10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008

OR

¨ 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 000-22439

FISHER COMMUNICATIONS, INC.

(Exact name of registrant as specified in its charter)

Washington	91-0222175
(State of Incorporation)	(IRS Employer Identification No.)
100 4th Avenue N., Suite 510 Seattle, Washington	98109
(Address of principal executive offices)	(Zip Code)

(206) 404-7000

(Registrant’s telephone number, including area code)

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

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, $1.25 par value	Nasdaq Global Market

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

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.    Yes  ¨    No  x

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 periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.406 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

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.

Large accelerated filer  ¨         Accelerated filer  x        Non-accelerated filer  ¨        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  ¨    No  x

As of June 30, 2008, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $259,253,000 based on the closing sale price as reported on the Nasdaq Global Market.

The number of shares outstanding of each of the issuer’s classes of common stock, as of March 5, 2009 was:

Title of Class	Number of Shares Outstanding
Common Stock, $1.25 Par Value	8,740,060

DOCUMENTS INCORPORATED BY REFERENCE

Document	Parts Into Which Incorporated
Proxy Statement for the Annual Meeting of Shareholders to be held on April 28, 2009	Part III

PART I

ITEM 1. BUSINESS

This annual report on Form 10-K contains forward-looking statements that involve known and unknown risks and uncertainties, such as statements of our plans, objectives, expectations, and intentions. Words such as “may,” “could,” “would,” “should,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate” and variations of such words and similar expressions are intended to identify such forward-looking statements. You should not place undue reliance on these forward-looking statements, which are based on our current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties, and assumptions (including those described herein) and apply only as of the date of this report. Our actual results could differ materially from those anticipated in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this annual report entitled “Risk Factors,” as well as those discussed elsewhere in this annual report.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. Except as otherwise required by law, we disclaim any responsibility to update any of the forward-looking statements after the date of this annual report to conform such statements to actual results or to changes in our expectations.

Unless the context requires otherwise, references in this annual report to “Fisher,” “the Company,” “we,” “us,” or “our” refer to Fisher Communications, Inc. and its consolidated subsidiaries.

Company Description

Fisher Communications, Inc. is an integrated media company that was founded in 1910 and has been in the broadcasting business since 1926. Fisher Communications, Inc. is incorporated in the State of Washington. We conduct our operations through two subsidiaries, Fisher Broadcasting Company (“Fisher Broadcasting”) and Fisher Media Services Company (“Fisher Media Services”). Our broadcasting operations provided approximately 92% of consolidated revenue from continuing operations in 2008, with television accounting for approximately 77% and radio accounting for approximately 23% of our 2008 broadcasting revenue.

Fisher Broadcasting Company owns and operates 13 full power television stations (including a 50%-owned television station), eight low power television stations and eight radio stations in the Western United States. We have long-standing network affiliations with ABC and CBS, and also operate FOX and Univision affiliates as part of duopolies in several of our markets. Our television and radio stations are located in Washington, Oregon, California, Idaho and Montana. Seattle and Portland are our two largest markets for both television and radio. We own ABC and Univision network affiliates in both Seattle and Portland, which are within the top 25 Designated Market Area (“DMA”) television markets as determined by Nielsen Media Research (“Nielsen”). We also own three radio stations in Seattle, the 13th largest radio market, ranked by population, as determined by the Arbitron, Inc. (“Arbitron”). Our television stations reach 4.0 million households (approximately 3.5% of U.S. television households) according to Nielsen. Our stations produce quality local programming and have received numerous awards for broadcasting excellence.

As part of the ongoing development of our business, in recent years we completed the following transactions:

• In November 2006, we completed the purchase of two Univision-affiliated Oregon television stations for $19 million. As part of the same transaction, which was initially announced in December 2005, we also acquired two low-power Idaho TV stations in May 2006 for $1 million.

• In October 2006, we sold 18 of our 24 small-market radio stations located in Montana and Eastern Washington for $26 million. This transaction was structured as a like-kind exchange, for tax purposes,

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and we used a portion of the proceeds, $19 million, to purchase the two Oregon television stations in November 2006. We sold an additional Montana radio station in June 2007 for $3 million. We continue to operate five radio stations in Great Falls, Montana.

• In September 2006, we completed the stock purchase of African-American Broadcasting of Bellevue by acquiring 75% of the stock for $12 million. We had purchased an initial 25% of the equity in June 2006 for $4 million.

• In April 2007, we finalized the purchase of four low power television stations located in Eastern Washington for $5 million. The stations provide Spanish-language programming to the Yakima-Pasco-Richland-Kennewick television market through an affiliation with Univision.

• In January 2008, we completed the acquisition of the CBS and FOX affiliates in Bakersfield, California for $55.3 million in cash.

• In December 2008, we completed the sale by our wholly-owned subsidiary, Fisher Broadcasting, of 100% of the outstanding membership interests in Panlocal Media LLC, which owned and operated Pegasus News, an online hyper-local media pioneer based in Dallas, Texas. As consideration for the sale, the buyer paid Fisher Broadcasting $1.5 million in cash and granted us and our affiliates a royalty-free, non-exclusive, non-transferable license to use certain related technology in our existing television and radio markets to deliver personalized online local news, information and advertising. We acquired Pegasus for approximately $1.5 million in July 2007.

• During 2008, we sold our remaining 2.3 million shares of the common stock of Safeco Corporation, a publicly traded insurance and financial services corporation. Fisher had been a shareholder of Safeco Corporation since 1923. The shares were sold at an average price of $66.65 per share, resulting in pre-tax net proceeds to the Company of $153.4 million. The book basis of the shares sold totaled $782,000, resulting in a pre-tax gain on sale of $152.6 million, which is included in other income, net for 2008. In December 2007, we sold 699,700 shares of Safeco Corporation common stock, which, at the time, represented 23.3% of the Company’s total Safeco holdings. The shares were sold at an average price of $58.05 per share, resulting in pre-tax proceeds to the Company of approximately $40.6 million. The book basis of the shares sold totaled approximately $237,000, resulting in a pre-tax gain on sale of $40.4 million. A portion of the net proceeds from the Safeco stock sales were utilized to fund the January 2008 acquisition of the two television stations in Bakersfield, California.

Fisher Media Services Company owns and operates Fisher Plaza, a commercial building that includes a data center located near downtown Seattle. The data center is designed to enable companies to distribute analog and digital media content through numerous distribution channels, including broadcast, satellite, cable, Internet and broadband, as well as other wired and wireless communication systems. Fisher Plaza serves as the home of our corporate offices and our Seattle television and radio stations. Fisher Plaza also houses a variety of companies, including media and communications companies. Fisher Plaza was completed in the summer of 2003 and had a net book value of approximately $111 million as of December 31, 2008.

Fisher Communications, Inc. employed 776 full-time employees as of December 31, 2008. Approximately 14% of our workforce, located primarily at our KOMO TV, KATU TV, KBAK TV, KBFX CA and KBCI TV operations, is subject to collective bargaining agreements.

We report financial data for three reportable segments: television, radio and Fisher Plaza. Note 15 to the Consolidated Financial Statements contains information about the financial results of our segments for 2008, 2007, and 2006.

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Our Television Stations

The following table sets forth selected information about our television stations as of December 31, 2008:

Station	Market Area	DMA (1) Rank	Network Affiliation	Expiration Date of Affiliation Agreement
KOMO TV	Seattle-Tacoma, WA	14	ABC	August 31, 2009
KUNS TV	Seattle-Tacoma, WA	14	Univision	September 12, 2011
KATU TV	Portland, OR	22	ABC	August 31, 2009
KUNP TV	LaGrande, OR	22	Univision	September 12, 2011
KUNP LP	Portland, OR	22	Univision	September 12, 2011
KVAL TV	Eugene, OR	119	CBS	February 29, 2016
KCBY TV	Coos Bay, OR	119	CBS	February 29, 2016
KPIC TV (2)	Roseburg, OR	119	CBS	February 29, 2016
KIMA TV	Yakima, WA	126	CBS	February 29, 2016
KEPR TV	Pasco/Richland/Kennewick, WA	126	CBS	February 29, 2016
KBAK TV	Bakersfield, CA	125	CBS	March 3, 2016
KBFX CA	Bakersfield, CA	125	FOX	June 30, 2010
KUNW CA	Yakima, WA	126	Univision	September 12, 2011
KVVK CA	Pasco/Richland/Kennewick, WA	126	Univision	September 12, 2011
KORX CA	Walla-Walla, WA	126	Univision	September 12, 2011
KLEW TV (3)	Lewiston, ID	N/A	CBS	February 29, 2016
KBCI TV	Boise, ID	112	CBS	February 29, 2016
KUNB LP	Boise, ID	112	Independent	N/A
KIDK TV	Idaho Falls-Pocatello, ID	162	CBS	February 29, 2016
KPPP LP	Pocatello, ID	162	Independent	N/A

(1) “Market Area” refers to the television market served by each station. Most stations are located in Nielsen Media Research Designated Market Areas (“DMAs”), which represent exclusive geographic areas of counties in which the home market stations are estimated to have the largest quarter-hour audience share. DMA Rank represents the DMA ranking by size of the market area in which each station is located. DMA Rank is based on January 2009 estimates published by Nielsen Media Research. The legend “NA” in the DMA rank column designates that the station is not located in a Nielsen DMA.

(2) Fisher Broadcasting owns a 50% interest in South West Oregon Television Broadcasting Corporation, licensee of KPIC.

(3) Although included as part of the Spokane, Washington DMA, KLEW primarily serves the Lewiston, Idaho and Clarkston, Washington audience that is only a small portion of the Spokane DMA.

We have been affiliated with ABC since 1958, CBS since 1999, Univision since 2006 and FOX since 2008.

KOMO TV and KUNS TV, Seattle-Tacoma, Washington

KOMO TV and KUNS TV operate in the Seattle-Tacoma market, which has approximately 1.8 million television households and a population of approximately 4.4 million. In 2008, approximately 69% of the population subscribed to cable and 21% subscribed to alternative delivery systems (alternative delivery service includes program delivery via satellite, satellite master antenna systems or multipoint distribution systems) (Nielsen). Major industries in the market include aerospace, information technology, manufacturing, biotechnology, forestry, transportation, retail and international trade. Major employers include Microsoft Corporation, The Boeing Company, Liberty Mutual Group, PACCAR Inc, Nordstrom, Inc., Costco Wholesale Company, Starbucks Corporation, the University of Washington, Amazon.com, Inc., JPMorgan Chase & Co. and Weyerhaeuser Company.

KOMO has been on the air since 1953. KOMO TV’s commitment to be the market leader in local news is manifested on multiple distribution platforms. KOMO TV produces 38 hours of live local television news per

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week on its analog and digital channels. In 2008, the Radio and Television News Directors Association honored KOMO TV News with the Edward R. Murrow national award for Overall Excellence and regional awards for Investigative Reporting, Newscast, Sports Reporting, and Writing. In 2008, the National Association of Television Arts and Sciences awarded 14 Emmys to the station for program and individual excellence.

KUNS went live as Seattle’s first Univision station in January 2007. The Seattle-Tacoma market has a Hispanic population of approximately 319,000. The market is the 27^th largest Hispanic market in the United States. KUNS produces five hours of locally produced television news per week on its analog and digital channels.

KATU TV and KUNP TV, Portland, Oregon

KATU TV and KUNP TV serve the Portland market, which has approximately 1.2 million television households and a population of approximately 3 million. Approximately 53% of Portland’s population subscribed to cable in 2008, while approximately 31% of households are listed as subscribers to alternative delivery systems (Nielsen). The Portland metro area has a broad base of manufacturing, distribution, wholesale and retail trade, regional government and business services. Major employers in the Portland area include Oregon Health & Science University, Intel Corporation, Nike, Inc., Hewlett-Packard Company, Legacy Health System and Kaiser Permanente.

KATU currently broadcasts 40 hours of live local news weekly. The station produces and airs AM Northwest, one of the country’s longest running live Monday-Friday local talk/information programs.

In 2008, KATU won a Television Emmy Award for Human Interest, as well as receiving four first place Associated Press awards.

KUNP (formerly broadcasting as KPOU) has been our Portland Univision affiliate since 2006. The Portland market has a Hispanic population of approximately 319,000, the 31st largest Hispanic market in the United States. KUNP produces five hours of locally produced television news per week.

KVAL TV, KCBY TV, KPIC TV, Eugene, Coos Bay and Roseburg, Oregon

KVAL TV, KCBY TV, and KPIC TV (collectively “KVAL+”) serve the Eugene television market, which has approximately 243,000 television households and a population of approximately 568,000. The market has a 48% cable penetration and a 35% alternate delivery penetration (Nielsen). KVAL TV’s broadcast studios are located in Eugene. KCBY TV, in Coos Bay and KPIC TV, in Roseburg, are KVAL’s satellite stations which are defined as full-power terrestrial broadcast stations authorized to retransmit all or part of the programming of a parent station that is ordinarily commonly owned. The area’s economic base includes forest products, agriculture, high-tech manufacturing, regional hospital and medical services, packaging, tourism and fishing. Major employers include the state’s two major universities—University of Oregon in Eugene and Oregon State University in Corvallis, Hewlett-Packard Company, Symantec Corporation, Sacred Heart Medical Center, Monaco Coach Corporation, Levi Strauss & Company, Enterprise Car Rental, and Roseburg Forest Products.

KVAL+ broadcasts 27 hours of live local news per week. KVAL has a long tradition of award-winning news, public affairs programming and information. In 2008, KVAL won 15 Oregon Associated Press awards including six 1^st place, two 2^nd place and seven 3^rd place awards. KVAL was also nominated for a regional Emmy Award for best breaking news.

KIMA TV, KEPR TV, KLEW TV, KUNW CA, KVVK CA, KORX CA, Yakima and Tri-Cities, Washington and Lewiston, Idaho.

