<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 16, 1999
REGISTRATION NO. 333-69701
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
PULITZER PUBLISHING COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 43-0496290
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
900 NORTH TUCKER BOULEVARD
ST. LOUIS, MISSOURI 63101
(314) 340-8000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
RONALD H. RIDGWAY
PULITZER PUBLISHING COMPANY
900 NORTH TUCKER BOULEVARD
ST. LOUIS, MISSOURI 63101
(314) 340-8000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES OF ALL COMMUNICATIONS, INCLUDING ALL COMMUNICATIONS SENT TO
THE AGENT FOR SERVICE, SHOULD BE SENT TO:
RICHARD A. PALMER, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
666 FIFTH AVENUE
NEW YORK, NEW YORK 10103
(212) 318-3000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plan, please check the following
box: [ ]
If any of the securities being registered on this form are to be 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. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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 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. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SHARES TO BE AMOUNT TO BE AGGREGATE AGGREGATE AMOUNT OF
REGISTERED REGISTERED PRICE PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, $.01 par value
per share.................. 1,665,545 $79.13 $131,794,575.90 $36,638.89
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee. Such
estimates have been calculated in accordance with Rule 457(c) under the
Securities Act of 1933, as amended, and are based upon the average of the
high and low prices per share of the registrant's Common Stock on the New
York Stock Exchange, Inc. on December 18, 1998.
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.
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<PAGE> 2
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. THE SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE
REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
EFFECTIVE. THIS PRELIMINARY PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES
AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE
OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION. DATED FEBRUARY 16, 1999.
1,000,000 Shares
PULITZER PUBLISHING COMPANY
Common Stock
----------------------
All of the shares of Common Stock in the offering are being sold by the
selling stockholders identified in this prospectus. The Company will not receive
any of the proceeds from the sale of the shares.
The Common Stock is listed on the New York Stock Exchange under the symbol
"PTZ." The last reported sale price of the Common Stock on February 11, 1999 was
$83.50 per share.
----------------------
Prospective investors should see "Risk Factors," which begin on page 7 of
this prospectus, for certain information that should be considered before
investing in the Common Stock.
----------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY
OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------------
<TABLE>
<CAPTION>
Per Share Total
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<S> <C> <C>
Initial public offering price........................ $ $
Underwriting discount................................ $ $
Proceeds, before expenses, to the selling
stockholders....................................... $ $
</TABLE>
The underwriter may, under certain circumstances, purchase up to an
additional 126,000 shares from the selling stockholders at the initial public
offering price less the underwriting discount.
----------------------
The underwriter expects to deliver the shares against payment in New York,
New York on , 1999.
GOLDMAN, SACHS & CO.
----------------------
Prospectus dated , 1999.
<PAGE> 3
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may inspect and
copy any document we file at the SEC's public reference facilities in
Washington, D.C., New York, New York, or Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public from the SEC's web site on the Internet
at http://www.sec.gov. This web site contains reports, proxy and information
statements and other information regarding the Company and other registrants
that file electronically with the SEC.
The SEC allows us to "incorporate by reference" the information contained
in documents we file with the SEC (File No. 1-9329), which means that we can
disclose important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
prospectus, and later information that we file with the SEC will automatically
update and supersede this information. We incorporate by reference the documents
listed below and any future filings made with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, until the
selling stockholders sell all the shares:
1. Our Annual Report on Form 10-K for the year ended December 31, 1997 (except
that Items 7 and 8 and Schedule II of this Annual Report are not incorporated
by reference as they are superseded by the information set forth in our
Current Report on Form 8-K filed on January 22, 1999, which is incorporated
by reference);
2. Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998, as amended by Form 10-Q/A (except that
Items 1 and 2 and Exhibit 27 of these Quarterly Reports are not incorporated
by reference as they are superseded by the information set forth in our
Current Report on Form 8-K filed on January 22, 1999, which is incorporated
by reference);
3. Our Current Reports on Form 8-K filed on June 11, 1998, September 4, 1998,
December 16, 1998 and January 22, 1999;
4. Our Joint Proxy Statement/Prospectus with Hearst-Argyle, dated February 11,
1999;
5. The description of our capital stock contained in our Registration Statement
on Form 8-A filed on November 17, 1986;
6. Hearst-Argyle's Annual Report on Form 10-K for the year ended December 31,
1997, as amended by the Form 10-K/A filed on December 16, 1998, the Form
10-K/A filed on January 15, 1999 and the Form 10-K/A filed on February 11,
1999;
7. Hearst-Argyle's Quarterly Report on Form 10-Q for the quarter ended March 31,
1998, as amended by the Form 10-Q/A filed on December 10, 1998 and the Form
10-Q/A filed on February 11, 1999; Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998, as amended by the Form 10-Q/A filed on December
10, 1998 and the Form 10-Q/A filed on February 11, 1999; and Quarterly Report
on Form 10-Q for the quarter ended September 30, 1998, as amended by the Form
10-Q/A filed on February 11, 1999;
8. Hearst-Argyle's Current Reports on Form 8-K filed on January 13, 1998, March
31, 1998, and May 27, 1998; Current Report on Form 8-K filed on September 17,
1998, as amended by the Form 8-K/A filed on December 7, 1998; Current Report
on Form 8-K filed on September 29, 1998, as amended by the Form 8-K/A filed
on December 16, 1998; and Current Report on Form 8-K filed on December 16,
1998, as amended by the Form 8-K/A filed on January 26, 1999 and Form 8-K/A
filed on February 10, 1999;
9. The description of Hearst-Argyle Series A Common Stock contained in
Hearst-Argyle's Registration Statement on Form 8-A/A filed on July 14, 1998;
10. Argyle Television, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1996; and
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11. Argyle Television, Inc.'s Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997 and June 30, 1997.
You may request a copy of our filings, at no cost, by writing or
telephoning our Secretary at the following address:
Pulitzer Publishing Company
900 North Tucker Boulevard
St. Louis, Missouri 63101
(314) 340-8000
You may request a copy of Hearst-Argyle's filings, at no cost, by writing
or telephoning the Secretary of Hearst-Argyle at the following address:
Hearst-Argyle Television, Inc.
888 Seventh Avenue
New York, New York 10106
(212) 887-6800
This Prospectus is part of a registration statement we filed with the SEC
(Registration No. 333-69701). You should rely only on the information
incorporated by reference or provided in this prospectus or any supplement. We
have not authorized anyone else to provide you with different information. The
selling stockholders will not make an offer of these shares in any state where
the offer is not permitted. You should not assume that the information in this
prospectus or any supplement is accurate as of any date other than the date on
the front of those documents.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This prospectus contains certain forward-looking statements that are
subject to risks and uncertainties. You can find many of these forward-looking
statements by looking for words such as "believes," "expects," "anticipates" or
similar expressions. For all forward-looking statements, we claim the protection
of the safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995. You should understand that, in
addition to factors discussed elsewhere in this prospectus and in the documents
that are incorporated by reference, the following important factors could affect
our future results and/or those of Hearst-Argyle and New Pulitzer and could
cause those results to differ materially from those expressed in each
forward-looking statement:
- Material adverse changes in economic conditions in the relevant markets;
- The failure to occur of, or significant delay in, the expected closing of
the proposed merger;
- Future regulatory actions and conditions concerning broadcast radio and
television stations or their operating areas;
- The possibility that currently unanticipated difficulties may arise in
integrating the operations of two major businesses; and
- Competition in the respective broadcast television and newspaper markets.
