131 $321(a) $1,885(b) $2,576
Reserves:
Accrued Medical Plan................... 561 4,198 0 4,370(c) 389
Workers Compensation................... 2,005 1,478 0 1,357 2,126
YEAR ENDED DECEMBER 31, 1995
Valuation Accounts:
Allowance for Doubtful Accounts........ $2,135 $1,538 $247(a) $1,911(b) $2,009
Reserves:
Accrued Medical Plan................... 789 4,907 0 5,135(c) 561
Workers Compensation................... 2,327 1,192 0 1,514 2,005
</TABLE>

- -------------------------

(a) -- Accounts reinstated, cash recoveries, etc.

(b) -- Accounts written off

<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Claims paid................................. $3,596 $3,830 $4,660
Service fees................................ 473 579 548
Cash refunds................................ (9) (39) (73)
------ ------ ------
$4,060 $4,370 $5,135
====== ====== ======
</TABLE>

* * * * *

F-28
<PAGE> 92

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

STATEMENTS OF CONSOLIDATED INCOME

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------------
1998 1997
---- ----
(UNAUDITED)
(IN THOUSANDS, EXCEPT
EARNINGS PER SHARE DATA)
<S> <C> <C>
Operating Revenues -- Net:
Publishing:
Advertising............................................... $178,245 $168,245
Circulation............................................... 66,194 65,762
Other..................................................... 30,768 29,639
Broadcasting.............................................. 173,681 165,002
-------- --------
Total operating revenues.......................... 448,888 428,648
-------- --------
Operating expenses:
Publishing operations..................................... 111,667 106,437
Broadcasting operations................................... 54,313 51,502
Selling, general and administrative....................... 144,720 140,447
St. Louis Agency adjustment............................... 15,926 14,749
Depreciation and amortization............................. 26,750 27,435
-------- --------
Total operating expenses............................... 353,376 340,570
-------- --------
Operating income.......................................... 95,512 88,078
Interest income........................................... 3,541 3,476
Interest expense.......................................... (10,255) (12,553)
Net other expense......................................... (1,303) (867)
-------- --------
Income before provision for income taxes.................... 87,495 78,134
Provision for income taxes.................................. 35,422 31,735
-------- --------
Net income.................................................. $ 52,073 $ 46,399
======== ========
Basic earnings per share of stock:
Earnings per share........................................ $ 2.33 $ 2.10
======== ========
Weighted average number of shares outstanding............. 22,343 22,088
======== ========
Diluted earnings per share of stock:
Earnings per share........................................ $ 2.29 $ 2.07
======== ========
Weighted average number of shares outstanding............. 22,726 22,427
======== ========
</TABLE>

See notes to consolidated financial statements.

F-29
<PAGE> 93

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

STATEMENTS OF CONSOLIDATED FINANCIAL POSITION

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
------------- ------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents................................. $ 107,291 $ 62,749
Trade accounts receivable (less allowance for doubtful
accounts of $2,751 and $2,411).......................... 78,663 85,882
Inventory................................................. 2,427 5,265
Prepaid expenses and other................................ 8,764 12,847
Program rights............................................ 10,283 7,866
--------- ---------
Total current assets.................................... 207,428 174,609
--------- ---------
Properties:
Land...................................................... 15,904 16,154
Buildings................................................. 87,112 84,215
Machinery and equipment................................... 232,832 225,113
Construction in progress.................................. 14,420 7,324
--------- ---------
Total................................................... 350,268 332,806
Less accumulated depreciation............................. 186,605 170,992
--------- ---------
Properties -- net....................................... 163,663 161,814
--------- ---------
Intangible and other assets:
Intangible assets -- net of applicable amortization....... 277,148 287,617
Receivable from The Herald Company........................ 37,339 39,733
Other..................................................... 29,308 19,183
--------- ---------
Total intangible and other assets....................... 343,795 346,533
--------- ---------
Total.............................................. $ 714,886 $ 682,956
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable.................................... $ 15,947 $ 16,158
Current portion of long-term debt......................... 12,705 12,705
Salaries, wages and commissions........................... 13,198 15,232
Income taxes payable...................................... 881 3,070
Program contracts payable................................. 9,846 7,907
Interest payable.......................................... 2,088 5,677
Acquisition payable....................................... 9,804 9,804
Other..................................................... 8,078 4,734
--------- ---------
Total current liabilities............................... 72,547 75,287
--------- ---------
Long-term debt.............................................. 160,000 172,705
--------- ---------
Pension obligations......................................... 28,682 26,709
--------- ---------
Postretirement and postemployment
Benefit obligations....................................... 91,495 91,906
--------- ---------
Other long-term liabilities................................. 6,224 5,572
--------- ---------
Commitments and contingencies...............................
Stockholders' equity:
Preferred stock, $.01 par value; 25,000,000 shares
authorized; issued and outstanding -- none
Common stock, $.01 par value; 100,000,000 shares
authorized; issued -- 7,116,359 in 1998 and 6,797,895 in
1997.................................................... 71 68
Class B common stock, convertible, $.01 par value;
50,000,000 shares authorized; issued -- 27,083,630 in
1998 and 27,125,247 in 1997............................. 271 271
Additional paid-in capital................................ 142,077 135,542
Retained earnings......................................... 401,492 362,828
--------- ---------
Total................................................... 543,911 498,709
Treasury stock -- at cost; 25,519 and 24,660 shares of
common stock in 1998 and 1997, respectively, and
11,700,850 shares of Class B common stock in 1998 and
1997.................................................... (187,973) (187,932)
--------- ---------
Total stockholders' equity.............................. 355,938 310,777
--------- ---------
Total.............................................. $ 714,886 $ 682,956
========= =========
</TABLE>

See notes to consolidated financial statements.

F-30
<PAGE> 94

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

STATEMENTS OF CONSOLIDATED CASH FLOWS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------
1998 1997
-------- --------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
Cash flows from operating activities:
Net income................................................ $ 52,073 $ 46,399
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation........................................... 16,508 17,273
Amortization of intangibles............................ 10,242 10,162
Changes in assets and liabilities (net of the effects
of the purchase and sale of properties) which provided
(used) cash:
Trade accounts receivable............................ 7,219 3,005
Inventory............................................ 2,838 (659)
Other assets......................................... 2,464 (7,605)
Trade accounts payable and other liabilities......... (4,874) (2,057)
Income taxes payable................................. (2,189) (184)
-------- --------
Net cash provided by operating activities................... 84,281 66,334
-------- --------
Cash flows from investing activities:
Capital expenditures...................................... (19,364) (19,097)
Purchase of publishing properties......................... (2,051)
Purchase of broadcast assets.............................. (2,936)
Investment in limited partnerships........................ (4,788) (4,175)
Sale of publishing property............................... 2,590
Decrease in notes receivable.............................. 111 4,976
-------- --------
Net cash used in investing activities....................... (23,502) (21,232)
-------- --------
Cash flows from financing activities:
Repayments on long-term debt.............................. (12,705) (50,705)
Dividends paid............................................ (10,029) (8,599)
Proceeds from exercise of stock options................... 5,521 3,108
Proceeds from employee stock purchase plan................ 1,017
Purchase of treasury stock................................ (41) (28)
-------- --------
Net cash used in financing activities....................... (16,237) (56,224)
-------- --------
Net increase (decrease) in cash and cash equivalents........ 44,542 (11,122)
Cash and cash equivalents at beginning of year.............. 62,749 73,052
-------- --------
Cash and cash equivalents at end of period.................. $107,291 $ 61,930
======== ========
</TABLE>

See notes to consolidated financial statements.

F-31
<PAGE> 95

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. ACCOUNTING POLICIES

Interim Adjustments -- In the opinion of management, the accompanying
unaudited consolidated financial statements contain all adjustments, consisting
only of normal recurring adjustments, necessary to present fairly the Company's
financial position as of September 30, 1998, and results of operations and cash
flows for the nine-month periods ended September 30, 1998 and 1997. These
financial statements should be read in conjunction with the audited consolidated
financial statements and related notes thereto included elsewhere in this
Registration Statement on Form 10/A. Results of operations for interim periods
are not necessarily indicative of the results to be expected for the full year.

Fiscal Year and Fiscal Quarters -- The Company's fiscal year and third
fiscal quarter end on the Sunday coincident with or prior to December 31 and
September 30, respectively. For ease of presentation, the Company has used
December 31 as the year end and September 30 as the third quarter end.

Earnings Per Share of Stock -- Basic earnings per share of stock is
computed using the weighted average number of common and Class B common shares
outstanding during the applicable period. Diluted earnings per share of stock is
computed using the weighted average number of common and Class B common shares
outstanding and potential common shares (outstanding stock options). Weighted
average shares of common and Class B common stock and potential common shares
used in the calculation of basic and diluted earnings per share are summarized
as follows:

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30,
----------------
1998 1997
---- ----
(IN THOUSANDS)
<S> <C> <C>
Weighted average shares outstanding (Basic EPS)............. 22,343 22,088
Stock options............................................... 383 339
------ ------
Weighted average shares outstanding and stock options
(Diluted EPS)............................................. 22,726 22,427
====== ======
</TABLE>

Stock options included in the diluted earnings per share calculation were
determined using the treasury stock method. Under the treasury stock method,
outstanding stock options are dilutive when the average market price of the
Company's common stock exceeds the option price during a period. In addition,
proceeds from the assumed exercise of dilutive options along with the related
tax benefit are assumed to be used to repurchase common shares at the average
market price of such stock during the period.

Comprehensive Income -- In June 1997, the Financial Accounting Standards
Board issued statement of Financial Accounting Standards No. 130, Reporting
Comprehensive Income. This statement established standards for the reporting and
display of Comprehensive Income and its components. This statement is required
to be implemented in financial statements issued for periods ending after
December 15, 1997. For the nine-month periods ended September 30, 1998 and 1997,
the Company did not incur items to be reported in "Comprehensive Income" that
were not already included in reported "net income". As a result, comprehensive
income and net income were the same for these periods.

Reclassifications -- Certain reclassifications have been made to the 1997
consolidated financial statements to conform with the 1998 presentation.

F-32
<PAGE> 96
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2. SPIN-OFF AND MERGER

Consummation of the Transactions is subject, among other things, to the
receipt of various regulatory approvals, Pulitzer stockholder approval of the
Charter Amendment (as defined in Note 7), and approval of the Merger by the
stockholders of both the Company and Hearst-Argyle. The Company has received a
favorable letter ruling from the Internal Revenue Service confirming that the
Spin-off will be tax-free to Pulitzer stockholders. Early termination of the
initial waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of
1976 has also been granted. In addition, the Federal Communications Commission
(the "FCC") has published notice of its grant of the application for the
transfer of FCC licenses, including related waiver requests, from the Company to
Hearst-Argyle. The Company anticipates that its special stockholders meeting to
consider the Charter Amendment and the Merger will be held in the first quarter
of 1999 and that the Transactions will be completed shortly after the meeting.

3. DIVIDENDS

In the first quarter of 1998, two dividends of $0.15 per share were
declared, payable on February 2, 1998 and May 1, 1998. In the second quarter of
1998, a dividend of $0.15 per share was declared, payable on August 3, 1998. In
the third quarter of 1998, a dividend of $0.15 per share was declared, payable
on November 2, 1998.

In the first quarter of 1997, two dividends of $0.13 per share were
declared, payable on February 3, 1997 and May 1, 1997. In the second quarter of
1997, a dividend of $0.13 per share was declared, payable on August 1, 1997. In
the third quarter of 1997, a dividend of $0.13 per share was declared, payable
on November 1, 1997.

F-33
<PAGE> 97

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. BUSINESS SEGMENTS

The Company's operations are divided into two business segments, publishing
and broadcasting. The following is a summary of operating data by segment (in
thousands):

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------
1998 1997
-------- ----
<S> <C> <C>
Operating revenues:
Publishing............................................. $275,207 $263,646
Broadcasting........................................... 173,681 165,002
-------- --------
Total............................................... $448,888 $428,648
======== ========
Operating income (loss):
Publishing............................................. $ 35,385 $ 35,157
Broadcasting........................................... 64,086 57,131
Corporate.............................................. (3,959) (4,210)
-------- --------
Total............................................... $ 95,512 $ 88,078
======== ========
Depreciation and amortization:
Publishing............................................. $ 10,238 $ 9,813
Broadcasting........................................... 16,512 17,622
-------- --------
Total............................................... $ 26,750 $ 27,435
======== ========
Operating margins
(Operating income to revenues):
Publishing(a).......................................... 18.6% 18.9%
Broadcasting........................................... 36.9% 34.6%
</TABLE>

- -------------------------

(a) Operating margins for publishing stated with St. Louis Agency adjustment
added back to publishing operating income.

5. COMMITMENTS AND CONTINGENCIES

At September 30, 1998, the Company and its subsidiaries had construction
and equipment commitments of approximately $12,342,000. The Company's commitment
for broadcasting program contracts payable and license fees at September 30,
1998 was approximately $17,908,000.

The Company is an investor in two limited partnerships requiring future
capital contributions. As of September 30, 1998, the Company's unfunded capital
contribution commitment related to these investments was approximately
$9,075,000.

F-34
<PAGE> 98

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Pulitzer pursuant to which holders of Pulitzer common stock receive securities
other than Pulitzer common stock and (ii) any recapitalization, dividend or
distribution, or series of related recapitalizations, dividends or
distributions, in which holders of Pulitzer common stock receive securities
(other than Pulitzer common stock) having a Fair Market Value (as defined
herein) of not less than 33 1/3 percent of the Fair Market Value of the shares
of Pulitzer common stock immediately prior to such transaction. The amount of
the additional payment, if any, would equal (x) the product of (i) the amount by
which the Transaction Proceeds (as defined herein) exceeds the Imputed Value (as
defined herein) multiplied by (ii) the applicable percentage (i.e., 50 percent
for the period from May 13, 1996 through May 12, 2001) multiplied by (iii) the
number of shares of Pulitzer common stock issuable upon conversion of the shares
of Pulitzer Class B common stock owned by the 1986 Selling Stockholders,
adjusted for, among other things, stock dividends and stock splits; less (y) the
sum of any additional payments previously received by the 1986 Selling
Stockholders; provided, however, that in the event of any recapitalization,
dividend or distribution, the amount by which the Transaction Proceeds exceeds
the Imputed Value shall not exceed the amount paid or distributed pursuant to
such recapitalization, dividend or distribution in respect of one share of
Pulitzer common stock.