KIMA TV serves the Yakima, Washington area while its satellite stations, KEPR TV and KLEW TV, serve the Pasco-Richland-Kennewick, Washington (the “Tri-Cities”), and Lewiston, Idaho, respectively. Together, the

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Yakima and the Tri-Cities areas comprise the Yakima-Pasco-Richland-Kennewick DMA, which includes approximately 217,000 television households and a population of approximately 600,000. The market has a 41% cable penetration and a 43% alternate delivery penetration (Nielsen). KLEW TV is the only full power station licensed to Lewiston, Idaho, which is part of the Spokane, Washington DMA. KLEW TV serves approximately 165,000 people in approximately 65,000 TV households.

The area covered by KIMA, KEPR and KLEW has an economic base that consists primarily of agriculture, nuclear technology, government, manufacturing and the wholesale food processing and tourism industries, as well as being the core of “Washington Wine Country.” Major employers include Battelle, Inc., Clearwater Paper, Con Agra Foods, Inc., Duratek, Inc., Tyson Foods, Inc., Energy Northwest, CH2M HILL Companies, Ltd., Fluor Corporation, Bechtel Corporation, Lockheed Martin Corporation, Siemens AG, Tree Top, Inc., Noel Corp., and Boise Cascade.

KIMA and KEPR each broadcast 20 hours per week of scheduled live local news programs. KIMA is a leader in its market. According to Nielsen Media Research, KIMA/KEPR reaches 44% of the local news audience at 6 p.m. against both ABC and NBC local news, and KIMA TV alone has more than double the households of the other two news stations combined. In 2008, KIMA was nominated for an Emmy for “Best Newscast”. In 2008, the station also won eight awards from the Society of Professional Journalists (“SPJ”), including first place for Spot News. KEPR won four SPJ awards, including a sweep of the Investigative category. In 2008, the Idaho State Broadcasters’ Association honored KLEW for having the “Best Sports Program.”

KUNW, KVVK and KORX are the Univision affiliates for the Yakima-Pasco-Richland-Kennewick market. The Yakima market has a year-round Hispanic population of approximately 165,000. The market is the 51^st largest Hispanic market in the United States. KUNW produces a daily local newscast, and also broadcasts interviews with members of the Hispanic community throughout the day. These run on all three stations.

KBCI TV and KUNB LP, Boise, Idaho

KBCI TV and KUNB LP serve the Boise, Idaho DMA, which has approximately 262,000 television households and a total population of approximately 677,000. An estimated 31% of the television households in the Boise DMA subscribe to cable television with another 44% subscribing to an alternative delivery system (Nielsen). Boise is the state capital and regional center for business, government, education, health care and the arts. Major employers include Hewlett-Packard Company, Micron Technology, Inc., Boise State University, Albertson’s, Saint Alphonsus Regional Medical Center, St. Luke’s Regional Medical Center, J.R. Simplot Company, Idaho Power Company, Boise Cascade, Sears Boise Regional Credit Card Operations Center, Washington Group International (formerly Morrison Knudson), Mountain Home Air Force Base, and the Idaho State government. Boise was recognized by Forbes Magazine in 2008 as the second-best “Place for Business and Careers”. Kiplinger’s July 2008 issue ranked Boise fourth among the “10 Greatest Places to Live, Work and Play.”

KBCI currently broadcasts 25 hours per week of live local news programs. In 2008, KBCI was nominated for three Emmy’s, including “Best Newscast”. The station was also honored by the Idaho Press Club for “Best News Series” and “Best Sports”. KBCI also produced six hours of local special news programming during 2008, in addition to three hours of locally produced “Project Green” programs. KUNB LP currently rebroadcasts KBCI’s programming.

KIDK TV and KPPP LP, Idaho Falls-Pocatello, Idaho

KIDK TV and KPPP LP serve the Idaho Falls-Pocatello market, which has approximately 124,000 television households and a population of approximately 339,000. An estimated 35% of the television households subscribe to cable, with another 46% subscribing to an alternative delivery system (Nielsen). The Idaho Falls-Pocatello DMA

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consists of 14 counties located in Eastern Idaho and Western Wyoming. Idaho Falls and Pocatello, 50 miles apart, are the two largest cities in the DMA. Battelle Inc., the contractor for operation of the Idaho National Engineering & Environmental Laboratory, is the largest employer in the region. Other major employers include Melaluca, Inc., JR Simplot Company, American Microsystems, Idaho State University, Brigham Young University-Idaho, Eastern Idaho Regional Medical Center, Negra Modelo, Qwest, American Microsystems, Inc., Portneuf Medical Center, Convergys Corporation and Ballard Medical Products.

KIDK broadcasts 19.5 hours per week of live local news programs. In 2007, KIDK received two first place awards by the Idaho Press Club. KPPP LP currently rebroadcasts KIDK’s programming.

KBAK TV and KBFK CA, Bakersfield, California

KBAK-TV (CBS) and KBFX-CA (Fox) serve the Bakersfield, California market. Ranked as the 125^th largest television market, Bakersfield has approximately 225,000 television households and a population of approximately 679,000. In 2008, approximately 52% of the population subscribed to cable, while approximately 30% of households are listed as subscribers to alternative delivery systems (Nielsen). The Bakersfield economy is based on agriculture (ranching and row crops), petroleum, and the defense and aerospace industries. The U.S. Department of Defense accounts for approximately 28% of total Kern County employment. The area continues to grow in the areas of manufacturing, distribution, health care, and agriculture-related business services. Major employers in the Bakersfield area include Occidental, Chevron, Frito Lay, Nestle, and the University of California at Bakersfield.

KBAK currently broadcasts 25 hours of live local news weekly, and KBFX broadcasts 16 hours of news weekly. KBAK produces Health Alert, a locally produced program on health issues, which airs on Saturday evenings at 6:30 p.m. Major station community initiatives include Cancer Fighters, targeted to cancer prevention, research, and treatment. In recent years, KBAK has been recognized with numerous awards, including the Mark Twain Award and Associated Press Awards, and in 2006 a story on methamphetamine addiction won a National Edward R. Murrow Award.

Television Broadcasting Industry

The Federal Communications Commission (“FCC”) grants licenses to build and operate broadcast television stations. Currently, a limited number of channels are available for television broadcasting in any one geographic area.

In the United States, legislation setting the mandatory switch-off of all analog terrestrial television broadcasts was signed into law in early 2006. Some stations began broadcasting exclusively digital on February 17, 2009. Stations that are switching to a channel other than their current Digital Television (“DTV”) channel for post-transition operation are, with few exceptions, required to construct DTV transmission facilities specified by the FCC by June 12, 2009.

There are approximately 114 million television households in the United States (household universe estimates), of which approximately 70 million are cable households, and a total of approximately 101 million receive television via cable or an alternative delivery service. On average, overall household television viewing is 57 hours per week (Nielsen).

Television stations primarily receive revenue from the sale of local, regional and national advertising and, to a much lesser extent, from retransmission consent fees, network compensation, tower rental and commercial production activities. Broadcast television stations’ relatively high fixed costs of operation and heavy reliance on advertising revenue render the stations vulnerable to cyclical changes in the economy. The size of advertisers’ budgets, which are sensitive to broad economic trends, affects the broadcast industry in general and, specifically, the revenue of individual broadcast television stations. We are dependent on advertising revenue, which can be

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influenced by events such as declines in the national, regional, or local economies (as has been the case recently), employment levels, network ratings, consumer confidence and the success of national time sales representatives. Political and advocacy advertising can constitute, and in the past has constituted, a significant revenue source in some years, particularly national election years. The amount of our revenue in election years depends on many factors, such as whether Washington, Oregon, and Idaho are contested states in a presidential election and the extent of local and regional ballot initiatives.

Digital Television (“DTV”) Transition

The Digital Television, or DTV, standard, developed after years of research, and approved by the FCC in December 1996, was the breakthrough that made possible the transmission of vast amounts of information in the same size channel (6 MHz) as the current analog standard television system. All full-power television stations in the United States are required by law to discontinue analog service and operate only in digital no later than June 12, 2009. Some stations already have completed this transition, and certain other stations that are not licensed as full-power television stations are permitted to transition later than June 12, 2009. This transition to digital television requires consumers who rely on over-the-air reception of broadcast signals to purchase new television receivers that are capable of displaying DTV signals or set-top boxes that can receive digital signals and convert them to analog signals for display on existing receivers.

DTV brings with it major changes to the way viewers experience television. Specifically, DTV technology permits the distribution of high-definition television (“HDTV”) programming, which includes higher-quality sound and pictures with substantially higher resolution than analog television programming. DTV technology also allows broadcasters to provide multiple channels of programming on one 6 MHz channel, a practice known as “multicasting.”

Television station operators may use a portion of their DTV signals to provide ancillary services, such as transmission of data, interactive programming, e-commerce, paging services, audio signals, subscription video, or data transmission services. To the extent a station provides such ancillary services, it is subject to the same regulations as are applicable to other analogous services under the FCC’s rules and policies. A commercial television station is also required to pay the FCC a fee equal to 5% of the gross revenues derived from all ancillary services provided over such station’s DTV signal for which it received a fee in exchange for the service or received compensation from a third party in exchange for transmission of material from that third party, not including commercial advertisements used to support broadcasting. Because multicast programming, described above, is available to the public without charge, it is not subject to this fee.

Beginning in 2002, the FCC required all commercial television broadcasters to transmit programming in DTV format in addition to their existing analog service. The FCC allotted to each station a temporary DTV channel, in addition to its existing analog channel, for this purpose. During 2008, the FCC completed its proceeding to allot DTV channels to each full-power station for post-transition use. The FCC authorized most stations to operate on either their existing DTV channel or their existing analog channel after the DTV transition; a few stations have been allotted a third channel for post-transition use.

Stations that are switching to a channel other than their current DTV channel for post-transition operation are, with few exceptions, required to construct DTV transmission facilities specified by the FCC by June 12, 2009. In general, stations will be able to serve approximately the same number of viewers using their post-transition facilities as they currently serve using their analog facilities. However, a number of technical and regulatory factors may cause a station to be permitted to serve more or less viewers after the transition.

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The following table sets forth the DTV capabilities for each of our television stations.

Station	Market Area	Analog Channel Allotment	Post- Transition Digital Channel Allotment	Currently Broadcasting in Digital Format (1)
KOMO TV	Seattle-Tacoma, WA	4	38	Yes (HDTV)
KUNS TV	Seattle-Tacoma, WA	51	50	Yes
KATU TV	Portland, OR	2	43	Yes (HDTV)
KUNP TV	LaGrande, OR	16		No
KUNP LP	Portland, OR	47		No
KVAL TV	Eugene, OR	13	25	Yes (HDTV)
KCBY TV	Coos Bay, OR	11	21	Yes
KPIC TV	Roseburg, OR	4	19	Yes
KIMA TV	Yakima, WA	29	33	Yes (HDTV)
KEPR TV	Pasco/Richland/Kennewick, WA	19	18	Yes (HDTV)
KBAK TV	Bakersfield, CA	29	33	Yes (HDTV)
KBFX CA	Bakersfield, CA	58		No
KUNW CA	Yakima, WA	2	32	No
KVVK CA	Pasco/Richland/Kennewick, WA	15	34	No
KORX CA	Walla-Walla, WA	16		No
KLEW TV	Lewiston, ID	3	32	Yes (HDTV)
KBCI TV	Boise, ID	2	28	Yes (HDTV)
KUNB LP	Boise, ID	35		No
KIDK TV	Idaho Falls-Pocatello, ID	3	36	Yes
KPPP LP	Pocatello, ID	24		No

(1) We have constructed and commenced operation of stations KOMO-DT, Seattle, KUNS-DT, Bellevue, KATU-DT, Portland, KVAL-DT, Eugene, KCBY-DT, Coos Bay, KPIC-DT, Roseburg, KEPR-DT, Pasco, KBCI-DT, Boise, KIDK-DT, Idaho Falls and KBAK-DT, Bakersfield with digital facilities in compliance with the FCC’s rules pursuant to authorizations issued by the FCC. KIMA-DT, Yakima and KLEW-DT, Lewiston have commenced DTV operations with reduced facilities pursuant to special temporary authority (“STA”) granted by the FCC. None of our low power television stations have been granted a digital companion channel. Pursuant to the FCC’s rules, we were required to have filed either a license application for digital facilities or a request for waiver of the deadline for each of our full power stations by July 7, 2006, or the station would lose interference protection in areas beyond that served on that date. We timely filed waiver requests for KIMA-DT and KLEW-DT, which requests remain pending. KUNP, La Grande was not originally granted a paired DTV channel. These three full power stations were not on the list of compliant stations due to the election of remaining on, or returning to their current analog channel for digital transmission (known as flash-cut).

The FCC has adopted rules to limit the amount of interference that full-power DTV stations may cause to other stations. It also has acknowledged that the DTV transition may involve interference to existing low-power TV stations and translators, particularly in major television markets. Although most low-power stations are required to accept interference from full-power television stations, certain low-power stations, known as “Class A” stations, have greater interference protection rights. Some low-power and translator stations also were “displaced” by the FCC’s channel allotment process for full-power stations, and the FCC has allowed such stations to either apply for a “paired” digital channel on which they can operate simultaneously with their existing analog operations or to choose to convert directly from analog to digital transmissions in the future. Accordingly, the transition to digital television service may materially adversely affect the operations of our full-power and low-power stations.

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The regulatory matters discussed in the sections below are impacted by television stations’ transition to digital television, and those matters could materially impact our stations’ operations. In addition, it is not yet clear whether the transition to digital television will impact broadcast stations’ competition with other sources of video programming, including if viewers do not purchase DTV receivers or converter boxes, and whether and how TV broadcast stations will be able to avail themselves of or profit by the transition to DTV.