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PROSPECTUS SUMMARY
This summary highlights selected information from this prospectus and may
not contain all of the information that is important to you. You should
carefully read this document to understand the terms of our securities. You
should also read the documents we have referred you to in the section entitled
"Where You Can Find More Information" on page 2 for information on our company
and our financial statements and on Hearst-Argyle and its financial statements.
INVESTMENT IN PULITZER PUBLISHING COMPANY'S COMMON STOCK
The selling stockholders are selling shares of our common stock. However,
you should be aware that we and Pulitzer Inc., a subsidiary of ours, entered
into an amended and restated merger agreement with Hearst-Argyle Television,
Inc. dated as of May 25, 1998. This merger agreement provides that Hearst-Argyle
will acquire our television and radio broadcasting operations. Hearst-Argyle
will accomplish this acquisition by merging us into Hearst-Argyle. Our newspaper
publishing and related new media businesses will continue as Pulitzer Inc.,
which we refer to in this document as "New Pulitzer."
Prior to the merger, we will transfer to New Pulitzer all of our assets,
other than our broadcasting assets, and then distribute the shares of New
Pulitzer to our stockholders in a tax-free "spin-off" on a share-for-share
basis. As part of the spin-off, we will also transfer the net proceeds of $700
million in new financing, and New Pulitzer will assume certain liabilities
unrelated to the broadcasting assets. After the spin-off, we will have only our
broadcasting assets and the indebtedness under the $700 million new financing
and will merge into Hearst-Argyle. As a result of the merger, Hearst-Argyle will
assume the indebtedness under the new financing.
In the merger, Hearst-Argyle has agreed to issue to our stockholders
37,096,774 shares of Hearst-Argyle Series A common stock in exchange for our
stockholders' shares of our stock. We refer to the Hearst-Argyle Series A common
stock as the "Hearst-Argyle stock."
We refer to the merger and spin-off as the "Transactions." We expect to
hold our special stockholders' meeting in connection with the merger on March
17, 1999. We also expect the closing of the Transactions to occur shortly after
the meeting. The special stockholders' meeting and the closing are subject to
certain conditions and rights which are further described in this prospectus.
You should consider the risks described in the section entitled "Risk
Factors" which begins on page 7 in determining whether to invest in our common
stock. In particular, you should consider that if and when the Transactions are
completed, each holder of our common stock will receive, first, common stock of
New Pulitzer in connection with the spin-off and, second, Hearst-Argyle stock in
connection with the merger. However, we cannot assure that the Transactions will
be completed. When considering an investment in our common stock, you are
advised to evaluate Hearst-Argyle, New Pulitzer and us, as if the Transactions
will occur, as well as if the Transactions will not occur.
THE COMPANY
We are engaged primarily in newspaper publishing and television and radio
broadcasting. We operate and publish two major metropolitan daily newspapers:
the St. Louis Post-Dispatch, the only major daily newspaper serving the St.
Louis metropolitan area; and The Arizona Daily Star, serving the Tucson
metropolitan area. In addition, our Pulitzer Community Newspaper group operates
and publishes 12 dailies which serve smaller markets, primarily in the West and
Midwest. Our television and radio broadcasting operations consist of nine
network-affiliated television stations and five radio stations.
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Publishing
Both major metropolitan daily newspapers have weekly total market coverage
sections to provide advertisers with market saturation. In addition, both
newspapers also offer an electronic news, information and communication web site
on the Internet. We provide full access on a subscription basis to these
"electronic publication" web sites, as well as full Internet access.
Our 12 daily community newspapers have a combined average daily circulation
of approximately 162,000. The smaller markets served by these newspapers and
their locations provide us with further diversification and participation in
several higher growth areas of the United States.
We derive our publishing revenues primarily from advertising and
circulation. Advertising and circulation have averaged approximately 87% of
total publishing revenue over the last five years. We continue to seek ways to
leverage our newspaper assets, such as electronic publishing, voice services
delivered by phone, electronic dissemination of information via the world wide
web/Internet and alternative newspaper delivery systems to provide advertisers
with either targeted or total market coverage.
New Pulitzer will retain and continue to operate our newspaper publishing
and related new media businesses.
Broadcasting
We currently own and operate eight network-affiliated VHF television
stations, one network-affiliated UHF television station, two satellite network
television stations rebroadcasting KOAT, four AM radio stations and one FM radio
station. We have diversified our revenues by purchasing properties in different
geographic regions of the United States in an effort to insulate ourselves from
regional economic downturns.
Historically, advertising during local news programs has accounted for a
significant portion of each station's total revenues, with percentages
approaching 50% at some stations. We believe that our stations are particularly
strong in local news programming.
We intend to sell this broadcasting business to Hearst-Argyle.
General
The Pulitzer Publishing Company was founded by the first Joseph Pulitzer in
1878 to publish the original St. Louis Post-Dispatch and has operated
continuously since that time under the direction of the Pulitzer family. We were
reorganized as a Delaware corporation in October 1986. Michael E. Pulitzer, a
grandson of the founder, currently serves as our Chairman of the Board,
President and Chief Executive Officer.
On December 18, 1998, New Pulitzer entered into an employment agreement
with Robert C. Woodworth pursuant to which Mr. Woodworth will serve as President
and Chief Executive Officer of New Pulitzer for an initial term of three years,
beginning January 1, 1999. Mr. Woodworth has over 25 years of newspaper
publishing experience, having served with Capital Cities, Capital Cities/ABC
and, most recently, Knight-Ridder, Inc. in various senior management capacities.
In the event the Transactions do not occur, we will assume all provisions of the
employment agreement with Mr. Woodworth, including the provisions relating to
his position, rights and entitlements.
Our principal executive offices are located at 900 North Tucker Boulevard,
St. Louis, Missouri 63101, and our telephone number is (314) 340-8000.
5
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HEARST-ARGYLE
Hearst-Argyle owns or manages 17 television stations reaching approximately
12.0% of U.S. television households. Hearst-Argyle is the largest "pure-play"
(owning television stations only) publicly-owned television broadcast company in
the U.S. and is the fourth-largest, non-network-owned television group. Formed
as a Delaware corporation in 1994 under the name Argyle Television, Inc.,
Hearst-Argyle is the successor to the combined operations of Argyle Television,
Inc. and the television broadcast group of The Hearst Corporation. Hearst-Argyle
currently owns 13 television stations, programs one other television station
under a time brokerage agreement, and manages three additional television
stations and two radio stations that are owned or operated by The Hearst
Corporation. Hearst-Argyle has an option to acquire one of the managed
television stations and The Hearst Corporation's interests in another of the
managed television stations. Hearst-Argyle also has a right of first refusal
with respect to the third managed television station.
Effective June 1, 1998, Hearst-Argyle completed a tax-deferred exchange
with STC Broadcasting, Inc. and certain related entities whereby Hearst-Argyle
exchanged its television stations WNAC-TV, Providence, Rhode Island, and
WDTN-TV, Dayton, Ohio, for television stations KSBW-TV, Monterey-Salinas,
California, and WPTZ-TV/WNNE-TV, Burlington, Vermont/Plattsburgh, New York. The
order of the FCC approving the combination of Argyle Television, Inc. and the
television group of The Hearst Corporation required divestiture of WNAC and
WDTN.
On January 5, 1999 and effective January 1, 1999 for accounting purposes,
Hearst-Argyle acquired through a merger transaction all of the partnership
interests in Kelly Broadcasting Co. for approximately $520 million in cash,
subject to a working capital adjustment. We refer to this transaction as the
Kelly Transaction. As a result of the Kelly Transaction, Hearst-Argyle acquired
television broadcast station KCRA-TV, Sacramento, California, and the
programming rights under an existing Time Brokerage Agreement with Channel 58,
Inc. with respect to television broadcast station KQCA-TV, Sacramento,
California. In addition, Hearst-Argyle acquired substantially all of the assets
and certain of the liabilities of Kelleproductions, Inc. for approximately $10
million in cash.