6. SUBSEQUENT EVENT

On October 30, 1998, the Company acquired, in a purchase transaction, Troy
Daily News, Inc., the publisher of a daily afternoon and Sunday morning
newspaper located in Troy, Ohio, for approximately $20 million.

F-35
<PAGE> 99
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. RESTATEMENT

On October 22, 1998, the Company determined that a change in facts had
occurred concerning a stockholder vote that is required to consummate the
Spin-off and Merger (see Note 2). When the Company entered into the Merger
Agreement on May 25, 1998, the principal stockholders of the Company controlled,
and continue to control, that number of shares of Class B Common Stock
sufficient to approve the Merger regardless of the vote of any other holders of
the Company's Common Stock and Class B Common Stock. In addition, on May 25,
1998 the principal stockholders of the Company entered into a voting agreement
with Hearst-Argyle (the "Pulitzer Voting Agreement"), in which they agreed to
direct the vote of all their shares in favor of the Merger and the transactions
contemplated by it (including the Charter Amendment defined below). Consummation
of the Merger is also conditioned upon the passage of an amendment to the
Company's restated certificate of incorporation (the "Charter Amendment"), the
approval of which requires the affirmative vote of the holders of a majority of
the outstanding shares of the Company's Common Stock and the Class B Common
Stock voting together as a single class and the vote of the holders of a
majority of the outstanding shares of the Company's Common Stock voting as a
separate class. On May 25, 1998, at the time of the execution and delivery of
the Merger Agreement and the Pulitzer Voting Agreement, the principal
stockholders of the Company had stated to the Company that they were committed
to take such actions as they deemed necessary to effectuate the Transactions,
including (i), on or before the record date for the Special Meeting of
Stockholders of the Company (the "Special Stockholders Meeting") to be called
for the purpose of voting upon the Merger and the Charter Amendment, the
conversion of that number of their shares of Class B Common Stock into shares of
Common Stock as would constitute a majority of the Company's then issued and
outstanding shares of Common Stock and (ii) to vote those shares of Common Stock
at the Special Stockholders Meeting in accordance with the provisions of the
Pulitzer Voting Agreement. Based upon the facts that existed on May 25, 1998,
and continued to exist through October 21, 1998, the Company determined that it
was appropriate to report the Broadcasting Business as discontinued operations
under Accounting Principles Board Opinion 30, "Reporting the Results of
Operations -- Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions" ("APB
30"). On October 22, 1998, the principal stockholders advised the Company that
they had not converted, and did not deem it necessary to convert on or before
the record date for the Special Stockholders Meeting, that number of shares of
the Company's Class B Common Stock as would constitute a majority of the then
issued and outstanding shares of the Company's Common Stock. Accordingly, based
upon this change in facts (i.e., even though the principal stockholders of the
Company intend to vote all their shares in favor of the Charter Amendment upon
which the Spin-off and Merger are conditioned, they alone will not be in a
position at the Special Stockholders Meeting to approve the Charter Amendment),
the Company determined that it would no longer be appropriate under APB 30 to
report the Broadcasting Business as discontinued operations in the Company's
consolidated financial statements. As a result, the Company's financial
statements as of September 30, 1998 and for the three-month and nine-month
periods ended September 30, 1998 and 1997 (included in Item 1 of the Company's
Report on Form 10-Q, as filed with the Securities and Exchange Commission on
November 12, 1998) have been restated from the amounts previously reported to
now reflect the Broadcasting Business as a part of continuing operations of the
Company. Such restatement results in the reclassification of amounts related to
the Broadcasting Business previously reflected as discontinued operations in the
consolidated financial statements but does not change the Company's previously
reported amounts for consolidated net income, total earnings per share and
stockholders' equity.

F-36
<PAGE> 100

PULITZER PUBLISHING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

A summary of the significant effects of the restatement is as follows:

<TABLE>
<CAPTION>
AT SEPTEMBER 30, 1998
----------------------
AS
PREVIOUSLY AS
REPORTED RESTATED
---------- --------
<S> <C> <C>
Total current assets..................................... $153,970 $207,428
Properties -- net........................................ 80,857 163,663
Total intangibles and other assets....................... 273,338 343,795
Total assets............................................. 508,165 714,886
Total current liabilities................................ $ 37,671 $ 72,547
Long-term debt........................................... -- 160,000
Pension obligations...................................... 22,092 28,682
Postretirement and postemployment benefit obligations.... 88,784 91,495
Other long-term obligations.............................. 3,680 6,224
</TABLE>

<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
------------------------------------------------
1998 1997
---------------------- ----------------------
AS AS
PREVIOUSLY AS PREVIOUSLY AS
REPORTED RESTATED REPORTED RESTATED
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
Total operating revenues.............. $275,207 $448,888 $263,646 $428,648
Total operating expenses.............. 243,781 353,376 232,699 340,570
Operating income...................... 31,426 95,512 30,947 88,078
Income from continuing operations..... 19,276 52,073 19,242 46,399
Income from discontinued operations... 32,797 -- 27,157 --
BASIC EARNINGS PER SHARE OF STOCK:
Continuing operations................. $ 0.86 $ 2.33 $ 0.87 $ 2.10
Discontinued operations............... 1.47 -- 1.23 --
DILUTED EARNINGS PER SHARE OF STOCK:
Continuing operations................. $ 0.85 $ 2.29 $ 0.86 $ 2.07
Discontinued operations............... 1.44 -- 1.21 --
</TABLE>

* * * * * *

F-37

<PAGE> 1
Exhibit 10.27

PULITZER INC.
1999 KEY EMPLOYEES' RESTRICTED STOCK PURCHASE PLAN

1. Purpose. The purpose of the Pulitzer Inc. 1999
Key Employees' Restricted Stock Purchase Plan (the "Plan") is to enable
Pulitzer Inc. (the "Company") and its stockholders to secure the benefits of
incentives inherent in common stock ownership by present and future officers
and other key employees and personnel of the Company and its subsidiaries,
which, for purposes hereof, shall be deemed to include any entity in which the
Company has an ownership interest, directly or indirectly, of at least 50%
(a "Subsidiary").

2. Stock Subject to the Plan. Subject to the
provisions of Section 6 hereof, the Company may issue and sell a total of
500,000 shares of its common stock, $.01 par value (the "Common Stock"),
pursuant to the Plan. Such shares may be either authorized and unissued or
held by the Company in its treasury. If shares issued and sold hereunder are
repurchased by the Company in accordance with the provisions hereof or of the
applicable restricted stock purchase agreements, then such shares shall again
be available for issuance under the Plan.

3. Administration. The Plan will be administered by
a committee (the "Committee") consisting of at least two directors appointed by
and serving at the pleasure of the Board of Directors of the Company (the
"Board"). Subject to the provisions of the Plan, the Committee, acting in its
sole and absolute discretion, will have full power and authority to make awards
under the Plan, to interpret the provisions of the Plan, to fix and interpret
the provisions of

<PAGE> 2

restricted stock purchase agreements made under the Plan, to supervise the
administration of the Plan, and to take such other action as may be necessary or
desirable in order to carry out the provisions of the Plan. A majority of the
members of the Committee will constitute a quorum. The Committee may act by the
vote of a majority of its members present at a meeting at which there is a
quorum or by unanimous written consent. The decision of the Committee as to any
disputed question, including questions of construction, interpretation and
administration, will be final and conclusive on all persons. The Committee will
keep a record of its proceedings and acts and will keep or cause to be kept such
books and records as may be necessary in connection with the proper
administration of the Plan. The Company shall indemnify and hold harmless each
member of the Committee and any employee or director of the Company or a
Subsidiary to whom any duty or power relating to the administration or
interpretation of the Plan is delegated from and against any loss, cost,
liability (including any sum paid in settlement of a claim with the approval of
the Board), damage and expense (including legal and other expenses incident
thereto) arising out of or incurred in connection with the Plan, unless and
except to the extent attributable to such person's fraud or wilful misconduct.

4. Eligibility. Shares of Common Stock may be issued and sold
under the Plan to present and future officers and other key employees and
personnel of the Company or a Subsidiary. Common Stock may not be issued or sold
under the Plan to directors of the Company who are not also employees of the
Company and/or a Subsidiary. Subject to the provisions of the Plan, the
Committee may from time to time select the persons to whom Common Stock will be
offered hereunder, and will fix the number of shares covered by each such offer
and establish the

<PAGE> 3

terms and conditions thereof, including, without limitation,
the purchase price, and vesting and other restrictions on any shares to be
acquired pursuant to said offer.

5. Terms and Conditions of Restricted Stock Awards.
Each restricted stock award made and accepted under the Plan will be evidenced
by a restricted stock purchase agreement approved by the Committee. Each
restricted stock award will be subject to the terms and conditions set forth in
this section and such additional terms and conditions not inconsistent with the
Plan as the Committee deems appropriate.

(a) Purchase Price. The purchase price of
shares of Common Stock issued and sold under this Plan may not be less than the
par value thereof on the date of their issuance and sale.

(b) Restrictions. The Committee shall
determine if, the extent to which and the manner in which shares of Common
Stock issued or sold pursuant to the Plan shall be subject to vesting and/or
other conditions and restrictions. Unless the Committee determines otherwise,
with respect to each restricted stock award made hereunder, the Company shall
have the right, but not the obligation, to reacquire all or a portion of the
shares of Common Stock acquired pursuant to the award for an amount equal to
the price paid therefor if the applicable vesting or other conditions or
restrictions are not satisfied within the time or in the manner specified in
the award. The recipient of a restricted stock award may be required to agree
that all Common Stock acquired by him or her pursuant to the Plan is acquired
for investment purposes and not for the purpose of resale or other distribution
thereof.

(c) Transferability. Shares of Common Stock
issued and sold hereunder and subject to reacquisition by the Company may not
be sold, assigned, transferred, disposed of,

<PAGE> 4

pledged or otherwise hypothecated by the holder thereof other than to the
Company in accordance with the restricted stock purchase agreement applicable
thereto. Any attempt to do any of the foregoing without the committee's prior
agreement shall be null and void, and, unless the Committee determines
otherwise, shall result in the immediate forfeiture of such shares of Common
Stock.

(d) Other Provisions. The Committee may impose
such other conditions with respect to the issuance and sale of Common Stock
under the Plan as it may deem necessary or advisable, including, without
limitation, any conditions relating to the application of federal or state
securities, tax or other laws.

6. Capital Changes. The aggregate number and class of shares
for which awards may be made under the Plan shall be adjusted proportionately or
as otherwise appropriate to reflect any increase or decrease in the number of
issued shares of Common Stock resulting from a split-up or consolidation of
shares or any like capital adjustment, or the payment of any stock dividend,
and/or to reflect a change in the character or class of shares covered by the
Plan arising from a readjustment or recapitalization of the Company's capital
stock.

7. Amendment and Termination. The Board may amend or terminate
the Plan. Except as otherwise provided in Section 6 hereof, any amendment which
would increase the aggregate number of shares of Common Stock as to which awards
may be made under the Plan or modify the class of persons eligible to receive
awards under the Plan shall be subject to the approval of the Company's
stockholders. No amendment or termination of the Plan may affect adversely the
terms of any outstanding award or restricted stock purchase agreement without
the written consent of the holder. The Committee may amend the terms of any
award or restricted stock purchase agreement made hereunder at any time and from
time to time (e.g., to accelerate vesting upon a

<PAGE> 5

change of control), provided, however, that any amendment which would adversely
affect the rights of the holder under his or her award or agreement may not be
made without the holder's prior written consent.

8. No Rights Conferred. Nothing contained herein will be
deemed to give any individual any right to receive an award under the Plan or to
be retained in the employ or service of the Company or any Subsidiary.

9. Governing Law. The Plan and each award and agreement made
hereunder shall be governed by the laws of the State of Delaware.

10. Decisions and Determinations of Committee to be Final. Any
decision or determination made by the Board pursuant to the provisions hereof
and, except to the extent rights or powers under this Plan are reserved
specifically to the discretion of the Board, all decisions and determinations of
the Committee are final and binding.

11. Term of the Plan. The Plan shall be effective as of the
date on which it is adopted by the Board, subject to the approval of the
stockholders of the Company within one year from the date of adoption by the
Board. The Plan will terminate on the date ten years after the date of adoption,
unless sooner terminated by the Board. The rights of any individual to whom
shares of Common Stock are issued and sold hereunder shall not be affected
solely by reason of the termination of the Plan and shall continue to be
governed by the terms of the applicable restricted stock grant or restricted
stock purchase agreement (as then in effect or thereafter amended) and the Plan.

<PAGE> 1
Exhibit 10.28

PULITZER INC.
1999 STOCK OPTION PLAN

1. Purpose. The purpose of the Pulitzer Inc. 1999 Stock Option
Plan (the "Plan") is to enable Pulitzer Inc. (the "Company") and its
stockholders to secure the benefit of the incentives inherent in common stock
ownership by (a) present and future officers and other key employees and
personnel of the Company and its subsidiaries, which, except as otherwise
specified herein, shall include any entity in which the Company has an ownership
interest, directly or indirectly, of at least 50% (a "Subsidiary"), and (b)
Non-Employee Directors (within the meaning of Section 6(a) hereof).

2. Stock Subject to the Plan. Subject to the provisions of
Section 7(a) hereof, the Company may issue and sell a total of 3,000,000 shares
of its common stock, $.01 par value (the "Common Stock"), pursuant to the Plan,
of which no more than 75,000 shares shall be issuable pursuant to Section 6
(relating to nondiscretionary grants to Non-Employee Directors). Such shares may
be either authorized and unissued or held by the Company in its treasury. The
maximum option grant which may be made in any calendar year to any employee of
the Company or a Subsidiary shall not cover more than 150,000 shares. New
options may be granted under the Plan with respect to shares of Common Stock
which are covered by the unexercised portion of an option which terminates or
expires by its terms, by cancellation or otherwise.