The foregoing does not purport to be a complete summary of all of the provisions of the Communications Act of 1934, as amended, or of the regulations and policies of the FCC thereunder. Proposals for additional or revised regulations and requirements are pending before, and are considered by, Congress and federal regulatory agencies from time to time. We are unable at this time to predict the outcome of any of the pending FCC rulemaking proceedings, the outcome of any reconsideration or appellate proceedings concerning any changes in FCC rules or policies, the possible outcome of any proposed or pending Congressional legislation, or the impact of any of those changes on our broadcast operations.

Television Broadcasting Competition

Competition within the media/communications industry, including the markets in which our stations compete, is considerable. This competition takes place on several levels: competition for audience, competition for programming (including news), competition for advertisers and competition for local staff and management. Additional factors material to a television station’s competitive position include signal coverage and assigned frequency. The television broadcasting industry faces continuing technological change and innovation, the possible rise in popularity of competing entertainment and communications media, changing business practices such as television “duopolies” (owning and operating two stations in the same market), use of local marketing agreements (“LMAs”) and joint sales agreements (“JSAs”) by which one entity agrees to provide administrative and other services to a station operated by another entity, and governmental restrictions or actions of federal regulatory bodies, including the FCC and the Federal Trade Commission. Any of these factors could change and materially harm the television broadcasting industry and our business in particular.

Audience.    Stations compete for audience on the basis of program popularity, which has a direct effect on advertising rates. During periods of network programming, the stations are totally dependent on the performance of the network programs in attracting viewers. The competition between the networks is keen and the success of any network’s programming can vary significantly over time. During non-network time periods, each station competes on the basis of the performance of its local and syndicated programming using a combination of self-produced news, public affairs and other entertainment or informational programming to attract viewers. The competition between stations in non-network time periods is intense, and here, too, success can vary over time.

Our stations compete for television viewership share against local network-affiliated and independent stations, as well as against programming provided by cable, direct broadcast satellite (“DBS”), and similar multichannel video programming services. These service providers can increase competition faced by a station by bringing into its market distant broadcasting signals not otherwise available to the station’s audience to the extent permitted by the FCC’s rules, and also by serving as a distribution system for nonbroadcast programming originated on these systems. To the extent cable and other multichannel video distribution system operators and broadcasters increase the amount of local news programming, the heightened competition for local news audiences could have a material adverse effect on our advertising revenue.

Other sources of competition for Fisher’s television stations include home entertainment systems (including video cassette recorder and playback systems, DVD players, digital video recorders, video on demand and television game devices), Internet websites, wireless cable, satellite master antenna television systems, and program downloads to handheld or other playback devices. Our television stations also face competition from DBS services, which transmit programming directly to homes equipped with special receiving antennas or to cable television systems for transmission to their subscribers, and Internet Protocol Television (“IPTV”). We compete with these sources of competition both on the basis of product performance (quality, variety, information and entertainment value of content) and price (the cost to utilize these systems).

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Programming.    Competition for syndicated programming involves negotiating with national program distributors, or producers. Our stations compete against in-market broadcast stations, as well as station groups, for exclusive access to syndicated programming. Operators of cable, DBS and similar systems (including video services offered by telephone companies such as AT&T and Verizon) generally do not compete with local stations for programming. However, various national non-broadcast programming networks acquire programs that might have otherwise been offered to local television stations.

Advertising.    Television advertising rates are based on the size of the market in which a station operates, a program’s popularity among the viewers an advertiser wishes to attract in that market, the number of advertisers competing for the available time, the demographic make-up of the market served by the station, the availability of alternative advertising media in the market area, the presence of aggressive and knowledgeable sales forces and the development of projects, features and programs that tie advertiser messages to programming. Our stations compete for advertising revenue with other television stations in their respective markets, as well as with other advertising media, such as newspapers, DBS services, radio, magazines, Internet websites, outdoor advertising, transit advertising, yellow page directories, direct mail and local cable systems. In addition, another source of revenue is paid political and advocacy advertising, the amount of which fluctuates significantly, particularly being higher in national election years and very low in years in which there is little election or other ballot activity. Competition for advertising dollars in the television broadcasting industry occurs primarily within individual markets on the basis of the above factors as well as on the basis of advertising rates charged by competitors. Generally, a television broadcasting station in one market area does not compete with stations in other market areas. Our television stations are located in highly competitive markets.

Digital Television

With digital television, broadcasters are not restricted to sending one high-definition picture, but rather a standard-definition picture and multicast multiple channels of standard-definition television. Some broadcasters are planning to multicast many choices of programming during the day and reduce the number of channels in the evening in order to feed a high-definition signal for prime-time. DTV technology will make it possible for broadcasters to offer more choices to viewers. Like traditional television channels, competition in digital television will likely take place on several levels: competition for audience, competition for programming (including news), competition for advertisers and competition for local staff and management. Additional factors material to a television station’s competitive position include signal coverage and assigned frequency. Our stations compete for television viewership share against traditional television stations, as well as against cable programming and alternate methods of television program distribution, such as DBS program services. These other transmission methods can increase competition for a station by bringing into its market distant broadcasting signals not otherwise available to the station’s audience, and also by serving as a distribution system for nonbroadcast programming originated on the cable system. To the extent cable operators and broadcasters increase the amount of local news programming, the heightened competition for local news audiences could have a material adverse effect on our advertising revenue. Other sources of competition for Fisher’s digital television stations include home entertainment systems (including video cassette recorder and playback systems, DVD players, digital video recorders and television game devices), Internet websites, wireless cable, satellite master antenna television systems, and program downloads to handheld or other playback devices. Our multicast stations also face competition from DBS services, which transmit programming directly to homes equipped with special receiving antennas or to cable television systems for transmission to their subscribers. We compete with these sources of competition both on the basis of product performance (quality, variety, information and entertainment value of content) and price (the cost to utilize these systems).

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Radio Markets and Stations

Seattle Radio

The following table sets forth certain information regarding our radio stations located in Seattle, Washington.

Market	Station	Dial Position	Power	National Market Rank (1)	Format
Seattle, WA				13
	KOMO AM	1000 kHz	50 kW		News
	KVI AM	570 kHz	5 kW		Talk
	KPLZ -FM	101.5 MHz	100 kW		Hot Adult Contemporary

(1) National Market Rank for Seattle, WA is based on 2008 data from Arbitron.

Our Seattle radio stations broadcast to a six-county metropolitan population of approximately 3.4 million with news and entertainment radio services. KOMO (AM), KVI (AM) and KPLZ (FM) have been on the air since 1926, 1926 and 1959, respectively. KOMO (AM) is Seattle’s only all news format station. KVI (AM) is the market’s Fox News station with a talk radio format and a mix of local and national issue-oriented programming. KPLZ (FM) programs “Hot Adult Contemporary” music with veteran morning personalities Kent Phillips and Alan Budwill.

Effective March 1, 2002, Fisher Broadcasting Seattle Radio LLC entered into a JSA with classical music station KING FM. Pursuant to the agreement, the licensee of the station, Classic Radio, Inc., retains all operating accountability, while we pay KING FM a flat fee, subject to annual adjustment, and a share of the net revenue generated by the sale of advertising time for the right to sell substantially all the commercial advertising on the station. This agreement was amended during 2006 and the term was extended through June 30, 2011.

Great Falls, Montana Radio

The following table sets forth certain information regarding our radio stations located in Great Falls, Montana.

Market	Station	Dial Position	Power	National Market Rank	Format
Great Falls, MT				N/A
	KXGF AM	1400 kHz	1 kW		Traditional Country
	KQDI AM	1450 kHz	1 kW		Talk
	KQDI FM	106.1 MHz	100 kW		Classic Rock
	KIKF FM	104.9 MHz	94 kW		Country
	KINX FM	107.3 MHz	94 kW		4 decades of hits

In October 2006, we sold 18 of our 24 small-market radio stations known as Fisher Radio Regional Group with stations located in Montana and Eastern Washington for $26.1 million. In June 2007, one additional station in Great Falls, Montana was sold for $3.0 million following FCC approval.

Radio Broadcasting Industry

Only a limited number of frequencies are available for commercial radio broadcasting in any one geographic area. The FCC grants the license to operate a radio station. Currently, two commercial radio broadcast bands provide free, over-the-air radio service, each of which employs different methods of delivering the radio signal to radio receivers. The AM band (amplitude modulation) consists of frequencies from 530 kilohertz (“kHz”) to 1700 kHz. The FM (frequency modulation) band consists of frequencies from 88.1 megahertz (“MHz”) to 107.9 MHz.

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Radio station revenue is generally affected by the same economic trends and factors as television station revenues, as described in the section entitled “Television Broadcasting Industry” above.

Radio Broadcasting Competition

A small number of companies control a large number of radio stations within the United States. Some of these companies syndicate radio programs or own networks whose programming is aired by our stations. Some of these companies also operate radio stations in markets in which we operate, have greater overall financial resources available for their operations and may control large national networks of radio sales representatives.

Competition in the radio industry, including each of the markets in which our radio stations compete, takes place on several levels: competition for audience, competition for advertisers, competition for programming and competition for on-air talent, staff and management. Additional significant factors affecting a radio station’s competitive position include assigned frequency and signal strength. The radio broadcasting industry is continually faced with technological change and innovation and the possible rise in popularity of competing entertainment and communications media, as well as governmental restrictions or actions of federal regulatory bodies, including the FCC and the Federal Trade Commission, any of which could have a material adverse effect on the broadcasting business.

The FCC has authorized Direct Audio Radio from Satellite (“DARS”) to broadcast over a separate frequency spectrum (the S-Band, between 2.31 and 2.36 GHz). Sirius XM Radio Inc. is currently offering programming via S-Band satellite channels. The company offers numerous programming channels on a monthly fee basis. Some of its program channels contain commercial announcements, but they do not currently insert local commercials. Radios capable of receiving these digital signals are available as after-market equipment and in selected new vehicles. While DARS stations are not currently expected to significantly compete for local advertising revenue, they compete for listenership, and may dilute the overall radio audience growth scale.

Audience.    Our radio stations compete for audience on the basis of programming popularity, which has a direct effect on advertising rates. As a program or station grows in audience, the station is capable of charging a higher rate for advertising. Formats, stations and music are often researched through large-scale perceptual studies, auditorium-style music tests and weekly call-outs. All are designed to evaluate the distinctions and unique tastes of formats and listeners. New formats and audience niches have created targeted advertising vehicles and programming that are focused to appeal to a narrow segment of the population. Tactical and strategic plans are utilized to attract larger audiences through marketing campaigns and promotions. Marketing campaigns using television, Internet, transit, outdoor, telemarketing or direct mail advertising are designed to improve a station’s cumulative audience (total number of people listening) while promotional tactics such as cash giveaways, trips and prizes are utilized by stations to extend the time spent listening, both of which are intended to establish a station’s share of audience. In the effort to increase audience, the format of a station may be changed. Format changes can result in increased costs and create disruptions that can harm the performance of the station, especially in the time period immediately following a format change. We have experienced this effect in the past in connection with our prior station format changes.

The proliferation of radio stations and other companies streaming their programming over the Internet has created additional competition for local radio stations, as have “podcasts” which contain programming compilations intended to be recorded on personal audio devices and replayed later, and personal audio systems like iPods and MP3 players. These Internet channels provide further choice for listeners, in addition to the existing over-the-air radio stations and the DARS stations.

Advertising.    Radio advertising rates are based on the number and mix of media outlets, the audience size of the market in which a radio station operates, the total number of listeners the station attracts in a particular demographic group that an advertiser may be targeting, the number of advertisers competing for available time, the demographic make-up of the market served by the station, the availability of alternative advertising media in the market area, the presence of aggressive and knowledgeable sales forces and the development of projects,

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features and programs that tie advertisers’ messages to programming. Our radio stations compete for revenue primarily with other radio stations and, to a lesser degree, with other advertising media such as television, cable, newspapers, yellow page directories, direct mail, Internet and outdoor and transit advertising. Competition for advertising dollars in the radio broadcasting industry occurs primarily within the individual markets on the basis of the above factors, as well as on the basis of advertising rates charged by competitors. Generally, a radio station in one market area does not compete with stations in other market areas.

Internet

Technology is impacting the distribution and consumption of traditional broadcast media. Developments in digital technology, the Internet, and other interactive media have fundamentally changed the competitive landscape and have created an entirely new way for consumers to experience media. In April 2006, Fisher formed the Fisher Interactive Network to bring together the digital media assets of the Company. The following table sets forth selected information about our websites:

Property	Market Area	Website URL
KOMO-TV	Seattle-Tacoma, WA	www.komonews.com
KOMO AM	Seattle-Tacoma, WA	www.komoradio.com
KVI AM	Seattle-Tacoma, WA	www.570kvi.com
KPLZ-FM	Seattle-Tacoma, WA	www.star1015.com
KUNS-TV	Seattle-Tacoma, WA	www.univisionseattle.com
KATU-TV	Portland, OR	www.katu.com
KUNP-TV	Portland, OR	www.univisionportland.com
KVAL-TV	Eugene, OR	www.kval.com
KCBY-TV	Coos Bay, OR	www.kcby.com
KPIC-TV	Roseburg, OR	www.kpic.com
KIMA-TV	Yakima, WA	www.kimatv.com
KEPR-TV	Pasco/Richland/Kennewick, WA	www.keprtv.com
KLEW-TV	Lewiston, ID	www.klewtv.com
KBCI-TV	Boise, ID	www.2news.tv
KIDK-TV	Idaho Falls-Pocatello, ID	www.kidk.com
KBAK-TV/KBFX-CA	Bakersfield, CA	www.bakersfieldnow.com

Competition.    Individuals as well as multi-national companies can easily enter the Internet business with a limited amount of investment. Some organizations or individuals may have greater financial resources available affording them better access to content, talent, revenue and audience. Competition in the Internet industry takes place on several levels: competition for audience, competition for advertisers, competition for content and competition for staff and management. Websites are in a state of constant technological advancement and innovation and there is no limit to the number of websites one company or individual can create or operate. While there are few governmental restrictions on websites, changes from regulatory bodies could have a material adverse effect on the business.

