BELO A H CORP, S-3/A, 1996-04-02

BELO A H CORP
S-3/A, 1996-04-02
NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 2, 1996.

REGISTRATION NO. 333-01291

================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

AMENDMENT NO. 1

FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

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

A. H. BELO CORPORATION
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C>
DELAWARE 75-0135890
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

MICHAEL J. MCCARTHY
SENIOR VICE PRESIDENT,
400 SOUTH RECORD STREET GENERAL COUNSEL AND SECRETARY
DALLAS, TEXAS 75202 P.O. BOX 655237
(214) 977-6606 DALLAS, TEXAS 75265-5237
(Address, including zip code, and telephone (214) 977-6606
number, including area code, of (Name, address, including zip code, and
registrant's principal executive offices) telephone number, including area code,
of agent for service)
</TABLE>

Copies to:

<TABLE>
<S> <C>
GUY KERR KERRY C. L. NORTH
LOCKE PURNELL RAIN HARRELL BAKER & BOTTS, L.L.P.
(A PROFESSIONAL CORPORATION) 800 TRAMMELL CROW CENTER
2200 ROSS AVENUE, SUITE 2200 2001 ROSS AVENUE
DALLAS, TEXAS 75201-6776 DALLAS, TEXAS 75201
(214) 740-8000 (214) 953-6500
</TABLE>

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /

If any of the securities being registered on this Form are being offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: / /

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

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

================================================================================
<PAGE> 2

A. H. BELO CORPORATION

CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K

<TABLE>
<CAPTION>
FORM S-3 ITEM NUMBER AND HEADING CAPTION OR LOCATION IN PROSPECTUS
------------------------------------------- -------------------------------------------
<C> <S> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus... Facing Page of Registration Statement;
Cross Reference Sheet; Outside Front
Cover of Prospectus
2. Inside Front and Outside Back Cover Pages
of Prospectus............................ Inside Front Cover and Outside Back Cover
Pages of Prospectus
3. Summary Information, Risk Factors and Ratio
of Earnings to Fixed Charges............. Prospectus Summary
4. Use of Proceeds............................ Use of Proceeds
5. Determination of Offering Price............ Outside Front Cover Page of Prospectus
6. Dilution................................... Not Applicable
7. Selling Security Holders................... Not Applicable
8. Plan of Distribution....................... Underwriting; Price Range of Series A
Common Stock and Dividends
9. Description of Securities to be
Registered............................... Description of Capital Stock
10. Interest of Named Experts and Counsel...... Legal Matters
11. Material Changes........................... Business; Price Range of Series A Common
Stock and Dividends; Description of
Capital Stock
12. Incorporation of Certain Information by
Reference................................ Incorporation of Certain Documents by
Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.............................. Not Applicable
</TABLE>
<PAGE> 3

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED APRIL 2, 1996

5,000,000 SHARES

LOGO

SERIES A COMMON STOCK
(PAR VALUE $1.67 PER SHARE)

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

Of the 5,000,000 shares of Series A Common Stock offered, 4,000,000 shares
are being offered hereby in the United States and 1,000,000 shares are being
offered in a concurrent international offering outside the United States. The
initial public offering price and the aggregate underwriting discount per share
will be identical for both offerings. See "Underwriting".

The last reported sale price of the Series A Common Stock, which is listed
under the symbol "BLC," on the New York Stock Exchange on March 29, 1996 was
$34.00 per share. See "Price Range of Series A Common Stock and Dividends".

After giving effect to the offerings (assuming the Underwriters'
over-allotment option is not exercised) as of December 31, 1995, the Company had
outstanding 33,961,753 shares of Series A Common Stock with one vote per share
and 9,280,179 shares of Series B Common Stock with ten votes per share. As a
result, the holders of Series B Common Stock will have the exclusive right to
vote shares constituting approximately 73% of the combined voting power of the
Series A and Series B Common Stock. See "Description of Capital Stock".

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

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

<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE DISCOUNT(1) COMPANY(2)
-------------- ------------ -----------
<S> <C> <C> <C>
Per Share....................................... $ $ $
Total(3)........................................ $ $ $
</TABLE>

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

(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(2) Before deducting estimated expenses of $ payable by the Company.
(3) The Company has granted the Underwriters options for 30 days to purchase up
to an additional 750,000 shares of Series A Common Stock at the initial
public offering price per share, less the underwriting discount, solely to
cover over-allotments. If such options are exercised in full, the total
initial public offering price, underwriting discount and proceeds to the
Company will be $ , $ and $ , respectively. See
"Underwriting".

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

These shares offered hereby are offered severally by the U.S. Underwriters,
as specified herein, subject to receipt and acceptance by them and subject to
their right to reject any order in whole or in part. It is expected that
certificates for the shares will be ready for delivery in New York, New York, on
or about , 1996.

GOLDMAN, SACHS & CO. SMITH BARNEY INC.

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

The date of this Prospectus is , 1996.
<PAGE> 4

[A.H. BELO LOGO]

[Map of the United States indicating
the locations of the Company's businesses.]

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES A COMMON
STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

2
<PAGE> 5

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by and should be read in
conjunction with the information and consolidated financial statements,
including the notes thereto, appearing elsewhere or incorporated by reference
herein. Unless otherwise indicated, all share and per share data in this
Prospectus (i) assume no exercise of the Underwriters' over-allotment options
and (ii) have been adjusted to reflect the two-for-one split of the Common Stock
which became effective on June 9, 1995. Unless the context requires otherwise,
the "Company" refers to A. H. Belo Corporation, a Delaware corporation, its
predecessors and its consolidated subsidiaries. Unless otherwise indicated, all
information in this Prospectus concerning television households, the size and
rankings of specified television markets and the rankings, ratings and audience
shares of the Company's television stations is based on the November 1995
estimates provided by A.C. Nielsen Company ("Nielsen").

THE COMPANY

A. H. Belo Corporation (the "Company") owns and operates seven
network-affiliated VHF television stations in the top 60 U.S. television markets
and the largest daily newspaper in the Dallas-Fort Worth metropolitan area. The
Company's broadcast group reaches 8 percent of all U.S. television households
and its principal newspaper, The Dallas Morning News, has the country's seventh
largest Sunday circulation (800,147) and eighth largest daily circulation
(534,197). The Company believes the success of its media franchises is built
upon providing local news, information and community service of the highest
caliber. These principles have attracted and built relationships with viewers,
readers and advertisers and have guided the Company's success for 154 years.

Three of the Company's seven stations are in the top 12 television markets:
WFAA (ABC) Dallas-Fort Worth; KHOU (CBS) Houston; and KIRO (United Paramount
Network or UPN) Seattle-Tacoma. These major metropolitan areas are among the
fastest growing in the country. All of the Company's stations are ranked either
number one or two in overall sign-on/sign-off audience delivery, with the
exception of KIRO, which was acquired by the Company in 1995. In 1995, WFAA, the
Company's flagship station, had the highest rated late newscast in any of the
top 10 markets based on an average of the four Nielsen rating periods. In
addition, WWL (CBS) in New Orleans, which the Company acquired in June 1994, is
the highest rated television station in the top 50 markets in overall
sign-on/sign-off audience delivery. In 1993, the Company broadened its broadcast
operations when it created Belo Productions, Inc., which produces television
programming for the Company's station group as well as for network and cable
distribution.

The Dallas Morning News is one of the leading newspaper franchises in
America. The Dallas Morning News' success is founded upon the highest standards
of journalistic excellence, with a special emphasis on local news, information
and community service. The newspaper's outstanding reporting and editorial
initiatives have earned six Pulitzer Prizes since 1986. As the leading newspaper
in the Dallas-Fort Worth market, The Dallas Morning News' success is measured by
its high circulation and volume of advertising. Based on the most recently
available industry information, The Dallas Morning News runs more full run
advertising than any other newspaper in the United States. In late 1995 and
early 1996, the Company expanded its publishing division by acquiring two daily
newspapers serving Bryan-College Station, Texas and Owensboro, Kentucky. The
Company also publishes nine other community newspapers in the Dallas-Fort Worth
suburban area and operates a commercial printing business.

The Company's operating strategy for its media franchises focuses on
increasing profitability through revenue growth and effective cost control. Key
components of its operating strategy include a commitment to the highest
standards of journalistic excellence, a special emphasis on local news and a
dedication to community service.

3
<PAGE> 6

The Company will continue to identify and pursue additional acquisitions of
television stations and newspapers in situations where the Company believes it
can successfully apply its operating strategy and where such businesses can be
acquired on economically attractive terms.

For the year ended December 31, 1995, the Company's net operating revenues
were $735,343,000 and its earnings before interest, taxes, depreciation and
amortization (EBITDA) were $200,448,000.

The address of the Company's principal executive offices is 400 South
Record Street, Dallas, Texas 75202, and its telephone number is (214) 977-6606.

THE OFFERINGS

The 4,000,000 shares of Series A Common Stock initially being offered in
the United States (the "U.S. Offering") and the 1,000,000 shares of Series A
Common Stock initially being offered outside the United States (the
"International Offering") are referred to herein as the "Offerings". The closing
of the International Offering is conditioned on the closing of the U.S. Offering
and vice versa.

<TABLE>
<S> <C>
Series A Common Stock offered by the Company:
U.S. Offering................................ 4,000,000 shares
International Offering....................... 1,000,000 shares
Common Stock to be outstanding after the
Offerings(1):
Series A Common Stock........................ 33,961,753 shares(2)
Series B Common Stock........................ 9,280,179 shares(2)
Use of proceeds................................ To repay outstanding bank debt to provide
liquidity for general corporate purposes,
including possible future acquisitions.
NYSE symbol for Series A Common Stock.......... BLC
</TABLE>

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

(1) The Company's Common Stock is currently divided into two series (Series A
Common Stock and Series B Common Stock) with identical rights except that
Series B Common Stock is entitled to ten votes per share on all matters
submitted to a vote of shareholders, while the Series A Common Stock is
entitled to one vote per share; transferability of the Series B Common Stock
is limited to family members and affiliated entities of the shareholder; and
Series B Common Stock is convertible at any time on a share-for-share basis
into Series A Common Stock. There is no established public trading market
for shares of Series B Common Stock. The Company has also issued certain
preferred share purchase rights that accompany the outstanding shares of
both series of the Company's Common Stock, including the shares of Series A
Common Stock to be sold in the Offerings. See "Description of Capital
Stock".

(2) As of December 31, 1995, excluding (i) 2,804,187 shares of Series A Common
Stock and 293,590 shares of Series B Common Stock issuable upon the exercise
of outstanding stock options and (ii) 3,849,727 shares of Common Stock (both
Series A and Series B Common Stock) reserved for future issuance under the
Company's long-term incentive plans.

4
<PAGE> 7

SUMMARY OF SELECTED CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
1991 1992 1993 1994 1995
--------- --------- --------- --------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF EARNINGS DATA:
Net operating revenues:
Broadcasting(1)....................................... $ 181,848 $ 201,241 $ 209,083 $ 258,040 $ 322,642
Newspaper publishing(2)............................... 249,737 314,701 335,651 369,366 409,099
Other(3).............................................. -- -- 101 719 3,602
--------- --------- --------- --------- -----------
Total................................................. 431,585 515,942 544,835 628,125 735,343
--------- --------- --------- --------- -----------
Earnings from operations................................ 47,857 81,626 89,474 130,999 136,563
Earnings before cumulative effect of change in
accounting............................................ 12,392 37,170 44,478 68,867 66,576
Cumulative effect of change in accounting for income
taxes(4).............................................. -- -- 6,599 -- --
--------- --------- --------- --------- -----------
Net earnings............................................ $ 12,392 $ 37,170 $ 51,077 $ 68,867 $ 66,576
========= ========= ========= ========= ===========
Earnings per common and common equivalent share(5):
Earnings before cumulative effect of change in
accounting.......................................... $ 0.32 $ 0.95 $ 1.10 $ 1.70 $ 1.68
Cumulative effect of change in accounting............. -- -- 0.16 -- --
--------- --------- --------- --------- -----------
Net earnings.......................................... $ 0.32 $ 0.95 $ 1.26 $ 1.70 $ 1.68
========= ========= ========= ========= ===========
OTHER DATA:
Operating cash flow(6):
Broadcasting........................................ $ 60,610 $ 75,921 $ 83,356 $ 106,396 $ 121,716
Newspaper publishing................................ 36,057 59,221 61,667 87,284 90,915
EBITDA(6)............................................. 76,551 121,771 128,257 170,414 200,448
Capital expenditures.................................. 19,741 27,145 62,130 47,371 40,830
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1995
----------------------------
ACTUAL AS ADJUSTED(7)
---------- --------------
(IN THOUSANDS)
<S> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Working capital................................................................... $ 83,638 $ 83,638
Total assets...................................................................... 1,154,022 1,154,022
Long-term debt.................................................................... 557,400 395,550
Shareholders' equity.............................................................. 388,464 550,314
</TABLE>

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

(1) Broadcasting revenues for 1995 include 11 months of KIRO, which was
purchased by the Company on February 1, 1995. Broadcasting revenues for
1994 include seven months of WWL, which was purchased by the Company on
June 1, 1994.

(2) In December 1991, the Company purchased substantially all the operating
assets of the Dallas Times Herald newspaper.

(3) Other includes revenues associated with the Company's television production
subsidiary and programming distribution partnership. The Company sold its
interest in the partnership in February 1996.

(4) Represents the cumulative effect of the adoption of Statement of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes".

(5) Per share amounts have been adjusted to reflect the two-for-one Common
Stock split effected as a stock dividend on June 9, 1995.

(6) Operating cash flow is defined as segment earnings from operations plus
depreciation and amortization. EBITDA is defined as consolidated earnings
before interest, taxes, depreciation and amortization. Operating cash flow
and EBITDA are used in the broadcasting and newspaper industries to analyze
and compare companies on the basis of operating performance, leverage and
liquidity. Neither operating cash flow nor EBITDA should be considered in
isolation or as a substitute for measures of performance prepared in
accordance with generally accepted accounting principles.

(7) Gives effect to the sale of 5,000,000 shares of Series A Common Stock by
the Company and the application of the net proceeds therefrom, as
described in "Use of Proceeds".

5
<PAGE> 8

USE OF PROCEEDS

The net proceeds to be received by the Company from the Offerings are
estimated to be approximately $161,850,000 ($186,202,500 if the Underwriters'
over-allotment option is exercised in full). The net proceeds will be used to
repay outstanding bank debt under the Company's revolving credit agreement to
provide liquidity for general corporate purposes, including possible future
acquisitions. The Company plans to continue to identify and pursue additional
acquisitions of television stations and newspapers in situations where the
Company believes it can successfully apply its operating strategy and where such
businesses can be acquired on economically attractive terms. See "Business." The
Company currently has no agreements, arrangements or understandings in place
with respect to any material acquisition. The outstanding debt under the
revolving credit agreement and short-term notes classified as long-term debt at
December 31, 1995 totaled $551,000,000 and had a weighted average interest rate
at such date of approximately 6.1%. The revolving credit agreement expires and
the debt thereunder matures on July 28, 2000, with an extension to July 28,
2001, at the request of the Company and with the consent of the participating
banks.

A portion of the outstanding debt that will be repaid with the net proceeds
from the Offerings was used to fund the cost of acquiring the Bryan-College
Station Eagle newspaper in December 1995 and the Owensboro Messenger-Inquirer
newspaper in January 1996 for an aggregate cost of approximately $89 million.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources".

PRICE RANGE OF SERIES A COMMON STOCK AND DIVIDENDS

The Series A Common Stock is listed on the New York Stock Exchange under
the symbol "BLC". The Series B Common Stock is not publicly traded. The
following table sets forth, for the quarters indicated, the high and low sales
prices for the Series A Common Stock as reported on the New York Stock Exchange
and the cash dividends per share.

<TABLE>
<CAPTION>
CASH
HIGH LOW DIVIDENDS
------ ------ ---------
<S> <C> <C> <C>
1996
First Quarter......................................... $37 3/8 $31 $ .08(1)
1995
Fourth Quarter........................................ 36 3/4 32 1/2 .08
Third Quarter......................................... 36 3/4 29 .08
Second Quarter........................................ 32 5/8 28 3/16 .08
First Quarter......................................... 30 1/4 27 13/16 .075
1994
Fourth Quarter........................................ 28 5/8 23 3/4 .075
Third Quarter......................................... 26 1/8 21 11/16 .075
Second Quarter........................................ 25 3/16 21 9/16 .075
First Quarter......................................... 27 1/2 23 7/8 .075
</TABLE>

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

(1) The Company declared this quarterly dividend on December 13, 1995, payable
to shareholders of record on February 16, 1996.

On February 28, 1996, the Company increased its quarterly dividend to $.11
per share and declared a second quarter dividend in this amount, payable to
shareholders of record on April 5, 1996. The closing sale price of the Series A
Common Stock as reported on the New York Stock Exchange on March 29, 1996, was
$34.00. As of December 31, 1995, there were approximately 687 record holders of
Series A Common Stock and 550 record holders of Series B Common Stock. See
"Description of Capital Stock".

6
<PAGE> 9

CAPITALIZATION

The following table sets forth the capitalization and cash and temporary
cash investments of the Company as of December 31, 1995, and as adjusted to
reflect the sale by the Company of 5,000,000 shares of Series A Common Stock and
the application of the net proceeds to reduce long-term debt, as described in
"Use of Proceeds" (after deducting the estimated underwriting discount and
offering expenses). This capitalization table should be read in conjunction with
the Consolidated Financial Statements and notes thereto incorporated by
reference in this Prospectus.

<TABLE>
<CAPTION>
DECEMBER 31, 1995
--------------------------
ACTUAL AS ADJUSTED
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Cash and temporary cash investments............................. $ 12,846 $ 12,846
=========== ===========
Long-term debt(1)............................................... $ 557,400 $ 395,550
----------- -----------
Shareholders' equity:
Preferred Stock, $1.00 par value. Authorized 5,000,000 shares;
none issued................................................ -- --
Common Stock, $1.67 par value. Authorized 150,000,000 shares;
Series A: 28,961,753 shares issued; and 33,961,753 shares
as adjusted(2)........................................... 48,366 56,716
Series B: 9,280,179 shares issued(2)....................... 15,498 15,498
Additional paid-in capital.................................... 97,930 251,430
Retained earnings............................................. 230,203 230,203
----------- -----------
Total...................................................... $ 391,997 $ 553,847
Less deferred compensation -- restricted shares............... 3,533 3,533
----------- -----------
Total shareholders' equity................................. $ 388,464 $ 550,314
----------- -----------
Total capitalization.................................. $ 945,864 $ 945,864
=========== ===========
</TABLE>

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

(1) Does not reflect the debt incurred in connection with the purchase of the
Owensboro Messenger-Inquirer in January 1996. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity
and Capital Resources".

(2) Excludes (i) 2,804,187 shares of Series A Common Stock and 293,590 shares of
Series B Common Stock issuable upon exercise of outstanding stock options
and (ii) 3,849,727 shares of Series A and Series B Common Stock reserved for
future issuance under the Company's long-term incentive plans.

7
<PAGE> 10

SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data presented below for each of the
five years in the period ended December 31, 1995 have been derived from the
Consolidated Financial Statements of the Company previously filed with the
Commission. This data should be read in conjunction with the Consolidated
Financial Statements and notes thereto incorporated by reference in this
Prospectus. For a more complete understanding of this selected consolidated
financial data, see "Management's Discussion and Analysis of Financial Condition
and Results of Operations".