3. Administration. The Plan will be administered by a
committee (the "Committee") consisting of at least two directors appointed by
and serving at the pleasure of the Board of Directors of the Company (the
"Board"). Subject to the provisions of the Plan, the Committee, acting in its
sole and absolute discretion, will have full power and authority to grant
options under the Plan, to interpret the provisions of the Plan, to fix and
interpret the provisions of

<PAGE> 2

option agreements made under the Plan, to supervise the administration of the
Plan, and to take such other action as may be necessary or desirable in order to
carry out the provisions of the Plan. A majority of the members of the Committee
will constitute a quorum. The Committee may act by the vote of a majority of its
members present at a meeting at which there is a quorum or by unanimous written
consent. The decision of the Committee as to any disputed question, including
questions of construction, interpretation and administration, will be final and
conclusive on all persons. The Committee will keep a record of its proceedings
and acts and will keep or cause to be kept such books and records as may be
necessary in connection with the proper administration of the Plan. The Company
shall indemnify and hold harmless each member of the Committee and any employee
or director of the Company or of a Subsidiary to whom any duty or power relating
to the administration or interpretation of the Plan is delegated from and
against any loss, cost, liability (including any sum paid in settlement of a
claim with the approval of the Board), damage and expense (including legal and
other expenses incident thereto) arising out of or incurred in connection with
the Plan, unless and except to the extent attributable to such person's fraud or
wilful misconduct. Notwithstanding anything to the contrary herein contained,
the Board shall be responsible for administering the provisions hereof in
connection with nondiscretionary options granted pursuant to Section 6 hereof
and all references herein to the Committee shall be deemed to refer to the Board
with respect to any such option grant.

4. Eligibility. Options may be granted under the Plan to
present and future officers and other key employees or other personnel of the
Company or a Subsidiary. Options may be granted to Non-Employee Directors only
in accordance with Section 6 hereof. Subject to the provisions of the Plan, the
Committee may from time to time select the persons to whom options will

<PAGE> 3

be granted, and will fix the number of shares covered by each such option and
establish the terms and conditions thereof (including, without limitation, the
exercise price, restrictions on the exercisability of the option and/or on the
disposition of the shares of Common Stock issued upon exercise thereof, and
whether or not the option is to be treated as an incentive stock option within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (an
"Incentive Stock Option").

5. Terms and Conditions of Options. Each option granted under
the Plan will be evidenced by a written agreement in a form approved by the
Committee. Subject to the provisions hereof, including, without limitation, the
provisions of Section 6, each such option will be subject to the terms and
conditions set forth in this paragraph and such additional terms and conditions
not inconsistent with the Plan as the Committee deems appropriate.

(a) Option Exercise Price. The exercise price
per share may not be less than the fair market value of a share of Common Stock
on the date the option is granted (110% in the case of an Incentive Stock Option
granted to an employee who, at the time the option is granted, owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or of a subsidiary of the Company within the meaning of
Section 424(f) of the Internal Revenue Code of 1986, as amended (a "ten percent
shareholder")). For purposes hereof, the fair market value of a share of Common
Stock on any date shall be equal to the closing price per share as published by
a national securities exchange on which shares of Common Stock are traded on
such date or, if there is no sale on such date, on the next preceding date on
which shares of Common Stock are traded.

<PAGE> 4

(b) Option Period. The period during which an
option may be exercised will be fixed by the Committee and will not exceed ten
years from the date the option is granted (five years in the case of an
Incentive Stock Option granted to a "ten percent shareholder").

(c) Exercise of Options. No option will become
exercisable unless the person to whom the option is granted remains in the
continuous employ or service of the Company or a Subsidiary for at least six
months (or for such other period as the Committee may designate) from the date
the option is granted. The Committee will determine and will set forth in the
option agreement any vesting or other restrictions on the exercisability of the
option, subject to earlier termination of the option as may be required
hereunder, and any vesting or other restrictions on shares of Common Stock
acquired pursuant to the exercise of the option. An option may be exercised by
transmitting to the Company, in a manner prescribed or approved by the
Committee, (1) a written notice specifying the number of shares to be purchased,
and (2) payment of the exercise price, together with the amount, if any, deemed
necessary by the Company to enable the Company or a Subsidiary, as the case may
be, to satisfy its income tax withholding obligations with respect to such
exercise unless other arrangements acceptable to the Company are made with
respect to the satisfaction of such withholding obligations. Subject to the
provisions of applicable law, the Company may agree to retain and withhold a
number of shares of Common Stock sufficient to reimburse the Company for all or
part of its withholding tax obligation.

(d) Payment of Exercise Price. The purchase
price of shares of Common Stock acquired pursuant to the exercise of an option
granted under the Plan may be paid in cash and/or such other form of payment as
may be permitted under the option agreement, including,

<PAGE> 5

without limitation, previously-owned shares of Common Stock and installment
payments under the optionee's promissory note.

(e) Rights as a Stockholder. No shares of
Common Stock will be issued in respect of the exercise of an option granted
under the Plan until full payment therefor has been made (and/or provided for if
all or a portion of the purchase price is being paid in installments). The
holder of an option will have no rights as a stockholder with respect to any
shares covered by an option until the date a stock certificate for such shares
is issued to him or her. Except as otherwise specifically provided herein, no
adjustments shall be made for dividends or distributions of other rights for
which the record date is prior to the date such stock certificate is issued.

(f) Nontransferability of Options. Unless the
Committee determines otherwise, (1) no option shall be assignable or
transferrable except upon the optionee's death to a beneficiary designated by
the optionee in accordance with procedures established by the Committee or, if
no designated beneficiary shall survive the optionee, pursuant to the optionee's
will or by the laws of descent and distribution; and (2) during an optionee's
lifetime, options may be exercised only by the optionee or the optionee's
guardian or legal representative. The Committee may permit the inter vivos
transfer of an optionee's options, if at all, to any member of the optionee's
immediate family or to a trust created for the benefit of any such person, on
such terms and conditions as the Committee deems appropriate.

(g) Termination of Employment or Other
Service. If an optionee ceases to be employed by or to perform services for the
Company and any Subsidiary, then, unless terminated sooner under the provisions
hereof or of the optionee's option agreement, and unless determined otherwise by
the Committee acting in its sole discretion, (a) if such termination of

<PAGE> 6

employment occurs by reason of the optionee's death, disability, retirement
after age 65 or voluntary retirement with the consent of the Company before age
65, then the optionee's outstanding options will be fully vested and may be
exercised within three years from the date of the termination of employment or
service, and, at the end of such three-year period, any unexercised outstanding
options will terminate; and (b) if the optionee's employment or service is
terminated for any reason other than the optionee's death, disability,
retirement after age 65 or voluntary retirement with the consent of the Company
before age 65, then the optionee's outstanding options, to the extent then
otherwise vested and exercisable, may be exercised within sixty days from the
date of such termination of employment or service and, at the end of such
sixty-day period, any unexercised vested and outstanding options will terminate,
and the optionee's nonvested outstanding options will terminate upon the
optionee's termination of employment or service.

(h) Other Provisions. The Committee may impose
such other conditions with respect to the exercise of options, including,
without limitation, any conditions relating to the application of federal or
state securities laws, as it may deem necessary or advisable.

6. Grant of Options to Non-Employee Directors.

(a) Definition. For all purposes hereof, the
term "Non-Employee Director" means any member of the Board who is not also an
employee of the Company or a Subsidiary.

(b) Nondiscretionary Grants. An option to
purchase 1,250 shares of Common Stock will automatically be granted to each
Non-Employee Director on the day following each annual meeting of the Company's
stockholders. Notwithstanding the foregoing, no option may be granted to a
Non-Employee Director who, on the date the option would otherwise be granted,

<PAGE> 7

beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended) 1% or more of the Common Stock of
the Company or of any other class of capital stock of the Company.

(c) Terms and Conditions of Nondiscretionary
Option Grants. Notwithstanding anything to the contrary contained herein, in the
case of an option granted to a Non- Employee Director under this Section, (1)
the exercise price per share shall be equal to the fair market value of a share
of Common Stock on the date the option is granted; (2) unless sooner terminated,
the option will expire on the date ten years from the date the option is
granted; (3) unless amended pursuant to Section 8 hereof, the option will not be
exercisable (and will thereupon expire) if the optionee's service as a director
ends for any reason other than death or disability prior to the annual meeting
of the Company's stockholders next following the date as of which the option is
granted; (4) the purchase price of shares of Common Stock acquired pursuant to
the exercise of the option shall be payable in cash or by personal check or with
previously-owned shares of Common Stock, or a combination thereof; and (5)
unless sooner terminated hereunder, the option will continue to be exercisable
for three years following the date of the optionee's termination of service as a
member of the Board.

(d) General. It is intended that options granted
under this Section shall constitute nondiscretionary options granted under a
"formula plan" within the meaning and for the purposes of Rule 16b-3. The
provisions of the Plan and of any option agreement made in connection with
options granted under this Section of the Plan shall be interpreted and applied
accordingly.

<PAGE> 8
7. Capital Changes, Reorganization, Sale.

(a) Adjustments Upon Changes in
Capitalization. The aggregate number and class of shares for which options may
be granted under the Plan,the maximum number of shares for which options may be
granted to any individual in any calendar year, the number and class of shares
which are automatically granted under Section 6(b), the number and class of
shares covered by each outstanding option and the exercise price per share
shall all be adjusted proportionately or as otherwise appropriate to reflect
any increase or decrease in the number of issued shares of Common Stock
resulting from a split-up or consolidation of shares or any like capital
adjustment, or the payment of any stock dividend, and/or to reflect a change in
the character or class of shares covered by the Plan arising from a
readjustment or recapitalization of the Company's capital stock.

(b) Cash, Stock or Other Property for Stock.
Except as otherwise provided in this Section 7(b), in the event of an Exchange
Transaction (as defined below), all optionees will be permitted to exercise
their outstanding options in whole or in part (whether or not otherwise
exercisable) immediately prior to such Exchange Transaction, and any
outstanding options which are not exercised before the Exchange Transaction
will thereupon terminate. Notwithstanding the preceding sentence, if, as part
of the Exchange Transaction, the stockholders of the Company receive capital
stock of another corporation ("Exchange Stock") in exchange for their shares of
Common Stock (whether or not such Exchange Stock is the sole consideration),
and if the Board, in its sole discretion, so directs, then all outstanding
options will be converted into options to purchase shares of Exchange Stock.
The amount and price of converted options will be determined by adjusting the
amount and price of the options granted hereunder on the same basis as the
determination of the number of shares of Exchange Stock the holders of Common
Stock will receive in the Exchange

<PAGE> 9

Transaction and, unless the Board determines otherwise, the vesting
conditions with respect to the converted options will be substantially the same
as the vesting conditions set forth in the original option agreement.

(c) Definition of Exchange Transaction. For
purposes hereof, the term "Exchange Transaction" means a merger (other than a
merger of the Company in which the holders of Common Stock immediately prior to
the merger have the same proportionate ownership of Common Stock in the
surviving corporation immediately after the merger), consolidation, acquisition
of property or stock, separation, reorganization (other than a mere
reincorporation or the creation of a holding company), liquidation of the
Company or any other similar transaction or event so designated by the Board in
its sole discretion, as a result of which the stockholders of the Company
receive cash, stock or other property in exchange for or in connection with
their shares of Common Stock.

(d) Fractional Shares. In the event of any
adjustment in the number of shares covered by any option pursuant to the
provisions hereof, any fractional shares resulting from such adjustment will be
disregarded, and each such option will cover only the number of full shares
resulting from the adjustment.

(e) Determination of Board to be Final. All
adjustments under this Section shall be made by the Board, and its determination
as to what adjustments shall be made, and the extent thereof, shall be final,
binding and conclusive.

8. Amendment and Termination. The Board may amend or terminate
the Plan, provided, however, that no such action may affect adversely any
outstanding option without the written consent of the optionee. Except as
otherwise provided in Section 7, any amendment which

<PAGE> 10

would increase the aggregate number of shares of Common Stock as to which
options may be granted under the Plan or modify the class of persons eligible to
receive options under the Plan shall be subject to the approval of the Company's
stockholders. The Committee may amend the terms of any stock option agreement
made hereunder at any time and from time to time (e.g., to accelerate vesting
upon a change of control), provided, however, that any amendment which would
adversely affect the rights of the optionee may not be made without the
optionee's prior written consent.

9. No Rights Conferred. Nothing contained herein will be
deemed to give any individual any right to receive an option under the Plan or
to be retained in the employ or service of the Company or any Subsidiary.

10. Governing Law. The Plan and each option agreement shall be
governed by the laws of the State of Delaware.

11. Decisions and Determinations of Committee to be Final. Any
decision or determination made by the Board pursuant to the provisions hereof
and, except to the extent rights or powers under this Plan are reserved
specifically to the discretion of the Board, all decisions and determinations of
the Committee are final and binding.

12. Term of the Plan. The Plan shall be effective as of the
date on which it is adopted by the Board, subject to the approval of the
stockholders of the Company within one year from the date of adoption by the
Board. The Plan will terminate on the date ten years after the date of adoption,
unless sooner terminated by the Board. The rights of optionees under options
outstanding at the time of the termination of the Plan shall not be affected
solely by reason of the termination of the Plan and shall continue in accordance
with the terms of the option (as then in effect or thereafter amended) and the
Plan.

<PAGE> 1
Exhibit 10.29

PULITZER INC.
1999 EMPLOYEE STOCK PURCHASE PLAN

1. Purpose. The purpose of the Plan is to provide eligible
employees of the Company and its Subsidiaries with a convenient way to acquire
shares of the Company's Common Stock. The Plan is intended to qualify as an
"employee stock purchase plan" under Section 423 of the Code, and the Plan will
be interpreted and construed accordingly.

2. Definitions. Wherever used herein, the masculine includes
the feminine, the singular includes the plural, and the following terms have the
following meanings unless a different meaning is clearly required by the
context.

(a) "Account" means the bookkeeping account
established in the name of each Participant to reflect the payroll deductions
made on behalf of the Participant.

(b) "Board" means the Board of Directors of
the Company.

(d) "Committee" means the administrative
committee appointed by the Board to administer the Plan.

(e) "Common Stock" means the common stock of
the Company, $.01 par value per share.