Audience.    Our websites compete for audience on the basis of content, which has a direct effect on advertising rates. As a website grows its page-impressions, unique visitors and the amount of time consumers spend browsing on the site, the company is capable of charging a higher rate for advertising. New content and audience features are regularly created to target advertising vehicles and programming that are focused to appeal to a narrow segment of the population. Tactical and strategic plans are utilized to attract larger audiences through marketing campaigns, designed to improve the site’s overall audience share.

Advertising.    Internet advertising rates are based on the mix of media outlets in the geo-targeting area, the page-impressions and unique visitors of the website, the ability of the website to target various demographic and psychographic groups, the number of advertisers competing for available inventory, the availability of alternative

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advertising media in the geo-target area, the presence of aggressive and knowledgeable sales forces and the development of projects and features that tie advertisers’ messages to the content. Our websites compete for revenue with other websites and, to a lesser degree, with other advertising media such as television, radio, cable, newspapers, yellow page directories, direct mail, outdoor and transit advertising. Competition for advertising dollars occurs at the national and local level and is subject to changes in rates generally. While there are no geographic barriers to accessing websites, most news and information based websites serving a local market compete for audience and revenue on a geo-targeted basis.

Federal Regulation

The ownership, operation and sale of broadcast stations are subject to the jurisdiction of the FCC under the Communications Act of 1934, as amended (the “Communications Act”). FCC rules cover many areas of station ownership and operation, including but not limited to allotment of television and radio channels to particular communities, approval of station operating parameters, issuance, renewal, revocation or modification of licenses, changes in the ownership or control of licensees, regulation of equipment, and the ownership, operation, and employment practices of stations. The FCC has the power to impose penalties, including fines or license revocations, for violations of its rules.

Programming and Operation.    The Communications Act requires broadcasters to serve the “public interest.” Stations must periodically document their presentation of programming responsive to local community problems, needs and interests. Complaints concerning programming may be considered by the FCC at any time. Stations also must follow various laws and rules that regulate, among other things, the maximum rates that stations may charge for certain political advertising, sponsorship identification, the advertisement of contests and lotteries, the quantity of educational and informational programming directed to children, the amount of content of commercials in and adjacent to children’s programming, the advertising of cigarettes or smokeless tobacco, obscene and indecent broadcasts and technical operations.

New Licenses.    Television and radio channels are allotted to particular communities. The FCC may change such allotments from time to time. The FCC periodically accepts applications for authority to construct new television and radio stations on unused allotted channels. New AM stations are approved based upon a sophisticated engineering demonstrating compliance with the complex technical rules designed to limit interference with existing stations. Auctions are held by the FCC if more than one party files an application for the same unused FM or television allotment and for any new AM facility. A petition to deny a winning application must be resolved through FCC consideration of the applicant’s qualifications and the application’s compliance with FCC rules.

Assignments and Transfers.    Assignment of a license or transfer of control of a broadcast licensee requires prior FCC consent. An application seeking such consent must be filed with the FCC. Public notice of such filings is provided, and interested parties may petition to deny such applications. The FCC considers the qualifications of the purchaser, the compliance of the transaction with rules, and other factors in order to determine whether the public interest would be served by such change in ownership. An evidentiary hearing may be conducted if there are unresolved substantial and material questions of fact.

License Renewal.    Broadcast licenses initially are issued for a period specified in the license. Broadcast licenses are normally renewed for an eight-year term (subject to short-term renewals in certain circumstances). Licensees seeking renewal must file an application containing certain required information. During the consideration of that application, interested parties may petition to deny the renewal application. The FCC will grant the renewal application and dismiss any petitions to deny if it determines that the licensee meets statutory renewal standards based on a review of the preceding license term. Competing applications for the frequency licensed to the renewal applicant may not be filed unless and until the FCC has determined that the incumbent is not qualified to hold the license.

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Failure to observe FCC rules and policies, including, but not limited to, those discussed in this document, can result in the imposition of various sanctions, including monetary forfeitures, the grant of short-term (i.e., less than the full eight years) license renewals or, for particularly egregious violations, the denial of a license renewal application or revocation of a license.

While the vast majority of such licenses are renewed by the FCC, there can be no assurance that our licenses will be renewed at their expiration dates, or, if renewed, that the renewal terms will be for eight years. If a station license is not renewed by the expiration date, the licensee may continue to operate such station until final action is taken on the station’s renewal application.

The expiration date for the licenses of our television stations are as follows:

Station	Market Area	Expiration Date
KOMO TV	Seattle-Tacoma, WA	February 1, 2015
KUNS TV	Seattle-Tacoma, WA	February 1, 2015
KATU TV	Portland, OR	February 1, 2007(1)
KUNP TV	LaGrande, OR	February 1, 2015
KUNP LP	Portland, OR	February 1, 2015
KVAL TV	Eugene, OR	February 1, 2015
KCBY TV	Coos Bay, OR	February 1, 2015
KPIC TV	Roseburg, OR	February 1, 2015
KIMA TV	Yakima, WA	February 1, 2015
KEPR TV	Pasco/Richland/Kennewick, WA	February 1, 2015
KBAK TV	Bakersfield, CA	December 1, 2014
KBFX CA	Bakersfield, CA	December 1, 2014
KUNW CA	Yakima, WA	February 1, 2015
KVVK CA	Pasco/Richland/Kennewick, WA	February 1, 2015
KORX CA	Walla-Walla, WA	February 1, 2015
KLEW TV	Lewiston, ID	October 1, 2014
KBCI TV	Boise, ID	October 1, 2014
KUNB LP	Boise, ID	October 1, 2014
KIDK TV	Idaho Falls-Pocatello, ID	October 1, 2014
KPPP LP	Pocatello, ID	October 1, 2014

(1) On December 22, 2006, a petition to deny was filed by Oregon Alliance to Reform Media (“OARM”) against KATU and seven other television stations licensed to serve the Portland, Oregon market. OARM argued that the stations each failed to present adequate programming relating to state and local elections during the 2004 election cycle in their news and public affairs programming. The FCC’s Media Bureau rejected OARM’s petition. However, on September 14, 2007, OARM petitioned the FCC for reconsideration of that decision. That petition remains pending, and we cannot predict when or how the FCC will address it.

The license terms for all of our Montana radio stations expire on April 1, 2013. The license terms of our radio stations in Seattle, Washington expire February 1, 2014. The non-renewal or revocation of one or more of our FCC licenses could harm our radio broadcasting operations.

Ownership Restrictions.    Complex FCC regulations limit the “cognizable interest” (also called “attributable interest”) that may be held by a single party. In general, officers, directors, general partners and parties with the power to vote or control the vote of 5% or more of the outstanding voting power of a corporate licensee are considered to hold an “attributable interest” in that entity, although certain passive investors must have a 20% or greater voting interest to be considered to have an “attributable interest.” Also, any party that holds a financial interest (whether equity or debt) in excess of 33% of a licensee’s total capital is “attributable” if

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such party is either a significant program supplier to the licensee or has another media interest in the same market. In addition, a licensee that provides more than 15% of the programming of another station in the local market is considered to have an attributable interest in that station.

National Television Ownership Limits

FCC rules prohibit a single entity from holding an attributable interest in television stations that have an aggregate national audience reach exceeding 39% of television households (the “National Television Ownership Limits”). The FCC counts the television households in each Nielsen DMA in which a party has an attributable interest in a television station as a percentage of the total television households in the DMAs. Only 50% of the television households in a DMA are counted toward the 39% national restriction if the owned station is a ultra high frequency station.

Local Television Ownership Limits

Detailed FCC rules regulate the extent to which a party may have an attributable interest in more than one full-power television station in the same area (the “Local Television Ownership Limits”). Common ownership of multiple television stations is permitted where the stations are in different Nielsen DMAs. Common ownership of two television stations in the same DMA is permitted where there is no Grade B contour overlap among the stations, where a specified number of separately-owned full-power television stations will remain after the combination is created, or where certain waiver criteria are met. A party may have attributable interests in both television and radio stations in the same local market. The specific number of such stations is governed by FCC rules, depending primarily on the number of independent media voices in the market. Low Power Television Stations (LPTVs) are not subject to such limits.

Local Radio Ownership Limits

Similarly, FCC rules regulate the extent to which a party may have an attributable interest in more than one radio station in the same market, as defined by Arbitron, or, in the case of communities outside of Arbitron-rated markets, certain overlapping or intersecting signal contours. Depending on the size of market, a single entity may have an attributable interest in from two to eight commercial radio stations.

Cross-Ownership Restrictions

A party may have attributable interests in both television and radio stations in the same local market. The specific number of such stations is governed by FCC rules, depending on the number of independent media voices in the market (the Television-Radio Cross-Ownership Rule”). A single entity may own attributable interests from as few as one television and one radio station in the market to as many as two television and six radio stations (or one television and seven radio stations). LPTVs are not considered in determining compliance with such restrictions.

In 2008, the FCC announced rules which would permit, in limited circumstances, a radio or television broadcast station to be licensed to an entity that, directly or indirectly, owns, operates or controls a daily English-language newspaper that is published in a community within certain defined signal strength contours of the broadcast station (the “Broadcast-Newspaper Cross-Ownership Rule”). Under the modified rules, the FCC will assess proposed newspaper/broadcast combinations on a case-by-case basis, but in limited circumstances will presumptively approve the common ownership of attributable interests in a newspaper and one television station or one radio station in the 20 largest markets, and will presumptively not approve such interests outside the 20 largest markets. The FCC stated that it would consider permitting newspaper/broadcast cross-ownership in smaller markets if it can be shown either (i) that the broadcast property is “failed” or “failing,” or (ii) that the transaction will result in a new source of news in the market, that is, at least seven new hours of local news per week on a broadcast station that previously has not aired local news. Because the U.S. Court of Appeals for the

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Third Circuit stayed the effectiveness of any modifications to the ownership rules until it reviews the FCC’s compliance with its June 2004 order, the modified daily newspaper cross-ownership rule will not go into effect until the court has completed its review. A number of media companies and public interest groups have challenged in court the FCC’s modification of the daily newspaper cross-ownership rule and its retention of the other ownership rules. These challenges are pending before the U.S. Court of Appeals for the Third Circuit. Several public interest groups also have asked the FCC to reconsider its 2008 order; this request is pending. We cannot predict the manner in which these matters will be resolved.

If an attributable stockholder of the Company has or acquires an attributable interest in other television or radio stations, or in daily newspapers, depending on the size and location of such stations or newspapers, or if a proposed acquisition by us would cause a violation of the FCC’s multiple ownership rules or cross-ownership restrictions, we may be unable to obtain from the FCC one or more authorizations needed to conduct our business and may be unable to obtain FCC consents for certain future acquisitions.

Local Marketing Agreements.    A number of television and radio stations have entered into LMAs. Such agreements typically permit a third party to provide the programming and sell the advertising time during a substantial portion of the broadcast day of a station, subject to the requirement that the station’s programming content and operations remain at all times under the independent control of the station licensee. At present, FCC rules permit LMAs, but the licensee of a broadcast station brokering more than 15% of the time on another station in the same market is generally considered to have an attributable interest in the brokered station. When the FCC decided to attribute LMAs for ownership purposes, it grandfathered LMAs that were executed prior to November 5, 1996, permitting the applicable stations to continue operations pursuant to the LMAs until the conclusion of the FCC’s 2004 biennial review. The FCC stated that at the conclusion of the 2004 biennial review it would conduct a case-by-case review of grandfathered LMAs and assess the appropriateness of extending the grandfathering period. To date, the FCC has not commenced that review. We cannot predict when or whether the FCC will begin its review of those LMAs.

Joint Sales Agreements.    Some television and radio stations have entered into cooperative arrangements commonly known as joint sales agreements (“JSAs”). Typically these involve the assignment, for a fee, of the right to sell substantially all the commercial advertising on a station. The typical JSA is distinct from an LMA in that a JSA (unlike an LMA) normally does not involve programming. Currently, radio station JSAs involving more than 15% of the advertising of a radio station in the same market are deemed by the FCC to give the broker an attributable interest in the brokered station. We currently broker the sale for advertising time on an FM station in Seattle pursuant to a JSA. While that will result in Fisher being considered to have an attributable interest in that station, such attribution does not cause us to exceed the FCC’s local radio ownership or cross-ownership limitations. In contrast, television stations for which a licensee sells time under a JSA are not deemed by the FCC to be attributable interests of that licensee at this time. An FCC proceeding to extend attribution to television JSAs was initiated in 2004 but remains unresolved.

Biennial Regulatory Reviews.    The FCC concluded its Biennial Regulatory Review of Broadcast Ownership Rules in June 2003, by adoption of a decision which modified a number of its media ownership limits. Those rules set forth a new radio market definition for the markets measured by Arbitron, based upon geographic areas, rather than signal contours. That decision significantly modified the multiple ownership rules related to television. It modified the National Television Ownership Limits to permit an entity to have a 45% national aggregate audience reach. The new rules modified the Local Television Ownership Limits to permit a single party to have an attributable interest in up to three television stations in certain very large DMAs; and reduced the number of separately-owned full-power television stations that must exist in a DMA to justify a party holding an attributable interest in two television stations in the same DMA. The FCC also eased the Television-Radio Cross-Ownership Rules relating to the ownership of interests in both radio and television stations in the same market, and modified the Broadcast-Newspaper Cross-Ownership Rule to permit common ownership of television stations and newspapers in many markets. The FCC decision adopted rules relating to radio JSAs under which stations for which a licensee sells time would be deemed to be attributable interests of that licensee,

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and the FCC has undertaken a proceeding whether to establish a similar standard for television JSAs. Legislation adopted in January 2004 lowered the National Television Ownership Limits to a 39% national aggregate audience reach. In June 2004, the U.S. Court of Appeals issued a decision upholding portions of the FCC decision, but concluded that the decision failed to adequately support numerous aspects of those rules, including the specific numeric ownership limits adopted by the FCC. The court remanded the matter to the FCC for revision or further justification of the rules, retained jurisdiction over the matter, and maintained its existing stay of the effectiveness of those rules. It subsequently allowed those portions of the new rules relating to radio ownership to go into effect. The U.S. Supreme Court has declined to review the matter. The FCC has made certain changes to the newspaper/broadcast cross-ownership rule, but it has indicated that it plans to retain the pre-June 2003 multiple ownership rules otherwise intact. The text to that decision has not yet been released to the public. Various parties have publicly stated their intent to appeal that decision. We cannot predict, whether the decision will in fact be appealed, or the outcome of such appeal.

