10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2008

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                      to                     

Commission File Number: 0-22439

FISHER COMMUNICATIONS, INC.

(Exact Name of Registrant as Specified in Its Charter)

WASHINGTON	91-0222175
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification Number)

100 Fourth Ave. N., Suite 510
Seattle, Washington 98109
(Address of Principal Executive Offices) (Zip Code)

(206) 404-7000
(Registrant’s Telephone Number, Including Area Code)

     Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer þ	Non-accelerated filer o	Smaller reporting company o
	(Do not check if a smaller reporting company)

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Common Stock, $1.25 par value, outstanding as of August 1, 2008: 8,732,860

PART I
FINANCIAL INFORMATION

Item 1. Financial Statements

     The following Condensed Consolidated Financial Statements (unaudited) are presented for the Registrant, Fisher Communications, Inc., and its subsidiaries.

1.	Condensed Consolidated Statements of Operations: Three and six months ended June 30, 2008 and 2007
2.	Condensed Consolidated Balance Sheets: June 30, 2008 and December 31, 2007
3.	Condensed Consolidated Statements of Cash Flows: Six months ended June 30, 2008 and 2007
4.	Condensed Consolidated Statements of Comprehensive Income: Three and six months ended June 30, 2008 and 2007
5.	Unaudited Notes to Condensed Consolidated Financial Statements
EXHIBIT 3.1
EXHIBIT 4.1
EXHIBIT 10.2
EXHIBIT 10.3
EXHIBIT 10.4
EXHIBIT 10.5
EXHIBIT 31.1
EXHIBIT 31.2
EXHIBIT 32.1
EXHIBIT 32.2

2

FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Six months ended						Three months ended
(in thousands, except per-share amounts)	June 30						June 30
(Unaudited)	2008			2007			2008			2007
Revenue	$	83,013		$	75,542		$	45,292		$	41,299
Costs and expenses
Direct operating costs (exclusive of depreciation and amortization of $5,160, $4,886, $2,562, and $2,593, respectively, and amortization of program rights of $9,461, $9,434, $7,015, and $7,011, respectively, reported separately below)		35,375			31,081			17,881			15,265
Selling, general and administrative expenses		34,881			25,202			21,174			12,705
Amortization of program rights		9,461			9,434			7,015			7,011
Depreciation and amortization		6,253			5,857			3,126			3,016
		85,970			71,574			49,196			37,997
Income (loss) from operations		(2,957	)		3,968			(3,904	)		3,302
Other income, net		105,756			2,296			104,730			1,126
Interest expense, net		(6,902	)		(6,904	)		(3,544	)		(3,410	)
Income (loss) from continuing operations before income taxes		95,897			(640	)		97,282			1,018
Provision (benefit) for federal and state income taxes		33,282			(71	)		33,626			319
Income (loss) from continuing operations		62,615			(569	)		63,656			699
Income (loss) from discontinued operations, net of income taxes		(7	)		1,580			18			1,557
Net income	$	62,608		$	1,011		$	63,674		$	2,256
Income (loss) per share:
From continuing operations	$	7.17		$	(0.06	)	$	7.29		$	0.08
From discontinued operations		—			0.18			—			0.18
Net income per share	$	7.17		$	0.12		$	7.29		$	0.26
Income (loss) per share assuming dilution:
From continuing operations	$	7.17		$	(0.06	)	$	7.29		$	0.08
From discontinued operations		—			0.18			—			0.18
Net income per share assuming dilution	$	7.17		$	0.12		$	7.29		$	0.26
Weighted average shares outstanding		8,730			8,721			8,731			8,722
Weighted average shares outstanding assuming dilution		8,732			8,727			8,735			8,729

See accompanying notes to condensed consolidated financial statements.

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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per-share amounts)	June 30			December 31
(Unaudited)	2008			2007
ASSETS
Current Assets
Cash and cash equivalents	$	74,871		$	6,510
Receivable from broker		14,412
Marketable securities, at market value		50,620
Receivables, net		33,560			30,498
Deferred income taxes		785			785
Prepaid expenses and other assets		4,275			3,855
Television and radio broadcast rights		2,596			5,934
Assets held for sale		29			37
Total current assets		181,148			47,619
Restricted cash					52,365
Marketable securities, at market value		893			129,223
Cash value of life insurance and retirement deposits		17,222			16,809
Television and radio broadcast rights		266			7
Goodwill		52,294			37,361
Intangible assets		78,626			42,782
Investment in equity investee		2,636			2,635
Deferred financing fees and other assets		4,997			9,072
Assets held for sale		2,053			2,053
Property, plant and equipment, net		149,581			146,008
Total Assets	$	489,716		$	485,934
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Trade accounts payable	$	4,577		$	3,737
Accrued payroll and related benefits		6,456			7,614
Interest payable		3,800			3,773
Television and radio broadcast rights payable		1,488			4,940
Income taxes payable		20,212			3,959
Deferred income taxes		17,627
Current portion of accrued retirement benefits		1,230			1,230
Other current liabilities		5,934			4,218
Liabilities of businesses held for sale		121			100
Total current liabilities		61,445			29,571
Long-term debt		150,000			150,000
Accrued retirement benefits		18,563			18,552
Deferred income taxes		729			45,274
Other liabilities		12,651			9,140
Commitments and Contingencies
Stockholders’ Equity
Common stock, shares authorized 12,000,000, $1.25 par value; issued and outstanding 8,731,402 as of June 30, 2008 and 8,725,516 as of December 31, 2007		10,914			10,907
Capital in excess of par		10,630			10,220
Accumulated other comprehensive income, net of income taxes:
Unrealized gain on marketable securities		32,690			82,818
Accumulated loss		(1,940	)		(1,958	)
Prior service cost		(165	)		(181	)
Retained earnings		194,199			131,591
Total Stockholders’ Equity		246,328			233,397
Total Liabilities and Stockholders’ Equity	$	489,716		$	485,934

See accompanying notes to condensed consolidated financial statements.

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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six months ended
(in thousands)	June 30
(Unaudited)	2008			2007
Cash flows from operating activities
Net income	$	62,608		$	1,011
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation and amortization		6,253			5,857
Deferred income taxes		74			(56	)
Dividends from equity investee					150
Amortization of deferred financing fees		316			316
Amortization of program rights		9,461			9,434
Payments for television and radio broadcast rights		(9,588	)		(9,704	)
Gain on sale of marketable securities		(103,621	)
Gain on sale of radio station					(1,491	)
Net non-cash contract termination fee		4,990			—
Amortization of non-cash contract termination fee		(533	)		(434	)
Equity in operations of equity investees		(1	)		22
Stock-based compensation		426			328
Other		182			91
Change in operating assets and liabilities
Receivables		(3,062	)		(1,584	)
Prepaid expenses and other current assets		(618	)		(1,123	)
Cash value of life insurance and retirement deposits		(413	)		(396	)
Other assets		1,005			619
Trade accounts payable, accrued payroll and related benefits, interest payable, and other current liabilities		818			(2,643	)
Income taxes receivable and payable		16,253			(101	)
Accrued retirement benefits		11			40
Other liabilities		(483	)		346
Net cash provided by (used in) operating activities		(15,922	)		682
Cash flows from investing activities
Purchases of marketable securities		(56	)		(177	)
Proceeds from sales of marketable securities		89,845
Proceeds from sale of radio station					2,869
Purchase of television stations		(52,365	)		(4,931	)
Decrease in restricted cash		52,365			8,473
Purchase of property, plant and equipment		(5,436	)		(4,638	)
Net cash provided by investing activities		84,353			1,596
Cash flows from financing activities
Borrowings under borrowing agreements		14,000			6,000
Payments on borrowing agreements		(14,000	)		(6,000	)
Payment of capital lease obligation		(70	)
Proceeds from exercise of stock options					34
Net cash provided by (used in) financing activities		(70	)		34
Net increase in cash and cash equivalents		68,361			2,312
Cash and cash equivalents, beginning of period		6,510			7,477
Cash and cash equivalents, end of period	$	74,871		$	9,789

See accompanying notes to condensed consolidated financial statements.

5

FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Six months ended						Three months ended
(in thousands)	June 30						June 30
(Unaudited)	2008			2007			2008			2007
Net income	$	62,608		$	1,011		$	63,674		$	2,256
Other comprehensive income (loss):
Unrealized gain (loss) on marketable securities		26,491			(840	)		53,722			(12,498	)
Effect of income taxes		(9,272	)		294			(18,803	)		4,374
Accumulated loss		27			21			14			21
Effect of income taxes		(9	)		(7	)		(5	)		(7	)
Prior service cost		24			24			12			24
Effect of income taxes		(8	)		(8	)		(4	)		(8	)
Reclassification adjustment for gains included in net income		(103,611	)		(8	)		(103,622	)		(8	)
Effect of income taxes		36,264			3			36,268			3
Other comprehensive loss		(50,094	)		(521	)		(32,418	)		(8,099	)
Comprehensive income (loss)	$	12,514		$	490		$	31,256		$	(5,843	)

See accompanying notes to condensed consolidated financial statements.

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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

     The unaudited financial information furnished herein, in the opinion of management, reflects all adjustments which are necessary to state fairly the consolidated financial position, results of operations, and cash flows of Fisher Communications, Inc. and its consolidated subsidiaries (the “Company”) as of and for the periods indicated. Any adjustments are of a normal recurring nature. Fisher Communications, Inc.’s principal wholly owned subsidiaries include Fisher Broadcasting Company and Fisher Media Services Company. The Company presumes that users of the interim financial information herein have read or have access to the Company’s audited consolidated financial statements and that the adequacy of additional disclosure needed for a fair statement, except in regard to material contingencies or recent subsequent events, may be determined in that context. Accordingly, footnote and other disclosures which would substantially duplicate the disclosures contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 filed by the Company have been omitted. The financial information herein is not necessarily representative of a full year’s operations.

          Reclassifications

     Certain amounts in the 2007 condensed consolidated statement of operations have been reclassified to conform to the 2008 presentation. Certain employment-related expenses totaling approximately $1.5 million and $3.0 million for the three and six months ended June 30, 2007, respectively, which were previously reported within “Selling, general and administrative expenses”, are now reported within “Direct operating costs”. The reclassifications have no effect on income from operations, shareholders’ equity, cash flows from operating, or investing or financing activities.

2. Summary of Significant Accounting Policies

     The significant accounting policies used in preparation of the consolidated financial statements are disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007. Additional significant accounting policies for 2008 are disclosed below.

          Fair Value Measurements

     In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 defines fair value, establishes a market-based framework or hierarchy for measuring fair value, and expands disclosures about fair value measurements. SFAS 157 is applicable whenever another accounting pronouncement requires or permits assets and liabilities to be measured at fair value. SFAS 157 does not expand or require any new fair value measures; however, the application of this statement may change current practice. The requirements of SFAS 157 are effective for the Company’s fiscal year beginning January 1, 2008; however, the FASB did provide a one year deferral for the implementation of SFAS 157 for nonfinancial assets and liabilities. The adoption of SFAS 157 did not have any impact on the Company’s results of operations, financial position or cash flows.

     SFAS 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. SFAS 157 also establishes a three-tier hierarchy, which prioritizes the inputs used to measure fair value as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities

Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

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Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

     Assets and liabilities measured at fair value on a recurring basis consist of marketable securities, for which the reported fair value of $51.5 million at June 30, 2008 is measured using Level 1 inputs.

3. Recent Accounting Pronouncements

     In April 2008, the FASB issued Staff Position (“FSP”) No. 142-3, Determination of the Useful Life of Intangible Assets. This FSP amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, Goodwill and Other Intangible Assets. The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under Statement 142 and the period of expected cash flows used to measure the fair value of the asset under FASB Statement No. 141(R), Business Combinations. The requirements of FSP 142-3 applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008 (for acquisitions closed on or after January 1, 2009 for the Company). The impact that FSP 142-3 will have on the Company’s consolidated financial statements when effective will depend upon the nature, terms and size of the acquisitions completed after the effective date.

     In February 2008, the FASB issued FSP No. FAS 157-2, Fair Value Measurements. This FSP delays the effective date of SFAS 157 until January 1, 2009 for all nonfinancial assets and liabilities, except those recognized or disclosed at fair value in the financial statements on a recurring basis. Nonfinancial assets and liabilities include, among other things: intangible assets acquired through business combinations; long-lived assets when assessing potential impairment; and liabilities associated with restructuring activities. The Company has not yet determined the impact, if any, that adoption of FAS 157 for nonfinancial assets and liabilities will have on its consolidated financial statements.

     In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (“FAS 141R”). FAS 141R retains the fundamental requirements in FAS 141 that the acquisition method of accounting (which FAS 141 called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. FAS 141R also establishes principles and requirements for how the acquirer: (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree; (b) improves the completeness of the information reported about a business combination by changing the requirements for recognizing assets acquired and liabilities assumed arising from contingencies; (c) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (d) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. FAS 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008 (for acquisitions closed on or after January 1, 2009 for the Company). Early application is not permitted. The impact that FAS 141R will have on the Company’s consolidated financial statements when effective will depend upon the nature, terms and size of the acquisitions completed after the effective date.