In late December 1998 and early January 1999, Hearst-Argyle issued $450
million aggregate principal amount of senior notes to institutional investors.
The notes have a maturity of 12 years, with an average life of ten years, and
bear interest at 7.18% per annum.
The Hearst-Argyle stock is listed on the New York Stock Exchange under the
symbol "HTV." The reports filed by Hearst-Argyle with the SEC contain additional
information regarding Hearst-Argyle.
Hearst-Argyle is organized under the laws of the State of Delaware, its
principal executive offices are located at 888 Seventh Avenue, New York, New
York 10106 and its telephone number is (212) 887-6800.
6
<PAGE> 8
RISK FACTORS
An investment in our common stock involves a high degree of risk. You
should consider carefully the following risk factors, as well as the other
information set forth in this prospectus.
RISK FACTORS ASSOCIATED WITH THE SPIN-OFF AND THE MERGER
Consummation of the Transactions is Subject to Many Factors. One of the
most significant risks in purchasing our shares in this offering is that the
Transactions may not be completed. The completion of the Transactions is subject
to many factors, including the following:
- Our ability to obtain new financing in the amount of $700 million, the
net proceeds of which will be transferred to New Pulitzer in the
spin-off;
- Consents of various third parties; and
- Approval by the holders of our common stock, voting separately as a
class, of an amendment to our Restated Certificate of Incorporation. This
amendment is required in connection with the spin-off to permit us to
distribute shares of New Pulitzer for shares of our stock pursuant to the
merger agreement.
Because of these and other factors, we cannot assure if or when the
spin-off or the merger will be completed. If the Transactions are not completed,
purchasers of the shares will not receive shares of New Pulitzer or
Hearst-Argyle and will continue to own our shares. On February 26, 1998, the
last business day before we announced our intention to explore strategic
alternatives relating to our broadcasting division, the price of our shares
closed at $67.63 per share. Since that time, the price of our shares has closed
as low as $64.94 and as high as $90.00.
Federal Income Tax Risks Relating to the Spin-Off. We have received a
ruling from the IRS that the spin-off will qualify as a reorganization and
tax-free distribution to our stockholders under the Internal Revenue Code of
1986. A ruling from the IRS, while generally binding on the IRS, may under
certain circumstances be revoked or modified by the IRS retroactively. However,
we are not currently aware of any facts or circumstances that would cause the
IRS to revoke or modify its ruling. If the spin-off did not qualify as a
reorganization and tax-free distribution to our stockholders under the Code:
- The fair market value of the New Pulitzer stock received by each of our
stockholders in the spin-off would be taxable to such stockholder as a
dividend to the extent of such stockholder's pro rata share of our
current and accumulated earnings and profits; and
- The fair market remaining value, if any, of the New Pulitzer stock
received in the spin-off by each of our stockholders would be treated
first as a recovery of the adjusted tax basis of our stock owned by such
stockholder and then as taxable capital gain.
In the spin-off, we will recognize taxable gain in an amount equal to the
excess, if any, of the fair market value of the New Pulitzer stock distributed
to our stockholders over the adjusted tax basis of such New Pulitzer stock in
our hands immediately prior to the distribution. There is no assurance that the
IRS will agree with our determination of the fair market value of the New
Pulitzer stock or the resulting tax. Under the merger agreement, New Pulitzer
will be liable and will indemnify Hearst-Argyle and its subsidiaries for certain
of our unpaid tax liabilities resulting from the spin-off.
Federal Income Tax Risks Relating to the Merger. Our counsel has issued its
legal opinion that the merger will qualify as a reorganization that is tax-free
to our stockholders, except to the extent of any cash received by our
stockholders in lieu of fractional shares of Hearst-Argyle stock. However,
opinions of counsel are not binding on the IRS or the courts, and we cannot
assure that
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the IRS will agree with the conclusions set forth in our counsel's opinion. If
the merger did not qualify as a tax-free reorganization:
- Each of our stockholders would recognize gain or loss equal to the
difference between:
(a) the fair market value of the Hearst-Argyle stock received by such
stockholder plus any cash received by such stockholder in lieu of a
fractional share of Hearst-Argyle stock; and
(b) the adjusted tax basis of our stock held by such stockholder
immediately before the merger.
- We would recognize taxable gain in an amount equal to the excess of:
(a) the sum of (1) the aggregate fair market value of the Hearst-Argyle
stock received by our stockholders, (2) the amount of cash received
by our stockholders in lieu of fractional shares of Hearst-Argyle
stock and (3) the amount of our liabilities assumed by Hearst-Argyle
in the merger, over
(b) the aggregate adjusted tax basis of our assets.
Under the merger agreement, we will be liable and will indemnify
Hearst-Argyle and its subsidiaries against our tax liabilities attributable to
any tax period (or portion of such tax period) prior to completion of the
merger, except for any of our tax liability that results from the merger not
qualifying as a reorganization under the Code due to actions or inactions of
Hearst-Argyle after completion of the merger, or due primarily to
Hearst-Argyle's breach of certain covenants concerning the representations which
it has made in connection with the private letter ruling request which we filed
with the IRS. In addition, if the merger did not qualify as a reorganization,
the spin-off would probably not qualify as a tax-free distribution to our
stockholders.
WE URGE EACH PROSPECTIVE INVESTOR TO CONSULT WITH HIS, HER OR ITS TAX
ADVISOR REGARDING THE PARTICULAR TAX CONSEQUENCES OF THE TRANSACTIONS.
RISK FACTORS RELATED TO THE HEARST-ARGYLE STOCK
Reliance on Network Affiliation Agreements; Television Programming. The
success of each of the television stations owned by Hearst-Argyle depends upon,
among other things, network programming obtained through network affiliation
agreements. There is no assurance that the programming will achieve or maintain
satisfactory viewership levels in the future. In addition, although
Hearst-Argyle expects to be able to renew the network affiliation agreements,
there is no assurance that the renewals will be obtained on as favorable terms
or at all. The termination, non-renewal or renewal at less favorable terms of
the affiliation agreements could have an adverse effect on the operations of
Hearst-Argyle.
Television programming is one of Hearst-Argyle's most significant operating
cost components. There is no assurance that Hearst-Argyle will not be exposed in
the future to increased television programming costs. Should an increase occur,
it could have an adverse effect on Hearst-Argyle's results from operations. In
addition, television networks recently have been seeking to have their
affiliates share programming costs and to change the structure of network
compensation. Hearst-Argyle cannot predict the nature or scope of any such
cost-sharing and compensation changes or the effect, if any, on Hearst-Argyle's
operations.
Dependence on Advertising; Effect of Economic Conditions. Hearst-Argyle
relies to a significant extent upon sales of advertising for its revenues. On a
pro forma basis giving effect to Argyle Television, Inc.'s merger transaction
with the television broadcast group of The Hearst Corporation, advertising
revenue accounted for 92.3% of Hearst-Argyle's total revenues for the year ended
December 31, 1997. For the nine months ended September 30, 1998, advertising
revenue accounted for 93.3% of the total revenues of Hearst-Argyle. The
Hearst-Argyle stations are located in highly-competitive markets and compete for
advertising revenues with other television stations, as well as other media, in
their respective markets. There is no assurance that Hearst-Argyle will be able
to
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continue to compete successfully for such advertising revenues, upon which
Hearst-Argyle's results of operations are and will continue to be dependent.