Foreign Ownership.    The Communications Act generally prohibits foreign parties from having a 20% or greater interest in a broadcast licensee entity, or more than a 25% interest in the parent entity of a licensee. As presently organized, we comply with the FCC’s foreign ownership restrictions.

Network Affiliate Issues.    FCC rules affect the network-affiliate relationship. Among other things, these rules require network affiliation agreements to (i) prohibit networks from requiring affiliates to clear time previously scheduled for other use, (ii) permit an affiliate to preempt network programs it believes are unsuitable for its audience, and (iii) permit affiliates to substitute programs believed to be of greater local or national importance than network programming. In 2008, the FCC resolved a petition to review certain of these rules by clarifying its limitations on the extent to which the networks can exert control over the operations of their affiliates.

Other Matters.    The FCC has numerous other regulations and policies that affect its licensees, including rules requiring closed captioning to assist television viewing by hearing impaired viewers, requirements for visual display of emergency information, minimum amounts of television programming designed to serve the educational and informational needs of children, limitations on the amount of advertising within children’s television programming, and equal employment opportunities (“EEO”) rules requiring broadcast licensees to provide equal opportunity in employment to all qualified job applicants and prohibiting discrimination against any person by broadcast stations based on race, color, religion, national origin or gender. The EEO rules also require each station to (i) widely disseminate information concerning its full-time job vacancies, with limited exceptions, (ii) provide notice of each full-time vacancy to certain recruitment organizations and (iii) periodically complete a certain number of recruitment initiatives. Licensees are also required to collect, submit to the FCC and/or maintain for public inspection extensive documentation regarding a number of aspects of its station operations, including its EEO performance.

Another FCC rule prohibits the broadcast of indecent or profane material from 6 a.m. through 10 p.m., local time, and the willful or repeated violation of these rules could result in fines of up to $325,000 per violation, renewal of a station license for less than the normal term, loss of a station’s license to operate, or even criminal penalties. The U.S. Courts of Appeal of the Second and Third Circuits recently have reversed certain of the FCC’s decisions regarding enforcement of its indecency rule, and one of these cases is currently under consideration by the U.S. Supreme Court. While we cannot predict the resolution of this litigation, it may materially impact the risks associated with operating broadcast stations.

Cable and satellite carriage of broadcast television signals is also affected by FCC rules. An election is made by television stations every third year specifying, on a system-by-system basis, whether they will assert their right to mandatory carriage of their signals by local cable systems (known as “must carry”), subject to certain limitations set forth in the rules, or whether the system must contract for “retransmission consent” in order to carry their signal. Under the FCC’s rules, cable operators are required to carry the digital signals of so-called “must-carry” stations and to distribute each station’s HDTV programming, to the extent offered by the station, to cable subscribers. For a limited period, cable operators must also ensure that HDTV programming is available in

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standard definition to viewers who do not have television equipment capable of displaying HDTV signals. In addition, a must-carry station broadcasting only in digital is entitled to carriage of only one of its programming streams, but it is permitted to designate which of its programming streams will be carried by a cable operator.

Under the Satellite Home Improvement Act, as amended by the Satellite Home Viewer Extension and Reauthorization Act (“SHVERA”), satellite carriers are permitted to retransmit a local television station’s signal into its local market with the consent of the local television station. If a satellite carrier elects to carry one local station in a market, the satellite carrier must carry the signals of all local television stations that also request carriage. “Unserved households” which cannot receive the over-the-air signal of a network station with a specified signal strength may be eligible to receive by satellite a “distant signal” of that network which originates outside the local television market. The distant signal provisions of SHVERA will expire at the end of 2009. Congress is expected to consider an extension to these provisions along with other changes to the law, including changes to reflect the transition to digital television.

In an order released during March 2008, the FCC required satellite carriers to carry digital-only stations upon request in markets in which they are providing any local-into-local service. The same order required satellite carriers, over a four-year period, to begin transmitting the high definition (“HD”) signals of all stations that offer them in markets where any station’s signals are carried in HD. The FCC also is considering, in a pending proceeding, what obligations it should impose on satellite delivery of HD signals to subscribers who do not have HD-capable equipment.

Proposed Legislation and Regulation.    Congress and the FCC may in the future adopt new laws, regulations and policies regarding a wide variety of matters that could affect, directly or indirectly, the operation and ownership of our broadcast properties. Such matters include, for example, EEO regulations, spectrum use fees, political advertising rates, standardized and enhanced public interest disclosure requirements and potential restrictions on the advertising of certain products. Other matters that could affect our broadcast properties include assignment by the FCC of channels for additional broadcast stations or wireless cable systems, as well as technological innovations and developments generally affecting competition in the mass communications industry.

Seasonality

Our results are subject to seasonal fluctuations, and as a result, second and fourth quarter broadcasting revenue is typically greater than first and third quarter broadcasting revenue. This seasonality is primarily attributable to increased consumer advertising in the spring and then increased retail advertising in anticipation of holiday season spending. Furthermore, revenue from political advertising is cyclical and varies based on the timing of federal, state, and local elections, as well as the presence of highly contested initiatives or ballot measures.

Fisher Plaza

Through Fisher Media Services, we own and manage Fisher Plaza, a full-block, mixed-use facility located near downtown Seattle that serves as the home of our corporate offices and our Seattle television and radio stations. Fisher Plaza also houses a variety of technology and other media and communications companies as well as office and retail tenants. Fisher Plaza is designed to support the production and distribution of media content through numerous channels, including broadcast, satellite, cable, internet and broadband, as well as other wired and wireless communication systems. Fisher Plaza also houses many companies with complementary needs for the mission critical infrastructure provided at the facility. Major non-Fisher occupants include data center facilities for Internap Network Services Corporation, Verizon Communications, Inc., Swedish Health Services, Princess Cruise Lines, and Adhost Internet. Fisher also provides colocation facilities for many of its tenants. Fisher Plaza was completed in the summer of 2003 and had a net book value of approximately $111 million at December 31, 2008. We seek to produce a return on our total investment in Fisher Plaza by offering and leasing technology space to companies that complement the vision and capabilities of the facility, as well as using the facility for our Seattle-based operations.

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Available Information

Our website address is www.fsci.com. We make available on this website under “Investor Information—SEC Filings,” free of charge, our code of ethics, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after we electronically file or furnish such materials to the U.S. Securities and Exchange Commission (the “SEC”).

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ITEM 1A.  RISK FACTORS

The following risk factors and other information included in this annual report should be carefully considered. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. If any of the following risks occur, our business, financial condition and future results could be harmed.

The continued economic slowdown in the United States and the ongoing financial crisis may continue to adversely affect our results of operations, cash flows and financial condition.

The current economic slowdown in the United States is likely to continue to adversely affect our operating results and the broadcast industry in general by, among other things, reducing demand for local and national broadcast advertising and making it more difficult for customers to pay their accounts. Some companies have experienced downward pressure on their stock price and credit capacity without regard to their underlying financial strength. If current levels of market disruption and volatility continue or worsen, our business, financial condition, results of operations and cash flows may continue to be adversely affected, possibly materially. In addition, our ability to access the capital markets may be severely restricted which could reduce our flexibility to react to changing economic and business conditions. Any such disruption could require us to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our business needs can be arranged. In addition, our cash balances will not yield significant interest income in this low-interest rate environment. Such measures could include deferring capital expenditures and other discretionary uses of cash.

We depend on advertising revenues, which fluctuate as a result of a number of factors.

Our main source of revenue is the sale of advertising. Our ability to sell advertising depends on many factors, including the following:

• the health of the economy, and particularly the economy of the Pacific Northwest region and Seattle, Washington and Portland, Oregon;

• the popularity of our programming;

• pricing fluctuations in local and national advertising;

• the activities of our competitors, including increased competition from other forms of advertising-based media, particularly network, cable television, direct satellite television and radio, and the Internet;

• the use of new services and devices which allow viewers to minimize commercial advertisements, such as satellite radio and personal digital video recorders;

• changes in the makeup of the population in the areas where our stations are located; and

• other factors that may be beyond our control.

Our advertising revenue has decreased due to adverse developments in many of the above factors, and if the decrease continues, it will adversely affect our operating results and financial condition.

In addition, our results are subject to seasonal fluctuations, and as a result, second and fourth quarter broadcasting revenue is typically greater than first and third quarter broadcasting revenue. This seasonality is primarily attributable to increased consumer advertising in the spring and then increased retail advertising in anticipation of holiday season spending. Furthermore, revenue from political advertising is cyclical and varies based on the timing of federal, state, and local elections, as well as the presence of highly contested initiatives or ballot measures.

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We have incurred losses in the past. We cannot assure you that we will be able to maintain profitability.

During 2008 and 2007, we had income from continuing operations before income taxes of $71 million and $47 million respectively. However, approximately $153 million of income for 2008 and $40 million of income for 2007 resulted from our sale of shares of Safeco Corporation common stock. In 2006, we had income from continuing operations before income taxes of $9 million, and in 2005 we had a loss from continuing operations before income taxes of $16 million. We cannot assure you that our plans to improve operating performance will be successful or that we will be able to achieve profitability in the future, especially given the current state of the national and Pacific Northwest economies.

As of the end of 2008, after conducting an impairment review, we recorded a total impairment charge of $78.2 million, consisting of impairments of goodwill ($38.4 million), intangible assets ($38.3 million) and equity investment ($1.5 million). Approximately $55.6 million of goodwill, intangible assets (primarily FCC licenses) and equity investment remain on our balance sheet (or 15% of our total assets) as of December 31, 2008. We test goodwill and intangible assets at the reporting unit level annually in October or whenever certain triggering events or circumstances occur, including, but not limited to changing business conditions and outlook, significant slowdown in the economic environment, and significant reduction in our market capitalization, indicating that goodwill or intangible assets might be impaired. If impairment is indicated as a result of future evaluations, we would record a further impairment charge in accordance with accounting rules, which would reduce any reported net income or increase any reported net loss for the period in which the charge is taken, and which could adversely affect the value of our stock. We may need to take additional impairments in the future, and historical trends may not be indicative of our future impairments. From the end of 2008 until the date of this filing, our market capitalization has decreased significantly. Since significant reduction of market capitalization is one of the key trigger events for us to conduct an interim goodwill and intangible assets impairment review, we could recognize further impairments in future quarters on the approximately $55.6 million goodwill, intangibles and equity investment currently included in our total assets.

Although we expect to generate sufficient taxable income to realize the deferred tax asset set up as a result of the goodwill and intangible impairment, significant changes in expectations and future results could require us to establish a valuation allowance.

Our operating results are dependent on the success of programming aired by our television and radio stations, which depends in part upon factors beyond our control.

Our advertising revenues are dependent on the success of our local, network and syndicated programming. We make significant commitments to acquire rights to television and radio programs under multi-year agreements. The success of such programs is dependent partly upon unpredictable factors such as audience preferences, competing programming, and the availability of other entertainment activities. If a particular program is not popular in relation to its costs, we may not be able to sell enough advertising to cover the costs of the program. In some instances, we may have to replace or cancel programs before their costs have been fully amortized, resulting in write-offs that increase operating costs. Our Seattle and Portland television stations, which account for approximately 63% 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, two of our television stations are independent and the remainder of our television stations are affiliated with Univision. Any performance decline by ABC, CBS, or by other networks or network program suppliers, could harm our business and operating results.

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Competition in the broadcasting industry and the rise of alternative entertainment and communications media may result in loss of audience share and advertising revenue by our stations.

Our television and radio stations face intense competition, including competition from the following sources:

• local network affiliates and independent stations;

• cable, direct broadcast satellite and alternative methods of broadcasting brought about by technological advances and innovations, including pay-per-view and home video and entertainment systems; and

• other sources of news, information and entertainment, including streaming video broadcasts over the Internet, podcasting, newspapers, movie theaters and live sporting events.

In addition to competing with other media outlets for audience share, we also compete for advertising revenue that comprises our primary source of revenue. Our stations compete for advertising revenue with other television and radio stations in their respective markets, as well as with other advertising media such as newspapers, the Internet, magazines, outdoor advertising, transit advertising, yellow page directory, direct mail and local cable systems.

Our operating results are dependent in part upon the ability of each of our stations to compete successfully in its market, and there can be no assurance that any one of our stations will be able to maintain or increase its current audience share or revenue share. To the extent that certain of our competitors have, or may in the future obtain, greater resources, our ability to compete successfully in our broadcasting markets may be impeded.

If we are unable to respond to changes in technology and evolving industry trends, our television and radio businesses may not be able to compete effectively.

New technologies could adversely affect our television and radio stations. Information delivery and programming alternatives including cable, direct satellite-to-home services, satellite radio, pay-per-view, the Internet, digital video recorders and home video and entertainment systems and MP3 players have fractionalized television and radio audiences. Over the past decade, cable television programming services, other emerging video distribution platforms and the Internet have captured an increasing market share, while the aggregate viewership of the major television networks has declined. In addition, the expansion of cable and satellite television, the Internet and other technological changes including the increased usage of video-on-demand have increased, and may continue to increase, the competitive demand for programming. Such increased demand, together with rising production costs, may increase our programming costs or impair our ability to acquire desired programming.