4. Sale of Safeco Corporation Common Stock

     In June 2008, the Company sold 1,548,956 shares of Safeco Corporation common stock, which represented 67.3% of the Company’s total Safeco holdings. The shares were sold at an average price of $67.27 per share, resulting in pre-tax net proceeds to the Company of approximately $104.1 million. Of this amount, $14.4 million is included in receivable from broker on the consolidated balance sheet at June 30, 2008, representing the sales proceeds from trades occurring in June 2008 that were not settled until July 2008. The book basis of the shares sold totalled approximately $526,000, resulting in a pre-tax gain on sale of $103.6 million, which is included in other income, net for the three and six-month periods ended June 30, 2008.

     In July 2008, the Company sold the remaining 753,720 shares of Safeco Corporation common stock. The shares were sold at an average price of $65.38 per share, resulting in pre-tax net proceeds to the Company of approximately $49.3 million. The book basis of the shares sold totalled approximately $256,000, resulting in a pre-tax gain on sale of $49.0 million.

      The Company’s debt agreements contain provisions that limit its ability to distribute proceeds from asset sales, which includes proceeds from the sale of the Company’s Safeco shares. In the event that the Company does not use the proceeds from asset sales for qualifying purposes within 365 days from the date of sale it will be required to offer to repurchase its outstanding senior notes at their principal amount. A copy of the indenture governing the Company’s senior notes has been filed as an exhibit to its Annual Report on Form 10-K.

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5. Acquisitions

     On August 3, 2007 the Company signed an agreement to purchase the assets of two television stations in the Bakersfield, California Designated Market Area (“DMA”), pending FCC approval and other closing conditions. On January 1, 2008, the Company finalized the purchase of the stations for $55.3 million in cash. This acquisition serves to diversify the Company’s broadcast operations, and continues the Company’s strategy of creating duopolies in the markets it serves. The excess of the purchase price of the stations over the fair value of the tangible and identifiable intangible net assets was recorded as goodwill. The Company’s purchase price allocations are preliminary and have not been finalized. The Company does not anticipate any significant differences between current values recorded and the fair values upon finalizing the purchase price allocation. The purchase price of the stations, including direct costs of the acquisition, has been allocated as follows (in thousands):

Intangible assets — FCC licenses (indefinite life, non-amortizing)	$	32,200
Intangible assets — Network affiliation agreement (useful life of 15 years)		3,900
Goodwill (non-amortizing, tax deductible)		14,933
Property, plant and equipment		4,281
	$	55,314

6. Termination of Agreement with National Advertising Representation Firm

     On April 28, 2008, the Company terminated its agreement with its national advertising representation firm. The successor firm will satisfy the Company’s contractual termination obligation to the predecessor firm with no cash payment made by the Company. In the second quarter of 2008, the Company recognized a non-cash termination charge of approximately $7.3 million to selling, general and administrative expenses and will amortize the resulting liability as a non-cash benefit over the five year term of the new agreement. In addition, the Company recognized a non-cash benefit of approximately $2.3 million to selling, general and administrative expenses in the second quarter of 2008, representing the remaining unamortized balance of the Company’s 2005 non-cash charge resulting from the termination of its national advertising representation agreement.

7. Forfeiture of Non-Refundable Option Payment

     In November 2006, the Company finalized the purchase of two Oregon television stations (KUNP and KUNP LP) for $19.3 million. A second amendment to that purchase agreement in September 2006 included an additional $1.0 million payment for an option to purchase one to three additional television stations in the Northwest. In June 2008, after finalizing its evaluation of various acquisition alternatives, the Company determined that it would not exercise its option to purchase additional stations. Accordingly, the Company recognized a $1.0 million charge to selling, general and administrative expenses in the second quarter of 2008 for the forfeiture of the non-refundable option payment.

8. Discontinued Operations

     On May 30, 2006, the Company entered into an agreement to sell its 24 small-market radio stations located in Montana and Eastern Washington. This agreement was amended in the third quarter of 2006 to reduce the number of stations being sold to 19, at a revised sales price of $29.1 million. On October 31, 2006, the Company completed the sale of 18 small-market radio stations for $26.1 million. The sale of one additional Montana station to the same buyer closed on June 1, 2007, for $3.0 million. At June 30, 2008, $1.0 million is held in escrow and is included in prepaid expenses and other assets, pending final resolution of claims made by the buyer against the escrow amount. The buyer filed a claim on May 7, 2008 asserting breach of representations and damages in excess of $1.0 million. The Company believes the claim is without merit and intends to vigorously pursue the release and collection of the escrow funds. The remaining five stations continue to be held for sale, and the Company anticipates completing the sale of these remaining stations in 2008. In accordance with SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Company has reported the results of operations of these small-market stations as discontinued operations in the accompanying condensed consolidated financial statements. These stations were included in the Company’s radio segment.

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     Operational data for the radio stations is summarized as follows (in thousands):

	Six months ended						Three months ended
	June 30						June 30
	2008			2007			2008			2007
Revenue	$	813		$	977		$	453		$	533
Income (loss) from discontinued operations:
Discontinued operating activities	$	(10	)	$	137		$	29		$	102
Gain on sale		—			2,294			—			2,294
		(10	)		2,431			29			2,396
Income tax effect		3			(851	)		(11	)		(839	)
	$	(7	)	$	1,580		$	18		$	1,557

     The following table summarizes the classes of assets and liabilities held for sale (in thousands):

	June 30		December 31
	2008		2007
Goodwill, net	$	645	$	645
Property, plant and equipment, net		643		643
Intangible assets		765		765
Other assets		29		37
	$	2,082	$	2,090
Liabilities of businesses held for sale	$	121	$	100

9. Television and Radio Broadcast Rights and Other Broadcast Commitments

     The Company acquires television and radio broadcast rights. The impact of such contracts on the Company’s overall financial results is dependent on a number of factors, including popularity of the program, increased competition from other programming, and strength of the advertising market. It is possible that the cost of commitments for program rights may ultimately exceed direct revenue from the program. Estimates of future revenue can change significantly and, accordingly, are reviewed periodically to determine whether impairment is expected over the life of the contract.

     At June 30, 2008, the Company had commitments under license agreements amounting to $34.9 million for future rights to broadcast television and radio programs through 2013. The broadcasting subsidiary acquired exclusive rights to sell available advertising time for a radio station in Seattle (“Joint Sales Agreement”). Under the Joint Sales Agreement, the Company has commitments for monthly payments totaling $5.8 million through 2011.

10. Retirement Benefits

     The Company has a noncontributory supplemental retirement program for key management. No new participants have been admitted to this program since 2001. The program provides for vesting of benefits under certain circumstances. Funding is not required, but generally the Company has acquired annuity contracts and life insurance on the lives of the individual participants to assist in payment of retirement benefits. The Company is the owner and beneficiary of such policies; accordingly, the cash values of the policies as well as the accrued liability are reported in the financial statements. The program requires continued employment through the date of expected retirement. The cost of the program is accrued over the average expected future lifetime of the participants.

     In June 2005, the program was amended to freeze accrual of all benefits to active participants provided under the program. The Company will continue to recognize periodic pension cost related to the program.

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     The net periodic pension cost for the Company’s supplemental retirement program is as follows (in thousands):

	Six months ended				Three months ended
	June 30				June 30
	2008		2007		2008		2007
Interest cost	$	550	$	532	$	275	$	266
Amortization of loss		30		22		15		11
Net periodic pension cost	$	580	$	554	$	290	$	277

     The discount rate used to determine net periodic pension cost was 5.88% and 5.80% for 2008 and 2007, respectively.

11. Income (loss) per share

     Net income (loss) per share represents net income (loss) divided by the weighted average number of shares outstanding during the period. Net income (loss) per share assuming dilution represents net income (loss) divided by the weighted average number of shares outstanding, including the potentially dilutive impact of stock options and restricted stock rights issued under the Company’s incentive plans. Common stock options and restricted stock rights are converted using the treasury stock method.

     Basic and diluted net income (loss) per share has been computed as follows (in thousands, except per-share amounts):

	Six months						Three months
	ended June 30						ended June 30
	2008			2007			2008		2007
Income (loss) from continuing operations	$	62,615		$	(569	)	$	63,656	$	699
Income (loss) from discontinued operations, net of income taxes		(7	)		1,580			18		1,557
Net income	$	62,608		$	1,011		$	63,674	$	2,256
Weighted average shares outstanding — basic		8,730			8,721			8,731		8,722
Weighted effect of dilutive options and rights		2			6			4		7
Weighted average shares outstanding assuming dilution		8,732			8,727			8,735		8,729
Income (loss) per share:
From continuing operations	$	7.17		$	(0.06	)	$	7.29	$	0.08
From discontinued operations		—			0.18			—		0.18
Net income per share	$	7.17		$	0.12		$	7.29	$	0.26
Income (loss) per share assuming dilution:
From continuing operations	$	7.17		$	(0.06	)	$	7.29	$	0.08
From discontinued operations		—			0.18			—		0.18
Net income per share assuming dilution	$	7.17		$	0.12		$	7.29	$	0.26

     The effect of options to purchase 257,465 shares are excluded from the calculation of weighted average shares outstanding for each of the six and three-month periods ended June 30, 2008, because such options were anti-dilutive.

11

     The effect of options to purchase 200,685 and 176,625 shares are excluded from the calculation of weighted average shares outstanding for the six and three-month periods ended June 30, 2007, respectively, because such options were anti-dilutive.

12. Stock-Based Compensation

     Stock-based compensation expense related to stock-based awards under SFAS 123(R) totalled $426,000 and $328,000 for the six months ended June 30, 2008 and 2007, respectively, and $261,000 and $181,000 for the three months ended June 30, 2008 and 2007, respectively. Stock-based compensation expense is included in selling, general and administrative expenses in the Company’s Condensed Consolidated Statements of Operations.

13. Income Taxes

     As required by accounting rules for interim financial reporting, the Company records its income tax provision or benefit based upon its estimated annual effective tax rate, which is estimated as 35% and 20% for the six months ended June 30, 2008 and 2007, respectively. The estimated effective tax rate in the 2008 period was higher than in the same period in 2007 due primarily to the relationship between the amount of estimated annual permanent differences and the Company’s estimated annual pretax income or loss.

     The U.S. federal statute of limitations remains open for the year 2006 and onward. The IRS completed a field examination of the Company’s 2003 to 2005 U.S. tax returns during March 2008 and the Company paid final notice of settlement in the amount of $68,000. The Company recognizes tax expense related to agreed-upon tax adjustments currently as part of its income tax provision and recognizes interest and penalties related to uncertain tax positions in interest expense. As of June 30, 2008, the Company had no accrued interest related to uncertain tax positions, while $218,000 was accrued as of December 31, 2007.

14. Segment Information

     The Company reports financial data for three segments: television, radio, and Fisher Plaza. The television segment includes the operations of the Company’s owned and operated 20 network-affiliated television stations (including a 50%-owned television station) and internet business. The radio segment includes the operations of the Company’s three Seattle radio stations, while operations of the Company’s small-market radio stations are reported as discontinued operations. Corporate expenses of the broadcasting business unit are allocated to the television and radio segments based on actual expenditures incurred or based on a ratio that approximates historical revenue and operating expenses of the segments. The Fisher Plaza segment includes the operations of a communications center located near downtown Seattle that serves as home of the Company’s Seattle television and radio operations, the Company’s corporate offices, and third-party tenants.

     Revenue for each segment is as follows (in thousands):

	Six months						Three months
	ended June 30						ended June 30
	2008			2007			2008		2007
Television	$	58,885		$	51,578		$	30,950	$	26,980
Radio		17,665			18,351			11,150		11,443
Fisher Plaza		6,505			5,689			3,192		2,914
Corporate and eliminations		(42	)		(76	)				(38	)
	$	83,013		$	75,542		$	45,292	$	41,299

     Inter-segment sales amounted to $42,000 and $76,000 for the six months ended June 30, 2008 and 2007, respectively, and zero and $38,000 for the three months ended June 30, 2008 and 2007, respectively, relating primarily to telecommunications fees charged from Fisher Plaza.

12

     Income (loss) from continuing operations before interest and income taxes for each segment is as follows (in thousands):

	Six months						Three months
	ended June 30						ended June 30
	2008			2007			2008			2007
Television	$	1,955		$	6,417		$	(200	)	$	4,498
Radio		(1,789	)		(42	)		(1,459	)		(343	)
Fisher Plaza		2,699			2,196			1,285			1,272
Corporate and eliminations		99,934			(2,307	)		101,200			(999	)
	$	102,799		$	6,264		$	100,826		$	4,428

     Corporate income from continuing operations for the three and six-month periods ended June 30, 2008 includes the pre-tax gain of $103.6 million on sale of Safeco Corporation common stock (see Note 4).

     The following table reconciles total segment income from continuing operations before interest and income taxes shown above to consolidated income (loss) from continuing operations before income taxes (in thousands):

	Six months						Three months
	ended June 30						ended June 30
	2008			2007			2008			2007
Total segment income from continuing operations before interest and income taxes	$	102,799		$	6,264		$	100,826		$	4,428
Interest expense		(6,902	)		(6,904	)		(3,544	)		(3,410	)
Consolidated income (loss) from continuing operations before income taxes	$	95,897		$	(640	)	$	97,282		$	1,018

     Identifiable assets for each segment are as follows (in thousands):

			December 31
	June 30 2008		2007
Total assets
Television	$	187,835	$	136,341
Radio		22,179		20,030
Fisher Plaza		115,023		117,688
Corporate and eliminations		162,597		209,785
		487,634		483,844
Assets held for sale		2,082		2,090
	$	489,716	$	485,934

     Identifiable assets by segment are those assets used in the operations of each segment. Corporate assets are principally cash, cash equivalents and marketable securities.