In addition, Hearst-Argyle's ability to generate advertising revenues is
and will continue to be heavily dependent on the relative popularity of its
programming and cyclical changes in the national economy and regional economic
conditions in each of the markets in which its stations operate. Hearst-Argyle's
revenues could therefore be adversely affected by a future local, regional or
national recessionary environment. In addition, advertising revenues in
even-numbered years benefit from advertising placed by candidates for political
offices. Proposals have been advanced in the U.S. Congress to require television
broadcast stations to provide advertising time to political candidates at no
charge, which would eliminate in whole or in part advertising revenues from
political candidates.
Control by Majority Stockholder; Conflicts of Interest. Currently, Hearst
Broadcasting, Inc., a subsidiary of The Hearst Corporation, elects nine of the
11 directors of Hearst-Argyle and owns approximately 87.1% of the outstanding
common stock of Hearst-Argyle. As a result, The Hearst Corporation is able to
control substantially all actions to be taken by Hearst-Argyle stockholders and
is able to maintain control over the operations and business of Hearst-Argyle.
This control, as well as certain other factors, may make Hearst-Argyle a less
attractive target for a takeover than it otherwise might be, or render more
difficult or discourage transactions involving an actual or potential change of
control of Hearst-Argyle. In addition, the interests of The Hearst Corporation,
which owns or has significant investments in other businesses, including cable
television networks, newspapers, magazines and electronic media, may from time
to time be competitive with, or otherwise diverge from, the interests of
Hearst-Argyle, particularly with respect to new business opportunities and
future acquisitions.
In addition, under current law and existing contractual arrangements,
Hearst-Argyle is not allowed, without The Hearst Corporation's consent, to
acquire television broadcast stations in New York, Michigan, Texas, California,
Washington and Missouri. As a result, Hearst-Argyle's ability to make
acquisitions is restricted. Even with the consent of The Hearst Corporation,
such acquisitions would be permitted to occur only if The Hearst Corporation
were to agree to sell its newspapers in the corresponding markets. Additionally,
The Hearst Corporation is not precluded from purchasing television stations,
newspapers or other assets in other markets, the ownership of which assets by
The Hearst Corporation could preclude, under FCC rules, Hearst-Argyle from
owning television stations in such markets in the future.
The Hearst Corporation and Hearst-Argyle are parties to a series of
agreements where the interests of the two parties could conflict. Hearst-Argyle
believes that the terms of these agreements are reasonable to both parties.
There is no assurance, however, that more favorable terms would not be available
from third parties.
Television Industry Competition and Technology. The television broadcast
industry is highly competitive. Some of the stations that compete with
Hearst-Argyle's stations are owned and operated by large national or regional
companies that may have greater resources, including financial resources, than
Hearst-Argyle. There is no assurance that any one of Hearst-Argyle's stations
will compete successfully and maintain or increase its current audience share or
revenue share. The following are some of the factors that have fractionalized
television viewing audiences and/or affect the industry generally:
- Technological innovation and the resulting proliferation of programming
alternatives such as cable, direct satellite-to-home services,
pay-per-view and home video and entertainment systems;
- The aggregate viewership of the major television networks has declined
over the past decade;
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<PAGE> 11
- Increased demand for programming and rising production costs which may
increase programming costs or make it more difficult to acquire
programming;
- The formation and success of new television networks such as UPN and the
WB Network; and
- The FCC's adoption of rules for implementing digital television,
otherwise known as DTV, service in the United States and implementation
of DTV, which may provide a competitive advantage to, and is expected to
impose significant additional costs on, stations implementing DTV.
Regulatory Matters. Generally, Hearst-Argyle depends upon its continuing
ability to maintain broadcasting licenses from the FCC. While broadcasting
licenses are typically renewed by the FCC, there is no assurance that the FCC
will renew the licenses for Hearst-Argyle's stations or that, if renewed, the
renewal terms will be for the customary eight-year periods. The non-renewal or
revocation of one or more of the FCC licenses held by Hearst-Argyle could have a
material adverse effect on the operations of Hearst-Argyle.
The FCC restricts the common ownership or control of certain media
interests in the same market, including television and radio broadcast stations.
In addition, no person is permitted to hold an interest in television stations
collectively reaching more than 35% of all U.S. television households, subject
to a 50% discount for UHF television stations. As a result of prohibitions by
the FCC's "television duopoly" and "one-to-a-market" rules on certain
combinations created as a result of the merger, we and Hearst-Argyle received,
on November 24, 1998, the consent of the FCC for the transfer of control of our
television stations to Hearst-Argyle. We and Hearst-Argyle also received the
following waivers of the FCC's rules:
- temporary, six-month waiver of the television duopoly rule to permit the
common ownership of WBAL-TV, Baltimore, Maryland, and WGAL(TV),
Lancaster, Pennsylvania, for a brief period of time following the
completion of the merger;
- conditional waiver of the television duopoly rule to permit the common
ownership of WWWB(TV), Lakeland, Florida, and WESH(TV), Daytona Beach,
Florida;
- conditional waiver of the television duopoly rule to permit the common
ownership of WLWT(TV), Cincinnati, Ohio, and WLKY-TV, Louisville,
Kentucky;
- continued permanent waiver of the television duopoly rule to permit the
common ownership of KCCI(TV), Des Moines, Iowa, and KETV(TV), Omaha,
Nebraska;
- continued waiver of the one-to-a-market rule to permit the common
ownership of WXII-TV, Winston-Salem, North Carolina, and WXII(AM),
Kernersville, North Carolina; and
- continued waiver of the one-to-a-market rule to permit the common
ownership of WLKY-TV, Louisville, Kentucky, and WLKY(AM), Louisville,
Kentucky.
The FCC requires that licensees subject to conditional waivers of the
duopoly rule comply with the rule, if it is not changed to allow permanent
common ownership of stations (as the FCC is currently considering).
Petition to Deny Transfer Applications. On July 20, 1998, WLOS Licensee,
Inc., licensee of WLOS(TV), Asheville, North Carolina, filed with the FCC a
petition to deny the FCC transfer application with respect to WYFF(TV). WLOS
claimed that we lacked the requisite qualifications to be an FCC licensee.
Pulitzer Broadcasting Company, a subsidiary of ours, filed an opposition to
WLOS's petition, and WLOS submitted a reply to the Pulitzer Broadcasting
opposition. In granting the transfer application with respect to WYFF(TV), the
FCC considered the merits of the WLOS petition and denied it. While WLOS had
until December 28, 1998 to ask the FCC to reconsider its grant of the transfer
application, WLOS filed no such request.
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<PAGE> 12
Acquisition of KCRA-TV. On August 28, 1998, Hearst-Argyle filed an
application seeking the consent of the FCC to the Kelly Transaction involving
KCRA-TV and KSBW(TV). Currently, the two stations have overlapping contours,
which is prohibited by the FCC's duopoly rule. However, the FCC is considering
changes to this rule in an ongoing rulemaking proceeding. The FCC has adopted a
policy of granting waivers conditioned on the outcome of the rulemaking
proceeding in certain situations in which the stations are located in separate
television markets and have no Grade A signal contour overlap. The FCC has
granted Hearst-Argyle's application seeking the modification of the facilities
of KSBW(TV) in a manner that would eliminate the Grade A contour overlap between
the two stations. On December 11, 1998, the FCC granted its consent to the Kelly
Transaction. Because of the signal contour overlap between KCRA and
Hearst-Argyle's KSBW (TV), the FCC's grant was conditioned on (i) Hearst-Argyle
completing the modification of the KSBW facilities that will eliminate the Grade
A signal contour overlap between the stations within nine months of the
consummation of the Kelly Transaction; and (ii) the outcome of the pending FCC
rulemaking considering changes to the duopoly rule that would, if adopted, allow
the common ownership of certain stations, including KCRA and the modified KSBW,
with overlapping Grade B signal contours. As noted above, the FCC requires that
licensees subject to duopoly waivers conditioned on the outcome of the pending
rulemaking proceeding come into compliance with the duopoly rule if the rule is
not changed to allow permanent common ownership of the stations.