In addition, video compression techniques, now in use with direct broadcast satellites and potentially soon for cable and wireless cable, are expected to permit greater numbers of channels to be carried within existing bandwidth. These compression techniques as well as other technological developments are applicable to all video delivery systems, including over-the-air broadcasting, and have the potential to provide vastly expanded programming to highly targeted audiences. Reduction in the cost of creating additional channel capacity could lower entry barriers for new channels and encourage the development of increasingly specialized niche programming. This ability to reach very narrowly defined audiences may alter the competitive dynamics for advertising expenditures. We are unable to predict the effect that these and other technological changes will have on the television industry or the future results of our television businesses. Our inability to effectively respond to these technological changes may result in our inability to effectively compete for advertising revenue and programming.

Because significant portions of our cost of services are relatively fixed, downturns in the economy harm our operations, revenue, cash flow and earnings.

Nearly all of our operations are concentrated in the Pacific Northwest region. The Seattle, Washington and Portland, Oregon markets are particularly important for our financial well-being. Operating results over the past several years, including 2008, have been adversely impacted by a deteriorating regional economy. Continued

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weak economic conditions in these markets would harm our operations and financial condition. Because significant portions of our costs of services are relatively fixed, we may be unable to materially reduce costs to offset declines in our revenues. As a result, we could suffer net losses, which could increase if the current economic downturn accelerates. In addition, the significant downturn in the national economy that began in 2008 resulted (and may in the future continue to result) in decreased national advertising sales. If this continues, it could harm our results of operations because national advertising sales represent a significant portion of our television advertising net revenue.

The current economic downturn has particularly affected certain key categories of national broadcast advertising segments, including specifically, the automobile industry, which on a national basis represents the largest spending category in the broadcasting industry. Reductions in advertising spending by key segments in 2008 negatively affected our financial results, and a prolonged downturn in these industries could continue to harm our cash flows and results of operations.

We may experience disruptions in our business if we sell or acquire and integrate new television or radio stations.

As part of our business strategy and subject to market conditions, we plan to continue to evaluate opportunities to sell or acquire television and radio stations. On January 1, 2008, we finalized our purchase of KBAK and KBFX, our two Bakersfield, California television stations, for approximately $55 million in cash. The purchase price of this acquisition was paid with existing cash and proceeds from our sale of Safeco Corporation common stock. If we make acquisitions in the future, we may need to use more of our existing cash, incur more debt, or issue equity securities, and we may incur contingent liabilities and amortization and/or impairment expenses related to intangible assets. Further, we cannot provide assurance that we will find other attractive acquisition candidates or effectively manage the integration of acquired stations into our existing business. If the expected operating efficiencies from acquisitions do not materialize, if we fail to integrate new stations or recently acquired stations into our existing business, if the costs of such integration exceed expectations or if undertaking such sales or acquisitions diverts management’s attention from normal daily operations of the business, our operating results and financial condition could be harmed.

In addition, television station acquisitions are subject to the approval of the FCC and, potentially, other regulatory authorities. The need for FCC and other regulatory approvals could restrict our ability to consummate future transactions and potentially require us to divest some television stations if the FCC believes that a proposed acquisition would result in excessive concentration in a market, even if the proposed combinations may otherwise comply with FCC ownership limitations.

Radio and television programming revenue may be negatively affected by the cancellation of syndication agreements.

Syndication agreements are licenses to broadcast programs that are produced by production companies. Such programming can form a significant component of a station’s programming schedule. Syndication agreements are subject to cancellation, which may affect a station’s programming schedule, and we cannot assure you that we will continue to be able to acquire rights to syndicated programs once our current contracts for these programs end.

Our indebtedness could materially and adversely affect our business.

As of December 31, 2008, we had total debt, in the form of 8.625% senior notes due 2014, in the aggregate principal amount of $150 million. Our indebtedness could have a material adverse effect on our business. For example, it could:

• increase our vulnerability to the current general adverse economic and industry conditions and resulting downturn in our business;

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• reduce the availability of our cash flow to fund working capital, capital expenditures and other general business purposes;

• reduce the funds available to purchase the rights to television and radio programs;

• limit our flexibility in planning for, or reacting to, changes in our industries, making us more vulnerable to economic downturns, including the current one;

• limit our ability to raise additional funding; and

• place us at a competitive disadvantage compared to our competitors that have less debt.

If our indebtedness produces such adverse effects, our business, financial condition, cash flow and results of operations could suffer, making it more difficult for us to satisfy our obligations under the notes. Furthermore, the indenture governing our 8.625% senior notes due 2014 permits us to incur additional debt only if we satisfy certain financial tests and comply with other covenants. Refer to Note 10 in the accompanying notes to the consolidated financial statements for a description of the covenants included in the indenture. The failure to comply with the covenants in the indenture could be an event of default, which, if not cured or waived, would permit acceleration of the notes payment obligations. See Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” for further discussion on our debt.

The non-renewal, modification, or cancellation of affiliation agreements with major television networks, including our affiliation agreements with ABC Television Network for KOMO and KATU, could harm our operating results.

Each of our television stations’ affiliation with one of the major television networks has a significant impact on the composition of the station’s programming, revenue, expenses and operations. In some instances, network affiliation agreements are not renewed, or in limited circumstances, may be cancelled by the network. For example, if a network acquires a television station in a market in which we own a station affiliated with that network, the network will likely decline to renew the affiliation agreement for our station in that market.

Our two largest television stations, KOMO, which broadcasts in Seattle, Washington, and KATU, which broadcasts in Portland, Oregon, have affiliation agreements with ABC with current terms expiring in August 2009. While we expect to renew such affiliation agreements prior to expiration, there can be no assurances that we will do so at all, or on terms that are beneficial to the Company. In 2008, approximately 63% percent of our television broadcasting revenues (and approximately 45% of our total revenues) were derived from our two ABC-affiliated stations. Consequently, if we are unable to renew our ABC affiliation agreements, our operating results would be materially adversely affected.

The major network affiliations for our television stations other than KOMO and KATU are with CBS or Fox. Our affiliation agreements with CBS generally expire in February 2016. Our only affiliation agreement with the FOX Network generally expires in June 2010. Although none of our affiliation agreements with CBS or FOX are scheduled for renewal in 2009, any modification, cancellation or eventual non-renewal of any of these agreements could harm our operating results.

A change in network affiliation in a given television market may have many short-term and long-term consequences, depending upon the circumstances surrounding the change. Potential short-term consequences include the following:

• increased marketing costs and increased internal operating costs, which can vary widely depending on the amount of marketing required to educate the audience regarding the change and to maintain the station’s viewing audience;

• short term loss of market share or slower market growth due to advertiser uncertainty about the switch;

• costs of building a new or larger news operation and other increases in station programming costs, if necessary; and

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• the cost of equipment needed to conform the station’s programming, equipment and logos to the new network affiliation.

Long-term consequences are more difficult to assess, due to the cyclical nature of each of the major network’s audience share and the fact that national network audience ratings are not necessarily indicative of how a network’s programming is accepted in an individual market.

Changes in FCC regulations regarding ownership have increased the uncertainty surrounding the competitive position of our stations in the markets we serve.

In June 2003, the FCC relaxed certain of its local media ownership rules, including its local television ownership limitations and its prohibition on common ownership of newspapers and broadcast stations in the same market. It also modified its local radio ownership limitations in a way that could limit our ability to acquire additional radio stations in existing markets that we serve. The FCC’s new rules were to have become effective on September 4, 2003 but were stayed by the U.S. Court of Appeals for the Third Circuit. Then, in June 2004, the court remanded the new rules to the FCC with instructions to undertake additional analysis of the record in order to justify its decision. In September 2004 the Third Circuit court lifted its stay insofar as it applied to the modified local radio ownership rules, which are largely in effect. In all other respects the rules that were in effect prior to June 2003 will remain in effect until the appeals are resolved or the stay is lifted.

In a remand order released in February 2008, the FCC liberalized its broadcast/newspaper cross-ownership rule. Because the U.S. Court of Appeals for the Third Circuit stayed the effectiveness of any modifications to the ownership rules until it reviews the FCC’s compliance with its June 2004 order, the modified broadcast/newspaper rule will not go into effect until the court has completed its review. In its 2008 order, the FCC declined to modify its other ownership rules, including the local television ownership limitations. A number of media companies and public interest groups have challenged the FCC’s modification of the broadcast/newspaper cross-ownership rule and its retention of the other ownership rules. These challenges are pending before the U.S. Court of Appeals for the Third Circuit. Several public interest groups also have asked the FCC to reconsider its February 2008 order, and that request is pending. We cannot predict the outcome of these challenges or the effect that any particular outcome will have on our stations and business.

Under existing law a single entity is permitted to have an attributable interest in television stations serving up to 39% of U.S. television households. Large broadcast groups may take advantage of this law to expand further their ownership interests on a national basis. We expect that the consolidation of ownership of broadcasting and newspapers in the hands of a smaller number of competitors would intensify the competition in our markets, which could harm our future operating results.

The FCC’s extensive regulation of the broadcasting industry limits our ability to own and operate television and radio stations and other media outlets.

The broadcasting industry is subject to extensive regulation by the FCC under the Communications Act of 1934, as amended. Compliance with and the effects of existing and future regulations could have a material adverse impact on us. Issuance, renewal or transfer of broadcast station operating licenses requires FCC approval, and we cannot operate our stations without FCC licenses. Except for KATU, discussed below, FCC licenses for our various television and radio stations expire in 2013, 2014 or 2015. Failure to observe FCC rules and policies can result in the imposition of various sanctions, including monetary forfeitures, the grant of short-term (i.e., less than the full eight years) license renewals or, for particularly egregious violations, the denial of a license renewal application or revocation of a license. While the majority of such licenses are renewed by the FCC, we cannot assure you that our licenses will be renewed at their expiration dates, or, if renewed, that the renewal terms will be for eight years. If the FCC decides to include conditions or qualifications in any of our licenses, we may be limited in the manner in which we may operate the affected stations.

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On December 22, 2006, a petition to deny was filed by Oregon Alliance to Reform Media (“OARM”) against KATU and seven other television stations licensed to serve the Portland, Oregon market. OARM argued that the stations each failed to present adequate programming relating to state and local elections during the 2004 election cycle in their news and public affairs programming. The FCC’s Media Bureau rejected OARM’s petition. However, on September 14, 2007, OARM petitioned the FCC for reconsideration of that decision. That petition remains pending, and we cannot predict when or how the FCC will address it.

The Communications Act and FCC rules impose specific limits on the number of stations and other media outlets an entity can own in a single market. The FCC attributes interests held by, among others, such entity’s officers, directors, certain stockholders, and in some circumstances, lenders, to that entity for purposes of applying these ownership limitations. The ownership rules may prevent us from acquiring additional stations in a particular market. We may also be prevented from engaging in a swap transaction if the swap would cause the other company to violate these rules. We may further be prevented from implementing certain joint operations with competitors which might make the operation of our stations more efficient. Federal legislation and FCC rules have changed significantly in recent years and can be expected to continue to change. These changes may limit our ability to conduct our business in ways that we believe would be advantageous and may thereby affect our operating results.

We will be required to make additional investments in DTV technology, which could harm our ability to fund other operations or repay debt.

Although nearly all of our stations are operating within their FCC technical requirements, there are several exceptions. KVAL and KCBY will be transitioning back to their analog channels and work is nearing completion to accomplish these conversions. KIMA, KLEW and KBCI are currently operating at power levels or antenna heights less than that in their FCC allocations. KIMA and KBCI applied to increase transmission power during an FCC filing window in June 2008, and KBCI has completed the first phase of that power increase. KLEW continues to operate at a reduced antenna height pursuant to an FCC granted Special Temporary Authorization pending the analog shut down. The analog antenna can then be removed and the digital antenna repositioned to the top of the tower. We applied to change KUNP’s digital channel to that of the analog channel and “flash cut” to digital operation when analog operation ceases. This application was granted by the FCC. Additionally, during the FCC filing window in June 2008, KOMO, KPIC, KEPR, and KIDK filed applications to maximize coverage by relocating their digital antennas to the top of their towers once the analog antennas can be removed and for the relocation of KUNS to the KOMO transmitter site. During a filing window for low power stations in August 2008 KUNW and KVVK either applied for or modified existing construction permits for digital transmissions. These additional digital broadcasting investments by some of our stations could result in less cash being available to fund other aspects of our business or repay our debt.

If we are unable to secure or maintain carriage of our television stations’ signals over cable and/or direct broadcast satellite systems, our television stations may not be able to compete effectively.

Pursuant to FCC rules, local television stations may elect every three years to either (1) require cable and/or direct broadcast satellite operators to carry the stations’ signals or (2) enter into retransmission consent negotiations for carriage. On or before October 1, 2008, consistent with FCC rules, each of our television stations sent notices to each of the cable systems in its market electing retransmission consent status for the period from January 1, 2009 through December 31, 2011. Failure to reach timely retransmission consent agreements with the relevant cable operators may harm our business. There is no assurance that we will be able to agree on terms acceptable to us, which could lead to reduction in our cable earnings.

Some of our television stations are located in markets in which direct-to-home satellite operators are distributing local television signals to their subscribers (“local into local”). Television stations in such markets have the opportunity to elect must-carry or retransmission consent status according to the same triennial cycle applicable to cable carriage, described above. Stations not sending such elections are deemed to have elected retransmission consent status, in which case the satellite operator may not retransmit that station’s signal without

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the permission of the station after January 1, 2009. We have elected must-carry status from satellite providers for some of our stations in certain markets for the election period ending December 31, 2011, and for our other stations, we have elected retransmission consent status. Our stations in “local into local” markets are presently being carried by DirecTV, one of the two major direct-to-home satellite operators pursuant to an existing retransmission consent agreement. Failure to reach agreement with DirecTV prior to the expiration of the existing contract may harm our business. There is no assurance that we will be able to agree on terms acceptable to us prior to the contract’s expiration date.