13

15. Subsequent Event

     On July 30, 2008 the Company’s Board of Directors declared a special dividend of $3.50 per share on its common stock. This dividend is payable on August 29, 2008 to shareholders of record on August 15, 2008.

16. Financial Information for Guarantors

     The Company has outstanding $150.0 million of 8.625% senior notes outstanding, due 2014. The notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured, senior basis by the current and future 100% owned subsidiaries of the Company.

     Presented below are condensed consolidated statements of operations for the six and three months ended June 30, 2008 and 2007, and cash flows for the six months ended June 30, 2008 and 2007. Also presented are the condensed consolidated balance sheets as of June 30, 2008 and December 31, 2007. The condensed consolidated information is presented for the Company (issuer) with its investments accounted for under the equity method, the 100% owned guarantor subsidiaries, eliminations, and the Company on a consolidated basis. The Company (issuer) information consists primarily of corporate oversight and administrative personnel and related activities, as well as certain investments in marketable securities.

14

Financial Information for Guarantors
Condensed Consolidated Statement of Operations
for the six months ended June 30, 2008

				100%						Fisher
	Fisher			Owned						Communications,
	Communications,			Guarantor						Inc. and
(in thousands)	Inc.			Subsidiaries			Eliminations			Subsidiaries
Revenue	$			$	83,019		$	(6	)	$	83,013
Costs and expenses
Direct operating costs		147			35,131			97			35,375
Selling, general and administrative expenses		6,780			28,204			(103	)		34,881
Amortization of program rights					9,461						9,461
Depreciation and amortization		463			5,790						6,253
		7,390			78,586			(6	)		85,970
Income (loss) from operations		(7,390	)		4,433						(2,957	)
Other income, net		105,712			44						105,756
Equity in income of subsidiaries		2,713						(2,713	)		—
Interest expense, net		(6,857	)		(45	)					(6,902	)
Income (loss) from continuing operations before income taxes		94,178			4,432			(2,713	)		95,897
Provision for federal and state income taxes		31,570			1,712						33,282
Income (loss) from continuing operations		62,608			2,720			(2,713	)		62,615
Loss from discontinued operations, net of income taxes					(7	)					(7	)
Net income (loss)	$	62,608		$	2,713		$	(2,713	)	$	62,608

15

Financial Information for Guarantors
Condensed Consolidated Statement of Operations
for the six months ended June 30, 2007

				100%					Fisher
	Fisher			Owned					Communications,
	Communications,			Guarantor					Inc. and
(in thousands)	Inc.			Subsidiaries		Eliminations			Subsidiaries
Revenue	$			$	75,551	$	(9	)	$	75,542
Costs and expenses
Direct operating costs					30,982		99			31,081
Selling, general and administrative expenses		4,247			21,063		(108	)		25,202
Amortization of program rights					9,434					9,434
Depreciation and amortization		146			5,711					5,857
		4,393			67,190		(9	)		71,574
Income (loss) from operations		(4,393	)		8,361					3,968
Other income, net		2,069			227					2,296
Equity in income of subsidiaries		6,955					(6,955	)		—
Interest expense, net		(6,904	)							(6,904	)
Income (loss) from continuing operations before income taxes		(2,273	)		8,588		(6,955	)		(640	)
Provision (benefit) for federal and state income taxes		(3,284	)		3,213					(71	)
Income (loss) from continuing operations		1,011			5,375		(6,955	)		(569	)
Income from discontinued operations, net of income taxes					1,580					1,580
Net income (loss)	$	1,011		$	6,955	$	(6,955	)	$	1,011

16

Financial Information for Guarantors
Condensed Consolidated Statement of Operations
for the three months ended June 30, 2008

				100%						Fisher
	Fisher			Owned						Communications,
	Communications,			Guarantor						Inc. and
(in thousands)	Inc.			Subsidiaries			Eliminations			Subsidiaries
Revenue	$			$	45,292		$			$	45,292
Costs and expenses
Direct operating costs		77			17,750			54			17,881
Selling, general and administrative expenses		4,287			16,941			(54	)		21,174
Amortization of program rights					7,015						7,015
Depreciation and amortization		232			2,894						3,126
		4,596			44,600			—			49,196
Income (loss) from operations		(4,596	)		692						(3,904	)
Other income, net		104,675			55						104,730
Equity in income of subsidiaries		417						(417	)		—
Interest expense, net		(3,522	)		(22	)					(3,544	)
Income (loss) from continuing operations before income taxes		96,974			725			(417	)		97,282
Provision for federal and state income taxes		33,300			326						33,626
Income (loss) from continuing operations		63,674			399			(417	)		63,656
Income from discontinued operations, net of income taxes					18						18
Net income (loss)	$	63,674		$	417		$	(417	)	$	63,674

17

Financial Information for Guarantors
Condensed Consolidated Statement of Operations
for the three months ended June 30, 2007

				100%					Fisher
	Fisher			Owned					Communications,
	Communications,			Guarantor					Inc. and
(in thousands)	Inc.			Subsidiaries		Eliminations			Subsidiaries
Revenue	$			$	41,303	$	(4	)	$	41,299
Costs and expenses
Direct operating costs					15,216		49			15,265
Selling, general and administrative costs		2,018			10,740		(53	)		12,705
Amortization of program rights					7,011					7,011
Depreciation and amortization		74			2,942					3,016
		2,092			35,909		(4	)		37,997
Income (loss) from operations		(2,092	)		5,394					3,302
Other income, net		1,089			37					1,126
Equity in income of subsidiaries		4,911					(4,911	)		—
Interest expense, net		(3,410	)							(3,410	)
Income (loss) from continuing operations before income taxes		498			5,431		(4,911	)		1,018
Provision (benefit) for federal and state income taxes		(1,758	)		2,077					319
Income (loss) from continuing operations		2,256			3,354		(4,911	)		699
Income from discontinued operations, net of income taxes					1,557					1,557
Net income (loss)	$	2,256		$	4,911	$	(4,911	)	$	2,256

18

Financial Information for Guarantors
Condensed Consolidated Balance Sheet
as of June 30, 2008

				100%					Fisher
	Fisher			Owned					Communications,
	Communications,			Guarantor					Inc. and
(in thousands)	Inc.			Subsidiaries		Eliminations			Subsidiaries
ASSETS
Current Assets
Cash and cash equivalents	$	74,248		$	623	$			$	74,871
Receivable from broker		14,412								14,412
Marketable securities, at market value		50,620								50,620
Receivables, net		43			33,517					33,560
Due from affiliate		9,063					(9,063	)		—
Deferred income taxes		123			662					785
Prepaid expenses and other assets		396			3,879					4,275
Television and radio broadcast rights					2,596					2,596
Assets held for sale					29					29
Total current assets		148,905			41,306		(9,063	)		181,148
Marketable securities, at market value					893					893
Investment in consolidated subsidiaries		273,430					(273,430	)		—
Cash value of life insurance and retirement deposits		17,222								17,222
Television and radio broadcast rights					266					266
Goodwill					52,294					52,294
Intangible assets					78,626					78,626
Investment in equity investee					2,636					2,636
Deferred income taxes		15,932					(15,932	)		—
Deferred financing fees and other assets		3,591			1,406					4,997
Assets held for sale					2,053					2,053
Property, plant and equipment, net		1,620			147,961					149,581
Total Assets	$	460,700		$	327,441	$	(298,425	)	$	489,716
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Trade accounts payable	$	1,285		$	3,292	$			$	4,577
Due to affiliate					9,063		(9,063	)		—
Accrued payroll and related benefits		589			5,867					6,456
Interest payable		3,800								3,800
Television and radio broadcast rights payable					1,488					1,488
Income taxes payable		20,128			84					20,212
Deferred income taxes		17,627								17,627
Current portion of accrued retirement benefits		1,230								1,230
Other current liabilities		1,150			4,784					5,934
Liabilities of businesses held for sale					121					121
Total current liabilities		45,809			24,699		(9,063	)		61,445
Long-term debt		150,000								150,000
Accrued retirement benefits		18,563								18,563
Deferred income taxes					16,661		(15,932	)		729
Other liabilities					12,651					12,651
Stockholders’ Equity
Common stock		10,914			1,131		(1,131	)		10,914
Capital in excess of par		10,630			164,234		(164,234	)		10,630
Accumulated other comprehensive income, net of income taxes:
Unrealized gain on marketable securities		32,690								32,690
Accumulated loss		(1,940	)							(1,940	)
Prior service cost		(165	)							(165	)
Retained earnings		194,199			108,065		(108,065	)		194,199
Total Stockholders’ Equity		246,328			273,430		(273,430	)		246,328
Total Liabilities and Stockholders’ Equity	$	460,700		$	327,441	$	(298,425	)	$	489,716

19

Financial Information for Guarantors
Condensed Consolidated Balance Sheet
as of December 31, 2007

				100%					Fisher
	Fisher			Owned					Communications,
	Communications,			Guarantor					Inc. and
(in thousands)	Inc.			Subsidiaries		Eliminations			Subsidiaries
ASSETS
Current Assets
Cash and cash equivalents	$	5,804		$	706	$			$	6,510
Receivables, net		582			29,916					30,498
Due from affiliate					40,567		(40,567	)
Deferred income taxes		123			662					785
Prepaid expenses and other assets		237			3,618					3,855
Television and radio broadcast rights					5,934					5,934
Assets held for sale					37					37
Total current assets		6,746			81,440		(40,567	)		47,619
Restricted cash		52,365								52,365
Marketable securities, at market value		128,201			1,022					129,223
Investment in consolidated subsidiaries		270,717					(270,717	)
Cash value of life insurance and retirement deposits		16,809								16,809
Television and radio broadcast rights					7					7
Goodwill					37,361					37,361
Intangible assets					42,782					42,782
Investments in equity investee					2,635					2,635
Deferred financing fees and other assets		3,913			5,159					9,072
Assets held for sale					2,053					2,053
Property, plant and equipment, net		1,030			144,978					146,008
Total Assets	$	479,781		$	317,437	$	(311,284	)	$	485,934
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Trade accounts payable	$	924		$	2,813	$			$	3,737
Due to affiliate		40,567					(40,567	)
Accrued payroll and related benefits		1,656			5,958					7,614
Interest payable		3,773								3,773
Television and radio broadcast rights payable					4,940					4,940
Income taxes payable					3,959					3,959
Current portion of accrued retirement benefits		1,230								1,230
Other current liabilities		1,033			3,185					4,218
Liabilities of businesses held for sale					100					100
Total current liabilities		49,183			20,955		(40,567	)		29,571
Long-term debt		150,000								150,000
Accrued retirement benefits		18,552								18,552
Deferred income taxes		28,590			16,684					45,274
Other liabilities		59			9,081					9,140
Stockholders’ Equity
Common stock		10,907			1,131		(1,131	)		10,907
Capital in excess of par		10,220			164,234		(164,234	)		10,220
Accumulated other comprehensive income — net of income taxes:
Unrealized gain on marketable securities		82,818								82,818
Accumulated loss		(1,958	)							(1,958	)
Prior service cost		(181	)							(181	)
Retained earnings		131,591			105,352		(105,352	)		131,591
Total Stockholders’ Equity		233,397			270,717		(270,717	)		233,397
Total Liabilities and Stockholders’ Equity	$	479,781		$	317,437	$	(311,284	)	$	485,934

20

Financial Information for Guarantors
Condensed Consolidated Statement of Cash Flows
for the six months ended June 30, 2008

				100%					Fisher
	Fisher			Owned					Communications,
	Communications,			Guarantor					Inc. and
(in thousands)	Inc.			Subsidiaries			Eliminations		Subsidiaries
Net cash provided by (used in) operating activities	$	(20,545	)	$	4,623		$		$	(15,922	)
Cash flows from investing activities
Purchase of marketable securities					(56	)				(56	)
Proceeds from sale of marketable securities		89,735			110					89,845
Decrease in restricted cash		52,365								52,365
Purchase of television stations		(52,365	)							(52,365	)
Purchase of property, plant and equipment		(746	)		(4,690	)				(5,436	)
Net cash provided by (used in) investing activities		88,989			(4,636	)		—		84,353
Cash flows from financing activities
Borrowings under borrowing agreements		14,000								14,000
Payments on borrowing agreements		(14,000	)							(14,000	)
Payment of capital lease obligation					(70	)				(70	)
Net cash used in financing activities		—			(70	)		—		(70	)
Net increase (decrease) in cash and cash equivalents		68,444			(83	)		—		68,361
Cash and cash equivalents, beginning of period		5,804			706			—		6,510
Cash and cash equivalents, end of period	$	74,248		$	623		$	—	$	74,871

21

Financial Information for Guarantors
Condensed Consolidated Statement of Cash Flows
for the six months ended June 30, 2007

				100%						Fisher
	Fisher			Owned						Communications,
	Communications,			Guarantor						Inc. and
(in thousands)	Inc.			Subsidiaries			Eliminations			Subsidiaries
Net cash provided by (used in) operating activities	$	958		$	(1,343	)	$	1,067		$	682
Cash flows from investing activities
Proceeds from sale of radio station					2,869						2,869
Purchase of television stations					(4,931	)					(4,931	)
Decrease in restricted cash					8,473						8,473
Purchases of investments available-for-sale					(177	)					(177	)
Purchase of property, plant and equipment		(47	)		(4,591	)					(4,638	)
Net cash provided by (used in) investing activities		(47	)		1,643			—			1,596
Cash flows from financing activities
Borrowings under borrowing agreements		6,000									6,000
Payments on borrowing agreements		(6,000	)								(6,000	)
Proceeds from exercise of stock options		34									34
Net cash provided by financing activities		34			—			—			34
Net increase in cash and cash equivalents		945			300			1,067			2,312
Cash and cash equivalents, beginning of period		8,544						(1,067	)		7,477
Cash and cash equivalents, end of period	$	9,489		$	300		$	—		$	9,789

22

ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and related notes thereto included elsewhere in this quarterly report on Form 10-Q. Some of the statements in this quarterly report are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all passages containing verbs such as “aims”, “anticipates”, “believes”, “estimates”, “expects”, “hopes”, “intends”, “plans”, “predicts”, “projects” or “targets” or nouns corresponding to such verbs. Forward-looking statements also include any other passages that are primarily relevant to expected future events or that can only be fully evaluated by events that will occur in the future. There are many risks and uncertainties that could cause actual results to differ materially from those predicted in our forward-looking statements, including, without limitation, those factors discussed under the caption “Risk Factors” in Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2007, which was filed with the Securities and Exchange Commission on March 14, 2008. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. Readers are urged to carefully review and consider the various disclosures made in this report and in our other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect our business, prospects and results of operations. As used herein, unless the context requires otherwise, when we say “we”, “us”, “our”, or the “Company”, we are referring to Fisher Communications, Inc. and its consolidated subsidiaries.