Risks Associated with Integration of the Combined Operations and Possible
Expansion. As a result of the merger, the Kelly Transaction and other recent
transactions, Hearst-Argyle has expanded and will expand significantly into both
new and familiar markets. As part of its business strategy, Hearst-Argyle
intends to expand further through the acquisition of additional television
stations or television station groups. As a result, Hearst-Argyle's management
is and probably will be managing a substantially larger number of television
stations than it has historically. There is no assurance that Hearst-Argyle will
implement and manage effectively the organizational and operational systems
necessary for optimal management and integration of its newly acquired or future
television stations. As a result, the merger and any future acquisitions may
have an adverse effect on Hearst-Argyle's financial position and results of
operations. In addition, such acquisition opportunities may become limited due
to industry consolidation, competition for acquisition targets and FCC rules.
There is no assurance that future acquisitions will be available on attractive
terms, if at all.
Shares Eligible for Future Sale; Dilution; Share Repurchase Program. After
the completion of the merger, our stockholders will own shares of Hearst-Argyle
stock. All of the shares of Hearst-Argyle stock generally will be freely
tradeable without restriction or further registration under the Securities Act.
However, affiliates of Hearst-Argyle (as defined by the SEC) may generally sell
their shares only subject to certain restrictions as to timing, manner, volume,
notice and the availability of current public information regarding
Hearst-Argyle.
No prediction is made as to the effect, if any, that sales of shares of
Hearst-Argyle Series A common stock, or the availability of shares for future
sale, will have on the market price of the stock prevailing from time to time
following the merger. Sales of substantial amounts of stock in the public
market, or the perception that sales could occur, could depress the prevailing
market price for the stock. Sales may also make it more difficult for
Hearst-Argyle to sell equity securities or equity-related securities in the
future at a time and price that it deems appropriate.
As part of its share repurchase program, Hearst-Argyle may repurchase up to
$300 million of Hearst-Argyle stock from time to time. As of February 9, 1999,
Hearst-Argyle had repurchased 1,835,727 shares for an aggregate consideration of
$54.0 million. In addition, Hearst Broadcasting has notified Hearst-Argyle of
its intention to purchase up to 10 million shares of Hearst-Argyle stock from
time to time. As of February 9, 1999 and subsequent to the public announcement
of the Merger, Hearst Broadcasting had purchased 4,132,698 shares for an
aggregate consideration of $124.5 million. These repurchases and purchases may
affect the market price of the Hearst-Argyle stock.
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<PAGE> 13
Dividend Policy; Limitation on Dividends. Since its inception,
Hearst-Argyle has not paid any dividends on the Hearst-Argyle stock and does not
anticipate that it will pay any dividends on the stock in the foreseeable
future. Hearst-Argyle's senior credit facility limits the ability of Hearst-
Argyle to pay dividends on the stock under certain conditions.
Impact on Net Income. Both the merger and the Kelly Transaction will result
in a decline in pro forma net income of Hearst-Argyle. This decline is
attributable to the increase in depreciation and amortization resulting from the
write-up of the assets of the properties acquired in the merger and the Kelly
Transaction.
Uncertainty as to the Market Price of Hearst-Argyle Stock Issued in
Merger. In the merger, our stockholders will receive 37,096,774 shares of
Hearst-Argyle stock, regardless of the market price of Hearst-Argyle stock at
the time of the merger. Because of this and because the market price of
Hearst-Argyle stock is subject to fluctuation, the actual aggregate market value
of the Hearst-Argyle stock to be received by our stockholders in the merger is
also subject to fluctuation. The market price of Hearst-Argyle stock may be
influenced by many factors, including those disclosed elsewhere in this
prospectus.
RISK FACTORS RELATED TO THE NEW PULITZER STOCK
New Pulitzer Lacks an Operating History as a Stand-Alone Newspaper
Company. New Pulitzer was formed in May 1998 for purposes of effecting the
Transactions and does not have any operating history. Although we have a
substantial operating history with respect to the newspaper publishing and
related new media businesses to be contributed to New Pulitzer, we cannot assure
that New Pulitzer will be able to continue or improve such operating history.
New Pulitzer May Not Be Able to Compete Effectively. New Pulitzer will face
significant competition for readership and advertising revenues from other
newspapers and other publications, as well as with other news and advertising
media. Many of these competitors may be larger and have greater financial
resources than will New Pulitzer. We cannot assure that New Pulitzer will be
able to compete effectively in its markets.
New Pulitzer's Financial Condition Depends on Local Economies. New
Pulitzer's advertising revenues and, to a lesser extent, circulation revenues
will depend on a variety of factors specific to the communities that our
newspapers serve. These factors include the size and demographic characteristics
of the local population, local economic conditions in general, and the related
retail segments in particular. If the local economy or prevailing retail
environment of the communities that New Pulitzer's newspapers will serve were to
be adversely affected, New Pulitzer's financial condition or results of
operations may be adversely affected.
New Pulitzer Relies Heavily on the St. Louis Post-Dispatch and The Arizona
Daily Star. Both the Post-Dispatch and the Star have historically generated a
significant portion of our newspaper revenue, advertising revenue and operating
cash flow. New Pulitzer expects that both of these newspapers will continue to
have a similar impact for the foreseeable future. A significant decline in the
performance of the Post-Dispatch or the Star or in general advertising spending
could have a material adverse effect on New Pulitzer's business, financial
condition and results of operations.
New Pulitzer's Quarterly Results May Vary. New Pulitzer expects that
seasonal fluctuations will affect its results of operations from period to
period. You should not expect results of operations in any period to be
indicative of the results to be expected for any future periods.
New Pulitzer's Acquisition Strategy May Adversely Affect Its Business. New
Pulitzer anticipates that it will grow through acquisitions of daily and
non-daily newspapers and similar publications. Acquisitions may expose New
Pulitzer to particular risks, such as diversion of management's attention,
assumption of liabilities and amortization of goodwill and other acquired
intangible assets. These and other risks could have a material adverse effect on
the financial condition or results of operations of New Pulitzer, depending on
the value and nature of the consideration paid by New
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<PAGE> 14
Pulitzer. These acquisitions may have a dilutive impact on New Pulitzer's
earnings per share. New Pulitzer will compete for acquisition targets with other
companies. We cannot assure that New Pulitzer will be successful in identifying
acquisition opportunities, assessing the value, strengths and weaknesses of such
opportunities, generating the cash flow necessary to capitalize on such
opportunities, consummating such opportunities on terms favorable to New
Pulitzer or managing the publications it acquires and improving their operating
efficiency.
The Price of Newsprint May Increase. Although we generally obtain newsprint
at relatively favorable prices, we cannot assure that New Pulitzer will continue
to obtain its newsprint at those prices. Significant increases in newsprint
prices could adversely affect New Pulitzer's business, financial condition and
results of operations
New Pulitzer May Be Adversely Affected By Changes in Environmental Laws and
Regulations. New Pulitzer's operations will be subject to federal, state and
local environmental laws and regulations pertaining to air and water quality,
storage tanks and the management and disposal of wastes at its facilities.