Our retransmission consent agreement with the other major direct-to-home satellite operator, DISH Network, expired on December 17, 2008. As a result, our television stations have not been carried by DISH Network since December 2008. We continue to be in talks with DISH Network to reach an agreement that will allow our stations to return to DISH Network. However, there can be no assurance as to the timing or terms of any such agreement or whether, in fact, an agreement will be reached. Until we reach an agreement with DISH Network, our business and financial results may continue to be adversely affected, possibly materially.

Dependence on key personnel may expose us to additional risks.

Our business is dependent on the performance of certain key employees, including executive officers and senior operational personnel. We do not enter into employment agreements with most of our key executive officers and senior operational personnel. We also employ several on-air personalities who have significant loyal audiences in their respective markets, with whom we have entered into employment agreements. We cannot assure you that all such key personnel or on-air personalities will remain with us or that our on-air personalities will renew their contracts. The loss of any key personnel could harm our operations and financial results.

Failure of our information technology systems would disrupt our operations, which could reduce our customer base and result in lost revenue. Our computer systems are vulnerable to viruses, unauthorized tampering, system failures and potential obsolescence.

Our operations depend on the continued and uninterrupted performance of our information technology systems. Despite our implementation of network security measures, our servers and computer systems are vulnerable to computer viruses, break-ins, and similar disruptions from unauthorized tampering with our computer systems. Our computer systems are also subject to potential system failures and obsolescence. Any of these events could cause system interruption, delays and loss of critical data that would adversely affect our reputation and result in a loss of customers. Our recovery planning may not be sufficient for all eventualities.

Our ownership and operation of Fisher Plaza is subject to risks, including those relating to the economic climate, local real estate conditions, potential inability to provide adequate management, maintenance and insurance, potential collection problems, reliance on significant tenants, and regulatory risks.

Revenue and operating income from, and the value of, Fisher Plaza may be adversely affected by the general economic climate, the Seattle economic climate and real estate conditions, including prospective tenants’ perceptions of attractiveness of the property and the availability of space in other competing properties. In addition, the economic conditions in the telecommunications and high-tech sectors may significantly affect our ability to attract tenants to Fisher Plaza, because space at Fisher Plaza is marketed in significant part to organizations from these sectors. Other risks relating to the operation of Fisher Plaza include the potential inability to provide adequate management, maintenance and insurance, and the potential inability to collect rent, due to bankruptcy or insolvency of tenants or otherwise, especially in light of the current difficult economic environment. We also risk facing lower rents due to the current economic downturn and abundance of available commercial space in downtown Seattle. Real estate income and values may also be adversely affected by such factors as applicable laws and regulations, including tax and environmental laws, interest rate levels and the availability of financing. We carry comprehensive liability, fire, extended coverage and rent loss insurance with respect to Fisher Plaza. There are, however, certain losses that may be either uninsurable, not economically insurable, or in excess of our current insurance coverage limits. If an uninsured loss occurs with respect to Fisher Plaza, it could harm our operating results.

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We are subject to the ongoing internal control provisions of Section 404 of the Sarbanes-Oxley Act of 2002. Material weaknesses in internal control over financial reporting, if identified in future periods, could indicate a lack of proper controls to generate accurate financial statements.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 and related SEC rules, we are required to furnish a report of management’s assessment of the effectiveness of our internal control over financial reporting as part of our Annual Report on Form 10-K. Our independent registered public accountants are required to audit and provide a separate opinion on their evaluation of our internal controls over financial reporting. To issue our report, we document our internal control design and the testing processes that support our evaluation and conclusion, and then we test and evaluate the results. There can be no assurance, however, that we will be able to remediate material weaknesses, if any, that may be identified in future periods, or maintain all of the controls necessary for continued compliance. We have in the past discovered, and may in the future discover, areas of our internal control over financial reporting that need improvement. If we or our independent registered public accountants discover a material weakness, the disclosure of that fact, even if quickly remedied, could reduce the market’s confidence in our financial statements and harm our stock price. We may not be able to effectively and timely implement necessary control changes and employee training to ensure continued compliance with Section 404 of the Sarbanes-Oxley Act and other regulatory and reporting requirements. There likewise can be no assurance that we will be able to retain sufficient skilled finance and accounting personnel, especially in light of the increased demand for such personnel among publicly traded companies.

Our operations may be adversely affected by earthquakes and other natural catastrophes in the Pacific Northwest or California.

Our corporate headquarters, Fisher Plaza and the majority of our operations are located in the Pacific Northwest and we own two television stations in California. The Pacific Northwest and California have from time to time experienced earthquakes. We do not know the ultimate impact on our operations of being located near major earthquake faults, but an earthquake could harm our operating results. Our broadcasting towers may also be affected by other natural catastrophes, such as forest fires. Our insurance coverage may not be adequate to cover the losses and interruptions caused by earthquakes or other natural catastrophes.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None

ITEM 2. PROPERTIES

Television Segment Properties.    Our television stations operate from offices and studios owned by our Fisher Broadcasting subsidiary, other than KOMO TV, which operates from offices and studios in Fisher Plaza. Television transmitting facilities and towers are also generally owned by Fisher Broadcasting, although some towers are sited on leased land. Our Spanish-language television stations are being broadcast out of our Vashon Island, Washington satellite uplink facility. KATU Television in Portland, Oregon is a participant with three other broadcast companies in the Sylvan Tower LLC, formed to construct and operate a joint use tower and transmitting site for the broadcast of radio and digital television signals. The land on which this facility is sited is leased by the Sylvan Tower LLC from one of the participants under the terms of a 30-year lease with two options to extend the term for an additional five years. KBCI Television in Boise, Idaho is a participant with four other broadcast companies in the Deer Point Tower Venture LLC, formed to construct and operate a joint use tower and transmitting site for the broadcast of radio and digital television signals. The lease agreement is for a period of 15 years, expiring in December 2016.

Radio Segment Properties.    Radio studios, except for our Seattle stations, that are located in Fisher Plaza, are generally located in leased space. Radio transmitting facilities and towers are owned by Fisher Broadcasting, except KPLZ FM and the stations operated by Fisher Radio Regional Group, where such facilities are situated on leased land.

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Fisher Plaza Segment Properties.    Fisher Media Services owns and manages Fisher Plaza, a facility located near downtown Seattle that serves as the home of our corporate offices and our Seattle television and radio stations. Fisher Plaza also houses a variety of companies, including communications and media companies. See the section entitled “Business—Fisher Plaza” for a description of Fisher Plaza.

We believe that the properties owned or leased by our operating subsidiaries are generally in good condition and well maintained, and are adequate for present operations.

ITEM 3. LEGAL PROCEEDINGS

We are parties to various claims, legal actions and complaints in the ordinary course of our businesses. In our 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 our consolidated financial position or results of operations.

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

No matters were submitted to a vote of security holders in the fourth quarter of 2008.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is traded on The Nasdaq Global Market under the symbol “FSCI.” The following table sets forth the high and low sales prices for our common stock for the periods indicated. In determining the high and low prices we used the high and low sales prices as reported on The Nasdaq Global Market.

	Quarterly Common Stock Price Ranges
	2008				2007
Quarter	High		Low		High		Low
1st	$	44.99	$	28.37	$	48.60	$	41.32
2nd		38.56		29.55		51.90		47.16
3rd		39.98		29.99		51.99		44.77
4th		39.65		15.08		50.94		35.10

The Company estimates that at March 1, 2009, there were approximately 1,900 beneficial holders of the Company’s common stock, including holders represented by brokers and other institutions.

Dividends

On July 30, 2008 the Company’s Board of Directors declared a special cash dividend of $3.50 per share on the Company’s common stock. This dividend totaling $30.7 million was paid on August 29, 2008 to shareholders of record on August 15, 2008. No cash dividends were declared by the Company in 2007.

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Stock Performance Graph

This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Fisher under the Securities Act of 1933, as amended or the Exchange Act.

The following graph compares the cumulative 5-year total return attained by shareholders on Fisher’s common stock relative to the cumulative total returns of the S & P 500 Index, and a customized peer group of 18 companies listed in footnote 1 below. The graph tracks the performance of a $100 investment in our common stock, in the peer group, and the index (with the reinvestment of all dividends) from December 31, 2003 to December 31, 2008.

	12/03	12/04	12/05	12/06	12/07	12/08
Fisher Communications, Inc.	100.00	96.77	82.02	87.53	75.15	44.74
S&P 500	100.00	110.88	116.33	134.70	142.10	89.53
Peer Group	100.00	79.40	61.14	51.30	38.11	8.37

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The stock price performance included in this graph is not necessarily indicative of future stock price performance.

(1) There are 18 companies included in the customized peer group which are: Acme Communication Inc., Beasley Broadcast Group Inc., Belo Corp., Cox Radio Inc., Cumulus Media Inc., Emmis Communications Corp., Entercom Communications Corp., Gray Television Inc., Hearst-Argyle Television Inc., Ion Media Networks Inc., LIN TV Corp., Radio One Inc., Regent Communications Inc., Saga Communications Inc., Salem Communications Corp., Sinclair Broadcast Group Inc., Westwood One Inc. and Young Broadcasting Inc. We previously included Clear Channel Communications, Inc. in our peer group but they were acquired in July 2008 and are no longer a public company.

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ITEM 6. SELECTED FINANCIAL DATA

The following financial data of the Company are derived from the Company’s historical financial statements and related footnotes. The information set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and related footnotes contained elsewhere in this Form 10-K.

	Year ended December 31,
	2008 (2)			2007 (3)		2006		2005			2004
	(In thousands, except per-share amounts)
Revenue	$	173,791		$	162,266	$	156,537	$	137,086		$	141,731
Income (loss)
From continuing operations	$	45,730		$	30,879	$	6,527	$	(6,131	)	$	(13,039	)
From discontinued operations		(1,072	)		995		10,309		1,059			1,086
Net income (loss)	$	44,658		$	31,874	$	16,836	$	(5,072	)	$	(11,953	)
Per share data
Income (loss) per share—basic
From continuing operations	$	5.23		$	3.54	$	0.75	$	(0.70	)	$	(1.51	)
From discontinued operations		(0.12	)		0.11		1.18		0.12			0.12
Net income (loss)	$	5.11		$	3.65	$	1.93	$	(0.58	)	$	(1.39	)
Income (loss) per share assuming dilution
From continuing operations	$	5.23		$	3.54	$	0.75	$	(0.70	)	$	(1.51	)
From discontinued operations		(0.12	)		0.11		1.18		0.12			0.12
Net income (loss)	$	5.11		$	3.65	$	1.93	$	(0.58	)	$	(1.39	)
Dividends declared per share	$	3.50		$	—	$	—	$	—		$	—
	December 31,
	2008			2007		2006		2005			2004
Working capital (1)	$	104,905		$	18,048	$	30,373	$	35,562		$	33,181
Total assets (1)		371,293			485,934		497,577		440,393			435,872
Total debt (1)		150,000			150,000		150,000		150,000			150,053
Stockholders’ equity		164,744			233,397		239,565		209,621			202,453

(1) Includes discontinued operations and held for sale assets.

(2) Income from continuing operations in 2008 includes a $152.6 million pre-tax gain resulting from the sale of 2,302,676 shares of Safeco Corporation common stock and an impairment charge of $78.2 million for goodwill, intangibles and equity investment.

(3) Income from continuing operations in 2007 includes a $40.4 million pre-tax gain resulting from the sale of 699,700 shares of Safeco Corporation common stock.

Certain reclassifications have been made to prior period financial information to conform to the current presentation. Reclassifications include the results of Pegasus News, Inc. from continuing operations to discontinued operations (See Note 2 to our Consolidated Financial Statements), and the results of our five remaining small-market radio stations from discontinued operations to continuing operations (See Note 2 to our Consolidated Financial Statements). These reclassifications have no effect on previously reported net income (loss).

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS

This annual report on Form 10-K contains forward-looking statements that involve known and unknown risks and uncertainties, such as statements of our plans, objectives, expectations, and intentions. Words such as “may,” “could,” “would,” “should,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate” and variations of such words and similar expressions are intended to identify such forward-looking statements. You should not place undue reliance on these forward-looking statements, which are based on our current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties, and assumptions (including those described herein) and apply only as of the date of this report. Our actual results could differ materially from those anticipated in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section entitled “Risk Factors” as well as those discussed in this section and elsewhere in this annual report.

This discussion is intended to provide an analysis of significant trends and material changes in our financial position and operating results during the period 2006 through 2008.

Overview

We are an integrated media company. We own and operate 13 full power (including a 50%-owned television station) and seven low-power 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 commercial 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, particularly those affecting the Pacific 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—KOMO TV and KATU TV, which account for approximately 63% percent 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, two of our television stations are independent, and the remainder of our television stations are affiliated with Univision. 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 December 31, 2008, approximately 97% of Fisher Plaza was occupied or committed for occupancy (43% was occupied by Fisher entities), compared to 97% occupied or committed for occupancy at December 31, 2007 (43% was occupied by Fisher entities). Revenue and operating income from Fisher Plaza are dependent upon the general U.S. economic climate, and the Seattle economic climate in particular, the outlook of the telecommunications and technology sectors and real estate conditions, including the availability of space in other competing properties.

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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.”

Significant Developments

The following significant developments affect the comparability of our financial statements for the 12 months ended December 31, 2008, 2007 and 2006.

Goodwill and Intangibles Impairment.    We conduct our annual impairment review in October. Given the rapid economic deterioration and significant decline in our market capitalization during the fourth quarter, we conducted an additional interim assessment at year-end.

Based on this interim review we recorded a goodwill and intangible assets impairment charge of $76.7 million as of December 31, 2008 (excluding the $1.5 million impairment of investment in equity investee). Please refer to Note 8 in the accompanying notes to our consolidated financial statements for a discussion of several key assumptions used in the fair value estimate of our broadcasting licenses and goodwill during our fourth quarter 2008 interim impairment test.