     This discussion is intended to provide an analysis of significant trends and material changes in our financial condition and operating results during the three and six-month periods ended June 30, 2008, compared with the corresponding periods in 2007.

Overview

     We are an integrated media company. We own and operate thirteen full power (including a 50%-owned television station) and seven low power network-affiliated television stations and eight radio stations. Our television and radio stations are located in Washington, Oregon, Idaho, California and Montana. We also own and operate Fisher Plaza, a mixed-use facility located near downtown Seattle that serves as the home for our corporate offices and our Seattle television and radio stations, and also houses a variety of unaffiliated companies, including media and communications companies.

     Our broadcasting operations receive revenue from the sale of local, regional and national advertising and, to a much lesser extent, from network compensation, satellite and fiber transmission services, tower rental and commercial production activities. Our operating results are therefore sensitive to broad economic trends that affect the broadcasting industry in general, as well as local and regional trends, such as those affecting the Northwest economy. Excluding revenue derived from seasonal sports rights, the advertising revenue of our stations is generally highest in the second and fourth quarters of each year, due in part to increases in consumer advertising in the spring, and retail advertising in the period leading up to and including the holiday season. In addition, advertising revenue is generally higher during national election years due to spending by political candidates and advocacy groups. This political spending typically is heaviest during the fourth quarter.

     Our television revenue is significantly affected by network affiliation and the success of programming offered by those networks. Our two largest television stations, which account for approximately 65% of our television broadcasting revenue, are affiliated with the ABC Television Network. Nine of our television stations are affiliated with the CBS Television Network (including a 50%-owned television station), one of our television stations is affiliated with the FOX Television Network, and the remainder of our television stations are affiliated with Univision or its sister station Telefutura. Our broadcasting operations are subject to competitive pressures from traditional broadcasting sources, as well as from alternative methods of delivering information and entertainment, and these pressures may cause fluctuations in operating results.

     In addition to our broadcasting operations, we own and operate Fisher Plaza, and we lease space to other companies that are attracted by the property location and the infrastructure provided at this facility. As of June 30, 2008, approximately 97% of Fisher Plaza was occupied or committed for occupancy (43% was occupied by Fisher

23

entities), compared to 97% occupied or committed for occupancy at December 31, 2007 and 91% occupied or committed for occupancy at June 30, 2007. Revenue and operating income from Fisher Plaza are dependent upon the general economic climate, the Seattle economic climate, the outlook of the telecommunications and technology sectors and real estate conditions, including the availability of space in other competing properties. During the second quarter of 2008, we announced that we were exploring strategic options for our real estate assets, most notably Fisher Plaza.

     Management focuses on key metrics from operational data within our broadcasting and Fisher Plaza operations. Information on significant trends is provided in the section entitled “Consolidated Results of Operations” below.

     On July 30, 2008 our Board of Directors declared a special dividend of $3.50 per share on its common stock, payable on August 29, 2008 to shareholders of record on August 15, 2008. We anticipate funding the special dividend from the proceeds of short-term borrowings and cash from operations.

     In June 2008, we sold 1,548,956 shares of Safeco Corporation common stock, which represented 67.3% of our total Safeco holdings. The shares were sold at an average price of $67.27 per share, resulting in pre-tax net proceeds of approximately $104.1 million. Of this amount, $14.4 million is included in receivable from broker on the consolidated balance sheet at June 30, 2008, representing the sales proceeds from trades occurring in June 2008 that were not settled until July 2008. The book basis of the shares sold totalled approximately $526,000, resulting in a pre-tax gain on sale of $103.6 million, which is included in other income, net for the three and six-month periods ended June 30, 2008.

     In July 2008, we sold our remaining 753,720 shares of Safeco Corporation common stock. The shares were sold at an average price of $65.38 per share, resulting in pre-tax net proceeds of approximately $49.3 million. The book basis of the shares sold totalled approximately $256,000, resulting in a pre-tax gain on sale of $49.0 million.

     In April 2008, we terminated the agreement with our national advertising representation firm. The successor firm will satisfy our contractual termination obligation to the predecessor firm with no cash payment made by the Company. In the second quarter of 2008, we recognized a non-cash termination charge of approximately $7.3 million to selling, general and administrative expenses and will amortize the resulting liability as a non-cash benefit over the five year term of the new agreement. In addition, we recognized a non-cash benefit of approximately $2.3 million to selling, general and administrative expenses in the second quarter of 2008, representing the remaining unamortized balance of our 2005 non-cash charge resulting from the termination of our national advertising representation agreement.

     On January 1, 2008 we completed the purchase of the assets of two television stations in the Bakersfield, California Designated Market Area (“DMA”) for $55.3 million in cash.

     In November 2006, we finalized the purchase of two Oregon television stations (KUNP and KUNP LP) for $19.3 million. A second amendment to that purchase agreement in September 2006 included an option to purchase one to three additional television stations in the Northwest. In June 2008, after finalizing our evaluation of various acquisition alternatives, we determined that we would not exercise the option to purchase additional stations. Accordingly, we recognized a $1.0 million charge to selling, general and administrative expenses in the second quarter of 2008 for the forfeiture of the non-refundable option payment.

     In October 2006, we completed the sale of 18 of 24 small-market radio stations located in Montana and Eastern Washington for $26.1 million. The sale of one additional Montana station to the same buyer closed in June 2007, for $3.0 million. The remaining five stations continue to be actively marketed and held for sale, and we anticipate completing the sale of these remaining stations in 2008. The small-market radio stations are treated as discontinued operations in the accompanying condensed consolidated financial statements.

     In May 2002, we entered into a radio rights agreement (the “Rights Agreement”) to broadcast Seattle Mariners baseball games on KOMO AM for the 2003 through 2008 baseball seasons. The impact of the Rights Agreement is greater during periods that include the broadcast of Mariners baseball games; therefore, the impact on the first and fourth quarters of each calendar year is less than what is expected for the second and third quarters of the calendar year. The success of this programming is dependent, in part, on factors beyond our control, such as the competitiveness of the Seattle Mariners and the successful marketing of the team. In July 2008, we announced that we would not renew the Rights Agreement with the Seattle Mariners; therefore, 2008 will be the final year of our commitments under this agreement.

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Critical Accounting Policies

     The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of the company’s financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Our critical accounting policies and estimates include the estimates used in determining the recoverability of goodwill and other indefinite-lived intangible assets, the recoverability of long-lived tangible assets, the value of television and radio broadcast rights, the cost of pension programs, the amount of tax accruals, the amount of the allowance for doubtful accounts, the existence of and accounting for variable interest entities and the amount of stock-based compensation. For a detailed discussion of our critical accounting policies and estimates, please refer to our Annual Report on Form 10-K for the year ended December 31, 2007. There have been no material changes in the application of our critical accounting policies and estimates subsequent to that report. We have discussed the development and selection of these critical accounting estimates with the Audit Committee of our board of directors.

     The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Consolidated Results of Operations

     We report financial data for three segments: television, radio and Fisher Plaza. The television segment includes the operations of the Company’s owned and operated 20 network-affiliated television stations (including a 50%-owned television station) and internet business. The radio segment includes the operations of the Company’s three Seattle radio stations, while operations of the Company’s small-market radio stations are reported as discontinued operations. Corporate expenses of the broadcasting business unit are allocated to the television and radio segments based on actual expenditures incurred or based on a ratio that approximates historical revenue and operating expenses of the segments. The Fisher Plaza segment consists of the operations of Fisher Plaza, a communications center located near downtown Seattle that serves as the home of the Company’s Seattle television and radio operations, the Company’s corporate offices, and third-party tenants. Fisher-owned entities that reside at Fisher Plaza do not pay rent; however, these entities do pay common-area maintenance expenses. The segmental data includes additional allocation of depreciation and certain operating expenses from Fisher Plaza to the Seattle-based television and radio operations.

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     Percentage comparisons have been omitted within the following table where they are not considered meaningful.

	Six months												Three months
(Dollars in thousands)	ended June 30						Variance						ended June 30						Variance
(Unaudited)	2008			2007			$			%			2008			2007			$			%
Revenue
Television	$	58,885		$	51,578		$	7,307			14.2	%	$	30,950		$	26,980		$	3,970			14.7	%
Radio		17,665			18,351			(686	)		-3.7	%		11,150			11,443			(293	)		-2.6	%
Fisher Plaza		6,505			5,689			816			14.3	%		3,192			2,914			278			9.5	%
Corporate and eliminations		(42	)		(76	)		34						—			(38	)		38
Consolidated		83,013			75,542			7,471			9.9	%		45,292			41,299			3,993			9.7	%
Direct Operating Costs
Television		26,502			22,847			3,655			16.0	%		13,438			11,403			2,035			17.8	%
Radio		6,086			5,632			454			8.1	%		3,066			2,622			444			16.9	%
Fisher Plaza		1,774			1,671			103			6.2	%		847			775			72			9.3	%
Corporate and eliminations		1,013			931			82			8.8	%		530			465			65			14.0	%
Consolidated		35,375			31,081			4,294			13.8	%		17,881			15,265			2,616			17.1	%
Selling, general and administrative expenses
Television		22,460			14,592			7,868			53.9	%		13,737			7,070			6,667			94.3	%
Radio		7,438			7,162			276			3.9	%		4,301			4,040			261			6.5	%
Fisher Plaza		400			207			193			93.2	%		260			80			180			225.0	%
Corporate and eliminations		4,583			3,241			1,342			41.4	%		2,876			1,515			1,361			89.8	%
Consolidated		34,881			25,202			9,679			38.4	%		21,174			12,705			8,469			66.7	%
Amortization of program rights
Television		3,979			4,274			(295	)		-6.9	%		1,988			2,128			(140	)		-6.6	%
Radio		5,482			5,160			322			6.2	%		5,027			4,883			144			2.9	%
Consolidated		9,461			9,434			27			0.3	%		7,015			7,011			4			0.1	%
Depreciation and amortization
Television		4,016			3,622			394			10.9	%		2,029			1,907			122			6.4	%
Radio		449			473			(24	)		-5.1	%		216			248			(32	)		-12.9	%
Fisher Plaza		1,632			1,616			16			1.0	%		800			787			13			1.7	%
Corporate and eliminations		156			146			10			6.8	%		81			74			7			9.5	%
Consolidated		6,253			5,857			396			6.8	%		3,126			3,016			110			3.6	%
Income (loss) from operations
Television		1,928			6,243			(4,315	)					(242	)		4,472			(4,714	)
Radio		(1,790	)		(76	)		(1,714	)					(1,460	)		(350	)		(1,110	)
Fisher Plaza		2,699			2,195			504						1,285			1,272			13
Corporate and eliminations		(5,794	)		(4,394	)		(1,400	)					(3,487	)		(2,092	)		(1,395	)
Consolidated		(2,957	)		3,968			(6,925	)					(3,904	)		3,302			(7,206	)
Other income, net		105,756			2,296			103,460						104,730			1,126			103,604
Interest expense, net		(6,902	)		(6,904	)		2						(3,544	)		(3,410	)		(134	)
Income (loss) from continuing operations before income taxes		95,897			(640	)		96,537						97,282			1,018			96,264
Provision (benefit) for federal and state income taxes		33,282			(71	)		33,353						33,626			319			33,307
Income (loss) from continuing operations		62,615			(569	)		63,184						63,656			699			62,957
Income (loss) from discontinued operations, net of income taxes		(7	)		1,580			(1,587	)					18			1,557			(1,539	)
Net income	$	62,608		$	1,011		$	61,597					$	63,674		$	2,256		$	61,418

Reclassifications

Certain amounts in the 2007 condensed consolidated statements of operations have been reclassified to conform to the 2008 presentation. Certain employment-related expenses totaling approximately $3.0 million and $1.5 million for the six and three-month periods ended June 30, 2007, respectively, which were previously reported within “Selling, general and administrative expenses,” are now reported within “Direct operating costs.”