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1991 1992 1993 1994 1995
-------- -------- -------- -------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF EARNINGS DATA:
Net operating revenues:
Broadcasting(1)..................................... $181,848 $201,241 $209,083 $258,040 $ 322,642
Newspaper publishing(2)............................. 249,737 314,701 335,651 369,366 409,099
Other(3)............................................ -- -- 101 719 3,602
-------- -------- -------- -------- ----------
Total............................................... 431,585 515,942 544,835 628,125 735,343
-------- -------- -------- -------- ----------
Earnings from operations
Broadcasting........................................ 41,553 56,461 63,317 81,319 83,921
Newspaper publishing................................ 21,417 42,974 44,293 66,568 69,999
Other............................................... -- -- (77) (874) (3,972)
Corporate........................................... (15,113) (17,809) (18,059) (16,014) (13,385)
-------- -------- -------- -------- ----------
Total............................................... 47,857 81,626 89,474 130,999 136,563
-------- -------- -------- -------- ----------
Depreciation and amortization
Broadcasting........................................ 19,057 19,460 20,039 25,077 37,795
Newspaper publishing................................ 14,640 16,247 17,374 20,716 20,916
Other............................................... -- -- -- 2 31
Corporate........................................... 367 332 251 610 705
-------- -------- -------- -------- ----------
Total............................................... 34,064 36,039 37,664 46,405 59,447
-------- -------- -------- -------- ----------
Interest expense...................................... (23,882) (24,159) (15,015) (16,112) (29,987)
Other income (expense), net........................... (5,370) 4,106 1,119 (6,990) 4,438
-------- -------- -------- -------- ----------
Earnings before income taxes and cumulative effect
of change in accounting............................. 18,605 61,573 75,578 107,897 111,014
Income taxes.......................................... 6,213 24,403 31,100 39,030 44,438
-------- -------- -------- -------- ----------
Earnings before cumulative effect of change in
accounting.......................................... 12,392 37,170 44,478 68,867 66,576
Cumulative effect of change in accounting for income
taxes(4)............................................ -- -- 6,599 -- --
-------- -------- -------- -------- ----------
Net earnings.......................................... $ 12,392 $ 37,170 $ 51,077 $ 68,867 $ 66,576
======== ======== ======== ======== ==========
Earnings per common and common equivalent share(5):
Earnings before cumulative effect of change in
accounting........................................ $ 0.32 $ 0.95 $ 1.10 $ 1.70 $ 1.68
Cumulative effect of change in accounting........... -- -- 0.16 -- --
-------- -------- -------- -------- ----------
Net earnings........................................ $ 0.32 $ 0.95 $ 1.26 $ 1.70 $ 1.68
======== ======== ======== ======== ==========
Cash dividends declared............................. $ 0.26 $ 0.27 $ 0.28 $ 0.30 $ 0.315
OTHER DATA:
Operating cash flow(6):
Broadcasting...................................... $ 60,610 $ 75,921 $ 83,356 $106,396 $ 121,716
Newspaper publishing.............................. 36,057 59,221 61,667 87,284 90,915
EBITDA(6)........................................... 76,551 121,771 128,257 170,414 200,448
Capital expenditures................................ 19,741 27,145 62,130 47,371 40,830
CONSOLIDATED BALANCE SHEET DATA (AT PERIOD END):
Working capital..................................... $ 25,332 $ 32,712 $ 57,654 $ 46,600 $ 83,638
Total assets........................................ 746,384 758,527 796,156 913,791 1,154,022
Long-term debt...................................... 337,100 302,151 277,400 330,400 557,400
Shareholders' equity................................ 230,057 281,242 346,099 382,535 388,464
</TABLE>

(Footnotes on following page.)

8
<PAGE> 11

NOTES TO SELECTED CONSOLIDATED FINANCIAL DATA

(2) In December 1991, the Company purchased substantially all the operating
assets of the Dallas Times Herald newspaper.

(3) Other includes revenues associated with the Company's television production
subsidiary and programming distribution partnership. The Company sold its
interest in the partnership in February 1996.

(4) Represents the cumulative effect of the adoption of SFAS No. 109,
"Accounting for Income Taxes".

(5) Per share amounts have been adjusted to reflect the two-for-one Common
Stock split effected as a stock dividend on June 9, 1995.

9
<PAGE> 12

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

The Company is an owner and operator of seven network-affiliated television
stations and an established newspaper publisher. The Company's television
broadcast operations began in 1950 with the acquisition of WFAA in Dallas. In
1984, the Company expanded its broadcast operations through the acquisition of
four television stations in Houston, Sacramento, Hampton-Norfolk and Tulsa. In
June 1994 and February 1995, the Company acquired television stations in New
Orleans and Seattle, respectively. The Company's principal newspaper is The
Dallas Morning News. In December 1995, the Company purchased a daily newspaper
in Bryan-College Station, Texas. Comparability of year-to-year results and
financial condition are affected by these acquisitions. In the first quarter of
1996, the Company acquired a daily newspaper in Owensboro, Kentucky and sold its
interest in its programming distribution partnership, Maxam Entertainment.

The Company depends on advertising as its principal source of revenues. As
a result, the Company's operations are sensitive to changes in the economy,
particularly in the Dallas-Fort Worth metropolitan area. The Company also
derives revenues, to a much lesser extent, from the circulation revenue of its
newspaper operations and from compensation paid by the networks to its
television stations for broadcasting network programming.

CONSOLIDATED RESULTS OF OPERATIONS

1995 COMPARED TO 1994

The Company recorded 1995 net earnings of $66,576,000 or $1.68 per share,
compared to $68,867,000 or $1.70 per share in 1994. Results for 1995 include a
non-recurring charge for early retirement costs of $1,254,000 (2 cents per
share) and a non-recurring gain of $2,406,000 ($1,564,000 after tax, or 4 cents
per share) on the sale of the Company's remaining investment in Stauffer
Communications, Inc. ("Stauffer") stock. Excluding these non-recurring items,
1995 adjusted net earnings were $1.66 per share. Net earnings for 1994 included
the reversal of $631,000 of accrued music license fees (1 cent per share) and a
net after-tax charge of $1,567,000 (4 cents per share) for the donation of
Stauffer stock to a charitable foundation. The donation of Stauffer stock
included a $9,271,000 gain on the write-up of the shares to fair market value,
less a charge of $16,675,000 for the subsequent donation of the shares, and a
related income tax benefit of $5,837,000. Excluding these non-recurring items,
adjusted 1994 net earnings were $1.73 per share.

Interest expense in 1995 was $29,987,000 compared to $16,112,000 in 1994. A
significant portion of this increase resulted from the increase in average
interest rates in 1995 to approximately 6.3 percent from 4.8 percent in 1994.
Additionally, higher debt levels as a result of the two recent broadcast
acquisitions (KIRO in Seattle, Washington in February 1995 for $162,500,000 and
WWL in New Orleans, Louisiana in June 1994 for $110,000,000) contributed to the
increase in 1995 interest expense. Other income (expense), net for 1995 included
the gain on the sale of the Company's remaining investment in Stauffer stock
while 1994 included the charge for the donation of Stauffer shares to a
charitable foundation. The effective tax rate for 1995 of 40 percent is higher
than the 1994 effective tax rate of 36.2 percent due to the tax benefit
associated with the Stauffer stock donation in 1994.

1994 COMPARED TO 1993

The Company recorded 1994 net earnings of $68,867,000 or $1.70 per share,
compared to $51,077,000 or $1.26 per share in 1993. Results for 1993 included a
$6,599,000 increase (16 cents per share) representing the cumulative effect of
adopting SFAS No. 109 in January 1993. This increase was partially offset in the
third quarter, when the Company recorded a $2,249,000 (6 cents per share)
adjustment to deferred taxes following an increase in the federal income tax
rate. Earnings in 1993 also included a $5,822,000 (9 cents per share)
non-recurring restructuring charge related primarily to the write-off of
goodwill and a reduction in the carrying value of production

10
<PAGE> 13

assets associated with the Company's suburban newspaper operations. The Company
also recorded a reversal of accrued music license fees in 1993 of $3,349,000 (5
cents per share). Excluding these items, adjusted net earnings for 1993 were
$1.20 per share.

Interest expense in 1994 was $16,112,000 compared to $15,015,000 in 1993.
The increase from 1993 to 1994 was due primarily to higher debt levels
associated with the purchase of the New Orleans station, offset by savings from
lower interest rates. Average interest rates on total debt were 4.8 percent and
5.4 percent in 1994 and 1993, respectively. Other income (expense), net for 1994
included the net charge for the Stauffer transaction while 1993 included a gain
on the sale of two parcels of non-operating real estate. The effective tax rate
for 1994, including the tax benefit from the Stauffer stock donation, was 36.2
percent. The 1993 effective rate of 41.1 percent included the increase in
deferred tax expense associated with the increase in the federal income tax
rate, partially offset by the reversal of certain tax accruals due to other
aspects of the tax legislation. Excluding these unusual items, the comparable
effective tax rates for 1994 and 1993 were 38.9 percent and 39.5 percent,
respectively.

BROADCASTING

1995 COMPARED TO 1994

Broadcast revenues in 1995, which include 11 months of revenue for the
Seattle station, were $322,642,000. These revenue totals represent an increase
of 25 percent (3.3 percent on a same-station basis) over 1994 revenues of
$258,040,000, which included seven months of revenue for the New Orleans
station. The Company's television broadcast subsidiaries contributed 43.9
percent of total 1995 revenues compared to 41.1 percent in 1994.

Revenues in all broadcast advertising categories, with the exception of
political advertising, were higher during 1995 compared to 1994, both as
reported and on a same-station basis. Political advertising revenues in 1994
were strong due to several active gubernatorial and senate races, while 1995
political activity was relatively slow. Local advertising revenues increased by
28.5 percent overall (6.8 percent on a same-station basis), primarily due to
increases at the Dallas, Hampton-Norfolk and New Orleans stations. The Company's
Sacramento station, which changed its network affiliation during 1995 and
experienced a sizable shift from local to national advertising, showed a slight
decline in local advertising revenues. Automobile advertising was a significant
factor in the stations' local market gains. National advertising revenues
increased in 1995 over 1994 as well, primarily during the first half of the
year. However, the majority of the 20.6 percent increase in national advertising
in 1995 was due to the addition of the Seattle station in February and the full-
year effect of the New Orleans station. On a same-station basis, national
revenues were up 2.1 percent year-to-year. The most significant increases in
national advertising occurred at the Sacramento and Hampton-Norfolk stations,
although all other Company stations demonstrated a slight increase in national
advertising revenues as well. Network compensation payments increased in 1995
following the renegotiation of the Company's network affiliation contracts in
the latter part of 1994.

Broadcast earnings from operations were $83,921,000 in 1995 compared to
$81,319,000 in 1994, an increase of 3.2 percent (2.7 percent on a same-station
basis). Broadcast earnings from operations in 1995 included 11 months of the
Seattle station's operations while 1994 results included seven months of the New
Orleans station's operations. Operating margins in 1995 and 1994 were 26 percent
and 31.5 percent, respectively. On a same-station basis, margins in 1995 and
1994 were 32.1 percent and 32.3, respectively. Higher 1995 operating costs and
lower margins were due in part to significant increases in news and programming
costs as the Seattle station began developing a new format when its affiliation
changed from CBS to UPN. Salaries, wages and employee benefits increased 35.7
percent over 1994 due to the addition of the Seattle station and

11
<PAGE> 14

the full year effect of the New Orleans station. On a same-station basis, these
costs increased 4.7 percent due to merit increases and more employees. Other
production, distribution and operating costs for 1995 increased only marginally
over 1994 on a same-station basis. Depreciation and amortization expenses
increased in 1995 due to the broadcast acquisitions in mid-1994 and early 1995.

1994 COMPARED TO 1993

Broadcast revenues in 1994, which included seven months of revenue for the
New Orleans station, were $258,040,000, an increase of 23.4 percent over 1993
revenues of $209,083,000. The Company's television broadcast subsidiaries
contributed 41.1 percent of total 1994 revenues compared to 38.4 percent in
1993.

Each station contributed to the increase in revenues during 1994 with
improvement in every revenue category. Local advertising revenues, which
improved 25.5 percent overall (12.7 percent on a same-station basis), were up
most significantly at the Dallas, Houston and Tulsa stations. Automobile
advertising was a significant factor in each of the stations' local market gains
in 1994. National revenues benefited from the broadcast of the 1994 Winter
Olympics on the Company's CBS-affiliated stations, but were offset somewhat by
revenue losses associated with the baseball strike and the move of NFL Football
from CBS to the Fox network. Political revenues were up considerably in 1994 due
to active gubernatorial and senate races in several states. Network compensation
increases from the renegotiation of the Company's network affiliation agreements
began in the third quarter of 1994.

Broadcast earnings from operations were $81,319,000 in 1994 compared to
$63,317,000 in 1993. Broadcast earnings from operations in 1994 included seven
months of the New Orleans station's operations. Also included in broadcast
earnings from operations in 1994 and 1993 were increases in earnings of $631,000
and $3,349,000, respectively, for the reversal of certain music license fee
accruals from previous years. Excluding the music license fee adjustments,
broadcast earnings from operations for 1994 and 1993 were $80,688,000 and
$59,968,000, respectively. The increase was due to revenue improvements,
partially offset by higher operating costs. Salaries, wages and employee
benefits were higher in 1994 due to increases in sales commissions, more
employees, merit increases, higher performance-based bonuses and an increase in
benefit costs. Other production, distribution and operating costs were higher in
1994 than in 1993 (excluding the music license fee adjustments) due primarily to
increased contract rates for several syndicated program packages and costs to
produce a new local morning show and weekly news show at the Dallas station.
Advertising and promotion costs, as well as repair and maintenance expenses,
were also higher in 1994. These increases were slightly offset by lower bad debt
and outside services expenses. Depreciation and amortization expenses increased
as a result of the acquisition of the New Orleans station.

NEWSPAPER PUBLISHING

1995 COMPARED TO 1994

In 1995, newspaper publishing revenues represented 55.6 percent of total
revenues, compared to 58.8 percent in 1994. Although publishing revenues
increased 10.8 percent in 1995 from 1994, they decreased as a percent of total
revenues due to broadcast acquisitions. Advertising revenues account for
approximately 88 percent of publishing revenues, while circulation revenues
represent approximately 10 percent. Other publishing revenues, primarily
commercial printing, contribute the remainder.

12
<PAGE> 15

Newspaper advertising volume for The Dallas Morning News, the Company's
principal newspaper, is measured in column inches. Volume for the last three
years was as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1993 1994 1995
------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
Full-run ROP inches(1):
Classified............................................... 2,069 2,189 2,125
Retail................................................... 1,661 1,524 1,429
General.................................................. 262 271 254
------ ------ ------
- - -
Total............................................ 3,992 3,984 3,808
====== ====== ======
</TABLE>

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

(1) Full-run ROP inches refers to the number of column inches of display and
classified advertising that is printed and distributed in all editions of
the newspaper.

Revenues from newspaper publishing in 1995 were $409,099,000, an increase
of 10.8 percent over 1994 revenues of $369,366,000. Due to dramatically higher
newsprint prices in 1995, a series of advertising rate increases were put into
effect during the year at The Dallas Morning News. These rate increases resulted
in higher revenues in the three major advertising categories despite the volume
declines that resulted from the higher rates. Classified advertising linage was
down 2.9 percent from 1994 while revenues were up 18.6 percent. Retail
advertising revenues increased 4.2 percent due to higher rates, while volumes
were lower by 6.2 percent. General advertising revenues improved 7.9 percent,
although auto and bank advertising volumes decreased significantly, contributing
to the overall 6.3 percent decline in linage. Preprint revenues increased 9.3
percent in 1995 from 1994 due to increased activity from electronics retailers.
The Dallas Morning News' circulation revenues increased 8.8 percent over 1994
due to an increase in daily single copy prices and the full-year effect of 1994
increases in home delivery and Sunday single copy prices. Circulation volume
increased slightly in 1995 over 1994.

Despite significant increases in newsprint prices, newspaper publishing
earnings from operations for 1995 were $69,999,000, up 5.2 percent over 1994
earnings of $66,568,000. Operating margins were 17.1 percent in 1995 compared to
18 percent in 1994. Revenue increases were partially offset by total operating
costs that were 12 percent higher than 1994. Newsprint, ink and other supplies
expense in 1995 increased 29.2 percent over last year. Driving this increase
were market-wide newsprint price increases. The average cost per ton in 1995 at
The Dallas Morning News increased 44.2 percent over 1994. A reduction in tons
used during 1995 helped offset the effect of these price increases to some
extent. Reductions in newsprint usage came as a result of better waste control,
fewer news columns, lower ad linage and promotional space and the elimination of
a Sunday magazine. All other cost categories for the newspaper publishing
segment increased only slightly due to efforts to control costs to offset the
effect of the newsprint price increases.

The Company expects 1996 newsprint, ink and other supplies expense to
increase over 1995, due to the full-year effect of the 1995 newsprint price
increases. The Company anticipates that the higher expense will be offset by
advertising rate increases implemented in the second half of 1995 and at the
beginning of 1996. The Company cannot predict at this time the effect of
proposed newsprint price increases for 1996.

1994 COMPARED TO 1993

Revenues from newspaper publishing in 1994 were $369,366,000, an increase
of 10 percent over 1993 revenues of $335,651,000. Classified and general
advertising revenues at The Dallas Morning News contributed the majority of the
increase in year-to-year revenue gains. Linage in these two categories increased
5.8 percent and 3.3 percent, respectively, which, combined with rate

13
<PAGE> 16

increases, resulted in an increase in classified and general advertising
revenues of $27,580,000. Strong demand for employment advertising and a strong
automotive market accounted for the improvement in classified linage. The
telecommunications industry was a significant component of the general
advertising increase. Retail ROP revenues for 1994 decreased slightly when
compared to 1993 due to volume declines of 8.3 percent, offset by a rate
increase. The retail volume declines were primarily attributable to a shift by
certain department stores to preprints, revenues from which increased 15.6
percent over 1993. Circulation revenues in 1994 were up 2.1 percent from 1993
despite a slight decrease in the Sunday average circulation due to price
increases in April and July.

Newspaper publishing earnings from operations in 1994 were $66,568,000
compared to $44,293,000 in 1993. Earnings from operations in 1993 included the
$5,822,000 restructuring charge related to the Company's suburban newspaper
operations. Excluding this one-time charge, comparable 1993 earnings from
operations were $50,115,000. The 32.8 percent increase in 1994 from adjusted
1993 earnings from operations was due to the revenue increase, partially offset
by a 6 percent increase in operating expenses. Salaries, wages and employee
benefits increased in 1994 due to more employees, merit increases, higher
performance-based bonuses and an increase in related benefit costs. Other
production, distribution and operating costs were also higher due to increased
distribution and outside solicitation expenses associated with circulation
efforts and higher advertising and promotion expense. Rack conversion costs to
accommodate a Sunday single copy price increase also contributed to higher 1994
expense. Depreciation expense increased due to a full year's depreciation of The
Dallas Morning News' North Plant expansion project that was completed in late
1993. Newsprint expense was only slightly higher in 1994 compared to 1993. The
increase was primarily due to slightly higher consumption, which was offset
somewhat by lower average prices.

RECENT OPERATING RESULTS

The Company expects that earnings for the first quarter of 1996 could be as
much as 15 to 20 percent below 1995's first quarter results of $.28 per share.
The expected decline excludes a $2.3 million gain from the sale of its
programming distribution partnership.

Weak advertising demand at the Company's Dallas and Houston television
stations accounts for most of the anticipated decline in earnings. The Company's
total broadcast advertising sales are expected to decline by approximately 5
percent for the quarter (excluding additional revenues from the acquisition of
the Seattle television station in 1995) and political advertising revenue in the
quarter will be minimal.

The Company's publishing revenues are expected to increase by nearly 15
percent, excluding acquisitions. Newsprint costs, however, are expected to
increase approximately 35 percent over the first quarter of 1995.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operations is the Company's primary source of
liquidity. During 1995, net cash provided by operations was $96,601,000,
compared to $138,785,000 in 1994. The decrease was due primarily to changes in
working capital. One of the most significant working capital changes was in the
value of on-hand inventory at the end of 1995, due to both higher newsprint
tonnage in inventory and substantially higher prices. The timing of accounts
payable and income tax payments also contributed significantly to the decrease
in 1995 net cash provided by operations. Net cash provided by operations was
sufficient to fund capital expenditures, common stock dividends and a portion of
current year stock repurchases.

On February 1, 1995, the Company acquired KIRO in Seattle, Washington. The
purchase price was $162,500,000 in cash, plus transaction costs. KIRO was
purchased using funds from the Company's revolving credit agreement described
below. On December 26, 1995, the Company again used the revolving credit
agreement to complete the acquisition of the Bryan-College Station

14
<PAGE> 17

Eagle. On January 1, 1996, the Company acquired the Owensboro Messenger-Inquirer
by issuing notes payable to the seller. These notes are due in various
installments over the next four years.