Neither we nor New Pulitzer can predict whether future events, such as changes
in existing laws and regulations or the discovery of conditions not currently
known to them, may give rise to additional costs that could be material.
Furthermore, actions by federal, state and local governments concerning
environmental matters could result in laws or regulations that could have a
material adverse effect on the financial condition or results of operations of
New Pulitzer.
Potential Litigation Exposure. From time to time, we have been involved in
various claims and lawsuits incidental to the ordinary course of our business,
including matters such as libel, slander and defamation actions and complaints
alleging discrimination. While we cannot predict the results of litigation, we
and New Pulitzer believe that the ultimate outcome of existing litigation will
not have a material adverse effect on the consolidated financial statements of
New Pulitzer and its subsidiaries.
New Pulitzer May Become Obligated to Pay Certain Former
Stockholders. Pursuant to the merger agreement, New Pulitzer will pay and
indemnify Hearst-Argyle against any liabilities and/or expenses arising from any
claim or dispute relating to certain agreements entered into by us with certain
of our former stockholders. We agreed under certain circumstances to make
additional payments to those former stockholders. For many reasons, we and New
Pulitzer cannot determine at this time the additional amounts, if any, payable
by New Pulitzer under these agreements with respect to the merger. Depending on
the ultimate resolution of the meaning and application of various provisions of
those agreements, we believe that the amount of the additional payments, if any,
could be material to the consolidated financial statements of New Pulitzer.
Our Principal Stockholders May Control New Pulitzer and May Influence Many
Key Decisions. Following the completion of the Transactions and subject to the
terms of a New Pulitzer voting agreement, a small number of New Pulitzer
stockholders may control the stockholder vote of New Pulitzer stock on any
matter in which all shares of New Pulitzer stock are voted together as a single
class. This control and concentration of voting power may make New Pulitzer a
less attractive target for a takeover than it otherwise might be. This control
and concentration of power may also render more difficult or discourage
transactions involving an actual or potential change of control of New Pulitzer.
As a result, holders of New Pulitzer stock may not receive any premium above
market price for their New Pulitzer stock that would otherwise be offered in
connection with any attempt to acquire control of New Pulitzer.
Certain Certificate of Incorporation and By-Law Provisions May Discourage
the Acquisition of New Pulitzer. Certain provisions of New Pulitzer's
Certificate of Incorporation and By-laws could have the effect of discouraging
or making it more difficult for a third party to acquire a majority of the
outstanding capital stock of New Pulitzer.
The Price of New Pulitzer Stock May Vary. Prior to the completion of the
Transactions, New Pulitzer stock will not have any trading market. The New York
Stock Exchange, Inc. has approved
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<PAGE> 15
the listing, subject to official notice of issuance, of the New Pulitzer common
stock to be distributed to the holders of our common stock in the spin-off. We
cannot assure that the prices at which the New Pulitzer common stock will trade
after the completion of the Transactions will be favorable.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of our common
stock by the selling stockholders.
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<PAGE> 16
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
selling stockholders as of January 21, 1999. The selling stockholders
beneficially own shares of our common stock and/or our Class B common stock, and
these shares of Class B common stock may be converted into our common stock
pursuant to our Restated Certificate of Incorporation and a voting trust
agreement, as each may be amended from time to time. The shares of common stock
are being registered to permit public secondary trading of the shares of common
stock. See "Underwriting."
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF NUMBER OF SHARES PERCENT OF
OF COMMON STOCK AGGREGATE VOTING NUMBER OF OF CLASS B AGGREGATE VOTING
AND/OR CLASS B POWER OF COMMON SHARES OF COMMON STOCK POWER OF COMMON
COMMON STOCK STOCK AND CLASS B COMMON STOCK BENEFICIALLY STOCK AND CLASS B
BENEFICIALLY OWNED COMMON STOCK BEING OFFERED OWNED AFTER COMMON STOCK
PRIOR TO CONVERSION PRIOR TO CONVERSION AFTER CONVERSION AND AFTER CONVERSION
NAME OF SELLING STOCKHOLDER AND OFFERING AND OFFERING CONVERSION(12) OFFERING AND OFFERING
- --------------------------- ------------------- ------------------- -------------- ---------------- -----------------
<S> <C> <C> <C> <C> <C>
Emily Rauh Pulitzer, as
Trustee of the Pulitzer
Family Trust U/D/T dtd
6/8/74, as amended(1)(2)... 629,665 3.9% 299,405 330,260 2.2%
Spring Foundation(2)(3)...... 169,595 1.1% 169,595 0 0.0%
Margaret J. Warner and Kate
C. Moore as Trustees of the
David and Kathryn Moore
1998 Charitable Remainder
Trust dtd 10/5/98(4)(5).... 60,150(6) * 58,455 0 0.0%
Margaret J. Warner and Kate
C. Moore as Trustees of the
David and Kathryn Moore
1999 Charitable Remainder
Trust dtd 2/11/99(5)(7).... 230,000(8) * 213,545 16,455 *
Michael E. Pulitzer, Trustee,
U/A dtd 3/22/82 F/B/O
Michael E.
Pulitzer(9)(10)............ 3,638,590 22.7% 245,667 3,392,923 22.3%
The Ceil and Michael E.
Pulitzer Foundation,
Inc.(10)(11)............... 51,113 * 13,333 37,780 *
</TABLE>
- -------------------------
* Less than one percent.
(1) Emily Rauh Pulitzer is a director of the Company and a beneficiary of the
Pulitzer Family Trust.
(2) Prior to this offering and excluding shares which may be deemed to be
beneficially owned solely as a trustee of the Pulitzer Voting Trust, Emily
Rauh Pulitzer beneficially owned an aggregate of 6,780,667 shares of our
Class B common stock. Assuming the sale of all shares being offered hereby,
including the full exercise by Goldman Sachs of its option to purchase an
aggregate of 126,000 additional shares from certain selling stockholders,
Ms. Pulitzer will beneficially own 6,280,667 shares of our Class B common
stock or 41.7% of the aggregate voting power of our common stock and Class
B common stock.
(3) Emily Rauh Pulitzer is an officer and a director of the Spring Foundation.
The Spring Foundation is a private operating foundation established by Ms.
Pulitzer to further the arts.
(4) David E. Moore is a director of the Company and a beneficiary of this
trust.
(5) Prior to this offering and excluding shares which may be deemed
beneficially owned solely as a trustee of the Pulitzer Voting Trust, Mr.
Moore beneficially owned an aggregate of 3,986,819 shares of our Class B
common stock and common stock. Assuming the sale of all shares being
offered hereby, including the
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<PAGE> 17
full exercise by Goldman Sachs of its option to purchase an aggregate of
126,000 additional shares from certain selling stockholders, Mr. Moore will
beneficially own 3,698,364 shares of our Class B common stock or 24.5% of
the aggregate voting power of our common stock and Class B common stock.
(6) This trust owns an aggregate of 60,150 shares of our common stock and does
not own any shares of our Class B common stock.
(7) David E. Moore is a beneficiary of this trust.
(8) This trust will own up to an aggregate of 230,000 shares of our common
stock which will be contributed by David E. Moore. This trust will not own
any shares of our Class B common stock.
(9) Michael E. Pulitzer is Chairman of the Board, President and Chief Executive
Officer of the Company and a beneficiary of this trust.
(10) Prior to this offering and excluding shares which may be deemed
beneficially owned solely as a trustee of the Pulitzer Voting Trust,
Michael E. Pulitzer beneficially owned an aggregate of 3,735,873 shares of
our Class B common stock. Assuming the sale of all shares being offered
hereby, including the full exercise by Goldman Sachs of its option to
purchase an aggregate of 126,000 additional shares from certain selling
stockholders, Mr. Pulitzer will beneficially own 3,398,328 shares of our
Class B common stock or 22.5% of the aggregate voting power of our common
stock and Class B common stock.