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Comparison of Six and Three-Month Periods Ended June 30, 2008 and June 30, 2007

Revenue

     Television revenue increased in the three and six-month periods ended June 30, 2008 compared to the same periods in 2007, primarily due to the acquisition of the two Bakersfield, California television stations on January 1, 2008 as well as increased political advertising in certain markets. These new stations contributed approximately $2.6 million and $5.3 million in additional television revenue in the three and six-month periods ended June 30, 2008, respectively. Revenues from our ABC-affiliated stations increased 2.9% and 2.6% in the three and six-month periods ended June 30, 2008, respectively, as compared to the same periods in 2007, due primarily to increased political revenue. Revenues from our CBS-affiliated stations, excluding the new Bakersfield, California CBS affiliate, increased 3.9% in the three-month period ended June 30, 2008, as compared to the same period in 2007, while remaining relatively flat in the six-month period ended June 30, 2008 as compared to the same period in 2007. In addition, revenues from our growing Spanish-language television stations have increased.

     In May 2005, we signed agreements with ABC to renew that network’s affiliation at KOMO TV in Seattle and KATU TV in Portland through August 2009. In January 2006, we also renewed affiliation agreements with CBS through February 2016. The terms of the renewals include decreasing network compensation, and we are recognizing network compensation revenue on a straight-line basis over the terms of the agreements. In November 2006, we entered into affiliation agreements with Univision for our Spanish-language television stations for terms extending into 2011. With the acquisition of the two Bakersfield, California television stations in January 2008, we assumed the stations’ existing network affiliation agreements with CBS and FOX, expiring in March 2016 and June 2010, respectively.

     Radio revenue decreased in the three-month period ended June 30, 2008, as compared to the same period in 2007, primarily as a result of decreased local and non-traditional revenue, which was partially offset by increased national political revenue. Radio revenue decreased in the six-month period ended June 30, 2008, as compared to the same period in 2007, primarily as a result of decreased local and national revenue. Revenue and expenses from our small-market radio operations have been included in the discontinued operations category due to the held-for-sale status of those stations.

     The revenue increase at Fisher Plaza in the three and six-month periods ended June 30, 2008, as compared to the same periods in 2007, was due primarily to increased rental and service fees, as well as increased electrical infrastructure fees and tenant reimbursements.

Direct operating costs

     Direct operating costs consist primarily of costs to produce and promote broadcast programming for the television and radio segments, and costs to operate Fisher Plaza. Many of these costs are relatively fixed in nature and do not necessarily vary on a proportional basis with revenue.

     The increase in direct operating costs for the television segment in the three and six-month periods ended June 30, 2008 compared to the same periods in 2007, is primarily the result of increased costs associated with operating our two new Bakersfield, California television stations, in addition to increasing expenses associated with our strategy to grow our internet business.

     Direct operating costs increased at our radio segment in the three and six-month periods ended June 30, 2008 as compared to the same periods in 2007. The increased cost was primarily attributable to increased promotional expenses and rights fees related to our agreement to broadcast the Seattle Mariners baseball games.

     Direct operating costs increased at Fisher Plaza in the three and six-month periods ended June 30, 2008 as compared to the same periods in 2007 due primarily to higher costs associated with increased occupancy levels.

     The corporate and eliminations category consists primarily of the reclassification and elimination of certain operating expenses between operating segments. For example, KOMO TV and Seattle Radio recognize facilities-

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related expenses as selling, general and administrative, while Fisher Plaza records the reimbursement of these intercompany expenses as a reduction of direct operating costs.

Selling, general and administrative expenses

     The increase in selling, general and administrative expenses in the television segment in the three and six -month periods ended June 30, 2008 compared to the same periods in 2007, was due primarily to a net $5.0 million non-cash charge resulting from our April 2008 decision to change our national advertising representation firm as well as costs associated with operating our two new Bakersfield, California television stations and increasing expenses associated with our growing Internet business.

     In April 2008, we terminated an agreement with our national advertising representation firm. The successor firm will satisfy our contractual termination obligation to the predecessor firm with no cash payment made by the Company. We recognized a non-cash termination charge of approximately $7.3 million to television selling, general and administrative expenses and will amortize the resulting liability as a non-cash benefit over the five year term of the new agreement. In addition, we recognized a non-cash benefit of approximately $2.3 million to television selling, general and administrative expenses in the second quarter of 2008, representing the remaining unamortized balance of our 2005 non-cash charge resulting from the termination of our national advertising representation agreement.

     Selling, general and administrative expenses increased at our radio segment in the three and six-month periods ended June, 2008 as compared to the same periods in 2007 due primarily to increased marketing and personnel costs related to our agreement to broadcast the Seattle Mariners baseball games.

     Selling, general and administrative expenses increased at Fisher Plaza in the three and six-month periods ended June 2008 as compared to the same periods in 2007 primarily due to marketing expenses associated with our exploration of strategic alternatives for Fisher Plaza.

     Our corporate selling, general and administrative expenses increased primarily due to a $1.0 million non-cash charge for the forfeiture of a non-refundable option payment related to our decision not to exercise an option to acquire additional television stations, as well as increased legal and professional fees and payroll-related expenses.

Amortization of program rights

     Amortization of program rights for the television segment decreased in the three and six-month periods ended June 30, 2008 compared to the same periods in 2007, due primarily to renewal of several syndicated television programming contracts at reduced rates.

     Amortization of program rights for the radio segment are related to the agreement to broadcast Seattle Mariners baseball games and increased in the three and six-month periods ended June 30, 2008 compared to the same periods in 2007. This rise in expense is due primarily to an increase in the annual fee amount for the 2008 season.

Depreciation and amortization

     Depreciation and amortization for the television segment increased in the three and six-month periods ended June 30, 2008 compared to the same periods in 2007 due primarily to the acquisition of the two new Bakersfield, California stations in January 2008.

     Depreciation and amortization for the other segments remained relatively flat in the three and six-month periods ended June 30, 2008 compared to the same periods in 2007.

Other income, net

     Other income, net, includes gain on sale of marketable securities, dividends received on marketable securities and, to a lesser extent, interest and miscellaneous income. The significant increase in the three and six-months ended June 30, 2008 compared to the same periods in 2007 was the result of our June 2008 sale of 1,548,856 shares of Safeco Corporation common stock, resulting in a pre-tax gain of $103.6 million.

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Interest expense, net

     Interest expense consists primarily of interest on our $150 million senior notes and amortization of loan fees, and interest on borrowings under our $20 million senior credit facility. Interest expense in the three-month period ended June 30, 2008 increased from the same period in 2007 due primarily to borrowings on our $20 million senior credit facility.

Provision (benefit) for federal and state income taxes

     The provision for federal and state income taxes varies with pre-tax income or loss. Consequently, the changes in provision and benefit for federal and state income taxes were primarily due to fluctuating income and loss from continuing operations before income taxes. The effective tax rate varies from the statutory rate primarily due to a deduction for dividends received from our investment in Safeco Corporation common stock (70% exclusion rate), and changes in cash surrender value of life insurance policies held by the Company (for which proceeds are received tax-free if held to maturity). As required by accounting rules for interim financial reporting, we record our income tax provision or benefit based upon our estimated annual effective tax rate, which is estimated as 35% and 20% for the six months ended June 30, 2008 and 2007, respectively. The estimated effective tax rate in the 2008 periods was higher than in the same periods in 2007 due primarily to the relationship between the amount of estimated annual permanent differences and our estimated annual pretax income or loss.

Income from discontinued operations, net of income taxes

     The income from discontinued operations is related to our small-market radio stations sold or held for sale, and is presented net of income taxes. On June 1, 2007 we closed the sale of one of these stations and recognized a gain on sale of $1.5 million, net of tax. The remaining five stations remain classified as held for sale as of June 30, 2008. See Note 8 to the condensed consolidated financial statements for more information on our discontinued operations.

Liquidity and capital resources

     Our current assets as of June 30, 2008 included cash and cash equivalents totaling $74.9 million and marketable securities totaling $50.6 million, and we had working capital of $119.7 million. As of December 31, 2007, our current assets included cash and cash equivalents totaling $6.5 million, and we had working capital of $18.0 million. The significant increase in current assets and working capital is due to the sale of our investment in Safeco Corporation common stock. We have outstanding $150.0 million of 8.625% senior notes due 2014. The notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured, senior basis by our current and future material domestic subsidiaries. Interest on the notes is payable semiannually in arrears on March 15 and September 15 of each year. Additionally, we have a senior credit facility, expiring 2010, with a financial institution for borrowings of up to $20.0 million. The credit facility is collateralized by substantially all of our assets (excluding certain real property). As of June 30, 2008, and December 31, 2007, no amounts were outstanding under the senior credit facility. We intend to finance working capital, debt service and capital expenditures primarily through operating activities and use of the senior credit facility. As of June 30, 2008, no cash was restricted and $20.0 million was available under the credit facility.

     On July 30, 2008 our Board of Directors declared a special dividend of $3.50 per share on our common stock, payable on August 29, 2008 to shareholders of record on August 15, 2008. We anticipate funding the special dividend from the proceeds of short-term borrowings and cash from operations.

     In June 2008, we sold 1,548,956 shares of Safeco Corporation common stock, which represented 67.3% of our total Safeco holdings. The shares were sold at an average price of $67.27 per share, resulting in pre-tax net proceeds to the Company of approximately $104.1 million. Of this amount, $14.4 million is included in receivable from broker on the consolidated balance sheet at June 30, 2008, representing the sales proceeds from trades occurring in June 2008 that were not settled until July 2008. The book basis of the shares sold totalled approximately $526,000, resulting in a pre-tax gain on sale of $103.6 million, which is included in other income, net for the three and six-month periods ended June 30, 2008.

     In July 2008, we sold the remaining 753,720 shares of Safeco Corporation common stock. The shares were sold at an average price of $65.38 per share, resulting in pre-tax net proceeds of approximately $49.3 million. The book basis of the shares sold totalled approximately $256,000, resulting in a pre-tax gain on sale of $49.0 million.

     We are currently evaluating the redeployment of cash proceeds from the sale of our Safeco holdings as well as the proceeds from the possible sale of Fisher Plaza. We do not anticipate finalizing our evaluation or

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communicating our strategy for the use of the cash proceeds until we reach a decision on whether to sell Fisher Plaza.

     Our debt agreements contain provisions that limit our ability to distribute proceeds from asset sales, which includes proceeds from the sale of our Safeco shares. In the event that we do not use the proceeds from asset sales for qualifying purposes within 365 days from the date of sale we will be required to offer to repurchase our outstanding senior notes at their principal amount. A copy of the indenture governing our senior notes has been filed as an exhibit to our Annual Report on Form 10-K.

     On January 1, 2008 we completed the purchase of the assets of two television stations in the Bakersfield, California DMA for $55.3 million in cash.

     In October 2006, we completed the sale of 18 of 24 small-market radio stations located in Montana and Eastern Washington for $26.1 million. The sale of one additional Montana station to the same buyer closed in June 2007, for $3.0 million. At June 30, 2008, $1.0 million is held in escrow and is included in prepaid expenses and other assets, pending final resolution of claims made by the buyer against the escrow amount. The buyer filed a claim on May 7, 2008 asserting breach of representations and damages in excess of $1.0 million. We believe the claim is without merit and intend to vigorously pursue the release and collection of the escrow funds. The remaining five stations continue to be actively marketed and held for sale, and we anticipate completing the sale of these remaining stations in 2008. The small-market radio stations are treated as discontinued operations in the accompanying condensed consolidated financial statements.

     Net cash used in operating activities during the six-months ended June 30, 2008 was $15.9 million, compared to $682,000 provided by operating activities in the comparable period in 2007. Net cash used in operating activities consists of our net income, adjusted by non-cash expenses such as depreciation and amortization, further adjusted by gain on the sale of marketable securities (for the 2008 period) and gain on the sale of radio stations (for the 2007 period), changes in current and deferred income tax and changes in operating assets and liabilities.

     Net cash provided by investing activities during the six-month period ended June 30, 2008 was $84.4 million, compared to $1.6 million in the comparable period in 2007. During the six months ended June 30, 2008, we received proceeds from the sale of marketable securities of $89.8 million, used $52.4 million of restricted cash to complete the purchase of two television stations in Bakersfield, and used $5.4 million of cash to purchase property, plant and equipment. During the six months ended June 30, 2007, cash flows related to investing activities consisted primarily of $4.6 million in purchases of property, plant and equipment, $4.9 million for the purchase of television stations, proceeds of $2.9 million from the sale of a radio station and a decrease of $8.5 million in restricted cash. Broadcasting is a capital-intensive business; however, we had no significant commitments for the purchase of capital items as of June 30, 2008.

     Net cash used in financing activities in the six month period ended June 30, 2008 was $70,000, compared to $34,000 provided by financing activities in the comparable period in 2007. Net cash used in financing activities in the six months ended June 30, 2008 consisted of payments of a capital lease obligation. Net cash provided by financing activities in the six months ended June 30, 2007 consisted of proceeds from the exercise of stock options.

     We are subject to various debt covenants and other restrictions — including the requirement for early payments upon the occurrence of certain events, including the sale of assets — the violation of which could require repayment of outstanding borrowings and affect our credit rating and access to other financing. The Company was in compliance with all debt covenant requirements at June 30, 2008.