(f) "Company" means Pulitzer Inc., a Delaware
corporation, and any successor corporation.

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<PAGE> 2

(g) "Compensation" means the base cash
compensation paid by the Company or a Subsidiary to a Participant which is
required to be reported as wages on the Participant's Form W-2, including such
additional amounts which are not includable in gross income by reason of
Sections 125, 402(e) or 402(h)(1)(B) of the Code, and excluding any bonuses,
overtime pay, expense allowances and other irregular payments (except
commissions).

(h) "Employee" means an individual who
performs services for the Company or a Subsidiary in an employer-employee
relationship. For purposes of the Plan, the employment relationship shall be
treated as continuing intact while the individual is on sick leave or other
leave of absence approved by the Company. Where the period of leave exceeds 90
days and the individual's right to reemployment is not guaranteed either by
statute or by contract, the employment relationship will be deemed to have
terminated on the 91st day of such leave.

(i) "Enrollment Date" means the first day of an
Offering Period.

(j) "Exercise Date" means the last business day of
an Offering Period.

(k) "Fair Market Value" means the closing sale
price per share of the Common Stock as published by a national securities
exchange on which shares of the Common Stock are traded on such date or, if
there is no sale on such date, on the next preceding date.

(l) "Offering Period" means the calendar
quarter beginning April 1, 1999 or such later date as established by the
Committee, and each calendar quarter thereafter; provided, however, that the
Committee shall have the power to change the duration of Offering Periods and
the commencement dates thereof without stockholder approval if such change is
announced to Employees at least five days prior to the scheduled beginning of
the first Offering Period resulting from such change.

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<PAGE> 3

(m) "Participant" means any Employee for whom
an Account is maintained under the Plan.

(n) "Subsidiary" means a corporation 50% or
more of the total combined voting power of which is owned directly or
indirectly by the Company as described in Section 424(f) of the Code.

3. Stock Subject to the Plan. Subject to the
provisions of Section 11 hereof, the Company may issue and sell a total of
300,000 shares of its Common Stock pursuant to the Plan. Such shares may be
either authorized and unissued or held by the Company in its treasury. The
Committee may cause the Company to purchase previously issued and outstanding
shares of Common Stock in order to enable the Company to satisfy its
obligations hereunder.

4. Administration. The Plan will be administered by
a committee consisting of at least two directors appointed by and serving at
the pleasure of the Board. Subject to the provisions of the Plan, the
Committee, acting in its sole and absolute discretion, will have full power and
authority to interpret the provisions of the Plan, to change the time covered
by an Offering Period, to supervise the administration of the Plan, and to take
such other action as may be necessary or desirable in order to carry out the
provisions of the Plan. A majority of the members of the Committee will
constitute a quorum. The Committee may act by the vote of a majority of its
members present at a meeting at which there is a quorum or by unanimous written
consent. The decision of the Committee as to any disputed question, including
questions of construction, interpretation and administration, will be final and
conclusive on all persons. The Committee will keep a record of its proceedings
and acts and will keep or cause to be kept such books and records as may be
necessary in connection with the proper administration of the Plan. The Company
shall indemnify and hold harmless each member of the Committee and any employee
or director of the

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<PAGE> 4

Company or of a Subsidiary to whom any duty or power relating to the
administration or interpretation of the Plan is delegated from and against any
loss, cost, liability (including any sum paid in settlement of a claim with the
approval of the Board), damage and expense (including legal and other expenses
incident thereto) arising out of or incurred in connection with the Plan, unless
and except to the extent attributable to such person's fraud or wilful
misconduct.

5. Eligibility and Enrollment. An Employee will be eligible to
become a Participant in the Plan on the Enrollment Date coincident with or next
following the date he or she completes one year of employment with the Company
or a Subsidiary. An eligible Employee will become a Participant for an Offering
Period by completing a Plan enrollment form authorizing payroll deductions and
filing it with the Company prior to the Offering Period. Payroll deductions for
a Participant shall commence with the first payroll and shall end with the last
payroll in the Offering Period to which such authorization is applicable, unless
sooner terminated by the Participant in accordance with the provisions hereof.
Notwithstanding any provisions of the Plan to the contrary, no Employee may be
granted the right to purchase Common Stock under the Plan if and to the extent
that:

(a) immediately after the grant, such Employee would
directly or indirectly own stock and/or hold outstanding
options to purchase stock, possessing 5% or more of the total
combined voting power or value of all classes of stock of the
Company (determined in accordance with Section 424(d) of the
Code); or

(b) the Employee's right to purchase stock under all
employee stock purchase plans (within the meaning of Section
423 of the Code) of the Company or a Subsidiary would accrue
at a rate which exceeds $25,000 in fair market value

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<PAGE> 5

(determined at the time of grant) for each calendar
year in which such right is outstanding.

6. Payroll Deduction. At the time a
Participant enrolls in the Plan, he or she must elect the amount to be deducted
from each paycheck during the Offering Period(s) covered by the election;
provided, however, that no more than 10% of a Participant's Compensation may be
withheld under the Plan on any pay date, and provided further that the
Committee, acting in its discretion and in a uniform and nondiscriminatory
manner, may establish a minimum required amount or percentage of Compensation
which must be withheld during an Offering Period. All payroll deductions made
for a Participant shall be credited to the Participant's Account. Interest
shall not accrue on any amounts credited to a Participant's Account. The rate
of a Participant's contribution, once established, shall remain in effect for
all subsequent Offering Periods unless changed by the Participant in writing at
such time and in such manner as the Committee may prescribe.

7. Purchase of Shares. On each Exercise Date, the
amount credited to a Participant's Account shall be used to purchase a whole
number of shares of Common Stock, the number of which will be determined by
dividing the amount credited to the Participant's Account by the purchase price
per share. Any amount remaining in the Participant's Account will be converted
to a fractional share unless the Committee, acting, in its discretion,
determines that fractional shares will not be credited to Participants under
the Plan, in which event, subject to the Participant's continuing withdrawal
right, such amount will be credited to the Participant's Account as of the
beginning of the next Offering Period. Subject to Section 11 of the Plan, the
purchase price per share will be equal to 85% of the Fair Market Value of a
share of Common Stock on the Exercise Date. If the total number of shares of
Common Stock to be purchased as of an Exercise Date, when

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<PAGE> 6

aggregated with shares of Common Stock previously purchased for all
Employees under the Plan, exceeds the number of shares then authorized under the
Plan, a pro-rata allocation of the available shares will be made among the
Participants based upon the amounts in their respective Accounts as of the
Exercise Date.

8. Discontinuance and Withdrawal of Contributions; Change of
Rate of Payroll Deductions.

(a) Discontinuance or Withdrawal. At any time
during an Offering Period, a Participant may notify the Company that he or she
wishes to discontinue contributions under the Plan. This notice shall be in
writing and shall become effective as soon as practicable following its receipt
by the Company. A Participant may elect to withdraw all, but not less than all,
of the amount of his or her Account at any time during an Offering Period except
on the Exercise Date with respect to that Offering Period. If a withdrawal is
made during an Offering Period, no further contributions will be permitted
during that Offering Period by the withdrawing Participant.

(b) Withholding Changes. At any time during an
Offering Period, a Participant may increase or decrease the rate of his or her
payroll deductions by completing or filing with the Company a new enrollment
form authorizing a change in payroll deduction rate. The Committee may, in its
discretion, limit the number of payroll deduction rate changes during any
Offering Period. The change in rate shall be effective as soon as practicable
after the Company's receipt of the new enrollment form.

9. Termination of Employment. Any Participant whose employment
with the Company and its Subsidiaries is terminated for any reason before an
Exercise Date shall thereupon cease being a Participant. The total amount
credited to the Participant's Account during the Offering

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<PAGE> 7

Period will be returned to the Participant or, in the case of a deceased
Participant, to the Participant's beneficiary, as soon as practicable after the
Participant's termination of employment.

10. Rights as a Stockholder. No shares of Common
Stock will be issued in respect of the exercise of an option granted under the
Plan until full payment therefor has been made (and/or provided for if all or a
portion of the purchase price is being paid in installments). The holder of an
option will have no rights as a stockholder with respect to any shares covered
by an option until the date a stock certificate for such shares is issued to
him or her. Except as otherwise specifically provided herein, no adjustments
shall be made for dividends or distributions of other rights for which the
record date is prior to the date such stock certificate is issued.

11. Capital Changes, Reorganization, Sale.

(a) Adjustments Upon Changes in
Capitalization. The number and class of shares of Common Stock which may be
issued under the Plan, as well as the number and class of shares of Common
Stock and the price per share covered by each right outstanding under the Plan
which has not yet been exercised, shall be adjusted proportionately or as
otherwise appropriate to reflect any increase or decrease in the number of
issued shares of Common Stock resulting from a split-up or consolidation of
shares or any like capital adjustment, or the payment of a stock dividend,
and/or to reflect a change in the character or class of shares covered by the
Plan arising from a readjustment or recapitalization.

(b) Cash, Stock or Other Property for Stock.
Except as otherwise provided in this Section, in the event of an Exchange
Transaction (as defined below), each Participant will be permitted to purchase
Common Stock with the balance of his or her Account immediately prior to such
Exchange Transaction, and any amount credited to a Participant's Account which
is not used to purchase Common Stock before the Exchange Transaction will be
distributed to the Participant.

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<PAGE> 8

Notwithstanding the preceding sentence, (1) if, as part of the Exchange
Transaction, the stockholders of the Company receive capital stock of another
corporation ("Exchange Stock") in exchange for their shares of Common Stock
(whether or not such Exchange Stock is the sole consideration), and if the
Board, in its sole discretion, so directs, then the rights of all Participants
to purchase shares of Common Stock will be converted into rights to purchase
shares of Exchange Stock on an economically equivalent basis; and (2) the
Committee, acting in its discretion, may suspend operation of the Plan as of any
date that occurs after a contract is made which, if consummated, would result in
an Exchange Transaction and before the Exchange Transaction is consummated.

(d) Fractional Shares. In the event of any
adjustment in the number of shares of Common Stock covered by any right pursuant
to the provisions hereof, any fractional shares resulting from such adjustment
will be disregarded and each such right will cover only the number of full
shares of Common Stock resulting from the adjustment.

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<PAGE> 9

(e) Determination of Board to be Final. All
adjustments under this Section 11 shall be made by the Board, and its
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive.

12. Amendment and Termination. The Board may amend or
terminate the Plan at any time; provided, however, that, except as otherwise
provided in Section 11 hereof, any amendment which would increase the aggregate
number of shares of Common Stock which may be issued under the Plan or modify
the class of persons eligible to participate in the Plan shall be subject to the
approval of the Company's stockholders.

13. Transferability. The rights of a Participant to purchase
Common Stock under the Plan are not assignable or transferable and may only be
exercised during the Participant's lifetime by the Participant. A Participant
may file a written designation of a beneficiary who is to receive the amount
credited to the Participant's Account in the event of the Participant's death
during an Offering Period. A Participant's beneficiary designation may be
changed by the Participant at any time by written notice. In the event of the
death of a Participant and in the absence of a validly designated beneficiary
who is living at the time of the Participant's death, the Participant's estate
will be deemed to be his or her designated beneficiary.

14. No Rights Conferred. Nothing contained in the Plan shall
be deemed to give any individual any right to be retained in the service or
employ of the Company and its Subsidiaries or to interfere with the right of the
Company and its Subsidiaries to discharge him or her at any time.

15. Use of Funds. All payroll deductions received or held by
the Company under the Plan may be used by the Company for any corporate purpose,
and the Company shall not be obligated to segregate such payroll deductions.

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<PAGE> 10

16. Legal Requirements. The Committee may impose such other
conditions with respect to the purchase of Common Stock hereunder, including,
without limitation, any conditions relating to the application of federal or
state securities laws, as it may deem necessary or advisable.

17. Governing Law. The Plan and each option agreement shall be
governed by the laws of the State of Delaware without regard to its conflict of
laws provisions.

18. Decisions and Determinations of Committee to be Final. Any
decision or determination made by the Board pursuant to the provisions hereof
and, except to the extent rights or powers under this Plan are reserved
specifically to the discretion of the Board, all decisions and determinations of
the Committee are final and binding.

19. Stockholder Approval. The Plan shall be effective upon its
adoption by the Board, subject to approval by the stockholders of the Company
within twelve months from the date of adoption by the Board.

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<PAGE> 1
EXHIBIT 10.34

EMPLOYMENT AGREEMENT

Agreement, made and entered into on the 26 day of August, 1998, by and
between PULITZER INC., a Delaware corporation with its principal offices in St.
Louis, Missouri (the "Company"), and TERRY EGGER, a resident of the State of
Missouri ("Egger").

1. Employment. The Company will employ Egger, and Egger will be
employed by the Company, upon the terms and conditions set forth in this
Agreement.

2. Term of Employment. Egger's employment under this Agreement will
begin immediately following the closing (the "Closing") of the transactions
contemplated by the Agreement and Plan of Merger dated May 25, 1998, by and
among Pulitzer Publishing Company ("PPC"), the Company, and Hearst-Argyle
Television Inc., if such closing occurs, and will continue for an initial term
of three year. The term will automatically continue for successive one-year
periods thereafter; provided, however, that either party may terminate this
Agreement at the end of the initial term or the end of any subsequent one-year
renewal term by giving at least 60 days' prior written notice of such
termination to the other party.

3. Position, Duties and Responsibilities. Egger will serve as a Vice
President of the Company and as general manager of the St. Louis Post Dispatch,
or in such other executive position as the Board of Directors of the Company
(the "Board") may determine. Egger will devote substantially all of his business
time and attention to the performance of his duties and responsibilities under
this Agreement. Egger may engage in personal, charitable, investment,
professional and other activities to the extent such activities do not prevent
him from properly fulfilling his obligations to the Company under this
Agreement.

4. Compensation.

(a) Base Salary. The Company will pay salary to Egger at an annual
rate of $240,000, in accordance with its regular payroll practices. The Board
will review Egger's salary at least annually. The Board, acting in its
discretion, may increase (but may not decrease) the annual rate of Egger's
salary in effect at any time.