The Company is a party to an $800,000,000 variable rate revolving credit
agreement with a syndicate of 14 banks led by managing agents Citicorp
Securities, Inc., The First National Bank of Chicago and Texas Commerce Bank
National Association. At December 31, 1995, borrowings under the agreement were
$480,000,000. The agreement expires and the debt thereunder matures on July 28,
2000 with an extension to July 28, 2001 at the request of the Company and with
the consent of the participating banks. The agreement contains certain
covenants, including the maintenance of cash flow in relation to both the
Company's leverage and its fixed charges and a limitation on repurchases of the
Company's stock. From time to time, short-term unsecured notes are also used as
a source of financing. Based on the Company's intent and ability to renew
short-term notes through the revolving credit facility, short-term borrowings
are classified as long-term. At December 31, 1995, $71,000,000 in short-term
notes were outstanding. Total debt outstanding increased by $227,000,000 from
December 31, 1994, primarily due to acquisitions and share repurchases.

Because substantially all of the Company's outstanding debt is currently at
floating interest rates, the Company is subject to interest rate volatility.
Weighted average interest rates at the end of 1995 were approximately 6.1
percent.

During 1995, the Company spent $63,400,000 to repurchase treasury stock at
an average price of $31.28 per share. The Company has in place a stock
repurchase program authorizing the purchase of up to $2,500,000 of Company stock
annually, and the Company has authority to purchase an additional 3,591,200
shares under another Board authorization.

At December 31, 1995, the Company's ratio of long-term debt to total
capitalization was 58.9 percent, compared to 46.3 percent at the end of 1994.
The change during 1995 was due to additional borrowings to finance acquisitions
and the effect on debt and shareholders' equity of the share repurchases.

Capital expenditures in 1995 were $40,830,000. Capital projects included
additional production equipment and major building renovations at The Dallas
Morning News, the completion of a building and studio remodeling project at the
Company's Houston station and the purchase of broadcast equipment for other
stations. The Company expects to finance future capital expenditures using cash
generated from operations and, when necessary, borrowings under the revolving
credit agreement. Total capital expenditures in 1996 are expected to be
approximately $45,000,000 and relate primarily to additional newspaper
publishing equipment, the renovation of certain operating facilities and the
purchase of certain broadcast equipment. As of December 31, 1995, required
future payments for capital expenditures in 1996 were $7,881,000.

The Company paid dividends of $12,279,000 or 31 1/2 cents per share on
Series A and Series B Common Stock outstanding during 1995 compared to
$11,984,000 or 30 cents per share in 1994. The Company expects to pay higher
dividends in 1996 due to an increase in the quarterly dividend rate beginning in
the second quarter of 1996 and an increase in shares outstanding upon
consummation of the Offerings.

The Company believes its current financial condition and credit
relationships are adequate to fund current obligations and near-term growth. The
Company plans to use the net proceeds from the Offerings to repay existing debt
to provide liquidity for general corporate purposes, including possible future
acquisitions.

OTHER MATTERS

In early 1996, Congress passed the Telecommunications Act of 1996 (the
"1996 Act"), the most comprehensive overhaul of the country's telecommunications
laws in more than 60 years. The 1996 Act requires the FCC to take various
actions to implement its provisions. During the debate prior to the passage of
the 1996 Act, Congress considered whether to grant the FCC authority to auction
the second channels necessary for the implementation of digital advanced
television. The 1996 Act did not grant the FCC such authority, but such
authority could be contained in future

15
<PAGE> 18

budget legislation or a stand-alone spectrum law. In addition, actions by the
FCC, Congress and the courts in recent years have significantly affected the
telecommunications industry in various ways. See "Business -- Regulatory
Matters". The Company expects that these regulatory changes and the resolution
of uncertainties will have an impact on future revenues and earnings from
continuing operations which could be material, although the Company is unable to
determine whether the overall impact from these events will be favorable or
unfavorable.

NEW ACCOUNTING STANDARD

In March 1995, the Financial Accounting Standards Board issued SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of". This Statement established accounting standards for
the impairment of long-lived assets, certain identifiable intangibles and
goodwill related to those assets to be held and used and for long-lived assets
and certain identifiable intangibles to be disposed of. SFAS No. 121 will be
effective beginning in 1996. Management does not anticipate that the adoption of
SFAS No. 121 will have any effect on the consolidated financial position of the
Company.

INFLATION

The net effect of inflation on the Company's revenues and earnings from
operations has not been material in the last few years.

16
<PAGE> 19

BUSINESS

Three of the Company's seven stations are in the top 12 television markets:
WFAA (ABC) Dallas-Fort Worth; KHOU (CBS) Houston; and KIRO (UPN) Seattle-Tacoma.
These major metropolitan areas are among the fastest growing in the country. All
of the Company's stations are ranked either number one or two in overall
sign-on/sign-off audience delivery, with the exception of KIRO, which was
acquired by the Company in 1995. In 1995, WFAA, the Company's flagship station,
had the highest rated late newscast in any of the top 10 markets based on an
average of the four Nielsen rating periods. In addition, WWL (CBS) in New
Orleans, which the Company acquired in June 1994, is the highest rated
television station in the top 50 markets in overall sign-on/sign-off audience
delivery. In 1993, the Company broadened its broadcast operations when it
created Belo Productions, Inc., which produces television programming for the
Company's station group as well as for network and cable distribution.

The following table sets forth comparative operating cash flow information
for the Company's broadcast and publishing divisions:

<TABLE>
<CAPTION>
COMPOUND
YEAR ENDED DECEMBER 31, ANNUAL
------------------------------------------------------ GROWTH RATE
1991 1992 1993 1994 1995 1991-95
-------- -------- -------- --------- --------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
OPERATING CASH FLOW:
Broadcasting.................... $ 60,610 $ 75,921 $ 83,356 $ 106,396 $ 121,716 19%
Newspaper Publishing............ 36,057 59,221 61,667 87,284 90,915 26
</TABLE>

17
<PAGE> 20

TELEVISION BROADCASTING

The Company's television broadcast operations began in 1950 with the
acquisition of WFAA in Dallas-Fort Worth shortly after the station commenced
operations. In 1984, the Company significantly expanded its television broadcast
operations with the purchase of its four stations in Houston, Sacramento,
Hampton-Norfolk and Tulsa. In June 1994 and February 1995, the Company acquired
its stations in New Orleans and Seattle, respectively. For the year ended
December 31, 1995, revenues for the Company's broadcast division were
$322,642,000 while the broadcast division's operating cash flow was
$121,716,000. In 1995, the Company's broadcast division accounted for 43.9
percent of the Company's total revenues and 57.2 percent of the operating cash
flow for the combined broadcast and newspaper publishing divisions.

The following table sets forth information for each of the Company's
stations and their markets:

<TABLE>
<CAPTION>
NUMBER OF
COMMERCIAL STATION
STATIONS STATION AUDIENCE
MARKET YEAR NETWORK IN RANK IN SHARE IN
MARKET RANK(1) STATION ACQUIRED AFFILIATION CHANNEL MARKET(2) MARKET(3)(5) MARKET(4)(5)
------ ------- ------- -------- ----------- ------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dallas-Fort Worth.. 8 WFAA 1950 ABC 8 13 1 20%
Houston............ 11 KHOU 1984 CBS 11 13 1* 16%
Seattle-Tacoma..... 12 KIRO 1995 UPN 7 8 4* 8%
Sacramento......... 21 KXTV 1984 ABC 10 9 2 14%
Hampton-Norfolk.... 40 WVEC 1984 ABC 13 7 1* 18%
New Orleans........ 41 WWL 1994 CBS 4 7 1 28%
Tulsa.............. 59 KOTV 1984 CBS 6 7 2 19%
</TABLE>

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

* Tied with one or more other stations in the market.

(1) Market rank is based on the relative size of the television market or
Designated Market Area ("DMA") among the 211 generally recognized DMAs in
the United States, based on November 1995 Nielsen estimates. See
"-- Television Industry Background".

(2) Represents the number of television stations (both VHF and UHF)
broadcasting in the market, excluding public stations and national cable
channels.

(3) Station rank is derived from the station's rating which is based on
November 1995 Nielsen estimates of the number of television households
tuned to the Company's station for the Sunday-Saturday, 7:00 a.m. to 1:00
a.m. period ("sign-on/sign-off") as a percentage of the number of
television households in the market.

(4) Station audience share is based on November 1995 Nielsen estimates of the
number of television households tuned to the Company's station as a
percentage of the number of television households with sets in use in the
market for the sign-on/sign-off period.

(5) Station rank based on February 1996 Nielsen estimates is the same as
station rank based on November 1995 Nielsen estimates except that the
Company's Tulsa station moved from second in the market to a tie for first
with another station in the market. Station audience share based on
February 1996 Nielsen estimates changed for certain of the Company's
stations and is as follows: Dallas-Fort Worth, 19%; Seattle-Tacoma, 9%;
Sacramento, 13%; Hampton-Norfolk, 19%; New Orleans, 30%; and Tulsa, 22%.

OPERATING STRATEGY

The Company's operating strategy focuses on increasing profitability
through increased audience share, revenue growth and careful control of
programming and other operating costs. The Company strives to develop and
maintain the highest ranked station in each of its markets because the top
ranked stations typically enjoy market revenue shares that exceed the stations'
audience shares. Key components of the Company's operating strategy include:

Commitment to Journalistic Excellence. The Company believes that its
commitment to journalistic excellence, covering many areas of interest, is the
basic foundation for future growth and

18
<PAGE> 21

increased revenues and profitability. The Company's seven network-affiliated
television stations have received numerous awards for excellence in journalism
and public affairs programming. Collectively, the Company's television stations
have received seven George Foster Peabody awards, five duPont-Columbia awards
and three Edward R. Murrow awards. These are the most prestigious awards in
broadcast journalism, just as the Pulitzer Prize is for print journalism.

Building on Local News Franchises. The Company focuses on local news
franchises as a key element in each station's strategy to build audience loyalty
and position it for increased revenues and profitability. The Company believes a
strong, well-differentiated local news product builds viewer loyalty and can be
targeted to demographic groups that appeal to advertisers. The Company's Seattle
station currently offers eight hours of news programming daily which is one of
the highest amounts broadcast by any network affiliate in the country.

Dedication to Public Service and Community Affairs. The Company believes
its dedication to community service builds audience loyalty. This dedication is
evidenced by its public affairs programming and support of numerous community
and charitable endeavors. As an example, the "School Spirit" campaign, an
educational series of special programs and community events for teachers and
students produced by the Company's Hampton-Norfolk station, won the "Learning
Through Broadcasting" award from the National Education Association. The
campaign was also nominated for an Emmy Award.

Positioning and Branding Stations. The Company positions each station
within its market to create and enhance a local "brand" with which viewers and
advertisers can identify. In developing a positioning strategy, the Company
utilizes a planning process designed to integrate news, entertainment
programming, promotion and sales strategies customized for each market. The
positioning of the stations varies by market and takes into account market
demographics, competitors' positions and strategies, and other market-specific
dynamics and opportunities.

Investing in Technology and Other Capital Improvements. The Company
regularly invests in technology and other capital items to increase operating
efficiencies, reduce station operating costs, improve signal quality and
strength, and gain competitive advantages in its local markets. Areas of focus
include news gathering, editing and library systems, transmitters, antennae and
weather radars. As an example of this strategy, the Company's Houston station
has been recognized in the industry as the first television station to install a
nearly complete complement of state of the art digital equipment in preparation
for advanced television. Capital expenditures for the Company's broadcast
operations over the last five fiscal years were approximately $84 million.

Expanding Programming Production. The Company, through its subsidiary Belo
Productions, Inc. and a partnership with Universal Press Syndicate, produces and
distributes original programming to its station group and to various outside
purchasers. The most successful production to date has been "Beakman's World",
an Emmy Award-winning children's educational program, which has recently been
renewed for two additional seasons on the full CBS network. In connection with
the sale of Maxam Entertainment to CBS, the Company acquired the right to
participate with CBS in the development of future first-run programming projects
for three years. See "-- Program Production".

Developing Revenue Opportunities. The Company's stations explore additional
opportunities to provide programming services to other television stations or
cable systems in their markets. For example, the Company's New Orleans station
has participated since 1990 in a joint venture with a local cable operator
whereby the station provides local news programming around the clock on a
dedicated cable channel.

ACQUISITION STRATEGY

The Company will continue to identify and pursue acquisitions of television
stations in situations where the Company believes it can successfully apply its
operating strategy, and where the stations

19
<PAGE> 22

can be acquired on economically attractive terms. In addition, the Company may
consider investments in related businesses that are complementary to its current
business. The Company's acquisition strategy includes the following factors,
none of which alone determine whether or not the Company will pursue an
acquisition:

Complementary Additions to Station Group. The Company considers
acquisitions of stations where size, location, network affiliation or other
significant distinguishing characteristics complement the Company's current
television station group.

Attractive Projected Market Revenue Growth. The Company considers
acquisitions in markets with attractive projected growth in population and
audience demographics, which should lead to increased advertising revenues.

Revenue Enhancement Opportunities. The Company considers acquisitions that
provide station-specific opportunities to increase revenues, such as improving
audience share in the key demographic groups important to advertisers by
strengthening local news and syndicated programming.

THE COMPANY'S STATIONS AND THEIR MARKETS

As used in the tables and other information for each of the Company's
stations in the following section (i) in each case where independent third-party
market surveys are available to the Company, "market revenues" represent
advertising revenues, excluding network compensation and barter revenues,
compiled by third-party firms based on data provided to them by commercial
television stations participating in such surveys in a given year, or otherwise
represent Company estimates; (ii) the information concerning "station audience
share" and "station rank in market" is based on Nielsen estimates for November
of each year for the sign-on/sign-off period, except as otherwise indicated; and
(iii) the information concerning "median household effective buying income," a
measure of disposable personal income, is derived from Demographics USA: 1995.

WFAA -- DALLAS-FORT WORTH

Dallas-Fort Worth, Texas is the 8th largest television market in the United
States, with approximately 1.8 million television households (covering 1.9% of
all U.S. television households) and an estimated median household effective
buying income of $40,661. The Dallas-Fort Worth television market has 13
commercial television stations and two public television stations. WFAA is the
ABC network affiliate.

The following table sets forth the market revenues for Dallas-Fort Worth
and the audience share and ranking information for WFAA:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1991 1992 1993 1994 1995
-------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Market revenues............. $272,303 $301,759 $319,409 $356,362 $354,216
% Growth over prior year.... -- 11% 6% 12% (1)%
WFAA audience share......... 23% 23% 23% 23% 20%
WFAA rank in market......... 1 1 1 1 1
</TABLE>

WFAA is the established market leader in the Dallas-Fort Worth area,
building its success upon a commitment to journalistic excellence and
outstanding community service. Acquired by the Company in 1950, WFAA enjoys
substantial leads in key broadcasting dayparts according to the November 1995
Nielsen survey. In 1995, WFAA's 10 o'clock news was the highest-rated late
newscast on any top-10 market station based on an average of the four Nielsen
rating periods. In the fall of 1994, WFAA launched "Good Morning Texas", a live
morning program of talk, information and entertainment aimed at its Texas
audience. "Good Morning Texas" has won its time period every ratings period
since its premiere. WFAA's reputation for journalistic excellence has resulted
in

20
<PAGE> 23

numerous awards over the years including five duPont-Columbia awards and a
George Foster Peabody award. WFAA's approach to journalism and serving its
viewers is best captured by the phrase "The Spirit of Texas", which WFAA has
used since the mid-1980s to describe its brand of news, local programming and
public affairs initiatives.

KHOU -- HOUSTON

Houston, Texas is the 11th largest television market in the United States,
with approximately 1.6 million television households (covering 1.6% of all U.S.
television households) and an estimated median household effective buying income
of $39,753. The Houston television market has 13 commercial television stations
and one public television station. KHOU is the CBS network affiliate.

The following table sets forth the market revenues for Houston and the
audience share and ranking information for KHOU:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1991 1992 1993 1994 1995
-------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Market revenues............... $221,716 $238,544 $267,708 $295,841 $309,083
% Growth over prior year...... -- 8% 12% 11% 4%
KHOU audience share........... 19% 20% 19% 17% 16%
KHOU rank in market........... 2 1* 1 2 1*
</TABLE>

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

* Tied with one or more other stations in the market.

When the Company purchased KHOU in 1984, the station was generally ranked
fourth in the market. The Company's emphasis on journalistic excellence,
combined with quality syndicated programming and community service, resulted in
substantially improved ratings and operating performance. KHOU is positioned to
take advantage of advances in broadcast distribution technology with its recent
installation of state of the art digital equipment in preparation for advanced
television.

KIRO -- SEATTLE-TACOMA

Seattle-Tacoma, Washington is the 12th largest television market in the
United States, with approximately 1.5 million television households (covering
1.5% of all U.S. television households) and an estimated median household
effective buying income of $41,326. The Seattle-Tacoma television market has
eight commercial television stations and two public television stations. KIRO is
the UPN network affiliate.

The following table sets forth the market revenues for Seattle-Tacoma and
the audience share and ranking information for KIRO:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1991 1992 1993 1994 1995
-------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Market revenues............... $162,075 $177,069 $181,756 $213,909 $216,370
% Growth over prior year...... -- 9% 3% 18% 1%
KIRO audience share........... 15% 14% 14% 13% 8%
KIRO rank in market........... 3 3 3 3* 4*
</TABLE>

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

* Tied with one or more other stations in the market.

The Company acquired KIRO in February 1995 and it became an affiliate of
UPN in March 1995, when the station's affiliation agreement with CBS expired.
Under the Company's management, KIRO has substantially increased its news
programming and extended its long-standing and recognized role of leadership in
public service. KIRO carries eight hours of local news, which is one

21
<PAGE> 24

of the highest amounts broadcast by any network affiliate in the country. In
addition to news, the station features key programming like "Seinfeld" and
"Entertainment Tonight" as well as live coverage of the Seattle Mariners.

Since acquiring KIRO, the Company has made ratings progress in key local
newscasts and the primetime access period. The November 1995 Nielsen survey also
showed increases in audience share among 25 to 54-year olds, typically an
attractive demographic group to advertisers. In 1994, KIRO was honored with a
George Foster Peabody Award for its documentary, "When the Salmon Run Dry".

KXTV -- SACRAMENTO

Sacramento, California is the 21st largest television market in the United
States, with approximately 1.1 million television households (covering 1.2% of
all U.S. television households) and an estimated median household effective
buying income of $37,060. The Sacramento television market has nine commercial
television stations and one public television station. KXTV is the ABC network
affiliate.

The following table sets forth the market revenues for Sacramento and the
audience share and ranking information for KXTV:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1991 1992 1993 1994 1995
--------- -------- -------- --------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Market revenues............. $ 138,979 $141,505 $140,353 $ 155,880 $145,919
% Growth over prior year.... -- 2% (1)% 11% (6)%
KXTV audience share......... 16% 16% 17% 14% 14%
KXTV rank in market......... 2 2 2 2* 2
</TABLE>

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

* Tied with one or more other stations in the market.

KXTV was a CBS network affiliate until March 1995 when it switched its
affiliation to ABC. Since the affiliation switch, KXTV has made gains in the 25
to 54 demographic group. Building upon its commitment to local news excellence,
KXTV has also expanded its local news presence, adding two and one-half hours
per week to its evening newscast.

WVEC -- HAMPTON-NORFOLK

Hampton-Norfolk, Virginia is the 40th largest television market in the
United States, with approximately 620,000 television households and an estimated
median household effective buying income of $35,779. The Hampton-Norfolk market
has seven commercial television stations and one public television station. WVEC
is the ABC network affiliate.

The following table sets forth the market revenues for Hampton-Norfolk and
the audience share and ranking information for WVEC:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1991 1992 1993 1994 1995
------- -------- ------- ------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Market revenues................... $54,178 $ 55,659 $55,469 $62,782 $ 67,937
% Growth over prior year.......... -- 3% --% 13% 8%
WVEC audience share............... 20% 22% 21% 22% 18%
WVEC rank in market............... 2 1* 1* 1 1*
</TABLE>

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

* Tied with one or more other stations in the market.

Over the last five years, WVEC has consistently been ranked number one or
two in the Hampton-Norfolk market. In a highly competitive broadcast
environment, WVEC was in a three-way

22
<PAGE> 25

tie for first place in the November 1995 Nielsen ratings. Its consistent
performance over the years is a result of its recognized role in local news
coverage. Recently, the station was recognized for Best Documentary and Best
Sport Photography by the Virginia Associated Press Broadcasters. Consistent with
the Company's philosophy, WVEC emphasizes community affairs, sponsoring, among
other things, the Children's Miracle Network telethon which raised more than $1
million for the treatment of children in the Hampton-Norfolk area.