Recent Accounting Pronouncements

     In April 2008, the FASB issued Staff Position (“FSP”) No. 142-3, Determination of the Useful Life of Intangible Assets. This FSP amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, Goodwill and Other Intangible Assets. The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under Statement 142 and the period of expected cash flows used to measure the fair value of the asset under FASB Statement No. 141(R), Business Combinations. The requirements of FSP 142-3 applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008 (for acquisitions closed on or after January 1, 2009 for the Company). The impact that FSP 142-3 will have on the Company’s consolidated financial statements when effective will depend upon the nature, terms and size of the acquisitions completed after the effective date.

     In February 2008, the FASB issued Staff Position (“FSP”) No. FAS 157-2, Fair Value Measurements. This FSP delays the effective date of SFAS 157 until January 1, 2009 for all nonfinancial assets and liabilities, except those recognized or disclosed at fair value in the financial statements on a recurring basis. Nonfinancial assets and liabilities include, among other things: intangible assets acquired through business combinations; long-lived assets when assessing potential impairment; and liabilities associated with restructuring activities. The Company has not yet determined the impact, if any, that adoption of FAS 157 for nonfinancial assets and liabilities will have on its consolidated financial statements.

     In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (“FAS 141R”). FAS 141R retains the fundamental requirements in FAS 141 that the acquisition method of accounting (which FAS 141 called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. FAS 141R also establishes principles and requirements for how the acquirer: (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree; (b) improves the completeness of the information reported about a business combination by changing the requirements for recognizing assets acquired and liabilities assumed arising from contingencies; (c) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and

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(d) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. FAS 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008 (for acquisitions closed on or after January 1, 2009 for the Company). Early application is not permitted. The impact that FAS 141R will have on the Company’s consolidated financial statements when effective will depend upon the nature, terms and size of the acquisitions completed after the effective date.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The market risk in our financial instruments represents the potential loss arising from adverse changes in financial rates. We are exposed to market risk in the areas of interest rates and securities prices. These exposures are directly related to our normal funding and investing activities.

Interest Rate Exposure

As a result of our September 20, 2004 placement of $150.0 million of 8.625% senior notes due 2014, substantially all of our debt as of June 30, 2008 is at a fixed rate. As of June 30, 2008 and December 31, 2007, our fixed-rate debt totaled $150.0 million. The fair market value of long-term fixed interest rate debt is subject to interest rate risk. Generally, the fair market value of fixed interest rate debt will increase as interest rates fall and decrease as interest rates rise. The estimated fair value of our long-term debt at June 30, 2008 was approximately $157.7 million, which was approximately $7.7 million more than its carrying value, compared to approximately $153.0 million at December 31, 2007. Market risk is estimated as the potential change in fair value resulting from a hypothetical 10% change in interest rates and, as of June 30, 2008, amounted to approximately $6.0 million. Fair market values are determined based on estimates made by investment bankers based on the fair value of our fixed rate long-term debt. For fixed rate debt, interest rate changes do not impact book value, operations or cash flows.

Marketable Securities Exposure

The fair value of our investments in marketable securities as of June 30, 2008 was $51.5 million, compared to $129.2 million as of December 31, 2007. Marketable securities at June 30, 2008 and December 30, 2007 consisted primarily of 754,000 and 2.3 million shares, respectively, of Safeco Corporation common stock, valued based on the closing per-share sales price on the specific-identification basis as reported on the New York Stock Exchange. As of June 30, 2008, these shares represented 0.8% of the outstanding shares of common stock of Safeco Corporation. Subsequent to June 30, 2008, we sold our remaining 754,000 shares of Safeco Corporation common stock. We have classified the investments as available-for-sale under applicable accounting standards. As of June 30, 2008, a hypothetical 10% change in market prices underlying these securities would result in a $5.2 million change in the fair value of the marketable securities portfolio.

ITEM 4. CONTROLS AND PROCEDURES

The Company’s management, with the participation of our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the Company’s fiscal quarter ended June 30, 2008. Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the Company’s fiscal quarter ended June 30, 2008, the Company’s disclosure controls and procedures were effective in ensuring that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

We made no change in our internal control over financial reporting during the fiscal quarter ended June 30, 2008 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. We intend to continue to refine our internal control over financial reporting on an ongoing basis, as we deem appropriate with a view towards continuous improvement.

32

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company and its subsidiaries are parties to various claims, legal actions and complaints in the ordinary course of their businesses. In the Company’s opinion, all such matters are adequately covered by insurance, are without merit or are of such kind, or involve such amounts, that unfavorable disposition would not have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company.

ITEM 1A. RISK FACTORS

There have not been any material changes to the risk factors set forth in Part 1, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2007, filed with the Securities and Exchange Commission on March 14, 2008.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Our Annual Meeting of Shareholders was held April 30, 2008.

The four nominees elected to the Board of Directors for three-year terms expiring in 2011 are listed below. There were no broker non-votes with respect to any of the nominees.

	Votes for		Votes withheld
Richard L. Hawley		4,199,385		4,105,305
George F. Warren, Jr.		4,210,763		4,093,927
William W. Warren, Jr.		4,157,754		4,146,936
Michael D. Wortsman		4,199,511		4,105,179

Continuing as Directors are Colleen B. Brown, Donald G. Graham, III and Brian P. McAndrews, whose terms expire 2010, and Phelps K. Fisher, Deborah L. Bevier and Jerry A. St. Dennis, whose terms expire in 2009.

The following additional matters brought for vote at the 2008 Annual Meeting of Shareholders passed by the vote indicated:

							Broker Non-
	Votes for		Votes against		Votes abstain		votes
Approval of the Fisher Communications, Inc. 2008 Equity Incentive Plan		4,518,779		3,371,208		68,975		345,728
Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm		8,230,759		71,323		2,608		0

33

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

3.1	Articles of Incorporation, as amended to date.
4.1	Form of Common Stock Certificate.
10.1*+	Fisher Communications, Inc. Amended and Restated 2008 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 23, 2008 (File No. 000-22439)).
10.2+	Summary of Non-Employee Director Fees.
10.3+	Form of Option Agreement under the Fisher Communications, Inc. Amended and Restated 2008 Equity Incentive Plan.
10.4+	Form of Restricted Stock Unit under the Fisher Communications, Inc. Amended and Restated 2008 Equity Incentive Plan.
10.5+	Terms of Equity Grant Program for Nonemployee Directors under the Fisher Communications, Inc. Amended and Restated 2008 Equity Incentive Plan.
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*	Incorporated by reference.
+	Management contract or compensatory plan or arrangement.

34

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	FISHER COMMUNICATIONS, INC.
Date: August 8, 2008	/s/ Jodi A. Colligan
	Jodi A. Colligan
	Vice President Finance and Chief Accounting Officer (Signing on behalf of registrant and as Chief Accounting Officer)

35

EXHIBIT INDEX

Exhibit No.	Description
3.1	Articles of Incorporation, as amended to date.
4.1	Form of Common Stock Certificate.
10.1*+	Fisher Communications, Inc. Amended and Restated 2008 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 23, 2008 (File No. 000-22439)).
10.2+	Summary of Non-Employee Director Fees.
10.3+	Form of Option Agreement under the Fisher Communications, Inc. Amended and Restated 2008 Equity Incentive Plan.
10.4+	Form of Restricted Stock Unit under the Fisher Communications, Inc. Amended and Restated 2008 Equity Incentive Plan.
10.5+	Terms of Equity Grant Program for Nonemployee Directors under the Fisher Communications, Inc. Amended and Restated 2008 Equity Incentive Plan.
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*	Incorporated by reference.
+	Management contract or compensatory plan or arrangement.

36

EX-3.1

Exhibit 3.1

AMENDED AND RESTATED

ARTICLES OF INCORPORATION

OF

FISHER COMPANIES INC.

ARTICLE I

Name

The name of the corporation is FISHER COMPANIES INC.

ARTICLE II

Capitalization

The number of shares of stock which the corporation is authorized to issue is 12,000,000, all of which are one class of a par value of $2.50 each, and all of which are common stock.

ARTICLE III

Stockholder Rights

The stockholders of the corporation do not have preemptive rights to acquire proportional amounts of the corporation’s unissued shares upon the decision of the Board of Directors to issue them.

ARTICLE IV

Board of Directors

Section 1. The Board of Directors shall consist of not fewer than 9 nor more than 19 individuals. The exact number shall be fixed by the Bylaws and may be changed from time to time by amending such Bylaws as provided in the Bylaws.

Section 2. The Board of Directors shall be divided into three classes: Class 1, Class 2 and Class 3. Each such Class shall consist, as nearly as possible, of one-third of the total number of directors constituting the entire Board of Directors. In no event shall a Class be comprised of fewer than 3 directors. Each director shall serve for a term ending on the date of the third annual meeting of stockholders following the annual meeting at which such director was elected; provided, however, that each initial director in Class 1 shall hold office until the annual meeting of stockholders in 1997; each initial director in Class 2 shall hold office until the annual meeting of stockholders in 1998; and each initial director in Class 3 shall hold office until the annual meeting of stockholders in 1999.

Section 3. In the event of an increase or decrease in the authorized number of directors, (a) each director then serving as such shall nevertheless continue as a director of the Class in which he or she is a member until the expiration of his or her current term, or his or her earlier resignation, removal from office or death, and (b) the newly created or eliminated directorships resulting from such increase or decrease shall be apportioned by the Board of Directors among the three Classes of directors so as to maintain such Classes as nearly equal as possible.

ARTICLE V

Director Standard of Care and Indemnification

Section 1. The personal liability of an existing or former director or officer-director to the corporation or its stockholders, or to a subsidiary corporation or its stockholders, for monetary damages for conduct as a director or officer-director is hereby eliminated, provided that such liability shall not be eliminated for acts or omissions that involve intentional misconduct or a knowing violation of law, for conduct violating RCW § 23B.08.310, or for any transaction from which the existing or former director or officer-director will personally receive a benefit in money, property, or services to which such person is not legally entitled.

Section 2. The corporation shall indemnify an existing or former director or officer-director made a party to a proceeding by reason of the fact that such person is or was a director or officer-director and obligate itself to advance or reimburse expenses incurred in any such proceeding, all without regard to the limitations in RCW §§ 23B.08.510 through 23B.08.550 and in RCW § 23B.08.560(2), provided that no such indemnity, advance or reimbursement shall be provided from or on account of (a) acts or omissions finally adjudged to be intentional misconduct or a knowing violation of law, (b) conduct finally adjudged to be in violation of RCW § 23B.08.310, or (c) any transaction with respect to which it was finally adjudged that such person personally received a benefit in money, property, or services to which such person was not entitled.

Section 3. The Board of Directors, by resolution adopted at any regular or special meeting, shall make provisions in the corporation’s Bylaws for the matters set forth in this Article V.

/s/ William W. Krippaehne, Jr.  

William W. Krippaehne, Jr. 

President and CEO 

CERTIFICATE TO
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
FISHER COMPANIES INC.

     THESE ARTICLES OF AMENDMENT AND RESTATEMENT of the Amended and Restated Articles of Incorporation of FISHER COMPANIES INC., a Washington corporation, are hereby executed and delivered for filing in accordance with the provisions of Section 23B.10.060 of the Washington Business Corporation Act:

     1. The name of the corporation is Fisher Companies Inc.

     2. The Amended and Restated Articles of Incorporation of Fisher Companies Inc. (the “Articles”) are hereby amended and replaced in their entirety with the Amended and Restated Articles of Incorporation attached hereto (the “Restated Articles”). A Certificate of Amendment is attached hereto as Exhibit A outlining all amendments made to the Articles.

     3. The amendments to the Articles and the Restated Articles were approved and recommended by the corporation’s Board of Directors on February 29, 1996 and were adopted by the corporation’s stockholders on April 23, 1996, all in accordance with the provisions of Sections 23B.10.030 and 23B.10.040 of the Washington Business Corporation Act.

     DATED this 24^th day of April, 1996.

FISHER COMPANIES INC., a
Washington corporation
 

By /s/ William W. Krippaehne, Jr.,  

William W. Krippaehne, Jr., 

President and CEO 

Exhibit A

CERTIFICATE OF AMENDMENT

1. Article I is amended in its entirety as follows

ARTICLE I

Name

The name of the corporation is FISHER COMPANIES INC.

2. Article II is amended in its entirety as follows:

ARTICLE II

Capitalization

The number of shares of stock which the corporation is authorized to issue is 12,000,000, all of which are one class of a par value of $2.50 each, and all of which are common stock.

3. Article III is amended in its entirety as follows:

ARTICLE III

Stockholder Rights

The stockholders of the corporation do not have preemptive rights to acquire proportional amounts of the corporation’s unissued shares upon the decision of the Board of Directors to issue them.

4. Article IV is amended in its entirety as follows:

ARTICLE IV

Board of Directors

Section 1. The Board of Directors shall consist of not fewer than 9 nor more than 19 individuals. The exact number shall be fixed by the Bylaws and may be changed from time to time by amending such Bylaws as provided in the Bylaws.

Section 2. The Board of Directors shall be divided into three classes: Class 1, Class 2 and Class 3. Each such Class shall consist, as nearly as possible, of one-third of the total number of directors constituting the entire Board of Directors. In no event shall a Class be comprised of fewer than 3 directors. Each director shall serve for a term ending on the date of the third annual meeting of stockholders following the annual meeting at which such director was elected; provided, however, that each initial director in Class 1 shall hold office until the annual meeting of stockholders in 1997; each initial director in Class 2 shall hold office until the annual meeting of stockholders in 1998; and each initial director in Class 3 shall hold office until the annual meeting of stockholders in 1999.