(b) Annual Incentive Awards. Egger will participate in any bonus
plan that may be established by the Company on the same basis as other
executives. Egger will be eligible for an annual target incentive opportunity of
30% of salary, increasing to 40% of salary effective January 1, 1999, on a basis
that is consistent with the annual incentive opportunity currently afforded
Egger by PPC under PPC's executive annual incentive plan. Annual incentive
awards will be payable promptly after the end of the year for which they are
earned, subject to deferral requirements that may be imposed by the Company in
order to preserve its income tax deduction or elective deferral opportunities
that may be afforded by the Company.

(c) Employee Benefit Programs. Egger will be entitled to
participate in such employee retirement, pension, welfare and fringe benefit
plans, arrangements and programs of the Company as are made available to the
Company's employees generally. Egger will be entitled to participate in any
stock option, restricted stock or other equity-based plans or programs of the
Company that are made available to other executives of the Company. Subject to
stockholder approval of the Company's restricted stock plan, Egger will be
awarded restricted shares of Company stock with a value (determined at the close
of business on the first trading day following the date of the Closing) of
$240,000, subject to vesting upon completion of the stated term of this
Agreement.

<PAGE> 2

(d) PPC SERP. The Company will assume the obligations of PPC to
Egger for benefits accrued by Egger under PPC's Supplemental Executive Benefit
Pension Plan ("SERP") prior to the Closing. After the Closing, the Company will
either assume and continue to maintain the SERP for the benefit of its eligible
employees (including Egger) or will establish another plan or arrangement that
will provide Egger with continuing future benefits and accruals that are at
least as favorable as would have been provided under the terms of the SERP in
effect immediately prior to the Closing.

5. Reimbursement of Business Expenses. Egger is authorized to incur
reasonable expenses in carrying out his duties and responsibilities under this
Agreement, and the Company will promptly reimburse him for all such expenses
that are so incurred upon presentation of appropriate vouchers or receipts,
subject to the Company's expense reimbursement policies in effect from time to
time.

6. Termination of Employment.

(a) Death. If Egger's employment with the Company terminates before the
end of the term by reason of his death, then, as soon as practicable thereafter,
the Company will pay to his estate an amount equal to his "Accrued Compensation"
(defined below). Egger's spouse and covered dependents will be entitled to
continue to participate in the Company's group health plan(s) at the same
benefit level at which they participated immediately before Egger's death for a
period of at least one year after Egger's death or, if longer, for the balance
remaining in the term of this Agreement at the time of his death, and,
thereafter, for such additional continuation period as may be available under
COBRA or under any post-retirement group health plan or arrangement in which
Egger participated prior to his death. For the purposes of this Agreement, the
term "Accrued Compensation" means, as of any date, the amount of any unpaid
salary earned by Egger through that date, plus a pro rata amount of Egger's
target annual incentive award for the year in which such date occurs, plus any
additional amounts and/or benefits payable to or in respect of Egger under and
in accordance with the provisions of any employee plan, program or arrangement
under which Egger is covered immediately prior to his death.

(b) Disability. If the Company terminates Egger's employment by reason
of Egger's "disability" (defined below), then Egger will be entitled to (1) his
Accrued Compensation through his employment termination date, (2) continuing
salary payments (at the rate in effect at the time his employment terminates),
reduced by any amounts payable to him pursuant to a Company-sponsored long term
disability program, during the one-year period following the termination of his
employment, and (3) continuing participation in the Company's group health
plan(s) at the same benefit level at which he and his covered dependent(s)
participated immediately before the termination of his employment for a period
of at least one year after such termination or, if longer, for the balance
remaining in the term of this Agreement at the time of such termination of
employment, and, thereafter, for such additional continuation period as may be
available under COBRA or under any post-retirement group health plan or
arrangement in which Egger participated prior to the termination of his
employment by reason of his disability. For purposes of this Agreement, the term
"disability" means the inability of Egger to substantially perform the customary
duties of his employment for the Company for a period of at least 120
consecutive days by reason of a physical or mental incapacity which is expected
to result in death or last indefinitely.

(c) Termination by the Company for Cause or Voluntary Termination by
Egger. If the Company terminates Egger's employment for "cause" (defined below)
or if Egger terminates his employment without "Good Reason" (as defined in
subsection(d) below) before the end of the stated term that is then in effect,
then Egger will be entitled to receive his Accrued Compensation

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<PAGE> 3

through the date his employment terminates, determined without regard to pro
rata bonus, and nothing more. For purposes of this Agreement, the Company may
terminate Egger's employment for "cause" if (1) Egger commits a felony involving
moral turpitude, or (2) Egger fails to carry out the duties and responsibilities
of his employment due to his willful gross neglect or willful gross misconduct
which cannot be cured or which, if curable, is not cured within 30 days after
receipt of written notice by the Company and a reasonable opportunity to appeal
to the Board (in person or through a representative), provided that, in either
case (1 or 2), Egger's conduct results in material harm to the financial
condition or reputation of the Company.

(d) Termination by the Company Without Cause or by Egger for Good
Reason. If Egger's employment is terminated by the Company without Cause or by
Egger for "Good Reason" (defined below), then Egger will be entitled to receive
(1) Accrued Compensation through the termination date, (2) continued salary for
a period of six months after the termination date (or, if longer, for the
balance of the then term of this Agreement) at his annual rate of salary in
effect immediately prior to the termination date, (3) a single sum payment in an
amount equal to 40% of the highest annual rate of salary in effect before the
termination date (or, if higher, the highest annual incentive award paid or
payable to Egger for any of the three preceding years (including, for this
purpose, employment with PPC) multiplied by the number of years (including
fractions of a year) covered by the period described in (2), (4) continued
participation in the Company's group health plan(s) at the same benefit level at
which he and his covered dependent(s) participated immediately before the
termination of his employment for a period of at least one year after such
termination or, if longer, for the balance remaining in the term of this
Agreement at the time of such termination of employment, and, thereafter, for
such additional continuation period as may be available under COBRA or under any
post-retirement group health plan or arrangement in which Egger participated
prior to the termination of his employment, (5) continued participation for at
least one year or, if longer, for the then balance remaining in the term of this
Agreement in the Company's life insurance plans at the same benefit level in
effect immediately prior to the termination date, (6) elimination of all
restrictions, other than those required by law, on any restricted or deferred
stock awards previously granted to Egger and outstanding at the time of his
termination of employment; and (7) immediate vesting of all stock options
previously granted to Egger and outstanding at the time of his termination of
employment.. For the purposes of this Agreement, Egger may terminate his
employment for "Good Reason" if

(A) the Company materially diminishes Egger's duties, responsibilities
or employment conditions in a manner which is inconsistent with the
provisions hereof or with his status as a senior executive officer of
the Company or which has or reasonably can be expected to have a
material adverse effect on Egger's status or authority within the
Company;

(B) the Company wilfully fails or refuses to satisfy any of its
compensation obligations under this Agreement; or

(C) the Company fails to perform or breaches its obligations under any
other material provision of this Agreement and does not correct such
failure or breach (if correctable) within 30 days following notice
thereof by Egger to the Company.

8. No Mitigation; No Offset. Egger will have no obligation to seek
other employment or to otherwise mitigate the Company's obligations to him
arising from the termination of his employment, and no amounts paid or payable
to Egger by the Company under this Agreement shall

-3-
<PAGE> 4

be subject to offset for any remuneration to which Egger may become entitled
from any other source after his employment with the Company terminates, whether
attributable to subsequent employment, self-employment or otherwise

9. Confidential Information; Cooperation with Regard to Litigation.

(a) Nondisclosure of Confidential Information. During the term
of his employment and thereafter, Egger will not, without the prior written
consent of the Company, disclose to anyone (except in good faith in the ordinary
course of business to a person who will be advised by Egger to keep such
information confidential) or make use of any Confidential Information (as
defined below) except in the performance of his duties hereunder or when
required to do so by legal process, by any governmental agency having
supervisory authority over the business of the Company or by any administrative
or legislative body (including a committee thereof) that requires him to
divulge, disclose or make accessible such information. In the event that Egger
is so ordered, he will give prompt written notice to the Company in order to
allow the Company the opportunity to object to or otherwise resist such order.

(b) Definition of Confidential Information. For purposes of
this Agreement, the term "Confidential Information" means information concerning
the business of the Company or any corporation or other entity that is
controlled, directly or indirectly, by the Company relating to any of its or
their products, product development, trade secrets, customers, suppliers,
finances, and business plans and strategies. Excluded from the definition of
Confidential Information is information (1) that is or becomes part of the
public domain, other than through the breach of this Agreement by Egger or (2)
regarding the Company's business or industry properly acquired by Egger in the
course of his career as an executive in the Company's industry and independent
of Egger's employment by the Company or PPC. For this purpose, information known
or available generally within the trade or industry of the Company or any
subsidiary shall be deemed to be known or available to the public.

(c) Post-Termination Assistance. Egger will cooperate with the
Company, during the term of his employment and thereafter (including following
Egger's termination of employment for any reason), by making himself reasonably
available to testify on behalf of the Company or any subsidiary of the Company
in any action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, and to reasonably assist the Company or any such subsidiary in
any such action, suit, or proceeding by providing information and meeting and
consulting with the Board or its representatives or counsel, or representatives
or counsel to the Company or any such subsidiary, as reasonably requested;
provided, however, that the same does not materially interfere with his then
current professional activities. The Company will reimburse Egger, on an
after-tax basis, for all expenses reasonably incurred by him in connection with
his provision of testimony or assistance.

10. Non-solicitation. During the term of his employment and for a
period of 24 months thereafter, Egger will not induce or solicit, directly or
indirectly, any employee of the Company or any subsidiary of the Company to
terminate his or her employment with the Company or any such subsidiary.

11. Remedies. If Egger commits a material breach of any of the
provisions contained in sections 9 or 10 above, then (a) the Company will have
the right to immediately terminate all payments and benefits which remain due
under this Agreement, and (b) the Company will have the right to seek injunctive
relief. Egger acknowledges that such a breach of sections 9 or 10 could

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<PAGE> 5

cause irreparable injury and that money damages may not provide an adequate
remedy for the Company. Nothing contained herein will prevent Egger from
contesting any such action by the Company on the ground that no violation or
threatened violation of section 9 or 10 has occurred.

12. Resolution of Disputes. Any controversy or claim arising out of or
relating to this Agreement or any breach or asserted breach hereof or
questioning the validity and binding effect hereof arising under or in
connection with this Agreement, other than seeking injunctive relief under
section 11, shall be resolved by binding arbitration, to be held in St. Louis in
accordance with the rules and procedures of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. Pending the resolution of any
arbitration or court proceeding, the Company will continue payment of all
amounts and benefits due Egger under this Agreement. All costs and expenses of
any arbitration or court proceeding (including fees and disbursements of
counsel) shall be borne by the respective party incurring such costs and
expenses, but the Company shall reimburse Egger for such reasonable costs and
expenses in the event he substantially prevails in such arbitration or court
proceeding.

13. Indemnification.

(a) Company Indemnity. If Egger is made a party, or is threatened to be
made a party, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "Proceeding"), by reason of the fact that he
is or was a director, officer or employee of the Company, PPC or any subsidiary
or affiliate thereof or was serving at the request of the Company or any
subsidiary or affiliate as a director, officer, member, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether or not the
basis of such Proceeding is Egger's alleged action in an official capacity while
serving as a director, officer, member, employee or agent, then the Company will
indemnify Egger and hold him harmless to the fullest extent legally permitted or
authorized by the Company's certificate of incorporation or bylaws or
resolutions of the Company's Board or, if greater, by the laws of the State of
Delaware, against all cost, expense, liability and loss (including, without
limitation, attorney's fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
Egger in connection therewith, except to the extent attributable to Egger's
gross negligence or fraud), and such indemnification shall continue as to Egger
even if he has ceased to be a director, member, officer, employee or agent of
the Company or other entity and shall inure to the benefit of Egger's heirs,
executors and administrators. The Company will advance to Egger all reasonable
costs and expenses to be incurred by him in connection with a Proceeding within
20 days after receipt by the Company of a written request for such advance. Such
request shall include an undertaking by Egger to repay the amount of such
advance if it shall ultimately be determined that he is not entitled to be
indemnified against such costs and expenses. The provisions of this section
shall not be deemed exclusive of any other rights of indemnification to which
Egger may be entitled or which may be granted to him and shall be in addition to
any rights of indemnification to which he may be entitled under any policy of
insurance.

(b) No Presumption Regarding Standard of Conduct. Neither the failure
of the Company (including its Board, independent legal counsel or stockholders)
to have made a determination prior to the commencement of any proceeding
concerning payment of amounts claimed by Egger under the preceding subsection
(a) of this section that indemnification of Egger is proper because he has met
the applicable standard of conduct, nor a determination by the Company
(including its Board,

-5-
<PAGE> 6

independent legal counsel or stockholders) that Egger has not met such
applicable standard of conduct, shall create a presumption that Egger has not
met the applicable standard of conduct.

(c) Liability Insurance. The Company will continue and maintain a
directors and officers' liability insurance policy covering Egger to the extent
the Company provides such coverage for its other senior Egger officers.

14. Effect of Agreement on Other Benefits. Except as specifically
provided in this Agreement, the existence of this Agreement shall not be
interpreted to preclude, prohibit or restrict Egger's participation in any other
employee benefit or other plans or programs in which he currently participates.

15. Assignment; Binding Nature. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors, heirs
(in the case of Egger) and permitted assigns. No rights or obligations of the
Company under this Agreement may be assigned or transferred by the Company
except that such rights or obligations may be assigned or transferred to the
successor of the Company or its business if the assignee or transferee assumes
the liabilities, obligations and duties of the Company, as contained in this
Agreement, either contractually or as a matter of law; provided, however, that
no such assignment or transfer will relieve the Company from its payment
obligations hereunder in the event the transferee or assignee fails to timely
discharge them. No rights or obligations of Egger under this Agreement may be
assigned or transferred by him other than his rights to compensation and
benefits, which may be transferred only by will or operation of law, except as
otherwise specifically provided or permitted hereunder.

16. Representations. The Company represents and warrants that it is
fully authorized and empowered to enter into this Agreement and that the
performance of its obligations under this Agreement will not violate any
Agreement between it and any other person, firm or organization. Egger
represents and warrants that there is no legal or other impediment which would
prohibit him from entering into this Agreement or which would prevent him from
performing the duties of his employment hereunder.