WWL -- NEW ORLEANS

New Orleans, Louisiana is the 41st largest television market in the United
States, with approximately 615,000 television households and an estimated median
household effective buying income of $32,532. The New Orleans television market
has seven commercial television stations and two public television stations. WWL
is the CBS network affiliate.

The following table sets forth the market revenues for New Orleans and the
audience share and ranking information for WWL:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------
1991 1992 1993 1994 1995
------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Market revenues..................... $60,023 $59,396 $64,900 $72,125 $78,282
% Growth over prior year............ -- (1)% 9% 11% 9%
WWL audience share.................. 36% 34% 34% 29% 28%
WWL rank in market.................. 1 1 1 1 1
</TABLE>

The Company acquired WWL in June 1994. WWL is the highest-rated television
station in the top 50 television markets in overall sign-on/sign-off audience
delivery. The New Orleans market has benefited from WWL's commitment to
excellence in broadcast journalism for almost 40 years. According to the
November 1995 Nielsen survey, WWL's sign-on/sign-off ratings almost doubled that
of its nearest competitor. The same is true for its key 6 and 10 p.m. newscasts.
As a result of these audience shares, WWL generates revenues on par with
stations located in markets twice the size of New Orleans. The station's
approach to news coverage was honored in 1994 with two of broadcast journalism's
highest awards: the George Foster Peabody award, the station's fifth, and the
Edward R. Murrow award, its third.

KOTV -- TULSA

Tulsa, Oklahoma is the 59th largest television market in the United States,
with approximately 460,000 television households and an estimated median
household effective buying income of $27,843. The Tulsa television market has
seven commercial television stations and two public television stations. KOTV is
the CBS network affiliate.

The following table sets forth the market revenues for Tulsa and the
audience share and ranking information for KOTV:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1991 1992 1993 1994 1995
------- --------- ------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Market revenues................... $34,445 $ 40,448 $45,677 $54,774 $53,755
% Growth over prior year.......... -- 17% 13% 20% (2)%
KOTV audience share(1)............ 23% 24% 25% 20% 19%
KOTV rank in market(1)............ 2 1* 1 2 2
</TABLE>

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

* Tied with one or more other stations in the market.

(1) Source: Arbitron ratings for November 1991-1993 and Nielsen ratings for
November 1994-1995.

23
<PAGE> 26

KOTV, Tulsa's oldest television station, provides the nation's 59th-ranked
market with four and one-half hours of local news a day, which is more than any
other station in the market. KOTV provides programming suited to the Tulsa
market such as its "Wild Wild Weather Show", which features storm-video footage
and tips on how to deal with Oklahoma's severe weather.

PROGRAM PRODUCTION

The Company created Belo Productions, Inc. ("BPI") in 1993 to distribute
internally produced programs within the Company's station group. BPI now
distributes programming produced by the Company's stations to broadcasters
outside the Company's station group and has expanded to produce original
programming through its own resources as well as Universal Belo, the Company's
partnership with Universal Press Syndicate. The most significant success to date
has been "Beakman's World", an Emmy Award-winning children's educational program
which has recently been renewed for two additional seasons on the full CBS
network. In the first quarter of 1996, CBS acquired the Company's interest in
Maxam Entertainment, a programming distribution partnership. In connection with
the sale, the Company acquired the right to participate with CBS in the
development of future first-run programming projects for three years.

NETWORK AFFILIATIONS

Three of the Company's stations are affiliated with ABC, three are
affiliated with CBS and one is affiliated with UPN. Each of the Company's
network affiliation agreements provides the affiliated station with the right to
broadcast all programs transmitted by the network with which the station is
affiliated. In return, the network has the right to sell most of the advertising
time during such broadcasts. Each station receives a specified amount of network
compensation for broadcasting network programming, with the exception of the
Company's UPN affiliate. To the extent a station's preemptions of network
programming exceed a designated amount, such compensation may be reduced. Such
payments are also subject to decreases by the network during the term of an
affiliation agreement under other circumstances with provisions for advance
notice and right of termination by the station in the event of a reduction in
such payments. The Company has renegotiated its affiliation agreements with both
CBS and ABC, resulting in an increase in the compensation paid by each network
to the Company in return for a long-term extension of each of the agreements.
Final documentation of the new ABC affiliation agreements has not been completed
although the Company is receiving its increased compensation under the new
agreements.

TELEVISION INDUSTRY BACKGROUND

Commercial television broadcasting began in the United States on a regular
basis in the 1940s. Currently, there is a limited number of channels available
for broadcasting in any one geographic area, and the license to operate a
television station is granted by the FCC. Television stations that broadcast
over the VHF band (channels 2-13) generally have a competitive advantage over
television stations that broadcast over the UHF band (channels above 13) because
the former usually have better signal coverage and operate at a lower
transmission cost. However, the improvement of UHF transmitters and receivers,
the complete elimination from the marketplace of VHF-only receivers and the
expansion of cable television systems have reduced the VHF signal advantage.

The Market for Television Programming. Television station revenues are
primarily derived from local, regional and national advertising and, to a much
lesser extent, from network compensation and revenues from studio rental and
commercial production activities. Advertising rates are set based upon a variety
of factors, including a program's popularity among the viewers an advertiser
wishes to attract, the number of advertisers competing for the available time,
the size and demographic makeup of the market served by the station and the
availability of alternative advertising media in the market area. Rates also are
determined by a station's overall audience ratings and share in its market, as
well as the station's ratings in the particular demographic groups

24
<PAGE> 27

that an advertiser may be targeting. Because broadcast television stations rely
on advertising revenues, they are sensitive to cyclical changes in the economy.
The size of advertisers' budgets, which are also affected by broad economic
trends, affect the broadcast industry in general and the revenues of individual
television stations.

All television stations in the country are grouped into approximately 211
generally recognized television markets that are ranked in size according to
actual or potential audience size. Each market is designated as an exclusive
geographic area consisting of all counties in which the home-market commercial
stations receive the greatest percentage of total viewing hours. Each specific
geographic market is called a designated market area, or DMA, by Nielsen.
Nielsen, a national audience measuring service, periodically publishes audience
data for television markets throughout the country. The estimates are expressed
in terms of the percentage of the total potential audience in the market viewing
a station (the station's "rating") and of the percentage of households actually
viewing a particular station out of the total actual viewers (the station's
"share"). Nielsen provides such data on the basis of total television households
and on selected demographic groupings in the market. Nielsen uses two methods of
determining a station's ability to attract viewers. In larger geographic
markets, ratings are determined by a combination of meters connected directly to
selected television sets and weekly diaries of television viewing, while in
smaller markets only weekly diaries are utilized. Currently, four of the
Company's markets -- Dallas-Fort Worth, Houston, Seattle-Tacoma and Sacramento
are metered and the remaining three markets utilize diaries.

Historically, three major broadcast networks -- ABC, CBS and
NBC -- dominated broadcast television. In recent years, Fox has effectively
evolved into the fourth major network, although the hours of network programming
produced by Fox for its affiliates are less than those produced by the other
three major networks. In addition, UPN and the Warner Brothers Network ("WBN")
recently have been launched as new television networks.

The affiliation by a station with one of the four major networks has a
significant impact on the composition of the station's programming, revenues,
expenses and operations. A typical affiliate of a major network receives the
majority of each day's programming from the network. This programming, along
with network compensation, is provided to the affiliate by the network in
exchange for the right to sell a substantial majority of the advertising aired
during the network programs. The network then sells this advertising time for
its own account. The affiliate retains the revenues from time sold during breaks
in and between network programs and during programs produced by the station or
purchased from non-network sources. In acquiring such non-network programming,
stations compete with other affiliates and independent stations in their
markets. See "-- Network Affiliation". In addition, a television station may
acquire programming through barter arrangements. Under barter arrangements,
which are popular with both network affiliates and independents, a program
distributor may receive the right to sell advertising time for its own account
in exchange for the programming it supplies, with the station paying either a
reduced fee or no cash fee for such programming.

Affiliates of UPN receive a smaller portion of each day's programming from
its network compared to an affiliate of a major network. Currently, UPN provides
six hours of programming per week to its affiliates. As a result of the smaller
amount of programming provided by the network, affiliates of UPN must purchase
or produce a greater amount of their programming, resulting in generally higher
programming costs. These stations, however, are also able to sell a much larger
portion of advertising time compared to stations affiliated with the major
networks.

In contrast to a station affiliated with a network, a fully independent
station purchases or produces all of the programming that it broadcasts,
resulting in generally higher programming costs. The independent station,
however, may retain its entire inventory of advertising time and all of the
revenues obtained therefrom.

25
<PAGE> 28

NEWSPAPER PUBLISHING

The Company's principal newspaper, The Dallas Morning News, was established
in 1885. In 1963, the Company acquired its suburban newspaper operation. In late
1991, after years of intense competition, The Dallas Morning News' principal
newspaper competitor, the Dallas Times Herald, ceased operations and the Company
purchased its assets. In late 1995 and early 1996, the Company expanded its
publishing division by acquiring two daily newspapers serving Bryan-College
Station, Texas and Owensboro, Kentucky. For the year ended December 31, 1995,
revenues from the Company's publishing division were $409,099,000 and its
operating cash flow was $90,915,000. In 1995, the Company's publishing division
accounted for 55.6 percent of the Company's total revenues and 42.8 percent of
the operating cash flow for the combined publishing and broadcast divisions.

The following table sets forth information concerning the Company's daily
newspaper operations:

<TABLE>
<CAPTION>
CIRCULATION(1)
-------------------
NEWSPAPER LOCATION DAILY SUNDAY
---------------------------------- -------------------------- ------- -------
<S> <C> <C> <C>
The Dallas Morning News........... Dallas, TX 534,197 800,147
Bryan-College Station Eagle....... Bryan-College Station, TX 20,381 26,326
Owensboro Messenger-Inquirer...... Owensboro, KY 32,363 33,398
</TABLE>

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

(1) Average paid circulation for the six months ended September 30, 1995,
according to the unaudited Publisher's Statement of the Audit Bureau of
Circulations, an independent agency (the "Audit Bureau").

OPERATING STRATEGY

The Company's newspaper operations are focused on increasing profitability
through revenue growth and effective cost control. Key components of the
operating strategy for The Dallas Morning News and, where appropriate for the
Company's other publishing operations, include the following:

Commitment to Journalistic Excellence. The Company believes that its
success is primarily due to its high quality news coverage which creates demand
from both readers and advertisers, leading to increased revenues and
profitability. In recognition of its excellence in journalism, The Dallas
Morning News has received six Pulitzer Prizes since 1986.

Dedication to Public Affairs and Community Service. The Company believes
its dedication to public affairs and community service builds a loyal reader
base. This dedication is evidenced daily by the extensive support and
involvement of The Dallas Morning News in the local concerns of the Dallas-Fort
Worth area. Support is provided in many ways, including news and editorial
examination of important issues, promotional advertising in support of community
initiatives, organized programs and campaigns such as the Dallas Morning News
Charities and Company-encouraged employee participation.

Branding the Newspaper. The Company seeks to establish and extend the
newspaper's reputation for outstanding news coverage and community participation
through its marketing, promotion and customer service activities. A number of
marketing techniques are employed, including the use of television, radio and
outdoor advertising and event sponsorship as well as advertising within the
newspaper itself.

Leveraging Traditional Franchises. The Company seeks to expand the
newspaper's reach and influence, and thus revenue generation, through the
development of special sections, such as Fashion!Dallas and House and Garden,
that may be published on a weekly basis. The newspaper has created news
franchises through its coverage of such areas as sports, business, education,
religion, the arts, government, and in its editorial and opinion pages.

26
<PAGE> 29

Extending Franchises. Increased readership and advertising revenue
opportunities are sought through developing zoned news and advertising sections
serving certain suburban population areas, such as Plano, Garland, Mesquite,
Lewisville and other communities. Depending on advertiser demand, these may be
published on a weekly or more frequent basis. These sections, with more limited
circulation, permit smaller advertisers, who may have been priced out of the
full-run newspaper as it has grown in circulation, to reach their target market
at a lower cost.

Investing in Technology and Other Capital Improvements. The use of
technology in the design and production of the newspaper has led to greater
efficiency and capability. Technology used in the Company's Plano printing
facility has reduced paper waste, provided staffing efficiency and enabled the
newspaper to meet advertisers' demand for color advertising. Computer technology
has improved the efficiency in processing both news and advertising material
prior to publication. Over the last five fiscal years, the Company has spent
approximately $126 million in capital improvements for its publishing division,
including printing presses acquired from the Dallas Times Herald.

Developing New Media Opportunities. The Company believes that its role in
collecting, editing and distributing news and information allows it to take
advantage of emerging opportunities in "new media". The Company is engaged in
selected experiments with news and commercial activities on the Internet and
commercial on-line services. These efforts range from an on-line subscription
sports service to an Internet distributed city guide service. Another example of
these efforts is the Company's participation in a partnership with five other
newspaper companies to pool research expenses and share information to further
extend each participant's franchise into on-line media.

ACQUISITION STRATEGY

The Company will continue to identify and pursue acquisitions of newspapers
in situations where the Company believes it can successfully apply its operating
strategy and where the newspapers can be acquired on economically attractive
terms. In addition, the Company may consider investments in related businesses
that are complementary to its current business. The Company's acquisition
strategy includes the following factors, none of which alone determine whether
or not the Company will pursue an acquisition:

Desirable Market Characteristics. Markets with stable employment,
population and employment histories, and with attractive projected population
and economic growth rates are desirable. Adequate transportation, education,
government and economic infrastructure are also factors.

Favorable Newspaper Attributes. Attractive candidates may be either
newspapers that have stable histories and traditions of excellence, or those
that have potential for editorial improvement in growing markets. The ability to
achieve relatively high circulation penetration is important, especially in
smaller cities. Due to the extreme scarcity of opportunities to acquire large
metropolitan newspapers, candidates are more likely to be mid-size newspapers
with circulation of at least 20,000.

Cash Flow Growth Potential. Ideal acquisition candidates will offer
opportunities to increase cash flow either through enhanced revenue streams or
by achieving cost efficiencies, such as through the reduction of overhead and
centralized purchasing of newsprint. Geographic proximity to newspapers already
owned by the Company may also offer opportunities for cost savings.

THE COMPANY'S NEWSPAPERS AND THEIR MARKETS

THE DALLAS MORNING NEWS

The Dallas Morning News has been published continuously since 1885,
providing coverage of local, state, national and international news. The Dallas
Morning News is published seven days a week and distributed throughout the
Southwest, though its circulation is concentrated primarily in the 12 counties
surrounding Dallas.

27
<PAGE> 30

The Dallas Morning News serves a large readership in its primary market.
Average paid circulation for the six months ended September 30, 1995, was
534,197 daily, up 1.8 percent from the comparable period in 1994. Sunday's
average paid circulation was 800,147, up slightly from the comparable period in
1994.

The basic material used in publishing The Dallas Morning News is newsprint.
The average unit price of newsprint consumed during 1995 was sharply higher than
that of the prior year. The full year effect of the 1995 price increase will
result in even higher newsprint expense during 1996. At present, newsprint is
purchased from nine suppliers. During 1995, the Company's three largest
providers of newsprint supplied approximately half of its annual requirements,
but the Company is not dependent on any one of them. Management believes its
sources of newsprint, along with alternate sources that are available, are
adequate for its current needs.

The following table summarizes The Dallas Morning News' circulation and
advertising activity over the periods indicated:

<TABLE>
<CAPTION>
1991 1992 1993 1994 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Circulation(1):
Daily............................ 406,768 514,352 527,387 524,567 534,197
Sunday........................... 618,283 809,188 814,404 797,206 800,147
Advertising Linage (in thousands of
column inches)(2):
Full Run ROP..................... 3,782 3,918 3,992 3,984 3,808
Full Run Preprints............... 1,019 1,067 1,081 1,157 1,119
</TABLE>

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

(1) Represents average paid daily and Sunday circulation for the six months
ended September 30 of each respective year, according to the Audit Bureau.

(2) According to Company records, for the twelve months ended December 31 of
each respective year.

BRYAN-COLLEGE STATION EAGLE

The Bryan-College Station Eagle, with an average daily circulation of
20,381 for the six months ended September 30, 1995, serves one of the fastest
growing areas in Texas. The area is also home to Texas A&M University, the third
largest university in the nation. The market's growth characteristics should
provide the Company with an opportunity to enhance its newspaper product.

In connection with the Bryan-College Station acquisition, the Company also
acquired a
community newspaper in Rockwall, Texas that is published twice weekly.

OWENSBORO MESSENGER-INQUIRER

The Owensboro Messenger-Inquirer had an average daily circulation of 32,363
for the six months ended September 30, 1995. Owensboro is situated in northern
Kentucky on the Ohio River bordering Indiana. The community's long-term economic
outlook is bolstered by its new airport industrial park, growth at its new Scott
Paper plant, the announcement of Toyota's Gibson County, Indiana manufacturing
facility, and a new bridge under construction over the Ohio River.

SUBURBAN PUBLISHING AND PRINTING

DFW Suburban Newspapers, Inc., a wholly-owned subsidiary of the Company,
publishes five paid and two free circulation newspapers for suburban communities
in the Dallas-Fort Worth metropolitan area. These publications are delivered
either one or two days a week. Each of these community publications has its own
sales, circulation, news and editorial personnel, and several of the
publications maintain separate offices. All administrative functions are
centralized and all of

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these suburban newspapers are printed at a plant in Arlington, Texas. This plant
is owned and operated by DFW Printing Company, Inc., a wholly-owned subsidiary
of the Company, which, in addition to printing the suburban newspapers, is the
site of the Company's commercial printing operations.

COMPETITION

TELEVISION BROADCASTING

General. Competition in the television industry exists on several levels,
including competition for audience, competition for programming (including news)
and competition for advertisers. Additional factors that are material to a
television station's competitive position include signal coverage and assigned
frequency. The broadcasting industry is faced continually with technological
change and innovation, the possible rise in popularity of competing
entertainment and communications media and governmental restrictions or actions
of the Congress and federal regulatory bodies, including the FCC and the Federal
Trade Commission, any of which could have a material effect on the Company's
operations. In addition, since early 1994, there have been a number of network
affiliation changes in many of the top 100 television markets. As a result, the
major networks have sought longer terms in their affiliation agreements with
local stations and generally have increased the compensation payable to the
local stations in return for such longer term agreements. During the same time
period, the rate of change of ownership of local television stations has
increased over past periods.

Audience. Stations compete for audience on the basis of program popularity,
which has a direct effect on advertising rates. A substantial portion of the
daily programming on each of the Company's stations is supplied by the network
with which the station is affiliated (except for KIRO, which is affiliated with
UPN and therefore receives only a limited schedule of network programs). During
those periods, the stations are dependent upon the performance of the network
programs to attract viewers. Non-network time periods are programmed by the
stations with a combination of station-produced news, public affairs and
entertainment programming, and syndicated programs purchased for cash, cash and
barter, or barter only.

Independent stations, whose number has increased significantly over the
past decade, have emerged as viable competitors for television audiences. See
"-- Programming". The Company is unable to predict the effect, if any, that the
recently launched networks, WBN and UPN, will have on the future results of the
Company's operations.

In addition, alternative methods for transmitting television video
programming other than over-the-air broadcasting have significantly altered
competition for television audiences. These alternative transmission methods can
increase competition for a broadcasting station by bringing signals not
otherwise available to the station's audience and also by serving as a
distribution system for non-broadcast programming originated on the cable
system. Through the 1970s, television broadcasting enjoyed virtual dominance in
viewership and television advertising revenues because network-affiliated
stations competed only with each other in most local markets. Although cable
television systems initially retransmitted broadcast television programming to
paying subscribers in areas with poor broadcast signal reception, significant
increases in cable television penetration in areas that did not have signal
reception problems occurred throughout the 1970s and 1980s. As the technology of
satellite program delivery to cable systems advanced in the late 1970s,
development of programming for cable television accelerated dramatically,
resulting in the emergence of multiple program alternatives and the rapid
expansion of cable television.

Other sources of competition include home entertainment systems (including
video cassette recorder and playback systems, video discs, and television game
devices), "wireless cable" services, satellite master antenna television
systems, low power television stations, television translator stations and, more
recently, video distribution services that transmit programming directly

29
<PAGE> 32

to homes via satellite. Public broadcasting outlets in most communities compete
with commercial television stations for audience but not for advertising
dollars, although this may change as Congress considers alternative means for
the support of public television.