(11) Michael E. Pulitzer is an officer and a director of this foundation.
(12) This assumes Goldman Sachs does not exercise its option to purchase an
aggregate of 126,000 additional shares from the selling stockholders. If
Goldman Sachs exercises in full its option, the additional number of common
shares being offered after conversion by each selling stockholder would be
as follows: Emily Rauh Pulitzer, as Trustee of the Pulitzer Family Trust
(31,000 shares), Margaret J. Warner and Kate C. Moore as Trustees of the
David and Kathryn Moore 1999 Charitable Remainder Trust (16,455) and
Michael E. Pulitzer, as Trustee (78,545 shares).
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<PAGE> 18
LEGAL MATTERS
The validity of the issuance of the shares of our common stock offered will
be passed upon for us by Fulbright & Jaworski L.L.P., New York, New York. As of
January 21, 1999, William Bush, a partner of such firm, owned options to
purchase an aggregate of 3,334 shares of our common stock.
EXPERTS
Our financial statements and the related financial statement schedule as of
December 31, 1997 and 1996 and for each of the three years in the period ended
December 31, 1997 incorporated in this prospectus by reference from our Current
Report on Form 8-K, filed on January 22, 1999, have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their reports, which are
incorporated herein by reference, and have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts in accounting and
auditing. The financial statements of our broadcasting subsidiaries as of
December 31, 1997 and 1996 and for each of the three years in the period ended
December 31, 1997 incorporated in this prospectus by reference from our Current
Report on Form 8-K, filed on January 22, 1999, have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
The consolidated financial statements and the related financial statement
schedule of Hearst-Argyle incorporated in this prospectus by reference from
Hearst-Argyle's Annual Report on Form 10-K, as amended by Form 10-K/A, for the
year ended December 31, 1997, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
Ernst & Young LLP, independent auditors, have audited the consolidated
financial statements and schedule of Argyle Television, Inc. included in Argyle
Television, Inc.'s Annual Report on Form 10-K for the year ended December 31,
1996, as set forth in their report, which is incorporated in this prospectus by
reference. The consolidated financial statements and schedule of Argyle
Television, Inc. are incorporated by reference in reliance on their report,
given on their authority as experts in accounting and auditing.
The financial statements as of December 31, 1997 and 1996 and for each of
the three years in the period ended December 31, 1997 of Kelly Broadcasting Co.,
which appear in Hearst-Argyle's Current Reports on Form 8-K dated September 17,
1998, as amended by Form 8-K/A dated December 7, 1998, incorporated by reference
in this prospectus, have been incorporated herein in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
that firm, as experts in accounting and auditing.
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<PAGE> 19
UNDERWRITING
The Company, Hearst-Argyle, the selling stockholders and Goldman, Sachs &
Co. ("Goldman Sachs") have entered into an underwriting agreement with respect
to the shares being offered. Subject to certain conditions, Goldman Sachs has
agreed to purchase shares.
If Goldman Sachs sells more shares than the total number being offered,
Goldman Sachs has an option to buy up to an additional 126,000 shares from the
selling stockholders to cover such sales. They may exercise that option for 30
days but not after the fifth business day before the effective time of the
merger.
The following tables show the per share and total underwriting discounts
and commissions to be paid to Goldman Sachs by the selling stockholders. Such
amounts are shown assuming both no exercise and full exercise of Goldman Sachs'
option to purchase 126,000 additional shares.
<TABLE>
<CAPTION>
Paid by the Selling Stockholders No Exercise Full Exercise
-------------------------------- ----------- -------------
<S> <C> <C>
Per share........................................ $ $
Total............................................ $ $
</TABLE>
Shares sold by Goldman Sachs to the public will initially be offered at the
initial public offering price set forth on the cover of this prospectus. Any
shares sold by Goldman Sachs to securities dealers may be sold at a discount of
up to $ per share from the initial public offering price. Any such
securities dealers may resell any shares purchased from Goldman Sachs to certain
other brokers or dealers at a discount of up to $ per share from the initial
public offering price. If all of the shares are not sold at the initial offering
price, Goldman Sachs may change the offering price and the other selling terms.
The Company and the selling stockholders have agreed with Goldman Sachs not
to dispose of or hedge any of their common stock or securities convertible into
or exchangeable for shares of common stock during the period from the date of
this prospectus continuing through the date 90 days after the date of this
prospectus, except with the prior written consent of Goldman Sachs. This
agreement does not apply to any existing employee benefit plans.
In connection with the offering, Goldman Sachs may purchase and sell shares
of common stock in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by Goldman Sachs of a greater number of
shares than they are required to purchase in the offering. Stabilizing
transactions consist of certain bids or purchases made for the purpose of
preventing or retarding a decline in the market price of the common stock while
the offering is in progress.
These activities by Goldman Sachs may stabilize, maintain or otherwise
affect the market price of the common stock. As a result, the price of the
common stock may be higher than the price that otherwise might exist in the open
market. If these activities are commenced, they may be discontinued by Goldman
Sachs at any time. These transactions may be effected on the NYSE, in the
over-the-counter market or otherwise.
The selling stockholders estimate that their share of the total expenses of
the offering, excluding underwriting discounts and commissions, will be
approximately $ , payable by the Company.
The Company and the selling stockholders have agreed to indemnify Goldman
Sachs against certain liabilities, including liabilities under the Securities
Act of 1933.
U-1
<PAGE> 20
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No dealer, salesperson or other person has been authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the shares offered hereby, but only under circumstances
and in jurisdictions where it is lawful to do so. The information contained in
this prospectus is current only as of its date.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Where You Can Find More Information.. 2
Cautionary Statement Concerning
Forward-Looking Statements......... 3
Prospectus Summary................... 4
Investment in Pulitzer Publishing
Company's Common Stock.......... 4
The Company........................ 4
Hearst-Argyle...................... 6
Risk Factors......................... 7
Risk Factors Associated with the
Spin-Off and the Merger......... 7
Risk Factors Related to the Hearst-
Argyle Stock.................... 8
Risk Factors Related to the New
Pulitzer Stock.................. 12
Use of Proceeds...................... 14
Selling Stockholders................. 15
Legal Matters........................ 17
Experts.............................. 17
Underwriting......................... U-1
</TABLE>
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1,000,000 Shares
PULITZER PUBLISHING
COMPANY
Common Stock
---------------------
PROSPECTUS
---------------------
GOLDMAN, SACHS & CO.
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------------------------------------------------------
<PAGE> 21
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the Company's estimates (other than the SEC
registration fee) of the expenses in connection with the issuance and
distribution of the shares being registered. None of the following expenses is
being paid by the selling stockholders.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 36,638.89
Legal fees and expenses..................................... $ 75,000.00
Accounting fees and expenses................................ $ 30,000.00
Printing fees and expenses.................................. $ 30,000.00
Miscellaneous expenses...................................... $ 9,361.11
-----------
Total.................................................. $181,000.00
===========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware grants
corporations the power to indemnify their directors, officers, employees and
agents in accordance with the provisions set forth therein.