17. Entire Agreement. This Agreement contains the entire understanding
and agreement between the parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the Parties with respect thereto.

18. Amendment or Waiver. No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by Egger and an
authorized officer of the Company. Except as set forth herein, no delay or
omission to exercise any right, power or remedy accruing to any Party shall
impair any such right, power or remedy or shall be construed to be a waiver of
or an acquiescence to any breach hereof. No waiver by either party of any breach
by the other Party of any condition or provision contained in this Agreement to
be performed by such other Party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent time.
Any waiver must be in writing and signed by Egger or an authorized officer of
the Company, as the case may be.

19. Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining

-6-

<PAGE> 7

provisions of this Agreement shall be unaffected thereby and shall remain in
full force and effect to the fullest extent permitted by law.

20. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of Egger's employment to the extent
necessary to the intended preservation of such rights and obligations.

21. Beneficiaries/References. Egger shall be entitled, to the extent
permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
Egger's death by giving the Company written notice thereof. In the event of
Egger's death or a judicial determination of his incompetence, reference in this
Agreement to Egger shall be deemed, where appropriate, to refer to his
beneficiary, estate or other legal representative.

22. Governing Law. This Agreement shall be governed by and construed
and interpreted in accordance with the laws of Delaware without reference to
principles of conflict of laws.

23. Notices. Any notice given to a party shall be in writing and shall
be deemed to have been given when delivered personally or sent by certified or
registered mail, postage prepaid, return receipt requested, duly addressed to
the party concerned at the address indicated below or to such changed address as
such party may subsequently give such notice of:

If to the Company: Pulitzer Inc.
900 North Tucker Boulevard
St. Louis, Missouri 63101
Attention: Secretary

If to Egger: Terry Egger
822 Questover Lane
St. Louis, Missouri 63141

IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date first above written.

PULITZER INC.

By:_______________________________

__________________________________
Terry Egger

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<PAGE> 1
EXHIBIT 10.34

PARTICIPATION AGREEMENT

AGREEMENT made and entered into as of May 25, 1998, by and between PULITZER
PUBLISHING COMPANY, a Delaware corporation (the "Company"), and MICHAEL E.
PULITZER ("Pulitzer").

1. Retention Award. The Company will pay Pulitzer a retention award of
$900,000 on the earlier of (a) January 1, 2000, or (b), the date of the closing
("Closing") of the acquisition of Pulitzer Broadcasting Company and its
subsidiaries by Hearst-Argyle Television, Inc. pursuant the Agreement and Plan
of Merger dated May 25, 1998, by and among the Company, Pulitzer Inc. and
Hearst-Argyle Television, Inc., provided Pulitzer remains in the continuous
employ of the Company until such earlier date.

2. Transaction Incentive. If the Closing occurs and if Pulitzer remains
in the continuous employ of the Company until the date on which the Closing
occurs, then, in addition to the amount payable to Pulitzer pursuant to
paragraph 1 above, the Company will pay Pulitzer a transaction completion bonus
of $1,000,000. The Compensation Committee of the Board of Directors of the
Company, acting in its sole discretion, may increase the amount of the award.
Subject to the provisions of paragraph 3 below, the amount described in this
paragraph will be payable to Pulitzer on the date of the Closing.

3. Payment. Notwithstanding the foregoing, the Company will defer
payment of any amount described in paragraph 1 and paragraph 2 which constitutes
"applicable employee remuneration" (within the meaning of Section 162(m)(4) of
the Code) to the extent that such amount, when added to the "applicable employee
remuneration" previously paid by the Company to Pulitzer during the year in
which the Closing occurs, exceeds $1,000,000. The deferral amount, together with
interest at a rate to be determined by the Company, will be payable to Pulitzer
as soon as practicable following his termination of employment with the Company
and its affiliates (including, without limitation, Pulitzer Inc.) or following
his earlier death. Payment may be further deferred until the first day of the
year following Pulitzer's termination of employment with the Company and its
affiliates if and to the extent necessary to avoid a loss of deduction by the
Company or any of its affiliates by reason of the application of the limitation
of Section 162(m) of the Code in the termination year. The Board of Directors of
the Company, acting in its sole discretion, may permit or require an accelerated
payment of the deferral amount and/or an installment payout (in lieu of a lump
sum) on such terms and conditions as it deems appropriate, provided, however,
that, without Pulitzer's consent, the Board may not require an installment
payout that is less frequent than quarterly over a period of more than four
years.

4. Death. If the Closing occurs and if Pulitzer dies before the Closing
and while he is still an employee of the Company, then, for the purpose of this
agreement, Pulitzer will be deemed to have lived and to have continued to be
employed by the Company through the date the Closing occurs. In such event,
Pulitzer's estate will be entitled to receive the amounts that otherwise would
have been payable to him hereunder.

5. General Provisions.

(a) Nothing in this agreement is intended to create a contract
of employment between Pulitzer and the Company, or to interfere in any way with
the right of the Company to terminate Pulitzer's employment at any time.

<PAGE> 2

(b) In connection with the Closing, the Company may assign to
Pulitzer Inc., and Pulitzer Inc. may assume, the Company's obligations to
Pulitzer under this agreement, to the extent not previously satisfied. Pulitzer
will look solely to Pulitzer Inc. and will have no further claim against the
Company for payment of amounts that become due hereunder following any such
assignment and assumption. All payments made pursuant to this agreement will be
subject to applicable withholding taxes.

(c) No amounts paid or payable under this agreement will be
treated as compensation for purposes of calculating Pulitzer's benefits, if any,
under any retirement/pension plan maintained by the Company and/or Pulitzer Inc.
or any of their affiliates (including, without limitation, the Company's
Supplemental Executive Benefit Pension Plan).

(d) This agreement will be governed by and construed in
accordance with the laws of the State of Delaware without regard to its conflict
of laws provisions.

(e) No amendment or modification of this agreement may be made
except by a written instrument signed by the Company and Pulitzer.

(f) All disputes arising under or related to this agreement
will be resolved by arbitration. Such arbitration will be conducted by an
arbitrator mutually selected by the Company (or Pulitzer Inc., if the dispute
relates to an obligation of the Company that is assumed by Pulitzer Inc. at the
Closing) and Pulitzer (or, if the Company or Pulitzer Inc., as the case may be,
and Pulitzer are unable to agree upon an arbitrator within ten days, then the
Company or Pulitzer Inc., as the case may be, and Pulitzer will each select an
arbitrator, and the arbitrators so selected will mutually select a third
arbitrator, who will resolve such dispute). Such arbitration will be conducted
in St. Louis, Missouri in accordance with the applicable rules of the American
Arbitration Association. Any decision rendered by an arbitrator pursuant hereto
may be enforced by a court of competent jurisdiction without review of such
decision by such court. All attorneys' fees and costs of the arbitration will in
the first instance be borne by the respective party incurring such costs and
fees, but the arbitrator will award costs and attorneys' fees to the prevailing
party.

(g) This agreement constitutes the entire agreement between
the parties hereto relating to the matters encompassed hereby and supersedes any
prior oral or written agreements relating thereto.

IN WITNESS WHEREOF, the undersigned have executed this agreement as of
the date first written above.

PULITZER PUBLISHING COMPANY

By: /s/ Ronald H. Ridgway
--------------------------------------
Ronald H. Ridgway

/s/ Michael E. Pulitzer
--------------------------------------
Michael E. Pulitzer

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<PAGE> 1
EXHIBIT 10.36

PARTICIPATION AND SEVERANCE AGREEMENT

AGREEMENT made and entered into as of May 25, 1998, by and between
PULITZER PUBLISHING COMPANY, a Delaware corporation (the "Company"), and KEN J.
ELKINS ("Elkins").

1. Retention Award. The Company will pay Elkins a retention award of
$600,000 on the earlier of (a) January 1, 2000, or (b) the date of the closing
("Closing") of the acquisition of Pulitzer Broadcasting Company and its
subsidiaries (collectively, "PBC") by Hearst-Argyle Television, Inc. pursuant
the Agreement and Plan of Merger dated May 25, 1998, by and among the Company,
Pulitzer Inc. and Hearst-Argyle Television, Inc., provided Elkins remains in the
continuous employ of the Company or PBC until such earlier date.

2. Transaction Incentives. If the Closing occurs and if Elkins remains
in the continuous employ of the Company or PBC until the date on which the
Closing occurs, then Elkins will be entitled to the payments and benefits
described in (a) - (d) below, in addition to the amount payable pursuant to
paragraph 1 above. Elkins' employment with the Company will terminate at the
time of the Closing.

(a) Base Transaction Incentive Award. The Company will pay to
Elkins a transaction incentive award of $1,000,000. Elkins will not be entitled
to participate in any discretionary bonus pool to be established for the benefit
of certain employees of the Company and PBC in connection with the Closing.

(b) Cashout of Unexercised Options. The Company will make a cash
payment to Elkins in exchange for the cancellation of all of his options to
purchase Company stock that are outstanding immediately prior to the Closing,
whether or not vested. The amount of the cash payment for each such outstanding
option will be equal to the difference between the value and the exercise price
of the shares of Company stock covered by the option. For this purpose, unless
the Company, acting in a manner that is uniformly applicable to all option
holders, determines otherwise, the value of the shares of Company stock covered
by an outstanding option will be equal to the number of shares covered by the
option multiplied by the average daily closing price per share for the ten
trading days immediately prior to the date of the Closing.

(c) Supplemental Benefits. Elkins will be permitted to continue to
participate in the Company's group health (medical and dental) and life
insurance plans on the same basis as active senior executives for the two-year
period beginning on the date of the Closing. If Elkins defers the beginning date
of his retirement pension under the Company's Supplemental Executive Benefit
Pension Plan ("SERP") until November 1, 2000 (or later), then (1) the Company
will waive the early retirement reduction adjustment to the amount of the
retirement income that then becomes payable to Elkins under the SERP, and (2)
Elkins will be entitled to SERP and continuing group health benefits as if he
had retired from active service with the Company after reaching his normal
retirement date.

(d) Supplemental Transaction Incentive Award. The Company will make
a supplemental transaction incentive payment to Elkins in an amount equal to X
minus Y, where:

X is equal to the lesser of $2,476,000, or an amount equal to
2.99 times Elkins' "base amount" (as defined in Section
280G(b)(3) of the Internal Revenue Code of 1986); and

Y is equal to the total value (determined in accordance with
Section 280G of the Internal Revenue Code and regulations
thereunder) of all payments, accelerated

<PAGE> 2

vesting of stock options and other benefits (other than the
supplemental transaction incentive award payable under this
paragraph 2(d)) provided or to be provided to or for the benefit
of Elkins that are considered to be contingent on the change in
ownership of the Company within the meaning and for the purposes
of Section 280G(b)(2)(A)(i) of the Code attributable to the
transactions consummated as part of the Closing.

(e) Payments. The amounts described in subparagraphs (a), (b) and
(d) of this paragraph 2 will be payable to Elkins at the Closing or, in the case
of the amount described in subparagraph (d), as soon as practicable after the
Closing as and when such amount is ascertained. Notwithstanding the foregoing,
the Company will defer payment of any amount described in paragraph 1 and this
paragraph 2 which constitutes "applicable employee remuneration" (within the
meaning of Section 162(m)(4) of the Code) to the extent that such amount, when
added to the "applicable employee remuneration" paid or payable by the Company
to Elkins during the year in which the Closing occurs, exceeds $1,000,000. The
deferral amount, together with interest at a rate to be determined by the
Company, will be payable to Elkins as soon as practicable following his
termination of employment or service with the Company and its affiliates
(including, without limitation, Pulitzer Inc.) or following his earlier death.
Payment may be further deferred until the first day of the year following
Elkins' termination of employment or service with the Company and its affiliates
if and to the extent necessary to avoid a loss of deduction by the Company or
any of its affiliates by reason of the application of the limitation of Section
162(m) of the Code in the termination year. The Board of Directors of the
Company, acting in its sole discretion, may permit or require an accelerated
payment of the deferral amount and/or an installment payout (in lieu of a lump
sum) on such terms and conditions as it deems appropriate, provided, however,
that, without Elkins' consent, the Board may not require an installment payout
that is less frequent than quarterly over a period of more than four years.

3. Salary and Bonus. At or as soon as practicable after the Closing,
the Company will pay Elkins the unpaid amount, if any, of his base salary earned
through the date of the Closing, plus the pro rata amount of his annual bonus
for the year in which the Closing occurs. Except as otherwise specifically
provided, nothing contained in this agreement will affect Elkins' rights to
receive any accrued and unpaid amounts or benefits to which he is or may become
entitled to receive under and in accordance with the terms and provisions of any
Company employee benefit plan in which Elkins is a participant.

4. Death. If the Closing occurs and if Elkins dies before the Closing
and while he is still an employee of the Company or PBC, then, for the purpose
of this agreement, Elkins will be deemed to have lived and to have continued to
be employed by the Company or PBC through the date the Closing occurs. In such
event, Elkins' estate will be entitled to receive the amounts that otherwise
would have been payable to him hereunder.

5. General Provisions.

(a) Nothing in this agreement is intended to create a contract of
employment between Elkins and the Company, or to interfere in any way with the
right of the Company to terminate Elkins' employment at any time.

(b) In connection with the Closing, the Company may assign to
Pulitzer Inc., and Pulitzer Inc. may assume, the Company's obligations to Elkins
under this agreement, to the extent not previously satisfied. Elkins will look
solely to Pulitzer Inc. and will have no further claim against the Company for
payment of amounts that become due hereunder following any such assignment

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<PAGE> 3

and assumption. All payments made pursuant to this agreement will be subject to
applicable withholding taxes.

(c) No amounts paid or payable under paragraphs 1 and 2 of this
agreement will be treated as compensation for purposes of calculating Elkins'
benefits, if any, under any retirement/pension plan maintained by the Company
and/or Pulitzer Inc. or any of their affiliates (including, without limitation,
the Company's Supplemental Executive Benefit Pension Plan). Subject to the
preceding sentence, the amount of Elkins' SERP benefit will be determined on the
basis of his service and compensation as of the end of 1998 and without regard
to any service and compensation performed or earned, as the case may be, after
1998.