Section 3. In the event of an increase or decrease in the authorized number of directors, (a) each director then serving as such shall nevertheless continue as a director of the Class in which he or she is a member until the expiration of his or her current term, or his or her earlier resignation, removal from office or death, and (b) the newly created or eliminated directorships resulting from such increase or decrease shall be apportioned by the Board of Directors among the three Classes of directors so as to maintain such Classes as nearly equal as possible.

5. Article V is amended and replaced in its entirety as follows:

ARTICLE V

Director Standard of Care and Indemnification

Section 1. The personal liability of an existing or former director or officer-director to the corporation or its stockholders, or to a subsidiary corporation or its stockholders, for monetary damages for conduct as a director or officer-director is hereby eliminated, provided that such liability shall not be eliminated for acts or omissions that involve intentional misconduct or a knowing violation of law, for conduct violating RCW § 23B.08.310, or for any transaction from which the existing or former director or officer-director will personally receive a benefit in money, property, or services to which such person is not legally entitled.

Section 2. The corporation shall indemnify an existing or former director or officer-director made a party to a proceeding by reason of the fact that such person is or was a director or officer-director and obligate itself to advance or reimburse expenses incurred in any such proceeding, all without regard to the limitations in RCW §§ 23B.08.510 through 23B.08.550 and in RCW § 23B.08.560(2), provided that no such indemnity, advance or reimbursement shall be provided from or on account of (a) acts or omissions finally adjudged to be intentional misconduct or a knowing violation of law, (b) conduct finally adjudged to be in violation of RCW § 23B.08.310, or (c) any transaction with respect to which it was finally adjudged that such person personally received a benefit in money, property, or services to which such person was not entitled.

Section 3. The Board of Directors, by resolution adopted at any regular or special meeting, shall make provisions in the corporation’s Bylaws for the matters set forth in this Article V.

6. Article VI and Article VII are deleted in their entirety.

ARTICLES OF AMENDMENT
OF
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
FISHER COMPANIES INC.

     These Articles of Amendment of Amended and Restated Articles of Incorporation of FISHER COMPANIES, INC., a Washington corporation, are hereby executed and delivered for filing in accordance with the provisions of Section 23B.10.060 of the Washington Corporation Act:

     1. The name of record of the corporation is Fisher Companies Inc.

     2. Article II of the Amended and Restated Articles of Incorporation of the corporation is hereby amended to read as follows:

ARTICLES II
Capitalization

The number of shares of stock which the Corporation is authorized to issue is 12,000,000, all of which are one class of par value of $1.25 each, and all of which are common stock.

     3. The above amendment was adopted and duly approved by the Board of Directors of the corporation on December 3, 1997, in accordance with the provisions of Section 23B.08.210 of the Washington Business Corporation Act. Shareholders action was not required.

     DATED this 3^rd day of December, 1997.

FISHER COMPANIES INC. a Washington corporation
By:	/s/ William W. Krippaehne, Jr.
	William W. Krippaehne, Jr.
	President and CEO

ARTICLES OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
FISHER COMPANIES INC.

     THESE ARTICLES OF AMENDMENT of the Articles of Incorporation of FISHER COMPANIES INC. a Washington corporation, are hereby executed and delivered for filing in accordance with the provisions of Section 23B.10.060 of the Washington Business Corporation Act:

     1. The name of the corporation is FISHER COMPANIES INC.

     2. Article I of the Articles of Incorporation of the corporation is hereby amended to read as follows:

ARTICLE I
Name

         The name of the corporation is FISHER COMMUNICATIONS, INC.

     3. The above amendment was adopted on February 14, 2001.

     4. The above amendment was duly approved by the Board of Directors of the corporation, without shareholder action, in accordance with the provisions of Section 23B.10.020(5) of the Washington Business Corporation Act. Shareholder action was not required to effect this amendment.

     DATED this 7th day of March, 2001.

FISHER COMPANIES INC.
 

By /s/ William W. Krippaehne, Jr.  

William W. Krippaehne, Jr. 

Its President and Chief Executive Officer 

EX-4.1

Exhibit 4.1

[LOGO OF FISHER COMMUNICATIONS, INC.]
FISHER COMMUNICATIONS

NUMBER SHARES

Incorporated Under the Laws of the Sate of Washington

CUSIP 337756 20 9
SEE REVERSE FOR CERTAIN DEFINITIONS

This Certifies that

is the registered owner of                                                             ***SPECIMAN***

fully paid and nonassessable shares of the Common Stock of

FISHER COMMUNICATIONS, INC.

a corporation, transferable only on the books of the Corporation by the holder hereof in person or by duly authorized attorney upon surrender of this certificate properly endorsed. This certificate and the shares represented hereby are issued and shall be held subject to all of the provisions of the Articles of Incorporation of the Corporation as now or hereafter amended, to all of which the holder hereof by acceptance hereof assents.

IN WITNESS WHEREOF, the Corporation has caused this certificate to be signed by its officers.

[Fisher Communications, Inc. Corporate SEAL]

Dated:

Secretary President

1

FISHER COMMUNICATIONS, INC.

     The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM -	as tenants in common	UTMA-                    Custodian
		(Cust)                      (Minor)
TEN ENT -	as tenants by the entireties	under Uniform Transfers to Minors Act
JT TEN -	as joint tenants with right of survivorship and not as tenants in common
		(State)

  Additional abbreviations may also be used though not in the above list.

  For value received,                      hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUBER OF ASSIGNEE

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE

Shares

represented by the within Certificate, and do hereby irrevocably constitute and appoint

Attorney to transfer the said stock on the books of the within-named Corporation with full power of substitution in the premises.

Dated,                                         

NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON
THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERCATION OR ENLARGEMENT,
OR ANY CHANGE WHATEVER

SIGNATURE(S) GUARANTEED

By
	THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLON PROGRAM PURSUANT TO S.E.C. Rule 17Ad-15.

2

EX-10.2

Exhibit 10.2

FISHER COMMUNICATIONS, INC.

SUMMARY OF NONEMPLOYEE DIRECTOR FEES

Nonemployee directors receive the following compensation:

	Amount ($)
Annual Board Retainer
Chairman		65,000
All other directors		24,000
Additional Annual Committee Chair Retainers
Audit Committee		7,500
Compensation Committee		7,500
Board Meeting Fee (per meeting attended)		1,000
Committee Meeting Fee (per meeting attended)		1,000

Pursuant to the terms of the Equity Grant Program for Nonemployee Directors under the Fisher Communications, Inc. Amended and Restated 2008 Equity Incentive Plan, nonemployee directors receive a portion of their fees in the form of fully vested stock.

EX-10.3

Exhibit 10.3

FISHER COMMUNICATIONS, INC.
STOCK OPTION GRANT NOTICE
2008 EQUITY INCENTIVE PLAN

     Fisher Communications, Inc. (the “Company”) hereby grants to Participant an Option (the “Option”) to purchase shares of the Company’s Common Stock. The Option is subject to all the terms and conditions set forth in this Stock Option Grant Notice (this “Grant Notice”) and in the Stock Option Agreement and the Company’s 2008 Equity Incentive Plan (the “Plan”), which are incorporated into this Grant Notice in their entirety.

Participant:
Grant Date:
Vesting Commencement Date:
Number of Shares Subject to Option:
Exercise Price (per Share):
Option Expiration Date:
		(subject to earlier termination in
	accordance with the terms of the Plan and the Stock Option Agreement)
Type of Option:	Nonqualified Stock Option
Vesting and Exercisability Schedule:

Additional Terms/Acknowledgement: The undersigned Participant acknowledges receipt of, and understands and agrees to, this Grant Notice, the Stock Option Agreement and the Plan. Participant further acknowledges that as of the Grant Date, this Grant Notice, the Stock Option Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the Option and supersede all prior oral and written agreements on the subject.

FISHER COMMUNICATIONS, INC.	PARTICIPANT
By:	Signature
Its:
	Date:
Attachments:	Address:
1.   Stock Option Agreement
2.   Plan Summary	Taxpayer ID:

FISHER COMMUNICATIONS, INC.
2008 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

     Pursuant to your Stock Option Grant Notice (the “Grant Notice”) and this Stock Option Agreement, Fisher Communications, Inc. has granted you an Option under its 2008Equity Incentive Plan (the “Plan”) to purchase the number of shares of the Company’s Common Stock indicated in your Grant Notice (the “Shares”) at the exercise price indicated in your Grant Notice. Capitalized terms not explicitly defined in this Stock Option Agreement but defined in the Plan shall have the same definitions as in the Plan.

     The details of the Option are as follows:

     1. Vesting and Exercisability. Subject to the limitations contained herein, the Option will vest and become exercisable as provided in your Grant Notice, provided that vesting will cease upon the termination of your employment or service relationship with the Company or a Related Company and the unvested portion of the Option will terminate.

     2. Securities Law Compliance. Notwithstanding any other provision of this Agreement, you may not exercise the Option unless the Shares issuable upon exercise are registered under the Securities Act or, if such Shares are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. The exercise of the Option must also comply with other applicable laws and regulations governing the Option, and you may not exercise the Option if the Company determines that such exercise would not be in material compliance with such laws and regulations.

     3. Method of Exercise. You may exercise the Option by giving written notice to the Company, in form and substance satisfactory to the Company, which will state your election to exercise the Option and the number of Shares for which you are exercising the Option. The written notice must be accompanied by full payment of the exercise price for the number of Shares you are purchasing. You may make this payment in any combination of the following: (a) by cash; (b) by check acceptable to the Company; (c) by having the Company withhold shares of Common Stock that would otherwise be issued on exercise of the Option, (d) by tendering shares of Common Stock you already own; (e) if the Common Stock is registered under the Exchange Act and to the extent permitted by law, by instructing a broker to deliver to the Company the total payment required; or (e) by any other method permitted by the Committee.

     4. Treatment Upon Termination of Employment or Service Relationship. Except as otherwise provided below, the unvested portion of the Option will terminate automatically and without further notice immediately upon termination of your employment or service relationship with the Company or a Related Company for any reason (“Termination of Service”):

          (a) General Rule. You must exercise the vested portion of the Option on or before the earlier of (i) three months after your Termination of Service and (ii) the Option Expiration Date;

          (b) Retirement or Disability. If your employment or service relationship terminates due to Retirement or Disability, you must exercise the vested portion of the Option on or before the earlier of (i) three years after your Termination of Service and (ii) the Option Expiration Date;

          (c) Death. If your employment or service relationship terminates due to your death, the vested portion of the Option must be exercised on or before the earlier of (i) three years after your Termination of Service and (ii) the Option Expiration Date. If you die after your Termination of Service but while the Option is still exercisable, the vested portion of the Option may be exercised until the earlier of (x) three years after the date of death and (y) the Option Expiration Date; and

          (d) Cause. The vested portion of the Option will automatically expire at the time the Company first notifies you of your Termination of Service for Cause, unless the Committee determines otherwise. If your employment or service relationship is suspended pending an investigation of whether you will be terminated for Cause, all your rights under the Option likewise will be suspended during the period of investigation. If any facts that would constitute termination for Cause are discovered after your Termination of Service, any Option you then hold may be immediately terminated by the Committee.

It is your responsibility to be aware of the date the Option terminates.

     5. Limited Transferability. During your lifetime only you can exercise the Option. The Option is not transferable except by will or by the applicable laws of descent and distribution. The Plan provides for exercise of the Option by a beneficiary designated on a Company-approved form or the personal representative of your estate. Notwithstanding the foregoing, the Committee, in its sole discretion, may permit you to assign or transfer the Option, subject to such terms and conditions as specified by the Committee.

     6. Withholding Taxes. As a condition to the exercise of any portion of an Option, you must make such arrangements as the Company may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such exercise. You must satisfy such withholding obligation by tendering a cash payment. Notwithstanding the previous sentence, you acknowledge and agree that the Company and any Related Company have the right to deduct from payments of any kind otherwise due to you any federal, state or local taxes of any kind required by law to be withheld with respect the Option.

     7. Option Not an Employment or Service Contract. Nothing in the Plan or any Award granted under the Plan will be deemed to constitute an employment contract or confer or be deemed to confer any right for you to continue in the employ of, or to continue

-2-

any other relationship with, the Company or any Related Company or limit in any way the right of the Company or any Related Company to terminate your employment or other relationship at any time, with or without Cause.

     8. No Right to Damages. You will have no right to bring a claim or to receive damages if you are required to exercise the vested portion of the Option in connection with a Termination of Service, as provided in Section 4, or if any portion of the Option is cancelled or expires unexercised. The loss of existing or potential profit in Awards will not constitute an element of damages in the event of your Termination of Service for any reason even if the termination is in violation of an obligation of the Company or a Related Company to you.

     9. Binding Effect. This Agreement will inure to the benefit of the successors and assigns of the Company and be binding upon you and your heirs, executors, administrators, successors and assigns.

-3-

EX-10.4

Exhibit 10.4

FISHER COMMUNICATIONS, INC.
RESTRICTED STOCK UNIT AWARD NOTICE
AMENDED AND RESTATED 2008 EQUITY INCENTIVE PLAN

     Fisher Communications, Inc. (the “Company”) hereby grants to Participant a Restricted Stock Unit Award (the “Award”). The Award is subject to all the terms and conditions set forth in this Restricted Stock Unit Award Notice (the “Award Notice”) and in the Restricted Stock Unit Award Agreement and the Fisher Communications, Inc. Amended and Restated 2008 Equity Incentive Plan (the “Plan”), which are incorporated into the Award Notice in their entirety.