Further advances in technology may increase competition for household
audiences and advertisers. Video compression techniques are expected to reduce
the bandwidth required for television signal transmission. These compression
techniques, as well as other technological developments, are applicable to all
video delivery systems, including over-the-air broadcasting, and have the
potential to provide vastly expanded programming to highly targeted audiences.
Reduction in the cost of creating additional channel capacity could lower entry
barriers for new channels and encourage the development of increasingly
specialized "niche" programming. This ability to reach very narrowly defined
audiences is expected to alter the competitive dynamics for advertising
expenditures. In addition, competition in the television industry in the future
may come from interactive video and data services that may provide two-way
interaction with commercial video programming, along with information and data
services that may be delivered by commercial television stations, cable
television, multipoint distribution systems, multichannel multipoint
distribution systems or other video delivery systems. The entry of local
telephone companies into the market for video programming services, as permitted
under the 1996 Act, can be expected to have a significant impact on competition
in the television industry. The Company is unable to predict the effect that
these or other technological and related regulatory changes will have on the
broadcast television industry or the future results of the Company's operations.

Programming. Television stations affiliated with one of the major networks
receive a substantial portion of their programming from that network. The
television networks compete for affiliations with licensed television stations
through program commitments and local marketing support. From time to time,
local television stations also solicit network affiliations on the basis of
their ability to provide a network better access to a particular market.

Competition for non-network programming involves negotiating with national
program distributors or syndicators that sell first-run and off-network packages
of programming. Each of the Company's stations competes against the other
broadcast stations in its market for exclusive broadcast access to off-network
reruns and first-run product. Cable systems generally do not compete with local
stations for programming, although various national cable networks from time to
time have acquired programs that otherwise would have been offered to local
television stations. Competition exists for exclusive news stories and features,
as well.

During 1994, UPN established affiliation agreements with independent
stations, which operate on a basis similar to Fox, and began broadcasting in
January 1995. However, UPN currently supplies only six hours of programming per
week to its affiliates, which is significantly less than that of the four major
networks. UPN has indicated its intention to increase the amount of programming
supplied to its affiliates. According to UPN, as of February 1996, UPN had 143
affiliated stations broadcasting to approximately 87 percent of United States
television households and in 84 of the top 100 television markets in the United
States. Additionally, in 1994 the WBN announced its intention to establish
separate affiliations of independent television stations similar to UPN and
began broadcasting in January 1995. However, the WBN currently supplies only two
hours of programming per week to its affiliates.

Advertising. Advertising rates are based upon the size of the market in
which the station operates, a program's popularity among the viewers that an
advertiser wishes to attract, the number of advertisers competing for the
available time, the demographic makeup of the market served by the station, the
availability of alternative advertising media in the market area, aggressive and
knowledgeable sales forces and the development of projects, features and
programs that tie advertiser messages to programming. Advertising revenues are
the primary source of revenues for the Company's stations. Most advertising
during network programs is sold by the networks, which typically pay their
affiliated stations negotiated fees for broadcasting such programs and advertis-

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<PAGE> 33

ing. The four major national television networks are represented in each
television market in which the Company has a television broadcast station.

The Company's stations compete for advertising revenues with other
television stations in their respective markets. Generally, rates for national
and local spot advertising sold by the Company are determined by each station,
which receives all of the revenues, net of agency commissions, for that
advertising. The stations also compete for advertising revenues with other
media, such as newspapers (including newspapers owned and operated by the
Company), radio stations, magazines, outdoor advertising, direct mail and local
cable systems.

NEWSPAPER PUBLISHING

The Company's newspapers compete for advertising with television and radio
stations, magazines, direct mail, cable television and billboards. The Dallas
Morning News competes with the Fort Worth Star Telegram, which is owned by The
Walt Disney Company, as well as a television station and other newspapers owned
and operated by the Company.

REGULATORY MATTERS

Existing Regulation and 1996 Legislation. Television broadcasting is
subject to the jurisdiction of the Federal Communications Commission ("FCC")
under the Communications Act of 1934, as amended (the "Communications Act"). The
Communications Act prohibits the operation of television broadcasting stations
except under a license issued by the FCC and empowers the FCC, among other
things, to issue, renew, revoke and modify broadcasting licenses; assign
frequency bands; determine stations' frequencies, locations, and power; regulate
the equipment used by stations; adopt other regulations to carry out the
provisions of the Communications Act; impose penalties for violation of such
regulations; and impose fees for processing applications and other
administrative functions. The Communications Act prohibits the assignment of a
license or the transfer of control of a licensee without prior approval of the
FCC. Under the Communications Act, the FCC also regulates certain aspects of the
operation of cable television systems and other electronic media that compete
with broadcast stations.

The recently enacted Telecommunications Act of 1996 ("the 1996 Act")
represents the most comprehensive overhaul of the country's telecommunications
laws in more than 60 years. The first Communications Act originated at a time
when telephone and broadcasting technologies were quite distinct and addressed
different consumer needs. As a consequence, both the statute and its
implementing regulatory scheme were designed to compartmentalize the various
sectors of the telecommunications industry. The 1996 Act removes the statutory
barriers to telephone company ("telco") entry into the video programming
delivery business, to cable company provision of telephone service, and to
common ownership of broadcast television and cable properties.

The 1996 Act also significantly changes both the process for renewal of
broadcast station licenses and the broadcast ownership rules. First, the 1996
Act establishes a "two-step" renewal process that limits the FCC's discretion to
consider applications filed in competition with an incumbent's renewal
application. The 1996 Act also substantially liberalizes the national broadcast
ownership rules, eliminating the national radio limits and easing the national
restrictions on TV ownership. The 1996 Act also relaxes local radio ownership
restrictions, but leaves local TV restrictions in place pending further FCC
review.

This new regulatory flexibility is likely to engender aggressive local,
regional, and/or national acquisition campaigns. Removal of previous station
ownership limitations on leading incumbents (i.e., existing networks and major
station groups) can be expected to increase sharply the competition for and the
prices of attractive stations.

License Grant and Renewal. Prior to the passage of the 1996 Act, television
broadcasting licenses generally were granted or renewed for a period of five
years upon a finding by the FCC that the "public interest, convenience, and
necessity" would be served thereby. At the time an

31
<PAGE> 34

application is made for renewal of a television license, parties in interest may
file petitions to deny the application, and such parties, including members of
the public, may comment upon the service the station has provided during the
preceding license term. In addition, prior to passage of the 1996 Act, any
person was permitted to file a competing application for authority to operate on
the station's channel and replace the incumbent licensee. Renewal applications
were granted without a hearing if there were no competing applications or if
issues raised by petitioners to deny such applications were not serious. If
competing applications were filed, a full comparative hearing was required.

Under the 1996 Act, the statutory restriction on the length of broadcast
licenses has been amended to allow the FCC to grant broadcast licenses for terms
of up to eight years. The 1996 Act also requires renewal of a broadcast license
if the FCC finds that (1) the station has served the public interest,
convenience, and necessity; (2) there have been no serious violations of either
the Act or the FCC's rules and regulations by the licensee; and (3) there have
been no other serious violations which taken together constitute a pattern of
abuse. In making its determination, the FCC may still consider petitions to deny
but cannot consider whether the public interest would be better served by a
person other than the renewal applicant. Instead, under the 1996 Act, competing
applications for the same frequency may be accepted only after the FCC has
denied an incumbent's application for renewal of license.

Although in the vast majority of cases broadcast licenses are renewed by
the FCC even when petitions to deny are filed against them, there can be no
assurance that any of the Company's stations' licenses will be renewed.

The main station licenses of the Company's television stations will expire
as follows:

<TABLE>
<CAPTION>
STATION MARKET EXPIRATION DATE
- ------- -------------------------------- ------------------
<S> <C> <C>
WFAA-TV Dallas-Fort Worth August 1, 1993(1)
KHOU-TV Houston August 1, 1998
KIRO-TV Seattle-Tacoma February 1, 1999
KXTV Sacramento-Stockton-Modesto December 1, 1998
WVEC-TV Norfolk-Portsmouth-Newport October 1, 1996
News-Hampton
WWL-TV New Orleans June 1, 1997
KOTV Tulsa June 1, 1998
</TABLE>

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

(1) An application for renewal of the license for WFAA-TV is pending before the
FCC, and the station's license is by statute continued in effect pending
action thereon.

Multiple Ownership Restrictions. The FCC has promulgated rules that, among
other things, limit the ability of individuals and entities to own or have an
official position or ownership interest above a certain level (an "attributable"
interest, as defined more fully below) in broadcast stations, as well as other
specified mass media entities. Prior to the passage of the 1996 Act, these rules
included limits on the number of radio and television stations that could be
owned on both a national and local basis. On a national basis, the rules
generally precluded any individual or entity from having an attributable
interest in more than 20 AM radio stations, 20 FM radio stations and/or 12
television stations. Moreover, the aggregate audience reach of the co-owned
television stations could not exceed 25 percent of all U.S. television
households. The 1996 Act directs the FCC to eliminate the 12-station limit for
TV station ownership and increase the national audience reach limitation from 25
percent to 35 percent. The 1996 Act also directs the FCC to eliminate its
numerical limitations on radio station ownership nationwide.

On a local basis, FCC rules currently allow an individual or entity to have
an attributable interest in only one television station in a market. Further,
FCC rules, the Communications Act or both generally prohibit an individual or
entity from having an attributable interest in both a television station and a
radio station, daily newspaper or cable television system that is located in the
same

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<PAGE> 35

local market area served by the television station. The FCC employs a liberal
waiver policy with respect to the TV/radio cross-ownership restriction (the
so-called "one-to-a-market" rule) which generally permits common ownership of
one AM, one FM, and one TV station in any of the 25 largest markets, provided
there are at least 30 separately owned stations.

In a pending rulemaking proceeding, the FCC has suggested the possibility
of narrowing the geographic scope of the local television cross-ownership rule
(the so-called "TV duopoly rule") and permitting some two-station combinations
in certain (large) markets. Moreover, in the same proceeding, the FCC proposed
eliminating the one-to-a-market rule entirely, or at least exempting larger
markets. The FCC is also seeking comment on issues of control and attribution
with respect to certain time brokerage or local marketing agreements ("LMAs")
entered into by television stations.

The 1996 Act has a direct impact on several of these issues. Specifically,
the 1996 Act requires the FCC to conduct a rulemaking proceeding to determine
whether the television duopoly rule should be retained, modified or eliminated.
In addition, it directs the FCC to extend its one-to-a market waiver policy
(allowing TV/radio combinations) to the top 50 markets, consistent with the
public interest, convenience and necessity.

The 1996 Act also substantially relaxes the FCC's limits on local radio
station ownership. In addition, the 1996 Act eliminates a statutory prohibition
against common ownership of television broadcast stations and cable systems
serving the same area, but leaves the current FCC rule in place. The 1996 Act
stipulates that the FCC should not consider the repeal of the statutory ban in
any review of its applicable rules. The recent legislation also eliminates the
FCC's former network/cable cross-ownership limitations, but allows the FCC to
adopt regulations if necessary to ensure carriage, appropriate channel
positioning, and nondiscriminatory treatment of non-affiliated broadcast
stations on network-owned cable systems.

The 1996 Act does not alter the FCC's newspaper/broadcast cross-ownership
restrictions. The Company's ownership of The Dallas Morning News and co-located
WFAA, however, predates the adoption of the FCC's rules and therefore has been
"grandfathered" by the FCC. Finally, the 1996 Act directs the FCC to revise its
long-standing "dual network" rule to permit television broadcast stations to
affiliate with an entity that maintains two or more networks, unless the
combination is composed of (a) two of the four existing networks (ABC, CBS, NBC
or Fox) or (b) any of the four existing networks and one of the two emerging
networks (WBN or UPN).

Expansion of the Company's broadcast operations in particular areas and
nationwide will continue to be subject to the FCC's ownership rules and any
further changes the FCC or Congress may adopt. Significantly, the 1996 Act
requires the FCC to review its remaining ownership rules biennially -- as part
of its regulatory reform obligations -- to determine whether its various rules
are still necessary. The Company cannot predict the impact of the biennial
review process or any other agency or legislative initiatives upon the FCC's
broadcast rules. Further, the 1996 Act's relaxation of the FCC's ownership rules
may increase the level of competition in one or more of the markets in which the
Company's stations are located, particularly to the extent that any of the
Company's competitors may have greater resources and thereby be in a better
position to capitalize on such changes.

Under the FCC's ownership rules, a direct or indirect purchaser of certain
types of securities of the Company could violate FCC regulations if that
purchaser owned or acquired an "attributable" or "meaningful" interest in other
media properties in the same areas as stations owned by the Company or in a
manner otherwise prohibited by the FCC. All officers and directors of a licensee
or its parent, as well as general partners, limited partners who are not
properly "insulated" from management activities, and shareholders who own five
percent or more of the outstanding voting stock of a licensee (either directly
or indirectly), generally will be deemed to have an attributable interest in the
license. Certain institutional investors who exert no control or influence over
a licensee may own up to ten percent of such outstanding voting stock before
attribution occurs.

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<PAGE> 36

Under current FCC regulations, debt instruments, non-voting stock, properly
insulated limited partnership interests (as to which the licensee certifies that
the limited partners are not "materially involved" in the management and
operation of the subject media property) and voting stock held by minority
shareholders in cases in which there is a single majority shareholder generally
are not subject to attribution. The FCC's "cross-interest" policy, which
precludes an individual or entity from having a "meaningful" (even though not
attributable) interest in one media property and an attributable interest in a
broadcast, cable or newspaper property in the same area, may be invoked in
certain circumstances to reach interests not expressly covered by the multiple
ownership rules.

In January 1995, the FCC initiated a rulemaking proceeding designed to
permit a "thorough review of [its] broadcast media attribution rules." Among the
issues on which comment was sought were (i) whether to change the voting stock
attribution benchmarks from five percent to ten percent and, for passive
investors, from ten percent to twenty percent; (ii) whether there are any
circumstances in which non-voting stock interests, which are currently
considered non-attributable, should be considered attributable; (iii) whether
the FCC should eliminate its single majority shareholder exception (pursuant to
which voting interests in excess of five percent are not considered cognizable
if a single majority shareholder owns more than fifty percent of the voting
power); (iv) whether to relax insulation standards for business development
companies and other widely-held limited partnerships; (v) how to treat limited
liability companies and other new business forms for attribution purposes; (vi)
whether to eliminate or codify the cross-interest policy; and (vii) whether to
adopt a new policy which would consider whether multiple cross interests or
other significant business relationships (such as time brokerage agreements,
debt relationships or holdings of nonattributable interests), which individually
do not raise concerns, raise issues with respect to diversity and competition.
The Company cannot predict with certainty when this proceeding will be concluded
or whether any of these standards will be changed. Should the attribution rules
be changed, the Company is unable to predict what effect, if any, such changes
would have on the Company or its activities. To the best of the Company's
knowledge at present, no officer, director or five percent shareholder of the
Company holds an interest in another television station, radio station, cable
television system or daily newspaper that is inconsistent with the FCC's
ownership rules and policies or the Company's continued ownership of its
television stations.

Alien Ownership Restrictions. The Communications Act restricts the ability
of foreign entities or individuals to own or hold certain interests in broadcast
licenses. Foreign governments, representatives of foreign governments, non-U.S.
citizens, representatives of non-U.S. citizens, and corporations or partnerships
organized under the laws of a foreign nation are barred from holding broadcast
licenses. Non-U.S. citizens, collectively, may directly or indirectly own or
vote up to twenty percent of the capital stock of a licensee. In addition, a
broadcast license may not be granted to or held by any corporation that is
controlled, directly or indirectly, by any other corporation more than one-
fourth of whose capital stock is owned or voted by non-U.S. citizens or their
representatives, by foreign governments or their representatives, or by non-U.S.
corporations, if the FCC finds that the public interest will be served by the
refusal or revocation of such license. The FCC has interpreted this provision of
the Communications Act to require an affirmative public interest finding before
a broadcast license may be granted to or held by any such corporation, and the
FCC has made such an affirmative finding only in limited circumstances. The
Company, which serves as a holding company for wholly-owned subsidiaries that
serve as licensees for the stations, therefore may be restricted from having
more than one-fourth of its stock owned or voted directly or indirectly by non-
U.S. citizens, foreign governments, representatives of non-U.S. citizens or
foreign governments, or foreign corporations. The Communications Act previously
also prohibited grant of a broadcast station license (i) to any corporation with
an alien officer or director, or (ii) to any corporation controlled by another
corporation with any alien officers or more than one-fourth alien directors. The
restrictions on non-U.S. citizens serving as officers or directors of licensees
and their parent corporations have been eliminated, however, by the 1996 Act.
See "Description of Capital Stock -- Foreign Ownership".

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<PAGE> 37

Other Regulations Affecting Broadcast Stations. The FCC has significantly
reduced its past regulation of broadcast stations, including elimination of
formal ascertainment requirements and guidelines concerning amounts of certain
types of programming and commercial matter that may be broadcast. The U.S.
Supreme Court (in 1990) refused to review a lower court decision that upheld the
FCC's 1987 action invalidating most aspects of the Fairness Doctrine, which had
required broadcasters to present contrasting views on controversial issues of
public importance. The FCC may, however, continue to regulate other aspects of
fairness obligations in connection with certain types of broadcasts. In
addition, there are FCC rules and policies, and rules and policies of other
federal agencies, that regulate matters such as network-affiliate relations, the
ability of stations to obtain exclusive rights to air syndicated programming,
cable systems' carriage of syndicated and network programming on distant
stations, political advertising practices, equal employment opportunity,
application procedures and other areas affecting the business or operations of
broadcast stations. The FCC has adopted rules to implement the Children's
Television Act of 1990 ("Children's Television Act"), which, among other
provisions, limits the permissible amount of commercial matter in children's
programs and requires each television station to present "educational and
informational" children's programming.

Recent Developments; Proposed Legislation and Regulation. The FCC recently
decided to eliminate the prime time access rule ("PTAR"), effective August 30,
1996. The PTAR currently limits the ability of television stations within the 50
largest markets that are affiliated with ABC, CBS, or NBC to broadcast network
programming (including syndicated programming previously broadcast over any of
these networks) during certain prime time hours. The elimination of the PTAR
could increase the amount of network programming broadcast over a station
affiliated with ABC, CBS or NBC. Such elimination also could result in (i) an
increase in the compensation paid by the network (due to the additional prime
time hours during which network programming could be aired by a
network-affiliated station) and (ii) increased competition for syndicated
network programming that previously was unavailable for broadcast by network
affiliates during prime time. The FCC also recently announced the elimination of
its remaining financial interest and syndication rules. The original rules,
first adopted in 1970, severely restricted the ability of ABC, CBS and NBC to
obtain financial interests in, or participate in syndication of, prime-time
entertainment programming created by independent producers for airing during the
networks' evening schedules. The FCC previously lifted the financial interest
rules and restraints on foreign syndication. In January 1996, the Supreme Court
refused to review lower court decisions that upheld the FCC's restrictions on
the broadcast of indecent material and also upheld the agency's policy of
imposing substantial monetary sanctions on repeat offenders of the indecency
rules. The rules require stations to limit the airing of indecent programming to
a 10 p.m.-6 a.m. "safe harbor" period.

The FCC presently is seeking comment on its policies designed to increase
minority ownership of mass media facilities. Congress, however, recently enacted
legislation that eliminated the minority tax certificate program of the FCC,
which gave favorable tax treatment to entities selling broadcast stations to
entities controlled by an ethnic minority. In addition, a recent Supreme Court
decision has cast into doubt the continued validity of other FCC programs
designed to increase minority ownership of mass media facilities.

Congress and the FCC currently have under consideration, and may in the
future adopt, new laws, regulations and policies regarding a wide variety of
matters that could affect, directly or indirectly, the operation and ownership
of the Company's broadcast properties. In addition to the changes and proposed
changes noted above, such matters include, for example, the license renewal
process, spectrum use fees, political advertising rates, potential restrictions
on the advertising of certain products (beer and wine, for example), the rules
and policies to be applied in enforcing the FCC's equal employment opportunity
regulations, standards to more strictly define the type and quantify the amount
of educational and informational programming required under the Children's
Television Act, and regulatory schemes to control the amount of violent
television programming accessible to children (including implementation, as
required under the 1996 Act, of

35
<PAGE> 38

the so-called "V-chip technology," which would permit parents to program
television sets so that certain programming would be inaccessible to children).
Other matters that could affect the Company's broadcast properties include
technological innovations and developments generally affecting competition in
the mass communications industry, such as the recent initiation of direct
broadcast satellite service, the continued establishment of wireless cable
systems and low power television stations, and the advent of telephone company
participation in the provision of video programming service.