(d) This agreement will be governed by and construed in accordance
with the laws of the State of Delaware without regard to its conflict of laws
provisions.

(e) No amendment or modification of this agreement may be made
except by a written instrument signed by the Company and Elkins.

(f) All disputes arising under or related to this agreement will be
resolved by arbitration. Such arbitration will be conducted by an arbitrator
mutually selected by the Company (or Pulitzer Inc., if the dispute relates to an
obligation of the Company that is assumed by Pulitzer Inc. at the Closing) and
Elkins (or, if the Company or Pulitzer Inc., as the case may be, and Elkins are
unable to agree upon an arbitrator within ten days, then the Company or Pulitzer
Inc., as the case may be, and Elkins will each select an arbitrator, and the
arbitrators so selected will mutually select a third arbitrator, who will
resolve such dispute). Such arbitration will be conducted in St. Louis, Missouri
in accordance with the applicable rules of the American Arbitration Association.
Any decision rendered by an arbitrator pursuant hereto may be enforced by a
court of competent jurisdiction without review of such decision by such court.
All attorneys' fees and costs of the arbitration will in the first instance be
borne by the respective party incurring such costs and fees, but the arbitrator
will award costs and attorneys' fees to the prevailing party.

(g) This agreement constitutes the entire agreement between the
parties hereto relating to the matters encompassed hereby and supersedes any
prior oral or written agreements relating thereto.
(a) Nothing in this agreement is intended to create a contract of employment
between Elkins and the Company or PBC, or to interfere in any way with the right
of the Company or PBC to terminate Elkins' employment at any time.

IN WITNESS WHEREOF, the undersigned have executed this agreement as
of the date first written above.

PULITZER PUBLISHING COMPANY

By: /s/ Michael E. Pulitzer
--------------------------
Michael E. Pulitzer

/s/ Ken J. Elkins
--------------------------
Ken J. Elkins

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<PAGE> 1
EXHIBIT 10.37

PARTICIPATION AGREEMENT

AGREEMENT made and entered into as of May 25, 1998, by and between
PULITZER PUBLISHING COMPANY, a Delaware corporation (the "Company"), and
NICHOLAS G. PENNIMAN IV ("Penniman").

1. Retention Award. The Company will pay Penniman a retention award
of $150,000 on the earlier of (a) January 1, 2000, or (b), the date of the
closing ("Closing") of the acquisition of Pulitzer Broadcasting Company and its
subsidiaries by Hearst-Argyle Television, Inc. pursuant the Agreement and Plan
of Merger dated May 25, 1998, by and among the Company, Pulitzer Inc. and
Hearst-Argyle Television, Inc., provided Penniman remains in the continuous
employ of the Company until such earlier date.

2. Transaction Incentives. If the Closing occurs and if Penniman
remains in the continuous employ of the Company until the date on which the
Closing occurs, then Penniman will be entitled to the payments and benefits
described in (a) and (b) below, in addition to the amount payable pursuant to
paragraph 1 above.

(a) Transaction Incentive Award. The Company will pay Penniman a
fixed transaction incentive award of at $150,000. The Compensation Committee of
the Company's Board of Directors (the "Board"), acting in its sole discretion,
may increase the amount of the transaction incentive award. The increase, if
any, is expected to range from zero to $75,000.

(b) Cashout of Unexercised Options. The Company will make a cash
payment to Penniman in exchange for the cancellation of all of his options to
purchase Company stock that are outstanding immediately prior to the Closing,
whether or not vested. The amount of the cash payment for each such outstanding
option will be equal to the difference between the value and the exercise price
of the shares of Company stock covered by the option. For this purpose, unless
the Company, acting in a manner that is uniformly applicable to all option
holders, determines otherwise, the value of the shares of Company stock covered
by an outstanding option will be equal to the number of shares covered by the
option multiplied by the average daily closing price per share for the ten
trading days immediately prior to the date of the Closing.

(c) Payment. The amounts described in subparagraphs (a) and (b) of
this paragraph 2 will be payable to Penniman at the Closing. Notwithstanding the
foregoing, the Company will defer payment of any amount described in paragraph 1
and this paragraph 2 which constitutes "applicable employee remuneration"
(within the meaning of Section 162(m)(4) of the Code) to the extent that such
amount, when added to the "applicable employee remuneration" previously paid by
the Company to Penniman during the year in which the Closing occurs, exceeds
$1,000,000. The deferral amount, together with interest at a rate to be
determined by the Company, will be payable to Penniman as soon as practicable
following his termination of employment with the Company and its affiliates
(including, without limitation, Pulitzer Inc.) or following his earlier death.
Payment may be further deferred until the first day of the year following
Penniman's termination of employment with the Company and its affiliates if and
to the extent necessary to avoid a loss of deduction by the Company or any of
its affiliates by reason of the application of the limitation of Section

<PAGE> 2

162(m) of the Code in the termination year. The Board of Directors of the
Company, acting in its sole discretion, may permit or require an accelerated
payment of the deferral amount and/or an installment payout (in lieu of a lump
sum) on such terms and conditions as it deems appropriate, provided, however,
that, without Penniman's consent, the Board may not require an installment
payout that is less frequent than quarterly over a period of more than four
years.

3. Death. If the Closing occurs and if Penniman dies before the
Closing and while he is still an employee of the Company, then, for the purpose
of this agreement, Penniman will be deemed to have lived and to have continued
to be employed by the Company through the date the Closing occurs. In such
event, Penniman's estate will be entitled to receive the amounts that otherwise
would have been payable to him hereunder.

4. General Provisions.

(a) Nothing in this agreement is intended to create a contract of
employment between Penniman and the Company, or to interfere in any way with the
right of the Company to terminate Penniman's employment at any time.

(b) In connection with the Closing, the Company may assign to
Pulitzer Inc., and Pulitzer Inc. may assume, the Company's obligations to
Penniman under this agreement, to the extent not previously satisfied. Penniman
will look solely to Pulitzer Inc. and will have no further claim against the
Company for payment of amounts that become due hereunder following any such
assignment and assumption. All payments made pursuant to this agreement will be
subject to applicable withholding taxes.

(c) No amounts paid or payable under this agreement will be treated
as compensation for purposes of calculating Penniman's benefits, if any, under
any retirement/pension plan maintained by the Company and/or Pulitzer Inc. or
any of their affiliates (including, without limitation, the Company's
Supplemental Executive Benefit Pension Plan).

(d) This agreement will be governed by and construed in accordance
with the laws of the State of Delaware without regard to its conflict of laws
provisions.

(e) No amendment or modification of this agreement may be made
except by a written instrument signed by the Company and Penniman.

(f) All disputes arising under or related to this agreement will be
resolved by arbitration. Such arbitration will be conducted by an arbitrator
mutually selected by the Company (or Pulitzer Inc., if the dispute relates to an
obligation of the Company that is assumed by Pulitzer Inc. at the Closing) and
Penniman (or, if the Company or Pulitzer Inc., as the case may be, and Penniman
are unable to agree upon an arbitrator within ten days, then the Company or
Pulitzer Inc., as the case may be, and Penniman will each select an arbitrator,
and the arbitrators so selected will mutually select a third arbitrator, who
will resolve such dispute). Such arbitration will be conducted in St. Louis,
Missouri in accordance with the applicable rules of the American Arbitration
Association. Any decision rendered by an arbitrator pursuant hereto may be
enforced by a court of competent jurisdiction without review

-2-
<PAGE> 3

of such decision by such court. All attorneys' fees and costs of the arbitration
will in the first instance be borne by the respective party incurring such costs
and fees, but the arbitrator will award costs and attorneys' fees to the
prevailing party.

(g) This agreement constitutes the entire agreement between the
parties hereto relating to the matters encompassed hereby and supersedes any
prior oral or written agreements relating thereto.

IN WITNESS WHEREOF, the undersigned have executed this agreement as
of the date first written above.

PULITZER PUBLISHING COMPANY

By: /s/ Michael E. Pulitzer
--------------------------------
Michael E. Pulitzer

By: /s/ Nicholas G. Penniman IV
--------------------------------
Nicholas G. Penniman IV

-3-

<PAGE> 1
EXHIBIT 10.38

PARTICIPATION AGREEMENT

AGREEMENT made and entered into as of May 25, 1998, by and between
PULITZER PUBLISHING COMPANY, a Delaware corporation (the "Company"), and RONALD
H. RIDGWAY ("Ridgway").

1. Retention Award. The Company will pay Ridgway a retention award
of $450,000 on the earlier of (a) January 1, 2000, or (b), the date of the
closing ("Closing") of the acquisition of Pulitzer Broadcasting Company and its
subsidiaries by Hearst-Argyle Television, Inc. pursuant the Agreement and Plan
of Merger dated May 25, 1998, by and among the Company, Pulitzer Inc. and
Hearst-Argyle Television, Inc., provided Ridgway remains in the continuous
employ of the Company until such earlier date.

2. Transaction Incentives. If the Closing occurs and if Ridgway
remains in the continuous employ of the Company until the date on which the
Closing occurs, then Ridgway will be entitled to the payments and benefits
described in (a) and (b) below, in addition to the amount payable pursuant to
paragraph 1 above.

(a) Transaction Incentive Award. The Company will pay Ridgway a
fixed transaction incentive award of $450,000. The Compensation Committee of the
Company's Board of Directors (the "Board"), acting in its sole discretion, may
increase the amount of the transaction incentive award. The amount of the
increase, if any, is expected to range from zero to $225,000.

(b) Cashout of Unexercised Options. The Company will make a cash
payment to Ridgway in exchange for the cancellation of all of his options to
purchase Company stock that are outstanding immediately prior to the Closing,
whether or not vested. The amount of the cash payment for each such outstanding
option will be equal to the difference between the value and the exercise price
of the shares of Company stock covered by the option. For this purpose, unless
the Company, acting in a manner that is uniformly applicable to all option
holders, determines otherwise, the value of the shares of Company stock covered
by an outstanding option will be equal to the number of shares covered by the
option multiplied by the average daily closing price per share for the ten
trading days immediately prior to the date of the Closing.

(c) Payment. The amounts described in subparagraphs (a) and (b) of
this paragraph 2 will be payable to Ridgway at the Closing. Notwithstanding the
foregoing, the Company will defer payment of any amount described in paragraph 1
and this paragraph 2 which constitutes "applicable employee remuneration"
(within the meaning of Section 162(m)(4) of the Code) to the extent that such
amount, when added to the "applicable employee remuneration" previously paid by
the Company to Ridgway during the year in which the Closing occurs, exceeds
$1,000,000. The deferral amount, together with interest at a rate to be
determined by the Company, will be payable to Ridgway as soon as practicable
following his termination of employment with the Company and its affiliates
(including, without limitation, Pulitzer Inc.) or following his earlier death.
Payment may be further deferred until the first day of the year following
Ridgway's termination of employment with the Company and its affiliates if and
to the extent necessary to avoid a loss of deduction by the Company or any of
its affiliates by reason of the application of the limitation of Section 162(m)
of

<PAGE> 2

the Code in the termination year. The Board of Directors of the Company,
acting in its sole discretion, may permit or require an accelerated payment of
the deferral amount and/or an installment payout (in lieu of a lump sum) on such
terms and conditions as it deems appropriate, provided, however, that, without
Ridgway's consent, the Board may not require an installment payout that is less
frequent than quarterly over a period of more than four years.

3. Death. If the Closing occurs and if Ridgway dies before the
Closing and while he is still an employee of the Company, then, for the purpose
of this agreement, Ridgway will be deemed to have lived and to have continued to
be employed by the Company through the date the Closing occurs. In such event,
Ridgway's estate will be entitled to receive the amounts that otherwise would
have been payable to him hereunder.

4. General Provisions.

(a) Nothing in this agreement is intended to create a contract of
employment between Ridgway and the Company, or to interfere in any way with the
right of the Company to terminate Ridgway's employment at any time.

(b) In connection with the Closing, the Company may assign to
Pulitzer Inc., and Pulitzer Inc. may assume, the Company's obligations to
Ridgway under this agreement, to the extent not previously satisfied. Ridgway
will look solely to Pulitzer Inc. and will have no further claim against the
Company for payment of amounts that become due hereunder following any such
assignment and assumption. All payments made pursuant to this agreement will be
subject to applicable withholding taxes.

(c) No amounts paid or payable under this agreement will be treated
as compensation for purposes of calculating Ridgway's benefits, if any, under
any retirement/pension plan maintained by the Company and/or Pulitzer Inc. or
any of their affiliates (including, without limitation, the Company's
Supplemental Executive Benefit Pension Plan).

(d) This agreement will be governed by and construed in accordance
with the laws of the State of Delaware without regard to its conflict of laws
provisions.

(e) No amendment or modification of this agreement may be made
except by a written instrument signed by the Company and Ridgway.

-2-

<PAGE> 3

Association. Any decision rendered by an arbitrator pursuant hereto may be
enforced by a court of competent jurisdiction without review of such decision by
such court. All attorneys' fees and costs of the arbitration will in the first
instance be borne by the respective party incurring such costs and fees, but the
arbitrator will award costs and attorneys' fees to the prevailing party.

(g) This agreement constitutes the entire agreement between the
parties hereto relating to the matters encompassed hereby and supersedes any
prior oral or written agreements relating thereto.

IN WITNESS WHEREOF, the undersigned have executed this agreement as
of the date first written above.

PULITZER PUBLISHING COMPANY

By: /s/ Michael E. Pulitzer
-------------------------------
Michael E. Pulitzer

/s/ Ronald H. Ridgway
-------------------------------
Ronald H. Ridgway

-3-

<PAGE> 1
EXHIBIT 10.39

PARTICIPATION AND SEVERANCE AGREEMENT

AGREEMENT, made and entered into as of May 25, 1998, by and between
PULITZER PUBLISHING COMPANY, a Delaware corporation (the "Company"), and C.
WAYNE GODSEY (the "Godsey").

1. Retention Award. The Company will pay $250,000 to Godsey on the
earlier of (a) January 1, 2000, or (b) the date of the closing ("Closing") of
the acquisition of Pulitzer Broadcasting Company and its subsidiaries
(collectively, "PBC") by Hearst-Argyle Television, Inc. pursuant the Agreement
and Plan of Merger dated May 25, 1998, by and among the Company, Pulitzer Inc.
and Hearst-Argyle Television, Inc., PROVIDED that Godsey remains in the
continuous employ of the Company or PBC until such earlier date.