Article XI of the Restated Certificate of Incorporation of the Company
provides for indemnification of directors, officers, employees and agents of the
Company to the fullest extent provided by law. The Company currently maintains
directors' and officers' liability insurance. Sections 1, 2, 3 and 10 of Article
XI include basic indemnification provisions and provide as follows:
(1) Action Not By or on Behalf of Corporation. The Company shall indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Company) by reason of the fact that he is or was a director,
officer, employee or agent of the Company, or is or was serving at the request
of the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against judgments and
amounts paid in settlement and expenses (including attorneys' fees), actually
and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Company, and with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
(2) Action By or on Behalf of Corporation. The Company shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
Company to procure a judgment in its favor by reason of the fact that he is or
was a director, officer, employee or agent of the Company or is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the Company unless and only to the
extent that the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability and in view of all
of the circumstances of
II-1
<PAGE> 22
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper.
(3) Successful Defense. To the extent that a director, officer, employee or
agent of the corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in Section 1 or 2 of
Article XI, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(10) A director's liability to the Company for breach of duty to the
Company or its stockholders shall be limited to the fullest extent permitted by
Delaware law as now in effect or hereafter amended. In particular, no director
of the Company shall be personally liable to the Company or any of its
stockholders for monetary damages for breach of fiduciary duty as director,
except for liability (i) for any breach of the director's duty of loyalty to the
Company or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation law, as the same exists or
hereafter may be amended, or (iv) for any transaction from which the director
derived an improper personal benefit. If the Delaware General Corporation Law
hereafter is amended to authorize the further elimination or limitation of the
liability of directors, then the liability of a director of the Company, in
addition to the limitation on personal liability provided herein, shall be
limited to the fullest extent permitted by the amended Delaware General
Corporation law. Any repeal or modification of Article XI by the stockholders of
the Company shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the Company existing at
the time of such repeal or modification.
ITEM 16. EXHIBITS.
(a) Exhibits.
<TABLE>
<C> <S>
1 Underwriting Agreement by and among the Company, the selling
stockholders, Goldman, Sachs & Co. and Hearst-Argyle
Television, Inc.+
5 Opinion of Fulbright & Jaworski L.L.P.*
10.1 Employment Agreement with Robert C. Woodworth.*
23.1 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit
5).
23.2 Consent of Deloitte & Touche LLP with respect to the audited
financial statements of the Company and its wholly-owned
subsidiary Pulitzer Broadcasting Company.
23.3 Consent of Deloitte & Touche LLP with respect to the audited
financial statements of Hearst-Argyle.
23.4 Consent of Ernst & Young LLP with respect to the audited
financial statements of Argyle Television, Inc.
23.5 Consent of PricewaterhouseCoopers LLP with respect to the
audited financial statements of Kelly Broadcasting Co.
24 Power of Attorney (included on signature page).*
</TABLE>
- ---------------
+ To be filed by amendment.
* Previously filed.
II-2
<PAGE> 23
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment 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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement 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.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and 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
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant 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
II-3
<PAGE> 24
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.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, 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 registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the Securities
Act of 1933, 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.
II-4
<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of St. Louis and State of Missouri on the 16th day of
February, 1999.
PULITZER PUBLISHING COMPANY
By: /s/ MICHAEL E. PULITZER
-----------------------------------
Michael E. Pulitzer
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<C> <S> <C>
/s/ MICHAEL E. PULITZER Director, Chairman of the February 16, 1999
- --------------------------------------------- Board, President and Chief
Michael E. Pulitzer Executive Officer (principal
executive officer)
/s/ RONALD H. RIDGWAY Director, Senior Vice February 16, 1999
- --------------------------------------------- President -- Finance
Ronald H. Ridgway (principal financial and
accounting officer)
* Director February 16, 1999
- ---------------------------------------------
William Bush
* Director, Senior Vice February 16, 1999
- --------------------------------------------- President -- Broadcast
Ken J. Elkins Operations
* Director February 16, 1999
- ---------------------------------------------
Alice B. Hayes
* Director February 16, 1999
- ---------------------------------------------
David E. Moore
* Director, Senior Vice February 16, 1999
- --------------------------------------------- President -- Newspaper
Nicholas G. Penniman IV Operations
* Director February 16, 1999
- ---------------------------------------------
Emily Rauh Pulitzer
* Director February 16, 1999
- ---------------------------------------------
James M. Snowden, Jr.
*By: /s/ RONALD H. RIDGWAY
--------------------------------------
Ronald H. Ridgway
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 26
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
------- -------
<C> <S>
1 Underwriting Agreement by and among the Company, the selling
stockholders, Goldman, Sachs & Co. and Hearst-Argyle
Television, Inc.+
5 Opinion of Fulbright & Jaworski L.L.P.*
10.1 Employment Agreement with Robert C. Woodworth.*
23.1 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit
5).
23.2 Consent of Deloitte & Touche LLP with respect to the audited
financial statements of the Company and its wholly-owned
subsidiary Pulitzer Broadcasting Company.
23.3 Consent of Deloitte & Touche LLP with respect to the audited
financial statements of Hearst-Argyle.
23.4 Consent of Ernst & Young LLP with respect to the audited
financial statements of Argyle Television, Inc.
23.5 Consent of PricewaterhouseCoopers LLP with respect to the
audited financial statements of Kelly Broadcasting Co.
24 Power of Attorney (included on signature page).*
</TABLE>
- ---------------
+ To be filed by amendment.
* Previously filed.
II-6
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Pulitzer Publishing Company on Form S-3 of our reports dated February 6, 1998
(July 17, 1998 as to paragraphs 1, 2, 3 and 5 of Note 2 and paragraphs 3 through
7 of Note 13; November 25, 1998 as to paragraph 4 of Note 2; and December 11,
1998 as to Note 17) appearing in the Current Report on Form 8-K, filed on
January 22, 1999, of Pulitzer Publishing Company and to the reference to us
under the heading "Experts" in the Prospectus, which is part of the Registration
Statement.
We also consent to the incorporation by reference in this Registration Statement
of Pulitzer Publishing Company on Form S-3 of our report dated July 17, 1998
(November 25, 1998 as to paragraph 3 of Note 1) related to Pulitzer Broadcasting
Company and Subsidiaries appearing in the Current Report on Form 8-K, filed on
January 22, 1999, of Pulitzer Publishing Company and to the reference to us
under the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
DELOITTE & TOUCHE LLP
Saint Louis, Missouri
February 13, 1999
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-69701 of Pulitzer Publishing Company on Form S-3
of our report dated February 26, 1998 No. 333-6701 (March 9, 1998 as to Note
18), appearing in the Annual Report on Form 10-K, as amended by Form 10-K/A, of
Hearst-Argyle Television, Inc. for the year ended December 31, 1997 and to the
reference to us under the heading "Experts" in the Prospectus, which is part of
this Registration Statement.
Deloitte & Touche LLP
New York, New York
February 15, 1999
<PAGE> 1
EXHIBIT 23.4
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" and to the
incorporation by reference in this Registration Statement (Form S-3) of
Pulitzer Publishing Company of our report dated February 12, 1997 with respect
to the consolidated financial statements and schedule of Argyle Television,
Inc. as of and for the two years ended December 31, 1996 and 1995 included in
the Annual Report (Form 10-K) of Argyle Television, Inc., for the year ended
December 31, 1996.
ERNST & YOUNG LLP
San Antonio, Texas
February 11, 1999
<PAGE> 1
EXHIBIT 23.5
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 333-69701) of
Pulitzer Publishing Company of our report dated November 13, 1998 relating to
the financial statements of Kelly Broadcasting Co., which appears in
Hearst-Argyle's Current Report on Form 8-K dated September 17, 1998, as amended
by Form 8-K/A dated December 7, 1998. We also consent to the reference to our
firm under the caption "Experts."
PRICEWATERHOUSECOOPERS LLP
Sacramento, California
February 15, 1999