Distribution of Video Services by Telephone Companies. Recent actions by
Congress, the FCC and the courts all presage significant future involvement in
the provision of video services by telephone companies. The Company cannot
predict either the timing or the extent of such involvement. These developments
relate to a former provision of the Communications Act that prohibited a local
telco from providing video programming directly to subscribers within the
company's telephone service areas. That provision has now been superseded by the
1996 Act, which provides for telco entry into the distribution of video services
either under the laws and rules applicable to cable systems or under new rules
to be devised by the FCC for "open video systems" subject to certain common
carrier requirements.

As applied by government regulators historically, the former provision
prevented telcos from providing cable service over either the telephone network
or a separate cable system located within the telephone service area. However,
several telcos have won court rulings invalidating that historic interpretation,
including decisions from United States Courts of Appeal in the Fourth and Ninth
Circuits. The United States Supreme Court heard oral arguments in the Fourth
Circuit case in December 1995, prior to passage of the 1996 Act. Although a
resolution of the case is expected by midsummer 1996, in the wake of the new
legislation it is not clear whether the Supreme Court will rule on the merits of
the constitutional challenge.

Even before the court challenges, the FCC had reinterpreted the statutory
ban in a manner that authorized a broader role for telcos in transporting video
programming to subscribers. As originally envisioned in the FCC's 1992 "video
dialtone" ("VDT") decision, telcos offering VDT service would provide a
transport "platform" to multiple video programmers (including, potentially,
competing program packages) on a non-discriminatory, common carrier basis; the
telco itself, however, was barred from owning or providing programming to
subscribers via a VDT platform. The FCC already has approved several telco
applications to construct and operate VDT systems and processed tariffs filed to
govern the rates and terms of VDT offerings. In the wake of the first court
decisions, the FCC began reviewing its VDT rules to determine whether a telco's
direct provision of video programming should be regulated under the VDT rules,
under cable rules, or under some hybrid.

Further FCC action on VDT has been terminated by the 1996 Act. (The
legislation does not affect any VDT systems approved prior to enactment of the
1996 Act). Congress instead has determined that telcos may offer video
programming either as a traditional cable operator or through operation of an
"open video system". The Act requires that the FCC promulgate implementing
regulations for such systems within six months of enactment of the legislation.
Although Congress specifically preempted the FCC's VDT rulemaking proceeding,
the legislation's directives for open video systems resemble the rules adopted
or proposed for VDT systems in certain respects. These include the requirements
that (1) the operator of an open video system offer carriage capacity to various
video programming providers under nondiscriminatory rates, terms, and
conditions; and (2) if demand for carriage exceeds the channel capacity of the
open video system, the operator is barred from devoting more than one-third of
the system's capacity to programming provided by itself or an affiliate.

The 1992 Cable Act. On October 5, 1992, Congress enacted the Cable
Television Consumer Protection and Competition Act of 1992 (the "1992 Cable
Act"). The FCC began implementing the requirements of the 1992 Cable Act in
1993, and final implementation proceedings remain pending regarding certain of
the rules and regulations previously adopted. Certain statutory provisions, such

36
<PAGE> 39

as signal carriage, retransmission consent, and equal employment opportunity
requirements, have a direct effect on television broadcasting. Other provisions
are focused exclusively on the regulation of cable television but can still be
expected to have an indirect effect on the Company because of the competition
between over-the-air television stations and cable systems.

The signal carriage, or "must carry," provisions of the 1992 Cable Act
require cable operators to carry the signals of local commercial and
non-commercial television stations and certain low power television stations.
Systems with 12 or fewer usable activated channels and more than 300 subscribers
must carry the signals of at least three local commercial television stations. A
cable system with more than 12 usable activated channels, regardless of the
number of subscribers, must carry the signals of all local commercial television
stations, up to one-third of the aggregate number of usable activated channels
of such a system. The 1992 Cable Act also includes a retransmission consent
provision that prohibits cable operators and other multi-channel video
programming distributors from carrying broadcast signals without obtaining the
station's consent in certain circumstances. The "must carry" and retransmission
consent provisions are related in that a local television broadcaster, on a
cable system-by-cable system basis, must make a choice once every three years
whether to proceed under the "must carry" rules or to waive the right to
mandatory but uncompensated carriage and negotiate a grant of retransmission
consent to permit the cable system to carry the station's signal, in most cases
in exchange for some form of consideration from the cable operator. Cable
systems must obtain retransmission consent to carry all distant commercial
stations other than "super stations" delivered via satellite.

Under rules adopted to implement these must carry and retransmission
consent provisions, local television stations are required to make an election
of must carry or retransmission consent every three years. Other issues
addressed in the FCC rules were market designations, the scope of retransmission
consent and procedural requirements for implementing the signal carriage
provisions. Each of the Company's stations elected must carry status on certain
cable systems in its television market. This election entitles the stations to
carriage on those systems until at least December 31, 1996. In certain other
situations, the stations entered into "retransmission consent" agreements with
cable systems. The Company is unable to predict whether or not these
retransmission consent agreements will be extended and, if so, on what terms.

On April 8, 1993, a special three-judge panel of the U.S. District Court
for the District of Columbia upheld the constitutionality of the must carry
provisions of the 1992 Cable Act. Cable interests appealed that ruling directly
to the Supreme Court. On June 27, 1994, in a 5-4 decision, the justices
determined that must carry "in the abstract" did not constitute a clear
violation of the First Amendment. Nevertheless, the Court remanded the case to
the District Court and ordered it to determine the factual validity of Congress'
premise for enacting the law -- that "the economic health of local broadcasting"
would be "in genuine jeopardy" without cable carriage. On remand, the District
Court panel held, by a vote of 2-1, that Congress had sufficient evidence about
the state of broadcasting and cable competition to determine that mandatory
carriage laws were necessary. In response to an appeal filed by cable interests,
the Supreme Court recently announced that it will review the District Court's
decision in its next term. The Company cannot predict the timing of a decision
or the outcome of this appeal. In the meantime, the must carry regulations
implemented by the FCC pursuant to the 1992 Cable Act remain in effect.

The 1992 Cable Act also codified the FCC's basic equal employment
opportunity ("EEO") rules and the use of certain EEO reporting forms currently
filed by television broadcast stations. In addition, pursuant to the 1992 Cable
Act's requirements, the FCC has adopted new rules providing for a review of the
EEO performance of each television station at the mid-point of its license term
(in addition to renewal time). Such a review will give the FCC an opportunity to
evaluate whether the licensee is in compliance with the FCC's processing
criteria and notify the licensee of any deficiency in its employment profile.
Among the other rulemaking proceedings conducted by the FCC to implement
provisions of the 1992 Cable Act have been those concerning cable rate
regulation, cable technical standards, cable multiple ownership limits and
competitive access to programming.

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<PAGE> 40

The 1992 Cable Act was amended in several important respects by the 1996
Act. Most notably, as discussed above, the 1996 Act repeals the cross-ownership
ban between cable and telephone entities and the FCC's current video dialtone
rules. These provisions, among others, foreshadow significant future involvement
in the provision of video services by telephone companies. The Company cannot
predict the impact that telco entry into video programming will have upon the
broadcasting industry.

The 1996 Act also repeals or curtails several cable-related ownership and
cross-ownership restrictions. For example, as noted above, the 1996 Act
eliminates the broadcast network/cable cross-ownership limitations and the
statutory prohibition on TV/cable cross-ownership.

Advanced Television Service. The FCC has proposed the adoption of rules for
implementing advanced television ("ATV") service in the United States.
Implementation of digital ATV will improve the technical quality of television
signals receivable by viewers and will provide broadcasters the flexibility to
offer new services, including high-definition television ("HDTV"), simultaneous
multiple programs of standard definition television ("SDTV"), and data
broadcasting.

The FCC must adopt ATV service rules and a table of ATV allotments before
broadcasters can provide these services made possible by the new technology. In
1995, the FCC issued a notice of proposed rulemaking ("NPRM") inviting comment
on a broad range of issues related to the implementation of ATV, particularly
the transition to digital broadcasting. The FCC announced that the anticipated
role of digital broadcasting will cause it to revisit certain decisions made in
earlier orders. Among other things, the FCC proposed that broadcasters will be
allowed the flexibility to transmit a mix of HDTV, SDTV and perhaps other
services. The FCC also stated that the NPRM would be followed by two additional
proceedings that will address, respectively, the ATV broadcast technical
standards and an ATV channel allotment and assignment plan. A final report and
order which would launch the ATV system is anticipated in mid to late 1996.

Absent further legislation requiring the auctioning of ATV channels, it is
expected that the FCC will assign all existing television licensees and
permitees a second channel on which to provide ATV simultaneously with their
current "NTSC" service. After a period of years (the 1992 proposal was for 15
years, although that period of time is under review in the pending FCC
proceeding) broadcasters would be required to cease NTSC operations and
broadcast only with the newer digital ATV technology. It is also possible that
the NTSC channel, once returned to the FCC, will be auctioned for other use.
Under certain circumstances, conversion to ATV operations could reduce a
station's geographical coverage area; the majority of stations, however, will
obtain service areas that match or exceed the limits of existing operations.
Recent debates in Congress call into question whether the transition to ATV will
proceed as planned. Indeed, several senators favor authorizing the FCC to
auction the second channels. Such authority could be contained in budget
legislation or a stand-alone spectrum law. In any case, the FCC was asked and,
subsequently, agreed to delay licensing ATV stations until the auction issue has
been resolved by legislation or until early 1997.

Due to additional equipment costs, implementation of ATV will impose
near-term financial burdens on television stations providing the service. If ATV
stations are licensed by auction, this additional expense will apply to
broadcasters who choose to implement ATV. At the same time, there is a potential
for increased revenues to be derived from ATV. Although the Company believes the
FCC will authorize ATV in the United States, the Company cannot predict
precisely when or under what conditions such authorization might be given, when
NTSC operations will be required to cease, or the overall effect the transition
to ATV might have on the Company's business.

Direct Broadcast Satellite Systems. The FCC has authorized DBS, a service
which provides video programming via satellite directly to home subscribers.
Local broadcast stations are not carried on DBS systems. In June 1994, DIRECTV,
Inc. ("DIRECTV"), an affiliate of the General Motors Company, and United States
Satellite Broadcasting Company ("USSB") initiated DBS service. In January 1996,
AT&T Corporation announced it had invested $138 million in DIRECTV. In December
1995, EchoStar Satellite Corporation ("EchoStar") launched its first satellite;
EchoStar

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<PAGE> 41

expects to begin service in spring 1996. Directsat Corporation, an affiliate of
EchoStar, expects to launch its first satellite in summer 1996, with service to
begin a few months later.

In October 1995, the FCC upheld a decision of its International Bureau
revoking the DBS permit of Advanced Communications Corporation ("ACC"). The
FCC's decision has been appealed to federal court. ACC's primary orbital slot,
which is capable of providing service to the entire United States, was acquired
at auction in January 1996 by a partnership of MCI Telecommunications
Corporation and The News Corporation Limited. ACC's second orbital slot, which
can serve the western half of the United States, was acquired at auction in
January 1996 by EchoStar. The auction results are subject to the outcome of the
appeal for the FCC's order revoking ACC's permit. Other parties hold
authorizations to provide DBS service, but have not launched their proposed
satellites. It is uncertain if or when additional service by MCI, EchoStar, or
other parties may commence.

As part of the 1996 Act, Congress recently required the FCC to promulgate
regulations to prohibit restrictions that impair a viewer's ability to receive
video programming services through over-the-air reception devices, multipoint
distribution service, or direct broadcast satellite services. The legislation
also awards the FCC exclusive jurisdiction to regulate the provision of
direct-to-home satellite services, and limits the authority of local
jurisdictions to tax direct-to-home satellite service providers.

The foregoing does not purport to be a complete summary of all the
provisions of the Communications Act, the 1996 Act, or the 1992 Cable Act, nor
of the regulations and policies of the FCC thereunder. Proposals for additional
or revised regulations and requirements are pending before and are being
considered by Congress and federal regulatory agencies from time to time. Also,
various of the foregoing matters are now, or may become, the subject of court
litigation, and the Company cannot predict the outcome of any such litigation or
the impact on its broadcast business.

EMPLOYEES

As of December 31, 1995, the Company had 3,489 full-time employees. An
additional 173 employees were added on January 1, 1996 following the Owensboro
acquisition. Of the total workforce of 3,662, the Company has 234 employees,
located principally at its Seattle, New Orleans and Dallas-Fort Worth television
stations, that are represented by various employee unions. The Company believes
its relations with all of its employees are good.

LEGAL PROCEEDINGS

There are legal proceedings pending against the Company, including a number
of actions for alleged libel. In the opinion of management, liabilities, if any,
arising from these actions would not have a material adverse effect on the
consolidated results of operations or financial position of the Company.

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<PAGE> 42

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The executive officers and directors of the Company are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITIONS HELD
-------------------------------------- --- --------------------------------------
<S> <C> <C>
Robert W. Decherd..................... 44 Chairman of the Board, President and
Chief Executive Officer
Ward L. Huey, Jr...................... 57 Vice Chairman of the Board and
President, Broadcast Division
Burl Osborne.......................... 58 Director and President, Publishing
Division
Michael J. McCarthy................... 51 Senior Vice President, General Counsel
and Secretary
Michael D. Perry...................... 49 Senior Vice President and Chief
Financial Officer
John W. Bassett, Jr................... 58 Director
Judith L. Craven, M.D., M.P.H......... 50 Director
Roger A. Enrico....................... 51 Director
Dealey D. Herndon..................... 49 Director
Lester A. Levy........................ 73 Director
Arturo Madrid, Ph.D................... 57 Director
James M. Moroney, Jr.................. 74 Director
Hugh G. Robinson...................... 63 Director
William T. Solomon.................... 53 Director
Thomas B. Walker, Jr.................. 72 Director
J. McDonald Williams.................. 54 Director
</TABLE>

ROBERT W. DECHERD has served as a director of the Company since March 1976.
He has been Chairman of the Board and Chief Executive Officer of the Company
since January 1987. Mr. Decherd became President of the Company in January 1994,
and previously served as President from January 1985 through December 1986. From
January 1984 through December 1986, he served as Chief Operating Officer. Mr.
Decherd is a member of the Board of Directors of CCBG Corporation and became a
member of the Board of Directors of Kimberly-Clark Corporation in February 1996.

WARD L. HUEY, JR. has served as a director of the Company since April 1982.
He has been Vice Chairman of the Board and President, Broadcast Division since
January 1987. He was President and Chief Executive Officer of the Company's
broadcasting subsidiary, Belo Broadcasting Corporation, from April 1981 through
December 31, 1986, at which time the stock ownership of the broadcasting
subsidiaries changed from Belo Broadcasting Corporation to the Company.

BURL OSBORNE has served as a director of the Company since January 1987. He
has been President, Publishing Division of the Company since November 1995.
Since January 1991, Mr. Osborne has been Publisher and Editor of The Dallas
Morning News, Inc., a subsidiary of the Company. Mr. Osborne was President and
Editor of The Dallas Morning News, Inc. from 1985 through December 1990.

MICHAEL J. MCCARTHY has been Senior Vice President of the Company since
January 1987 and has been Secretary and General Counsel since October 1985. He
served as Vice President of the Company from 1985 to 1987.

MICHAEL D. PERRY has been Senior Vice President, Chief Financial Officer of
the Company since November 1987. From January 1989 through December 1991, Mr.
Perry was also Treasurer. He served as Vice President, Controller of the Company
from January 1984 to November 1987.

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<PAGE> 43

JOHN W. BASSETT, JR. has served as a director of the Company since March
1979. He is a practicing attorney and is a partner in the law firm of Bassett &
Copple, LLP in Roswell, New Mexico. Prior to forming Bassett & Copple, LLP in
October 1995, Mr. Bassett was a stockholder in the law firm of Atwood, Malone,
Mann & Turner, P.A., Roswell, New Mexico, for ten years.

JUDITH L. CRAVEN, M.D., M.P.H. has served as a director of the Company
since December 1992. Since July 1992, she has served as President of the United
Way of the Texas Gulf Coast. From February 1983 to June 1992, Dr. Craven served
as Dean of the School of Allied Health Sciences of the University of Texas
Health Science Center at Houston and from September 1987 to June 1992 as Vice
President of Multicultural Affairs for the University of Texas Health Science
Center.

ROGER A. ENRICO has served as a director of the Company since July 1995. In
April 1996, he became Chief Executive Officer of PepsiCo, Inc. He served as
Chairman and Chief Executive Officer of PepsiCo Worldwide Restaurants from the
end of 1994 and Vice Chairman of PepsiCo, Inc. from 1993 until March 1996. Mr.
Enrico was Chairman and Chief Executive Officer of PepsiCo Worldwide Foods from
1992 to 1993 and President and Chief Executive Officer of Frito-Lay, Inc. from
1991 to 1992. Mr. Enrico is a member of the Boards of Directors of PepsiCo,
Inc., Dayton Hudson Corporation, The Prudential Insurance Company of America,
Inc. and the United Negro College Fund.

DEALEY D. HERNDON has served as a director of the Company since May 1986.
Since November 1995, Mrs. Herndon has been President of Herndon, Stauch &
Associates, a project and construction management firm. Mrs. Herndon served from
1991 to September 1995 as the Executive Director of the State Preservation Board
of the State of Texas. She serves on the Boards of Directors of the Friends of
the Governor's Mansion, Capital Area United Way and St. Edward's University in
Austin, Texas. Mrs. Herndon is also a Trustee of the National Trust for Historic
Preservation in Washington, D.C.

LESTER A. LEVY has served as a director of the Company since April 1985. He
has been Chairman of the Board of Directors of NCH Corporation, a chemical
products company, since 1965 and has been with NCH Corporation since 1946.

ARTURO MADRID, PH.D. has served as a director of the Company since January
1994. He is the Murchison Distinguished Professor of the Humanities at Trinity
University in San Antonio, Texas. He assumed this position in September 1993
after serving from 1984 until 1993 as the founding president of the Tomas Rivera
Center, a national institute co-located at The University of Texas at Austin and
the Claremont (CA) Graduate School which focuses on Latino policy issues.

JAMES M. MORONEY, JR. has served as a director of the Company since
February 1952. He served as Chairman of the Board of the Company from April 1984
through December 1986, and from January 1983 through December 1986 he served as
Chief Executive Officer of the Company. Mr. Moroney currently serves as Chairman
of the Board of Trustees for the University of Dallas.

HUGH G. ROBINSON has served as a director of the Company since May 1989.
Mr. Robinson is Chairman and Chief Executive Officer of The Tetra Group, a
construction management firm. He has held that position since 1989, and for more
than five years prior to such date Mr. Robinson was President of Cityplace
Development Corporation, a real estate development subsidiary of The Southland
Corporation. Mr. Robinson is a former Chairman and Board member of the Federal
Reserve Bank of Dallas. He is currently a member of the Boards of Directors of
TU Electric Company, Guaranty Federal Savings Bank, Smith Environmental
Services, Inc. and Circuit City Stores, Inc., and is a Trustee of Columbus
Realty Trust, a real estate investment trust.

WILLIAM T. SOLOMON has served as a director of the Company since April
1983. He is the Chairman, President and Chief Executive Officer of Austin
Industries, Inc., a general construction company, a position he has held since
1987. Prior to 1987, Mr. Solomon was President and Chief Executive Officer of
Austin Industries, Inc.

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<PAGE> 44

THOMAS B. WALKER, JR. has served as a director of the Company since April
1982. He has been a partner, either general or limited, in The Goldman Sachs
Group, L.P., investment bankers, since 1968. Mr. Walker is a member of the
Boards of Directors of NCH Corporation, SYSCO Corporation and Riviana Foods,
Inc.

J. MCDONALD WILLIAMS has served as a director of the Company since April
1985. Mr. Williams is Chairman of Trammell Crow Company, a real estate services
firm. From 1991 until July 1994, Mr. Williams was President and Chief Executive
Officer of Trammell Crow Company and from 1977 to December 1990, he was managing
partner of Trammell Crow Company. Mr. Williams is a member of the Board of
Directors of Mitchell Energy & Development Corp.