2. Transaction Incentive Awards. If the Closing occurs and if Godsey
remains in the continuous employ of the Company or PBC until the date on which
the Closing occurs, then Godsey will be entitled to the payments and benefits
described in (a) - (d) below, in addition to the amount payable pursuant to
paragraph 1 above.

(a) Transaction Completion Award. The Company will pay to Godsey a
transaction completion bonus of $375,000 on or as soon as practicable after the
date on which the Closing occurs. Godsey will not be entitled to participate in
any discretionary bonus pool to be established for the benefit of certain
employees of the Company and PBC in connection with the Closing.

(b) Cashout of Unexercised Options. The Company will make a cash
payment to Godsey in exchange for the cancellation of all of Godsey's options to
purchase Company stock that are outstanding immediately prior to the Closing,
whether or not vested. The amount of the cash payment for each such outstanding
option will be equal to the difference between the value and the exercise price
of the shares of Company stock covered by the option. For this purpose, unless
the Company, acting in a manner that is uniformly applicable to all option
holders, determines otherwise, the value of the shares of Company stock covered
by an outstanding option will be equal to the number of shares covered by the
option multiplied by the average daily closing price per share for the ten
trading days immediately prior to the date of the Closing. The aggregate option
cashout amount, as so determined, will be payable to Godsey on or as soon as
practicable after the date the Closing occurs.

(c) Continued Benefits. Godsey will be permitted to continue to
participate in the Company's group health (medical and dental) and life
insurance plans on the same contributory basis as active employees for the
period beginning on the date of the Closing and ending on the earliest of (1)
the second anniversary of the date of Closing, (2) the date of Godsey's death,
and (3) the date Godsey becomes eligible to receive benefit coverage under
another employer plan. Godsey's right to receive COBRA continuation coverage
will not be affected by the continuing group health plan coverage afforded under
the preceding sentence.

(d) Severance Award. Godsey's employment with the Company and
PBC will terminate at the time of the Closing. At or as soon as practicable
after the Closing, the Company will make a separation payment to Godsey in an
amount equal to X minus Y, where:

<PAGE> 2

X is equal to the lesser of $928,000, or an amount equal to 2.99
times Godsey's "base amount" (as defined in Section 280G(b)(3) of
the Internal Revenue Code of 1986); and

Y is equal to the total value (determined in accordance with
Section 280G of the Internal Revenue Code and regulations
thereunder) of all payments, accelerated vesting of stock options
and other benefits (other than the severance award payable under
this paragraph 2(d)) provided or to be provided to or for the
benefit of Godsey that are considered to be contingent on the
change in ownership of the Company within the meaning and for the
purposes of Section 280G(b)(2)(A)(i) of the Internal Revenue Code
attributable to the transactions consummated as part of the
Closing.

The Company may cause payment of the severance award to be deferred if and to
the extent that (1) the amount thereof cannot be finally ascertained, or (2) the
deferral is necessary in order to avoid the loss of a deduction therefor by
reason of the executive compensation deduction limitation of Section 162(m) of
the Internal Revenue Code. The portion of the severance award that is deferred
(if any) will be payable to Godsey as soon as practicable after the amount
thereof is ascertained or the section 162(m) deduction limitation no longer
applies, as the case may be.

3. Salary and Bonus. At or as soon as practicable after the Closing,
the Company will pay Godsey the unpaid amount, if any, of Godsey's base salary
earned through the date of the Closing, plus the pro rata amount of his annual
bonus for the year in which the Closing occurs. Except as otherwise specifically
provided, nothing contained in this agreement will affect Godsey's rights to
receive any accrued and unpaid amounts or benefits to which he is or may become
entitled to receive under and in accordance with the terms and provisions of any
Company employee benefit plan in which Godsey is a participant.

4. Death. If the Closing occurs and if Godsey dies before the Closing
and while he is still an employee of the Company or PBC, then, for the purpose
of this agreement, Godsey will be deemed to have lived and to have continued to
be employed by the Company or PBC through the date the Closing occurs. In such
event, Godsey's estate will be entitled to receive the amounts that otherwise
would have been payable to Godsey hereunder.

5. General Provisions.

(a) Nothing in this agreement is intended to create a contract of
employment between Godsey and the Company or PBC, or to interfere in any way
with the right of the Company or PBC to terminate Godsey's employment at any
time.

(b) In connection with the Closing, the Company may assign to
Pulitzer Inc., and Pulitzer Inc. may assume, all or part of the payment and
benefit obligations of the Company under this agreement. Godsey will have no
further claim against the Company or PBC with respect to any such payment
obligation that is so assigned to and assumed by Pulitzer Inc. All payments made
pursuant to this agreement will be subject to applicable withholding taxes.

(c) No payments made pursuant to this agreement will be treated as
compensation for purposes of calculating Godsey's benefits, if any, under any
retirement/pension plan maintained

-2-
<PAGE> 3

by the Company and/or PBC (other than amounts payable under paragraph 3 that are
otherwise taken into account for purposes of such plan or plans).

(d) This agreement will be governed by and construed in accordance
with the laws of the State of Delaware without regard to its conflict of laws
provisions.

(e) No amendment or modification of this agreement may be made
except by a written instrument signed by the Company and Godsey.

(f) All disputes arising under or related to this agreement will be
resolved by arbitration. Such arbitration will be conducted by an arbitrator
mutually selected by the Company (or Pulitzer Inc., if the dispute relates to an
obligation of the Company that is assumed by Pulitzer Inc. at the Closing) and
Godsey (or, if the Company or Pulitzer Inc., as the case may be, and Godsey are
unable to agree upon an arbitrator within ten days, then the Company or Pulitzer
Inc., as the case may be, and Godsey will each select an arbitrator, and the
arbitrators so selected will mutually select a third arbitrator, who will
resolve such dispute). Such arbitration will be conducted in accordance with the
applicable rules of the American Arbitration Association. Any decision rendered
by an arbitrator pursuant hereto may be enforced by a court of competent
jurisdiction without review of such decision by such court. All attorneys' fees
and costs of the arbitration will in the first instance be borne by the
respective party incurring such costs and fees, but the arbitrator will award
costs and attorneys' fees to the prevailing party.

(g) This agreement constitutes the entire agreement between the
parties hereto relating to the matters encompassed hereby and supersedes any
prior oral or written agreements relating thereto.

IN WITNESS WHEREOF, the undersigned have executed this agreement as of
the date first written above.

PULITZER PUBLISHING COMPANY

By: /s/ Michael E. Pulitzer
----------------------------------
Michael E. Pulitzer

/s/ C. Wayne Godsey
----------------------------------
C. Wayne Godsey

-3-

<PAGE> 1
EXHIBIT 10.40

PARTICIPATION AND SEVERANCE AGREEMENT

AGREEMENT, made and entered into as of May 25, 1998, by and between
PULITZER PUBLISHING COMPANY, a Delaware corporation (the "Company"), and JOHN
KUENEKE (the "Kueneke").

1. Retention Award. The Company will pay $250,000 to Kueneke on the
earlier of (a) January 1, 2000, or (b) the date of the closing ("Closing") of
the acquisition of Pulitzer Broadcasting Company and its subsidiaries
(collectively, "PBC") by Hearst-Argyle Television, Inc. pursuant the Agreement
and Plan of Merger dated May 25, 1998, by and among the Company, Pulitzer Inc.
and Hearst-Argyle Television, Inc., PROVIDED that Kueneke remains in the
continuous employ of the Company or PBC until such earlier date.

2. Transaction Incentive Awards. If the Closing occurs and if Kueneke
remains in the continuous employ of the Company or PBC until the date on which
the Closing occurs, then Kueneke will be entitled to the payments and benefits
described in (a) - (d) below, in addition to the amount payable pursuant to
paragraph 1 above.

(a) Transaction Completion Award. The Company will pay to Kueneke a
transaction completion bonus of $375,000 on or as soon as practicable after the
date on which the Closing occurs. Kueneke will not be entitled to participate in
any discretionary bonus pool to be established for the benefit of certain
employees of the Company and PBC in connection with the Closing.

(b) Cashout of Unexercised Options. The Company will make a cash
payment to Kueneke in exchange for the cancellation of all of Kueneke's options
to purchase Company stock that are outstanding immediately prior to the Closing,
whether or not vested. The amount of the cash payment for each such outstanding
option will be equal to the difference between the value and the exercise price
of the shares of Company stock covered by the option. For this purpose, unless
the Company, acting in a manner that is uniformly applicable to all option
holders, determines otherwise, the value of the shares of Company stock covered
by an outstanding option will be equal to the number of shares covered by the
option multiplied by the average daily closing price per share for the ten
trading days immediately prior to the date of the Closing. The aggregate option
cashout amount, as so determined, will be payable to Kueneke on or as soon as
practicable after the date the Closing occurs.

(c) Continued Benefits. Kueneke will be permitted to continue to
participate in the Company's group health (medical and dental) and life
insurance plans on the same contributory basis as active employees for the
period beginning on the date of the Closing and ending on the earliest of (1)
the second anniversary of the date of Closing, (2) the date of Kueneke's death,
and (3) the date Kueneke becomes eligible to receive benefit coverage under
another employer plan. Kueneke's right to receive COBRA continuation coverage
will not be affected by the continuing group health plan coverage afforded under
the preceding sentence.

(d) Severance Award. Kueneke's employment with the Company and PBC
will terminate at the time of the Closing. At or as soon as practicable after
the Closing, the Company will make a separation payment to Kueneke in an amount
equal to X minus Y, where:

<PAGE> 2

X is equal to the lesser of $796,000, or an amount equal to 2.99
times Kueneke's "base amount" (as defined in Section 280G(b)(3)
of the Internal Revenue Code of 1986); and

Y is equal to the total value (determined in accordance with
Section 280G of the Internal Revenue Code and regulations
thereunder) of all payments, accelerated vesting of stock options
and other benefits (other than the severance award payable under
this paragraph 2(d)) provided or to be provided to or for the
benefit of Kueneke that are considered to be contingent on the
change in ownership of the Company within the meaning and for the
purposes of Section 280G(b)(2)(A)(i) of the Internal Revenue Code
attributable to the transactions consummated as part of the
Closing.

The Company may cause payment of the severance award to be deferred if and to
the extent that (1) the amount thereof cannot be finally ascertained, or (2) the
deferral is necessary in order to avoid the loss of a deduction therefor by
reason of the executive compensation deduction limitation of Section 162(m) of
the Internal Revenue Code. The portion of the severance award that is deferred
(if any) will be payable to Kueneke as soon as practicable after the amount
thereof is ascertained or the section 162(m) deduction limitation no longer
applies, as the case may be.

3. Salary and Bonus. At or as soon as practicable after the Closing,
the Company will pay Kueneke the unpaid amount, if any, of Kueneke's base salary
earned through the date of the Closing, plus the pro rata amount of his annual
bonus for the year in which the Closing occurs. Except as otherwise specifically
provided, nothing contained in this agreement will affect Kueneke's rights to
receive any accrued and unpaid amounts or benefits to which he is or may become
entitled to receive under and in accordance with the terms and provisions of any
Company employee benefit plan in which Kueneke is a participant.

4. Death. If the Closing occurs and if Kueneke dies before the Closing
and while he is still an employee of the Company or PBC, then, for the purpose
of this agreement, Kueneke will be deemed to have lived and to have continued to
be employed by the Company or PBC through the date the Closing occurs. In such
event, Kueneke's estate will be entitled to receive the amounts that otherwise
would have been payable to Kueneke hereunder.

5. General Provisions.

(a) Nothing in this agreement is intended to create a contract of
employment between Kueneke and the Company or PBC, or to interfere in any way
with the right of the Company or PBC to terminate Kueneke's employment at any
time.

(b) In connection with the Closing, the Company may assign to
Pulitzer Inc., and Pulitzer Inc. may assume, all or part of the payment and
benefit obligations of the Company under this agreement. Kueneke will have no
further claim against the Company or PBC with respect to any such payment
obligation that is so assigned to and assumed by Pulitzer Inc. All payments made
pursuant to this agreement will be subject to applicable withholding taxes.

(c) No payments made pursuant to this agreement will be treated as
compensation for purposes of calculating Kueneke's benefits, if any, under any
retirement/pension plan maintained

-2-

<PAGE> 3

by the Company and/or PBC (other than amounts payable under paragraph 3 that are
otherwise taken into account for purposes of such plan or plans).

(d) This agreement will be governed by and construed in accordance
with the laws of the State of Delaware without regard to its conflict of laws
provisions.

(e) No amendment or modification of this agreement may be made
except by a written instrument signed by the Company and Kueneke.

(f) All disputes arising under or related to this agreement will be
resolved by arbitration. Such arbitration will be conducted by an arbitrator
mutually selected by the Company (or Pulitzer Inc., if the dispute relates to an
obligation of the Company that is assumed by Pulitzer Inc. at the Closing) and
Kueneke (or, if the Company or Pulitzer Inc., as the case may be, and Kueneke
are unable to agree upon an arbitrator within ten days, then the Company or
Pulitzer Inc., as the case may be, and Kueneke will each select an arbitrator,
and the arbitrators so selected will mutually select a third arbitrator, who
will resolve such dispute). Such arbitration will be conducted in accordance
with the applicable rules of the American Arbitration Association. Any decision
rendered by an arbitrator pursuant hereto may be enforced by a court of
competent jurisdiction without review of such decision by such court. All
attorneys' fees and costs of the arbitration will in the first instance be borne
by the respective party incurring such costs and fees, but the arbitrator will
award costs and attorneys' fees to the prevailing party.

(g) This agreement constitutes the entire agreement between the
parties hereto relating to the matters encompassed hereby and supersedes any
prior oral or written agreements relating thereto.

IN WITNESS WHEREOF, the undersigned have executed this agreement as of
the date first written above.

PULITZER PUBLISHING COMPANY

By: /s/ Michael E. Pulitzer
------------------------------
Michael E. Pulitzer

/s/ John Kueneke
------------------------------
John Kueneke

-3-