Participant:
Grant Date:	___, 200_
Vesting Commencement Date:	___, 200_
Number of Restricted Stock Units:	___
Vesting Schedule:

Additional Terms/Acknowledgement: The undersigned Participant acknowledges receipt of, and understands and agrees to, the Award Notice, the Restricted Stock Unit Award Agreement and the Plan Summary for the Plan. Participant further acknowledges that as of the Grant Date, the Award Notice, the Restricted Stock Unit Award Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the Award and supersede all prior oral and written agreements on the subject.

FISHER COMMUNICATIONS, INC.	PARTICIPANT
By:	[Name]
Its:	Taxpayer ID:
	Address:
Attachments:
1.   Restricted Stock Unit Award Agreement
2.   Plan Summary

FISHER COMMUNICATIONS, INC.
AMENDED AND RESTATED 2008 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

     Pursuant to your Restricted Stock Unit Award Notice (the “Award Notice”) and this Restricted Stock Unit Award Agreement (this “Agreement”), Fisher Communications, Inc. (the “Company”) has granted you a Restricted Stock Unit Award (the “Award”) under its Amended and Restated 2008 EquityIncentive Plan (the “Plan”) for the number of Restricted Stock Units indicated in your Award Notice. Capitalized terms not explicitly defined in this Agreement but defined in the Plan shall have the same definitions as in the Plan.

     The details of the Award are as follows:

1. Vesting

     The Award will vest according to the vesting schedule set forth in the Award Notice (the “Vesting Schedule”). One share of the Company’s Common Stock will be issuable for each Restricted Stock Unit that vests. Restricted Stock Units that have vested and are no longer subject to forfeiture according to the Vesting Schedule are referred to herein as “Vested Units.” Restricted Stock Units that have not vested and remain subject to forfeiture under the Vesting Schedule are referred to herein as “Unvested Units.” The Unvested Units will vest (and to the extent so vested cease to be Unvested Units remaining subject to forfeiture) in accordance with the Vesting Schedule (the Unvested and Vested Units are collectively referred to herein as the “Units”). As soon as practicable, but in any event within 60 days, after Unvested Units become Vested Units, the Company will settle the Vested Units by issuing to you one share of the Company’s Common Stock for each Vested Unit. The Award will terminate and the Unvested Units will be subject to forfeiture upon your Termination of Service as set forth in Section 2.

2. Termination of Service; Change in Control

     2.1 Termination of Service

     Except as provided in Section 2.2 below, upon your Termination of Service for any reason, any portion of the Award that has not vested as provided in Section 1 will immediately terminate and all Unvested Units shall immediately be forfeited without payment of any further consideration to you.

     2.2 Change in Control

     In the event of a Change in Control, the Award shall be subject to the terms of the Plan.

3. Securities Law Compliance

     3.1 You represent and warrant that you (a) have been furnished with a copy of the prospectus for the Plan and all information which you deem necessary to evaluate the merits

and risks of receipt of the Award, (b) have had the opportunity to ask questions and receive answers concerning the information received about the Award and the Company, and (c) have been given the opportunity to obtain any additional information you deem necessary to verify the accuracy of any information obtained concerning the Award and the Company.

     3.2 You hereby agree that you will in no event sell or distribute all or any part of the shares of the Company’s Common Stock that you receive pursuant to settlement of this Award (the “Shares”) unless (a) there is an effective registration statement under the Securities Act and applicable state securities laws covering any such transaction involving the Shares or (b) the Company receives an opinion of your legal counsel (concurred in by legal counsel for the Company) stating that such transaction is exempt from registration or the Company otherwise satisfies itself that such transaction is exempt from registration. You understand that the Company has no obligation to you to maintain any registration of the Shares with the Securities and Exchange Commission and has not represented to you that it will so maintain registration of the Shares.

     3.3 You confirm that you have been advised, prior to your receipt of the Shares, that neither the offering of the Shares nor any offering materials have been reviewed by any administrator under the Securities Act or any other applicable securities act (the “Acts”) and that the Shares cannot be resold unless they are registered under the Acts or unless an exemption from such registration is available.

     3.4 You hereby agree to indemnify the Company and hold it harmless from and against any loss, claim or liability, including attorneys’ fees or legal expenses, incurred by the Company as a result of any breach by you of, or any inaccuracy in, any representation, warranty or statement made by you in this Agreement or the breach by you of any terms or conditions of this Agreement.

4. Transfer Restrictions

     Units shall not be sold, transferred, assigned, encumbered, pledged or otherwise disposed of, whether voluntarily or by operation of law.

5. No Rights as Shareholder

     You shall not have voting or other rights as a shareholder of the Company with respect to the Units.

6. Independent Tax Advice

     You acknowledge that determining the actual tax consequences to you of receiving or disposing of the Units and Shares may be complicated. These tax consequences will depend, in part, on your specific situation and may also depend on the resolution of currently uncertain tax law and other variables not within the control of the Company. You are aware that you should consult a competent and independent tax advisor for a full understanding of the specific tax consequences to you of receiving the Units and receiving or disposing of the Shares. Prior to executing this Agreement, you either have consulted with a competent tax

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advisor independent of the Company to obtain tax advice concerning the receipt of the Units and the receipt or disposition of the Shares in light of your specific situation or you have had the opportunity to consult with such a tax advisor but chose not to do so.

7. Book Entry Registration of the Shares

     The Company will issue the Shares by registering the Shares in book entry form with the Company’s transfer agent in your name and the applicable restrictions will be noted in the records of the Company’s transfer agent and in the book entry system.

8. Withholding

     8.1 You are ultimately responsible for all taxes owned in connection with this Award (e.g., at vesting and/or upon receipt of the Shares), including any domestic or foreign tax withholding obligation required by law, whether national, federal, state or local, including FICA or any other social tax obligation (the “Tax Withholding Obligation”), regardless of any action the Company or any related corporation takes with respect to any such Tax Withholding Obligation that arises in connection with this Award. You must satisfy your Tax Withholding Obligation by tendering a cash payment. The Company may refuse to issue any Shares to you until you satisfy the Tax Withholding Obligation.

     8.2 Notwithstanding the foregoing, by accepting this Agreement and in order to satisfy your obligations set forth in Section 8.1, you understand and agree that you may be required to enter into a trading plan (which complies with the requirements of Rule -1(c)(1)(i)(B) under the Exchange Act) with a brokerage firm acceptable to the Company for such purpose (the “Agent”), and to authorize the Agent, to:

(a)

sell on the open market at the then prevailing market price(s), on your behalf, on or as soon as practicable after the settlement date for any Vested Unit, the minimum number of Shares (rounded up to the next whole number) sufficient to generate proceeds to cover the withholding taxes that you are required to pay pursuant to Section 8.1 upon the settlement of a Vested Unit and all applicable fees and commissions due to, or required to be collected by, the Agent; and

(b)

remit any remaining funds to you.

     8.3 Notwithstanding the foregoing, to the maximum extent permitted by law, the Company has the right to retain without notice from Shares issuable under the Award or from salary or other amounts payable to you, Shares or cash having a value sufficient to satisfy the Tax Withholding Obligation.

9. General Provisions

     9.1 Assignment. The Company may assign its rights under this Agreement at any time, whether or not such rights are then exercisable, to any person or entity selected by the Company’s Board of Directors.

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     9.2 No Waiver. No waiver of any provision of this Agreement will be valid unless in writing and signed by the person against whom such waiver is sought to be enforced, nor will failure to enforce any right hereunder constitute a continuing waiver of the same or a waiver of any other right hereunder.

     9.3 Undertaking. You hereby agree to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on either you or the Units pursuant to the express provisions of this Agreement.

     9.4 Agreement Is Entire Contract. This Agreement, the Award Notice and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof. This Agreement is made pursuant to the provisions of the Plan and will in all respects be construed in conformity with the express terms and provisions of the Plan.

     9.5 Successors and Assigns. The provisions of this Agreement will inure to the benefit of, and be binding on, the Company and its successors and assigns and you and your legal representatives, heirs, legatees, distributees, assigns and transferees by operation of law, whether or not any such person will have become a party to this Agreement and agreed in writing to join herein and be bound by the terms and conditions hereof.

     9.6 No Employment or Service Contract. Nothing in this Agreement will affect in any manner whatsoever the right or power of the Company, or a related corporation, to terminate your employment or services on behalf of the Company, for any reason, with or without Cause.

     9.7 Section 409A Compliance. Payments made pursuant to this Agreement and the Plan are intended to qualify for an exception from or comply with Section 409A of the Code. Notwithstanding any other provision in the Plan or this Agreement to the contrary, the Plan Administrator reserves the right, but shall not be required to, unilaterally amend or modify the terms of this Agreement and/or the Plan as it determines necessary or appropriate, in its sole discretion, to avoid the imposition of interest or penalties under Section 409A of the Code; provided, however, that the Company makes no representation that that the Award shall be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to the Award.

     9.8 Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but which, upon execution, will constitute one and the same instrument.

     9.9 Governing Law. This Agreement will be construed and administered in accordance with and governed by the laws of the State of Washington without giving effect to principles of conflicts of law.

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EX-10.5

Exhibit 10.5

TERMS OF EQUITY GRANT PROGRAM FOR NONEMPLOYEE
DIRECTORS UNDER THE FISHER COMMUNICATIONS, INC.
AMENDED AND RESTATED 2008 EQUITY INCENTIVE PLAN

     The following provisions set forth the terms of the equity grant program (the “Program”) for nonemployee directors of Fisher Communications, Inc. (the “Company”) under the Fisher Communications, Inc. Amended and Restated 2008 Equity Incentive Plan (the “Plan”). The following terms are intended to supplement, not alter or change, the provisions of the Plan, and in the event of any inconsistency between the terms contained herein and in the Plan, the Plan shall govern. All capitalized terms that are not defined herein shall be as defined in the Plan.

1. Eligibility

     Each elected or appointed director of the Company who is not otherwise an employee of the Company or a related corporation (an “Eligible Director”) shall be eligible to receive Awards under the Plan, as described below.

2. Stock Awards

     (a) Retainer Stock Awards

     Commencing with the last calendar day of the calendar quarter ended September 30, 2008, and on the last calendar day of each calendar quarter thereafter, each Eligible Director shall automatically be granted a fully vested stock award (each, a “Retainer Stock Award”) for that number of shares of Common Stock determined by dividing (x) one-quarter of 25% of such Eligible Director’s annual Board retainer then in effect by (y) the Fair Market Value of the Common Stock on the last trading day of such calendar quarter, with any fractional share rounded to the nearest whole share (0.5 to be rounded up).

     (b) Elective Stock Awards

     (i) In addition to the Retainer Stock Awards, each Eligible Director may make an annual election (the “Election”) to receive all or any portion of his or her remaining annual Board retainer, chair retainer fees and Board/committee meeting fees (the “Elective Fees”) in the form of a fully vested stock award (each, an “Elective Stock Award”). The Election must be made in writing and received by the Company on or prior to December 31 of each calendar year preceding the calendar year in which the applicable Elective Fees are to be earned, such Election to be effective beginning with the first calendar quarter of the calendar year after the Election is received by the Company; provided, however, that any newly elected or appointed Eligible Director may make an initial Election during the 30-day period

immediately following the commencement of his or her service on the Board, such Election to be effective beginning with the calendar quarter in which the Election is received by the Company. An Election will be irrevocable for the calendar year with respect to which it is made and shall remain in effect for the entire calendar year, unless such Eligible Director ceases to be an Eligible Director.

     (ii) If an Election is timely made, the Eligible Director making such Election will automatically receive an Elective Stock Award on the last calendar day of each calendar quarter to which such Election applies. The number of shares of Common Stock subject to each Elective Stock Award shall be determined by dividing (x) the amount of the Elective Fees for the calendar quarter to which the Election applies by (y) the Fair Market Value of the Common Stock on the last trading day of such calendar quarter, with any fractional share rounded to the nearest whole share (0.5 to be rounded up).

3. Amendment

     The Board may amend the Program in such respects as it deems advisable. Any such amendment shall not, without the consent of the Eligible Director, impair or diminish any rights of an Eligible Director or any rights of the Company under an outstanding Award.

     Provisions of the Plan (including any amendments) not discussed above, to the extent applicable to Eligible Directors, shall continue to govern the terms and conditions of Awards granted to Eligible Directors.

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EX-31.1

Exhibit 31.1

Certification

I, Colleen B. Brown, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fisher Communications, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2008

/s/ Colleen B. Brown  

Colleen B. Brown 

President and Chief Executive Officer 

EX-31.2

Exhibit 31.2

Certification

I, Joseph L. Lovejoy, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fisher Communications, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2008

/s/ Joseph L. Lovejoy  

Joseph L. Lovejoy 

Senior Vice President
Chief Financial Officer 

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Quarterly Report of Fisher Communications, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), I, Colleen B. Brown, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2)	The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 8, 2008

/s/ Colleen B. Brown  

Colleen B. Brown 

President and Chief Executive Officer 

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Quarterly Report of Fisher Communications, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), I, Joseph L. Lovejoy, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2)	The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 8, 2008

/s/ Joseph L. Lovejoy  

Joseph L. Lovejoy 

Senior Vice President
Chief Financial Officer