STOCK OWNERSHIP BY MANAGEMENT

At December 31, 1995, the Company's executive officers and directors as a
group (17 persons) beneficially owned 6,904,799 shares of Series A Common Stock
and 4,706,474 shares of Series B Common Stock, representing approximately 30% of
the Company's outstanding shares of Common Stock (Series A and Series B
combined) and approximately 43.9% of the voting power attributable to such
outstanding shares. After giving effect to the sale of 5,000,000 shares of
Series A Common Stock in the Offerings as of December 31, 1995, the shares of
Common Stock owned by such group would have represented approximately 26.4% of
the outstanding shares of Common Stock (both Series A and Series B) and
approximately 42.2% of the voting power.

At December 31, 1995, Robert W. Decherd, Dealey D. Herndon and James M.
Moroney, Jr. beneficially owned shares of the Common Stock (both Series A and
Series B) aggregating 3,198,441, 2,364,270 and 1,670,232, respectively,
representing approximately 8.3%, 6.2% and 4.4%, respectively, of the outstanding
shares of Common Stock (both Series A and Series B). After giving effect to the
sale of 5,000,000 shares of Series A Common Stock in the Offerings as of
December 31, 1995, Mr. Decherd, Mrs. Herndon and Mr. Moroney's beneficial
ownership would have represented approximately 7.4%, 5.5% and 3.9%,
respectively.

DESCRIPTION OF CAPITAL STOCK

The Company's authorized capital stock consists of 150,000,000 shares of
Common Stock, $1.67 par value per share ("Common Stock"), and 5,000,000 shares
of Preferred Stock, $1.00 par value per share ("Preferred Stock").

COMMON STOCK

The Company's 150,000,000 shares of authorized Common Stock may be issued
and designated as Series A Common Stock, Series B Common Stock and/or Series C
Common Stock. As of December 31, 1995, 15,000,000 shares of Common Stock had
been designated Series B Common Stock and 135,000,000 shares of Common Stock had
been designated Series A Common Stock. No shares of Series C Common Stock have
been designated. Under the Company's Certificate of Incorporation, the Company
may not issue any additional shares of Series B Common Stock if such issuance
would result in the Series A Common Stock being excluded from trading on the
NYSE or other national stock exchange or quotation system. Except for this
limitation, the Board of Directors has the authority to fix the number of shares
constituting any such series and to increase or decrease the number of shares of
any series prior to or after the issuance of shares of that series, but not
below the number of shares of such series then outstanding.

The issued and outstanding shares of Series A Common Stock and Series B
Common Stock vote together as a single class on all matters submitted to a vote
of shareholders, with each issued and outstanding share of Series A Common Stock
entitled to one vote and each issued and outstanding share of Series B Common
Stock entitled to ten votes on all such matters, except that class votes by
series are required with respect to (i) any amendment to the Company's
Certificate

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<PAGE> 45

of Incorporation that alters or changes the powers, preferences, or special
rights of their respective series so as to affect them adversely, and (ii) such
other matters as require class votes under the Delaware General Corporation Law.
Cumulative voting is not permitted in the election of directors.

Transferability of the Series B Common Stock is limited to family members
and affiliated entities of the holder. Shares of Series B Common Stock are
convertible at any time on a one-for-one basis into Series A Common Stock.

Holders of either series of Common Stock are entitled to receive dividends,
if any, as may be declared by the Company's Board of Directors out of funds
legally available therefor and are entitled to share ratably in the net assets
available for distribution to such holders upon liquidation, dissolution and
winding up of the Company. Dividends must be paid on both the Series A Common
Stock and Series B Common Stock at any time that dividends are paid on either.

PREFERRED STOCK

None of the Company's 5,000,000 shares of authorized Preferred Stock is
outstanding. The Company's Certificate of Incorporation authorizes the Board of
Directors, without any further action by the shareholders, to issue the
Preferred Stock in one or more series, to establish from time to time the number
of shares to be included in each series and to fix the designations, powers,
preferences and rights of the shares of each series and the qualifications,
limitations or restrictions thereof. Although the ability of the Board of
Directors to designate and issue shares of the Preferred Stock provides
desirable flexibility, including the ability to engage in future public
offerings to raise additional capital, the issuance of shares of the Preferred
Stock may have adverse effects on the holders of Common Stock, including
restrictions on dividends on the Common Stock if dividends on shares of the
Preferred Stock have not been paid; dilution of voting power of the Common Stock
to the extent the shares of the Preferred Stock have voting rights; or, deferral
of participation in the Company's assets upon liquidation until satisfaction of
any liquidation preference granted to holders of shares of the Preferred Stock.
In addition, issuance of shares of the Preferred Stock could make it more
difficult for a third party to acquire a majority of the outstanding voting
stock and accordingly may be used as an "anti-takeover" device. The Board of
Directors, however, currently does not contemplate the issuance of any shares of
the Preferred Stock unless required in connection with the Company's
shareholders rights plan. See "-- Certain Anti-Takeover Matters -- Shareholders
Rights Plan".

FOREIGN OWNERSHIP

The Company's Bylaws provide that at no time shall aliens (as defined in
the Bylaws) (i) own, directly or indirectly, more than one-fourth of the equity
in the Company, or in any other corporation directly or indirectly controlling
the Company, that is represented by the issued and outstanding capital stock; or
(ii) vote, directly or indirectly, more than one-fourth of the total voting
rights in the Company, or in any other corporation directly or indirectly
controlling the Company, that are represented by the issued and outstanding
capital stock. The percentage of voting rights and equity ownership of aliens in
the Company's issued and outstanding capital stock shall be determined in
accordance with the Communications Act and FCC rules and regulations. If and so
long as circumstances exist which violate the foregoing Bylaw provisions, any
shareholders causing or contributing to such violation shall have no voting,
dividend or other rights with respect to the shares of the Company that they may
hold, except the right to transfer such shares in such a manner that the
violation will cease to exist. No transfers of shares of domestic record to
aliens shall be made if such a violation exists or if such transfer would result
in such a violation. If the Company shall determine that stock of domestic
record in fact is held or voted, in whole or in part, by or for the account of
an alien, and that such interest would give rise to a violation of the foregoing
Bylaw provision, the holder of such stock shall not be entitled to vote, to
receive dividends or to exercise any other normal shareholder rights, except the
right to transfer such stock to a citizen of the United

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<PAGE> 46

States of America. The Board of Directors has broad authority under the Bylaws
to administer these provisions. See "Business -- Regulatory Matters".

CERTAIN ANTI-TAKEOVER MATTERS

The Company is a Delaware corporation and is subject to Section 203 of the
Delaware General Corporation Law. In general, subject to certain exceptions,
Section 203 prohibits a Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years
following the date that such stockholder became an interested stockholder,
unless (i) prior to such date the board of directors of the corporation approved
either the business combination or the transaction which resulted in the
stockholder becoming an interested stockholder, or (ii) upon consummation of the
transaction which resulted in the stockholder becoming an interested
stockholder, the interested stockholder owned at least 85 percent of the voting
stock of the corporation outstanding at the time the transaction commenced
(excluding for purposes of determining the number of shares outstanding those
shares owned by (x) persons who are directors and also officers and (y) employee
stock plans in which employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be tendered in a
tender or exchange offer), or (iii) at or subsequent to such time, the business
combination is approved by the board of directors and authorized at an annual or
special meeting of stockholders, and not by written consent, by the affirmative
vote of at least 66 2/3 percent of the outstanding voting stock which is not
owned by the interested stockholder. Section 203 defines a "business
combination" to include certain mergers, consolidations, asset sales and stock
issuances and certain other transactions resulting in a financial benefit to an
"interested stockholder." In addition, Section 203 defines an "interested
stockholder" to include any entity or person beneficially owning 15 percent or
more of the outstanding voting stock of the corporation and any entity or person
affiliated with such an entity or person.

CERTIFICATE OF INCORPORATION; BYLAWS

The Company's Certificate of Incorporation and Bylaws contain several
provisions that may make the acquisition of control of the Company by means of a
tender offer, open market purchases, a proxy contest or otherwise more
difficult. Set forth below are brief descriptions of those provisions.

Classified Board of Directors. The Bylaws divide the Board of Directors
into three classes, with each class being as nearly equal in number as possible.
At each annual meeting of shareholders, directors are elected to succeed those
directors whose terms have expired, and each newly elected director serves for a
three-year term. The Company believes that a classified Board of Directors helps
assure the continuity and stability of the Company's Board of Directors and the
Company's business strategies and policies. The classified board provision could
increase the likelihood that, in the event of a takeover of the Company,
incumbent directors will retain their positions. In addition, the classified
board provision helps ensure that the Company's Board of Directors, if
confronted with an unsolicited proposal from a third party that has acquired a
block of the voting stock of the Company, will have sufficient time to review
the proposal and appropriate alternatives and to seek the best available result
for all shareholders.

Removal of Directors; Filling Vacancies. Under the Company's Bylaws, a
director may be removed from office only for cause and by a vote of shareholders
representing not less than a majority of the voting power of the stock entitled
to vote in an election of directors. The Bylaws further provide that vacant
directorships may be filled by the Board of Directors.

No Shareholder Action by Written Consent; Special Meeting. The Company's
Certificate of Incorporation provides that shareholders may only take action at
an annual or special meeting. The shareholders are thus prohibited from taking
action by written consent in lieu of a meeting. The Company's Bylaws provide
that special meetings of shareholders may only be called by (i) the

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<PAGE> 47

Chief Executive Officer, (ii) the Board of Directors or (iii) the holders of not
less than one-fifth of the voting power of all shares entitled to vote at the
meeting.

Advance Notice Requirements for Shareholder Proposals and Director
Nominations. The Company's Bylaws establish advance notice procedures with
regard to shareholder proposals and the nomination of candidates for election as
directors, other than by or at the direction of the Board of Directors. These
procedures provide that the notice of shareholder proposals and shareholder
nominations for the election of directors at a meeting must be in writing and
received at the principal executive offices of the Company generally not less
than 30 days nor more than 60 days prior to the meeting and under certain
circumstances no later than the close of business on the tenth day following the
day on which notice of the meeting was mailed or public disclosure of the date
of the meeting was made. The notice of shareholder nominations must set forth
certain information specified in the Bylaws and comply with applicable federal
proxy rules.

Supermajority and Fair Price Provisions. Article Eleven of the Certificate
of Incorporation provides that for purposes of Sections 251, 253, 271, 275, and
311 of the Delaware General Corporation Law (pertaining to mergers,
consolidations of assets and dissolutions), where applicable, the affirmative
vote of the holders of at least two-thirds, rather than a majority as provided
by statute, of the outstanding stock, or any class or series thereof, entitled
to vote in accordance therewith shall be required. Article Twelve of the
Company's Certificate of Incorporation requires the affirmative vote of the
holders of at least 80 percent of all of the then outstanding shares of capital
stock of the Company for approval of certain business transactions with any
interested shareholder (as defined) of the Company, including certain mergers,
sales or other dispositions of assets, issuances of securities, liquidations,
dissolutions, or recapitalizations of the Company. The 80% vote requirement does
not apply to any transaction that is approved by a majority of the Company's
continuing directors (as defined) or to any transaction that satisfies certain
procedural requirements set forth in Article Twelve, as well as form of
consideration and minimum price requirements.

SHAREHOLDERS RIGHTS PLAN

On February 28, 1996, the Company's Board of Directors authorized the
amendment and restatement of the Company's preferred share purchase rights plan
which was originally adopted in 1986 and was scheduled to expire in March 1996.
Pursuant to the Amended and Restated Rights Agreement approved by the Company's
Board of Directors (the "Rights Agreement"), each share of Common Stock
currently outstanding (both Series A Common Stock and Series B Common Stock) and
each share of Common Stock to be outstanding hereafter (unless and until the
Rights expire or are redeemed or a "Distribution Date", as described below,
occurs) will be accompanied by one preferred share purchase right (a "Right")
entitling the registered holder to purchase from the Company one one-hundredth
of a share of Preferred Stock at an exercise price of $150.00 per one
one-hundredth of a share of Preferred Stock (the "Purchase Price"), subject to
adjustment. The shares of Series A Common Stock sold in the Offerings will be
accompanied by Rights. The Rights Agreement and the Rights will expire in 2006,
unless extended.

The Rights are and will be evidenced by the Common Stock certificates
representing the shares which they accompany, and no separate Rights
certificates will be distributed, until the occurrence of a "Distribution Date".
The Rights will separate from the Common Stock and a "Distribution Date" will
occur at the close of business on the earlier of (x) the tenth business day
following a public announcement that a person or group of affiliated or
associated persons has acquired or obtained the right to acquire beneficial
ownership of 30 percent or more of the outstanding Common Stock (an "Acquiring
Person"), unless the person becomes the owner of 30 percent solely by reason of
share purchases by the Company or under certain other circumstances, or (y) the
tenth business day following the commencement of (or announcement of the intent
to commence) a tender offer or exchange offer (other than by the Company or
certain affiliates) that would result in a person or group beneficially owning
30 percent or more of the outstanding Common Stock. The Rights

45
<PAGE> 48

Agreement permits the Company's Board of Directors to reduce the 30 percent
threshold to as low as 10 percent and to redeem the Rights at a price of $.01
per Right (subject to adjustment).

In the event that (i) a person or group becomes an Acquiring Person or (ii)
the Company is acquired in a merger or business combination or 50 percent or
more of its consolidated assets or earning power are sold after a person or
group has become an Acquiring Person, each holder of a Right will thereafter
have the right to receive, upon exercise and payment of the exercise price,
Common Stock (or, in certain circumstances, cash, property or other securities
of the acquiring company) having a value equal to two times the exercise price
of the Right. Notwithstanding the foregoing, following the occurrence of any of
the events set forth in clauses (i) or (ii) of this paragraph, all Rights that
are or (under certain circumstances specified in the Rights Agreement) were
beneficially owned by any Acquiring Person will be null and void. At any time
after a person or group becomes an Acquiring Person and prior to the acquisition
of 50 percent or more of the voting power of the outstanding Common Stock, the
Board may exchange the Rights (other than Rights owned by the Acquiring Person)
in whole or in part at an exchange ratio of one share of Series A Common Stock
or Series B Common Stock, as determined by the Board of Directors, per Right,
subject to adjustment.

For example, at an exercise price of $150.00 per Right, each Right not
owned by an Acquiring Person following either of the events set forth in clauses
(i) or (ii) of the preceding paragraph would entitle its holder to purchase
$300.00 worth of Common Stock (or other consideration, as noted above),
determined pursuant to a formula set forth in the Rights Agreement, for $150.00.
Assuming that the Common Stock (or other consideration) had a per share market
price of $37.50 at such time, the holder of each valid Right would be entitled
to purchase eight shares of Common Stock (or other consideration) for $150.00.

Certain of the provisions described in this "Description of Capital Stock"
section could discourage potential acquisition proposals and could delay or
prevent a change in control of the Company. Such provisions are intended to
enhance the likelihood of continuity and stability in the composition of the
Board of Directors and in the policies formulated by the Board of Directors and
to discourage certain types of transactions that may involve an actual or
threatened change of control of the Company. These provisions are designed to
preserve and protect the Company's assets and to reduce the vulnerability of the
Company to an unsolicited acquisition proposal and are also intended to
discourage certain tactics that may be used in proxy fights. However, such
provisions could have the effect of discouraging others from making tender
offers for the Company's shares that could result from actual or rumored
takeover attempts and may also have the effect of preventing changes in the
management of the Company.

LIMITATIONS ON DIRECTOR LIABILITY

The Company's Certificate of Incorporation provides that, to the fullest
extent permitted by the General Corporation Law of Delaware, a director or
former director of the Company shall not be personally liable to the Company or
its shareholders for monetary damages for breach of fiduciary duty as a
director.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Company's Series A Common Stock is
Chemical Mellon Shareholder Services, LLC.

LISTING

The Series A Common Stock is listed on the New York Stock Exchange under
the symbol "BLC".

46
<PAGE> 49

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Company has agreed to sell to each of the U.S. Underwriters named below, and
each of such U.S. Underwriters, for whom Goldman, Sachs & Co. and Smith Barney
Inc. are acting as representatives, has severally agreed to purchase from the
Company, the respective number of shares of Series A Common Stock set forth
opposite its name below:

<TABLE>
<CAPTION>
NUMBER OF SHARES
OF SERIES A
UNDERWRITER COMMON STOCK
-------------------------------------------------------------------- ----------------
<S> <C>
Goldman, Sachs & Co. ...............................................
Smith Barney Inc. ..................................................

---------
Total..................................................... 4,000,000
=========
</TABLE>

Under the terms and conditions of the Underwriting Agreement, the U.S.
Underwriters are committed to take and pay for all of the shares offered hereby,
if any are taken.

The U.S. Underwriters propose to offer the shares of Series A Common Stock
in part directly to the public at the initial public offering price set forth on
the cover page of this Prospectus and in part to certain securities dealers at
such price less a concession of $ per share. The U.S. Underwriters may
allow, and such dealers may reallow, a concession not in excess of $
per share to certain brokers and dealers. After the shares of Series A Common
Stock are released for sale to the public, the offering price and other selling
terms may from time to time be varied by the representatives.

The Company has entered into an underwriting agreement (the "International
Underwriting Agreement") with the underwriters of the international offering
(the "International Underwriters") providing for the concurrent offer and sale
of 1,000,000 shares of Series A Common Stock in an international offering
outside the United States. The offering price and aggregate underwriting
discounts and commissions per share for the two offerings are identical. The
closing of the offering made hereby is a condition to the closing of the
international offering, and vice versa. The representatives of the International
Underwriters are Goldman Sachs International and Smith Barney Inc.

Pursuant to an Agreement between the U.S. and International Underwriting
Syndicates (the "Agreement Between") relating to the two offerings, each of the
U.S. Underwriters named herein has agreed that, as a part of the distribution of
the shares offered hereby and subject to certain exceptions, it will offer, sell
or deliver the shares of Series A Common Stock, directly or indirectly, only in
the United States or America (including the States and the District of
Columbia), its territories, its possessions and other areas subject to its
jurisdiction (the "United States") and to U.S. persons, which term shall mean,
for purposes of this paragraph: (a) any individual who is a resident of the
United States or (b) any corporation, partnership or other entity organized in
or under the laws of the United States of any political subdivision thereof and
whose office most

47
<PAGE> 50

directly involved with the purchase is located in the United States. Each of the
International Underwriters has agreed pursuant to the Agreement Between that, as
a part of the distribution of the shares offered as a part of the international
offering, and subject to certain exceptions, it will (i) not, directly or
indirectly, offer, sell or deliver shares of Series A Common Stock (a) in the
United States or to any U.S. persons or (b) to any person whom it believes
intends to reoffer, resell or deliver the shares in the United States or to any
U.S. persons, and (ii) cause any dealer to whom it may sell such shares at any
concession to agree to observe a similar restriction.

Pursuant to the Agreement Between, sales may be made between the U.S.
Underwriters and the International Underwriters of such number of shares of
Series A Common Stock as may be mutually agreed. The price of any shares so sold
shall be the initial public offering price, less an amount not greater than the
selling concession.

The Company has granted the U.S. Underwriters an option exercisable for 30
days after the date of this Prospectus to purchase up to an aggregate of 600,000
additional shares of Series A Common Stock solely to cover over-allotments, if
any. If the U.S. Underwriters exercise their over-allotment option, the U.S.
Underwriters have severally agreed, subject to certain conditions, to purchase
approximately the same percentage thereof that the number of shares to be
purchased by each of them, as shown in the foregoing table, bears to the
4,000,000 shares of Series A Common Stock offered. The Company has granted the
International Underwriters a similar option exercisable for 30 days to purchase
up to an aggregate of 150,000 additional shares of Series A Common Stock.

The Company and its directors and executive officers have agreed that,
during the period beginning from the date of this Prospectus and continuing to
and including the date 90 days after the date of the Prospectus, they will not
offer, sell, contract to sell or otherwise dispose of any securities of the
Company (other than pursuant to employee and director benefit plans existing, or
on the conversion or exchange of convertible or exchangeable securities
outstanding, on the date of this Prospectus) which are substantially similar to
the shares of Series A Common Stock or which are convertible or exchangeable
into securities which are substantially similar to the shares of Series A Common
Stock, without the prior written consent of the representatives except for the
shares of Series A Common Stock offered in connection with the concurrent U.S.
and international offerings.

Thomas B. Walker, Jr., a director of the Company, is a Limited Partner of
The Goldman Sachs Group, L.P., which is a general partner of and owns a 99
percent interest in Goldman, Sachs & Co.

The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act.

48
<PAGE> 51

LEGAL MATTERS

The validity of the shares of Series A Common Stock offered hereby is being
passed upon for the Company by Locke Purnell Rain Harrell (A Professional
Corporation) ("Locke Purnell"), Dallas, Texas. Attorneys employed by Locke
Purnell own shares of Common Stock in the Company. Certain legal matters in
connection with the Series A Common Stock offered hereby are being passed upon
for the Underwriters by Baker & Botts, L.L.P., Dallas, Texas.

EXPERTS

The Consolidated Financial Statements of the Company included in the
Company's Annual Report (Form 10-K) for the year ended December 31, 1995 have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by the Company may be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
located at Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511 and 7 World Trade Center, 7th Floor, New York, New
York 10048. Copies of such materials can be obtained upon written request from
the Public Reference Branch of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, such materials may
also be inspected and copied at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005.

The Company has filed with the Commission a Registration Statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is hereby made to the Registration Statement.

49
<PAGE> 52

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Company with the Commission (File No.
1-8598) pursuant to the Exchange Act are incorporated herein by reference:

1. Annual Report on Form 10-K for the year ended December 31, 1995, and

2. all documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the Series A Common
Stock.

The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any or all of the
documents which are incorporated herein by reference, other than exhibits to
such information (unless such exhibits are specifically incorporated by
reference into such documents). Requests should be directed to the Public
Affairs Department, A. H. Belo Corporation, P.O. Box 655237, Dallas, Texas
75265, telephone: (214) 977-6606.

Any statement contained in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified shall not be deemed to
constitute a part of this Prospectus except as so modified, and any statement so
superseded shall not be deemed to constitute part of this Prospectus.

50
<PAGE> 53
================================================================================

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR ANY OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary................... 3
Use of Proceeds...................... 6
Price Range of Series A Common Stock
and Dividends...................... 6
Capitalization....................... 7
Selected Consolidated Financial
Data............................... 8
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 10
Business............................. 17
Management........................... 40
Description of Capital Stock......... 42
Underwriting......................... 47
Legal Matters........................ 49
Experts.............................. 49
Available Information................ 49
Incorporation of Certain Documents by
Reference.......................... 50
</TABLE>

================================================================================

5,000,000 SHARES

LOGO

SERIES A COMMON STOCK
(PAR VALUE $1.67 PER SHARE)

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

PROSPECTUS

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

GOLDMAN, SACHS & CO.

SMITH BARNEY INC.

REPRESENTATIVES OF THE UNDERWRITERS

================================================================================
<PAGE> 54

[INTERNATIONAL OFFERING COVER PAGE]

SUBJECT TO COMPLETION, DATED APRIL 2, 1996

5,000,000 SHARES

LOGO

SERIES A COMMON STOCK
(PAR VALUE $1.67 PER SHARE)

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

Of the 5,000,000 shares of Series A Common Stock offered, 1,000,000 shares
are being offered hereby in an international offering outside the United States
and 4,000,000 shares are being offered in a concurrent United States offering.
The initial public offering price and the aggregate underwriting discount per
share will be identical for both offerings. See "Underwriting".

The last reported sale price of the Series A Common Stock, which is listed
under the symbol "BLC", on the New York Stock Exchange on March 29, 1996 was
$34.00 per share. See "Price Range of Series A Common Stock and Dividends".

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

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

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

These shares offered hereby are offered severally by the International
Underwriters, as specified herein, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part. It is expected
that certificates for the shares will be ready for delivery in New York, New
York, on or about , 1996.

GOLDMAN SACHS INTERNATIONAL SMITH BARNEY INC.

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

The date of this Prospectus is , 1996.
<PAGE> 55

[INTERNATIONAL OFFERING REPLACEMENT SECTION]

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Company has agreed to sell to each of the International Underwriters named
below, and each of such International Underwriters, for whom Goldman Sachs
International and Smith Barney Inc. are acting as representatives, has severally
agreed to purchase from the Company, the respective number of shares of Common
Stock set forth opposite its name below:

<TABLE>
<CAPTION>
NUMBER OF SHARES
OF SERIES A
UNDERWRITER COMMON STOCK
-------------------------------------------------------------------- ----------------
<S> <C>
Goldman Sachs International.........................................
Smith Barney Inc....................................................

---------
Total..................................................... 1,000,000
=========
</TABLE>

Under the terms and conditions of the Underwriting Agreement, the
International Underwriters are committed to take and pay for all of the shares
offered hereby, if any are taken.

The International Underwriters propose to offer the shares of Common Stock
in part directly to the public at the initial public offering price set forth on
the cover page of this Prospectus, and in part to certain securities dealers at
such price less a concession of $ per share. The International
Underwriters may allow, and such dealers may reallow, a concession not in excess
of $ per share to certain brokers and dealers. After the shares of
Common Stock are released for sale to the public, the offering price and other
selling terms may from time to time be varied by the representatives.

The Company has entered into an underwriting agreement (the "U.S.
Underwriting Agreement") with the underwriters of the U.S. offering (the "U.S.
Underwriters") providing for the concurrent offer and sale of 4,000,000 shares
of Common Stock in the United States. The offering price and aggregate
underwriting discounts and commissions per share for the two offerings are
identical. The closing of the offering made hereby is a condition to the closing
of the U.S. offering, and vice versa. The representatives of the U.S.
Underwriters are Goldman, Sachs & Co. and Smith Barney Inc.

Pursuant to an Agreement between the U.S. and International Underwriting
Syndicates (the "Agreement Between") relating to the two offerings, each of the
U.S. Underwriters named herein has agreed that, as a part of the distribution of
the shares offered hereby and subject to certain exceptions, it will offer, sell
or deliver the shares of Common Stock, directly or indirectly, only in the
United States of America (including the States and the District of Columbia),
its territories, its possessions and other areas subject to its jurisdiction
(the "United States") and to U.S. persons, which term shall mean, for purposes
of this paragraph: (a) any individual who is a resident of the United States or
(b) any corporation, partnership or other entity organized in or under the laws
of the United States or any political subdivision thereof and whose office most
directly involved with the purchase is located in the United States. Each of the
International Underwriters named herein has agreed pursuant to the Agreement
Between that, as a part of the distribution of the shares offered

47
<PAGE> 56

[INTERNATIONAL OFFERING REPLACEMENT SECTION]

as a part of the international offering, and subject to certain exceptions, it
will (i) not, directly or indirectly, offer, sell or deliver shares of Common
Stock (a) in the United States or to any U.S. persons or (b) to any person whom
it believes intends to reoffer, resell or deliver the shares in the United
States or to any U.S. persons, and (ii) cause any dealer to whom it may sell
such shares at any concession to agree to observe a similar restriction.

Pursuant to the Agreement Between, sales may be made between the
International Underwriters and the U.S. Underwriters of such number of shares of
Common Stock as may be mutually agreed. The price of any shares so sold shall be
the initial public offering price, less an amount not greater than the selling
concession.

The Company has granted the International Underwriters an option
exercisable for 30 days after the date of this Prospectus to purchase up to an
aggregate of 150,000 additional shares of Common stock solely to cover
over-allotments, if any. If the International Underwriters exercise their
over-allotment option, the International Underwriters have severally agreed,
subject to certain conditions, to purchase approximately the same percentage
thereof that the number of shares to be purchased by each of them, as shown in
the foregoing table, bears to the 1,000,000 shares of Common Stock offered. The
Company has granted the U.S. Underwriters a similar option to purchase up to an
aggregate of 600,000 additional shares of Common Stock.

The Company and its directors and executive officers have agreed that,
during the period beginning from the date of this Prospectus and continuing to
and including the date 90 days after the date of the Prospectus, they will not
offer, sell, contract to sell or otherwise dispose of any securities of the
Company (other than pursuant to employee and director benefit plans existing, or
on the conversion or exchange of convertible or exchangeable securities
outstanding, on the date of this Prospectus) which are substantially similar to
the shares of Common Stock or which are convertible or exchangeable into
securities which are substantially similar to the shares of Common Stock,
without the prior written consent of the representatives except for the shares
of Common Stock offered in connection with the concurrent U.S. and international
offerings.

Each International Underwriter has also agreed that (a) it has not offered
or sold and prior to the date six months after the date of issue of the shares
of Common Stock will not offer or sell any shares of Common Stock to persons in
the United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995, (b) it
has complied, and will comply with, all applicable provisions of the Financial
Services Act of 1986 of Great Britain with respect to anything done by it in
relation to the shares of Common Stock in, from or otherwise involving the
United Kingdom, and (c) it has only issued or passed on and will only issue or
pass on in the United Kingdom any document received by it in connection with the
issuance of the shares of Common Stock to a person who is of a kind described in
Article 11(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1995 of Great Britain or is a person to whom the document may
otherwise lawfully be issued or passed on.

Buyers of shares of Common Stock offered hereby may be required to pay
stamp taxes and other charges in accordance with the laws and practice of the
country of purchase in addition to the public offering price.

Thomas B. Walker, Jr., a director of the Company, is a Limited Partner of
The Goldman Sachs Group, L.P., which is a general partner of and owns a 99%
interest in Goldman, Sachs & Co.

The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act.

48
<PAGE> 57

[INTERNATIONAL OFFERING PAGE 50]

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Company with the Commission (File No.
1-8598) pursuant to the Exchange Act are incorporated herein by reference:

1. Annual Report on Form 10-K for the year ended December 31, 1995, and

This Prospectus does not constitute an offer to sell or the solicitation of
an offer to buy the shares in any jurisdiction in which such offer or
solicitation is unlawful. There are restrictions on the offer and sale of the
shares in the United Kingdom. All applicable provisions of the Financial
Services Act 1986 and the Public Offers of Securities Regulations 1995 with
respect to anything done by any person in relation to the shares, in, from or
otherwise involving the United Kingdom must be complied with. See
"Underwriting".

In this Prospectus, reference to "dollars", "U.S.$" and "$" are to United
States dollars.

50
<PAGE> 58

[International Offering Back Cover Page]

================================================================================

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

TABLE OF CONTENTS

================================================================================

5,000,000 SHARES

LOGO

SERIES A COMMON STOCK
(PAR VALUE $1.67 PER SHARE)

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

PROSPECTUS

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

GOLDMAN SACHS INTERNATIONAL

SMITH BARNEY INC.

REPRESENTATIVES OF THE UNDERWRITERS

================================================================================
<PAGE> 59

PART II

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table indicates the expenses to be incurred in connection
with the Offerings described in this Registration Statement. All expenses are
estimated except the SEC and NASD fees.

<TABLE>
<S> <C>
SEC Registration Fee..................................................... $ 69,400
NASD Filing Fee.......................................................... 20,600
Transfer Agent and Registrar Fees........................................ 15,000
Blue Sky Fees (including counsel fees)................................... 15,000
Accountants' Services and Expenses....................................... 75,000
Legal Services and Expenses.............................................. 175,000
Printing and Engraving Fees.............................................. 100,000
Miscellaneous............................................................ 30,000
--------
Total.......................................................... $500,000
========
</TABLE>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Under Section 145 of the Delaware General Corporation Law (the "DGCL"), the
Company, as a Delaware corporation, has the power, under specified
circumstances, to indemnify its directors, officers, employees and agents in
connection with actions, suits or proceedings brought against them by a third
party or in the right of the corporation, by reason that they were or are such
directors, officers, employees or agents, against expenses and liabilities
incurred in any such action, suit or proceeding so long as they acted in good
faith and in a manner that they reasonably believed to be in, or not opposed to,
the best interests of such corporation, and with respect to any criminal action,
that they had no reasonable cause to believe their conduct was unlawful. With
respect to suits by or in the right of such corporation, however,
indemnification is generally limited to attorneys' fees and other expenses and
is not available if such person is adjudged to be liable to such corporation
unless the court determines that indemnification is appropriate. A Delaware
corporation also has the power to purchase and maintain insurance for such
persons.

Article XI of the Bylaws of the Company provides for indemnification of,
and advancement of expenses to, directors and officers to the fullest extent
permitted by the DGCL. Reference is made to the Bylaws of the Company.

Reference is also made to the indemnification provisions of the
Underwriting Agreement, the forms of which have been filed as Exhibits 1.1 and
1.2 hereto, under which the Underwriters have agreed to indemnify the Company,
its directors and officers and certain other persons against liabilities,
including liabilities under the Securities Act of 1933, with respect to
information furnished in writing to the Company for use in this Registration
Statement.

Section 102(b)(7) of the DGCL provides that a certificate of incorporation
may contain a provision eliminating or limiting the personal liability of a
director to the corporation or its shareholders for monetary damages for breach
of fiduciary duty as a director provided that such provisions may not eliminate
or limit the liability of a director (i) for any breach of the director's duty
of loyalty to the corporation or its shareholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 (relating to liability for unauthorized
acquisitions or redemptions of, or dividends on, capital stock) of the DGCL or
(iv) for any transaction from which the director derived an improper personal
benefit. Article Fifteen of the Company's Certificate of Incorporation contains
such a provision.

II-1
<PAGE> 60

The above discussion of the Company's Certificate of Incorporation, Bylaws
and of Sections 102(b)(7) and 145 of the DGCL is not intended to be exhaustive
and is qualified in its entirety by such Certificate of Incorporation, Bylaws
and statutes.

ITEM 16. EXHIBITS.

<TABLE>
<C> <S>
*1.1 -- Form of U.S. Underwriting Agreement.
*1.2 -- Form of International Underwriting Agreement.
4.1 -- Certificate of Incorporation of the Company, as amended (incorporated
by reference to Exhibits 3.1-3.7 filed with or incorporated in Company's
Annual Report on Form 10-K for the year ended December 31, 1995 (the
"1995 10-K")).
4.2 -- By-Laws of the Company, as amended (incorporated by reference to
Exhibit 3.8 filed with the 1995 10-K).
4.3 -- Specimen Form of Certificate representing shares of the Company's
Series A Common Stock (incorporated by reference to Exhibit 4.2 filed
with the 1995 10-K).
4.4 -- Specimen Form of Certificate representing shares of the Company's
Series B Common Stock (incorporated by reference to Exhibit 4.3 filed
with the 1995 10-K).
4.5 -- Amended and Restated Rights Agreement, dated as of February 28, 1996,
(incorporated by reference to Exhibit 4.4 filed with the 1995 10-K).
5.1 -- Opinion of Locke Purnell Rain Harrell (A Professional Corporation) as
to validity of the securities registered hereby.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Locke Purnell Rain Harrell (A Professional Corporation)
(set forth in its opinion filed as Exhibit 5.1).
*24.1 -- Powers of attorney.
</TABLE>

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

* Filed previously

ITEM 17. UNDERTAKINGS.

The undersigned Company hereby undertakes to provide the Representatives of
the Underwriters at the closing specified in the Underwriting Agreement
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.

The Company hereby undertakes that:

(1) For purposes of determining any liability under the Act, the
information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Company pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of Prospectus shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and

II-2
<PAGE> 61

Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding) is asserted
by any director, officer or controlling person in connection with the securities
being registered, the Company will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

II-3
<PAGE> 62

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Company has
duly caused this Amendment No. 1 to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on the 2nd day of April, 1996.

A. H. Belo Corporation,
a Delaware corporation

By: /s/ MICHAEL D. PERRY
-----------------------------
Michael D. Perry
Senior Vice President and
Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement has been signed below by the following persons
in the capacities and on April 2, 1996.

<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------- ----------------------------
<S> <C>
/s/ ROBERT W. DECHERD* Chairman of the Board,
-------------------------------------- President and Chief
Robert W. Decherd Executive Officer

/s/ WARD L. HUEY, JR.* Vice Chairman of the Board
-------------------------------------- and President, Broadcast
Ward L. Huey, Jr. Division

/s/ BURL OSBORNE* Director and President,
-------------------------------------- Publishing Division
Burl Osborne

/s/ MICHAEL D. PERRY Senior Vice President and
-------------------------------------- Chief Financial Officer
Michael D. Perry

/s/ DUNIA A. SHIVE Vice President/Finance
-------------------------------------- (Chief Accounting Officer)
Dunia A. Shive
</TABLE>

II-4
<PAGE> 63

<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------- ----------------------------
<S> <C>
/s/ JOHN W. BASSETT, JR.* Director
----------------------------------------
John W. Bassett, Jr.

/s/ JUDITH L. CRAVEN, M.D., M.P.H.* Director
----------------------------------------
Judith L. Craven, M.D., M.P.H.

/s/ ROGER A. ENRICO* Director
----------------------------------------
Roger A. Enrico

/s/ DEALEY D. HERNDON* Director
----------------------------------------
Dealey D. Herndon

/s/ LESTER A. LEVY* Director
----------------------------------------
Lester A. Levy

/s/ ARTURO MADRID, PH.D.* Director
----------------------------------------
Arturo Madrid, Ph.D.

/s/ JAMES M. MORONEY, JR.* Director
----------------------------------------
James M. Moroney, Jr.

/s/ HUGH G. ROBINSON* Director
----------------------------------------
Hugh G. Robinson

/s/ WILLIAM T. SOLOMON* Director
----------------------------------------
William T. Solomon

/s/ THOMAS B. WALKER, JR.* Director
----------------------------------------
Thomas B. Walker, Jr.

/s/ J. MCDONALD WILLIAMS* Director
----------------------------------------
J. McDonald Williams

*By: /s/ MICHAEL D. PERRY
---------------------------------
Michael D. Perry
Attorney-in-Fact
</TABLE>

II-5
<PAGE> 64

EXHIBIT INDEX

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
*1.1 -- Form of U.S. Underwriting Agreement.
*1.2 -- Form of International Underwriting Agreement.
4.1 -- Certificate of Incorporation of the Company, as amended (incorporated
by reference to Exhibits 3.1-3.7 filed with or incorporated in Company's
Annual Report on Form 10-K for the year ended December 31, 1995 (the
"1995 10-K")).
4.2 -- By-Laws of the Company, as amended (incorporated by reference to
Exhibit 3.8 filed with the 1995 10-K).
4.3 -- Specimen Form of Certificate representing shares of the Company's
Series A Common Stock (incorporated by reference to Exhibit 4.2 filed
with the 1995 10-K).
4.4 -- Specimen Form of Certificate representing shares of the Company's
Series B Common Stock (incorporated by reference to Exhibit 4.3 filed
with the 1995 10-K).
4.5 -- Amended and Restated Rights Agreement, dated as of February 28, 1996,
(incorporated by reference to Exhibit 4.4 filed with the 1995 10-K).
5.1 -- Opinion of Locke Purnell Rain Harrell (A Professional Corporation) as
to validity of the securities registered hereby.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Locke Purnell Rain Harrell (A Professional Corporation)
(set forth in its opinion filed as Exhibit 5.1).
*24.1 -- Powers of attorney.
</TABLE>

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

* Filed previously.

<PAGE> 1
EXHIBIT 5.1

LOCKE PURNELL RAIN HARRELL [LETTERHEAD]

April 1, 1996

A.H. Belo Corporation
400 South Record Street
Dallas, TX 75202

Re: Registration Statement on Form S-3

Ladies and Gentlemen:

We have acted as counsel for A.H. Belo Corporation, a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), of an aggregate of 5,750,000
shares of the Company's Series A Common Stock, par value $1.67 per share, and a
like number of related Preferred Share Purchase Rights (collectively, the
"Securities"). We have examined such documents and questions of law as we have
deemed necessary or advisable for purposes of this opinion.

Based upon the foregoing, we are of the opinion that the Securities,
when issued and sold as described in the Registration Statement, as the same
may be amended (the "Registration Statement"), will be validly issued, fully
paid and nonassessable.

The opinion expressed above is limited in all respects to the General
Corporation Law of the State of Delaware and applicable federal laws of the
United States of America, each as presently in effect.

We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm in the prospectus
contained in the Registration Statement under the caption "Legal Matters." In
giving this consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Securities and Exchange Commission promulgated thereunder.

Sincerely,

LOCKE PURNELL RAIN HARRELL
(A Professional Corporation)

By: /s/ GUY KERR
---------------------------------

<PAGE> 1
EXHIBIT 23.1

Consent of Independent Auditors

We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3 No. 333-01291) and
related Prospectus of A.H. Belo Corporation for the registration of 5,750,000
shares of its Series A Common Stock and to the incorporation by reference
therein of our report dated January 24, 1996 with respect to the consolidated
financial statements of A.H. Belo Corporation included in its Annual Report
(Form 10-K) for the year ended December 31, 1995, filed with the Securities and
Exchange Commission.

/s/ ERNST & YOUNG LLP

Dallas, Texas
April 1, 1996