Investment in equity investee impairment.    During the fourth quarter of 2008, as a result of an impairment review, we recorded an impairment charge of $1.5 million on the investment in equity investee.

As such, we recorded total impairments of $78.2 million in 2008.

Special Dividend.    On July 30, 2008 our Board of Directors declared a special cash dividend of $3.50 per share on our common stock, which was paid on August 29, 2008 to shareholders of record on August 15, 2008. The dividend amount was $30.7 million in the aggregate.

Sale of Safeco Corporation Shares.    In June 2008, we sold 1,548,956 shares of Safeco Corporation common stock, which represented 67.3% of our total Safeco Corporation holdings. The shares were sold at an average price of $67.27 per share, resulting in pre-tax net proceeds of $104.1 million. The book basis of the shares sold totaled $526,000, resulting in a pre-tax gain on sale of $103.6 million.

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 $49.3 million. The book basis of the shares sold totaled $256,000, resulting in a pre-tax gain on sale of $49.0 million.

The pre-tax gain on 2008 sales of $152.6 million is included in other income, net.

Expiration of Seattle Mariners Radio Rights Agreement.    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 was greater during periods that included the broadcast of Mariners baseball games. Accordingly, the impact on the first and fourth quarters of each calendar year was less than for the second and third quarters of the calendar year. In July 2008, we announced that we would not renew the Rights Agreement with the Seattle Mariners. Therefore, the 2008 season was the final year of our commitments under this agreement. All commitments under the Rights Agreement have been satisfied.

Termination of National Advertising Representation Agreement.    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 $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 $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.

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Purchase of Bakersfield, California Television Stations.    On January 1, 2008 we completed the purchase of the assets of two television stations in the Bakersfield, California Designated Market Area (“DMA”)—KBAK TV and KBFX-CA, for $55.3 million in cash.

Option to Purchase Television Stations.    In November 2006, we finalized the purchase of two Oregon television stations (KUNP and KUNP LP) for $19.3 million in cash. The purchase agreement, as amended, 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.

Sale of Radio Stations.    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 had continued to be actively marketed and held for sale until the fourth quarter of 2008.

During the fourth quarter of 2008, we determined that in view of the uncertainty around the timing or probability of a sale of the remaining five stations, the requirements of SFAS 144 “Accounting for the Impairment or Disposal of Long-Lived Assets” necessary to classify the remaining five radio stations as discontinued operations were no longer met and that it was appropriate to present the stations as held for use in our continuing operations as of the fourth quarter of 2008 and going forward. The assets and liabilities of the five stations have been classified as held for use in the consolidated balance sheet as of December 31, 2008, and the results of operations of the five stations through December 31, 2008 have been classified as continuing operations in our radio segment in the consolidated statements of operations for all periods presented.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates including, but not limited to, those affecting revenues, goodwill and intangibles impairment, the useful lives of tangible and intangible assets, valuation allowances for receivables and broadcast rights, stock-based compensation expense, valuation allowances for deferred income taxes and liabilities and contingencies. The brief discussion below is intended to highlight some of the judgments and uncertainties that can impact the application of these policies and the specific dollar amounts reported on our financial statements. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, or if management made different judgments or utilized different estimates. Many of our estimates or judgments are based on anticipated future events or performance, and as such are forward-looking in nature, and are subject to many risks and uncertainties, including those discussed below and elsewhere in this annual report. Except as otherwise required by law, we do not undertake any obligation to update or revise this discussion to reflect any future events or circumstances.

We have identified below our accounting policies that we consider critical to our business operations and the understanding of our results of operations. This is not a complete list of all of our accounting policies, and there may be other accounting policies that are significant to us. For a detailed discussion on the application of these and our other accounting policies, see Note 1 to the consolidated financial statements included in this annual report.

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We have discussed the development and selection of these critical accounting estimates with the Audit Committee of our Board of Directors and the Audit Committee has reviewed our disclosures relating to them, as presented in this annual report.

Goodwill and indefinite-lived intangible assets.    Approximately $54.3 million or 15% of our total assets as of December 31, 2008 consisted of unamortized goodwill and intangible assets. Goodwill represents the excess of purchase price of certain media properties over the fair value of tangible and identifiable intangible net assets acquired and is accounted for under the provisions of Statement of Financial Accounting Standards No. 142 (“SFAS 142”). Indefinite-lived intangible assets include broadcast licenses (primarily FCC licenses).

Under SFAS 142, goodwill and intangible assets with indefinite useful lives are tested for impairment at least on an annual basis. If the fair value of these assets is less than the carrying value, we may be required to record an impairment charge.

The impairment test for FCC licenses consists of a station-by-station comparison of the carrying amount of FCC licenses with their fair value, using a discounted cash flow analysis.

The impairment step for goodwill utilizes a two-step fair value approach. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of the combined stations in a market (“reporting unit”) to its carrying amount. The fair value of a reporting unit is determined using a discounted cash flow analysis. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered impaired. If the carrying amount of the reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. The implied fair value of goodwill is determined by performing an assumed purchase price allocation, using the reporting unit’s fair value (as determined in Step 1) as the purchase price. If the carrying amount of goodwill exceeds the implied fair value, an impairment loss is recognized in an amount equal to that excess.

In the fourth quarter of 2008, we recorded an impairment loss of $76.7 million for our goodwill and intangible assets (primarily broadcasting licenses).

As of December 31, 2008, our total market capitalization was $15.6 million greater than our equity book value. We believe this difference can be attributed to the recent volatility of our stock price in the current economic environment and to the control premium that a market participant may pay in the event we were acquired.

From the end of 2008 until the date of this filing, our market capitalization has decreased significantly. Since significant reduction in market capitalization is one of the key trigger events for us to conduct an interim goodwill and intangible assets impairment review, we could recognize further impairments in future quarters on the approximately $54.3 million of goodwill and intangibles currently included in our total assets.

We believe our estimate of the value of our goodwill and broadcasting licenses is a critical accounting estimate as the value is significant in relation to our total assets, and our estimate of the value uses assumptions that incorporate variables based on past experiences and judgments about future performance of our stations.

Please refer to Note 8 in the accompanying notes to the consolidated financial statements for a discussion of several key assumptions used in the fair value estimate of our broadcasting licenses and goodwill during our fourth quarter 2008 interim impairment test.

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Tangible long-lived assets.    We evaluate the recoverability of the carrying amount of long-lived tangible assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable as required by SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” We use our judgment when applying the impairment rules to determine when an impairment test is necessary. Factors we consider which could trigger an impairment review include significant underperformance relative to historical or forecasted operating results, a significant decrease in the market value of an asset, a significant change in the extent or manner in which an asset is used, and significant negative cash flows or industry trends.

Impairment losses are measured as the amount by which the carrying value of an asset exceeds its estimated fair value, which is primarily based on market transactions for comparable businesses, discounted cash flows, and a review of the underlying assets of the reporting unit. In estimating these future cash flows, we use future projections of cash flows directly associated with, and that were expected to arise as a direct result of, the use and eventual disposition of the assets. These projections rely on significant assumptions. If it is determined that a long-lived asset is not recoverable, an impairment loss would be calculated based on the excess of the carrying amount of the long-lived asset over its fair value. Changes in any of our estimates could have a material effect on the estimated future cash flows expected to be generated by the asset and could result in a future impairment of the involved assets with a material effect on our future results of operations.

Television and radio broadcast rights.    Television and radio broadcast rights are recorded as assets when the license period begins and the programs are available for broadcast, at the gross amount of the related obligations (or, for non-sports first-run programming, at the amount of the annual obligation). Costs incurred in connection with the purchase of programs to be broadcast within one year are classified as current assets, while costs of those programs to be broadcast after one year are considered non-current. These programming costs are charged to operations over their estimated broadcast periods using either the straight-line method or in proportion to estimated revenue of the related program. Program obligations are classified as current or non-current in accordance with the payment terms of the license agreement. We periodically assess net realizable value for our capitalized broadcast rights, in which we compare estimated future revenues on a program-by-program basis to the carrying value of the related asset. Impairments, if any, are charged to programming expenses in the period of the impairment.

Revenue recognition.    Television and radio revenue is recognized when the advertisement is broadcast, subject to meeting certain conditions such as persuasive evidence that an arrangement exists, the price is fixed and determinable and collection is reasonably assured. These criteria are generally met at the time an advertisement is broadcast, and the revenue is recorded net of advertising agency commission.

Rentals from real estate leases are recognized on a straight-line basis over the term of the lease, while revenue from related service fees is recognized when the services are delivered.

Pensions.    We maintain a noncontributory supplemental retirement program that was established for key management. No new participants have been admitted to this program since 2001 and the benefits of active participants were frozen in 2005. The program provides for vesting of benefits under certain circumstances. Funding is not required, but generally we have acquired annuity contracts and life insurance on the lives of the individual participants to assist in payment of retirement benefits. We are 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 or disability through the date of expected retirement. The cost of the program is recognized over the participants’ average expected future lifetime.

The cost of this program is reported and accounted for in accordance with accounting rules that require significant assumptions regarding such factors as discount rates. We use actuarial consulting services to assist in estimating the supplemental retirement obligation and related periodic expenses. The discount rate used in determining the actuarial present value of the projected benefit obligation was 5.50% at December 31, 2008, and

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5.88% at December 31, 2007. The rate of increase in future compensation was no longer applicable at December 31, 2008 or 2007 (due to freezing plan benefits for active participants). Although we believe that our estimates are reasonable for these key actuarial assumptions, future actual results could differ from our estimates. Changes in benefits provided by us may also affect future plan costs.

Income taxes.    The determination of our provision of income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. These estimates and judgments must be used in the calculation of certain tax assets and liabilities because of differences in the timing of recognition of revenue and expense for tax and financial statement purposes.

We must assess the likelihood that we will be able to recover some or all our deferred tax assets prior to their expiration, and are required to establish valuation allowances against that portion of our deferred tax assets not considered recoverable. The determination of required valuation allowances involves significant management judgment and is based upon our best estimate of anticipated taxable profits in various jurisdictions with which the deferred tax assets are associated. Changes in expectations and actual future results could result in significant adjustments to the valuation allowances and material changes to our provision for income taxes.

Due to the uncertainty of our ability to generate sufficient state taxable income to realize our deferred state tax assets, a valuation allowance has been established for financial reporting purposes. The valuation allowance was $2.8 million and $388,000 at December 31, 2008 and 2007, respectively. As of December 31, 2007, we had utilized all of our prior year federal net operating losses.

Our federal and state income tax returns are subject to periodic examination, and the tax authorities may challenge certain of our tax positions as a result of examinations. We believe our tax positions comply with applicable tax law, and we would vigorously defend these positions if challenged. The final disposition of any positions challenged by the tax authorities could require us to make additional tax payments. Valuation allowances are established when we determine that there exists significant uncertainty that we will realize our deferred tax assets.

We adopted the provisions of Financial Accounting Standards Board Interpretation No. 48 (“FIN 48”) Accounting for Uncertainty in Income Taxes on January 1, 2007. The adoption of FIN 48 did not impact our consolidated financial condition, results of operations or cash flows. The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are sometimes ambiguous. As such, we are required to make certain subjective assumptions and judgments regarding our income tax exposures. Interpretations of and guidance surrounding income tax laws and regulations change over time. Accordingly, changes in our subjective assumptions and judgments can materially affect amounts recognized in the consolidated balance sheets and statements of operations.

We believe that we have appropriate support for the income tax positions taken and to be taken on our tax returns and that our accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter. Therefore, no reserves for uncertain income tax positions have been recorded for the years ended December 31, 2007 and 2008 pursuant to FIN 48.

Allowance for doubtful accounts.    We evaluate the collectibility of our accounts receivable based on a combination of factors. In circumstances where we are aware of a specific customer’s inability to meet its financial obligations, we record a specific reserve to reduce the amounts recorded to what we believe will be collected. Our allowance for doubtful accounts is based on factors such as our historical experience of bad debts as a percent of past-due balances for each business unit, as well as changes in current economic conditions.

Variable Interest Entities.    We may enter into Joint Sales Agreements (“JSAs”) or Local Marketing Agreements (“LMAs”) with non-owned stations. Under the terms of these agreements, we make specific periodic payments to the station’s owner-operator in exchange for the right to provide programming and/or sell advertising

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on a portion of the station’s broadcast time. Nevertheless, the owner-operator retains control and responsibility for the operation of the station, including responsibility over all programming broadcast on the station. Generally, we continue to operate the station under the agreement until the termination of such agreement. As a result of these agreements, we may determine that the station is a Variable Interest Entity (“VIE”) as defined by the Financial Accounting Standards Board (“FASB”) Interpretation No. (“FIN”) 46R, Consolidation of Variable Interest Entities, and that we are the primary beneficiary of the variable interest. This typically occurs if we also have an agreement to acquire a station and the conditions to close are considered to be perfunctory. We also may determine that a station is a VIE in connection with other types of local service agreements entered into with stations in markets in which we own and operate a station. We did not have any VIE’s in 2008 or 2007.

Stock-based compensation.    We use the Black-Scholes option pricing model as our method of valuation for stock option awards. Our determination of the fair value of stock option awards on the date of grant using an option pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the expected life of the award, our expected stock price volatility over the term of the award, forfeitures, and projected exercise behaviors. Although the fair value of stock option awards is determined in accordance with SFAS 123(R), the Black-Scholes option pricing model requires the input of subjective assumptions, and other reasonable assumptions could provide differing results.

Contingencies.    In the ordinary course of business, we are involved in legal proceedings regarding contractual and employment relationships and a variety of other matters. We record contingent liabilities resulting from claims against us, including related legal costs, when a loss is assessed to be probable and the amount of the loss is reasonably estimable. Assessing probability of loss and estimating probable losses requires analysis of multiple factors, including in some cases judgments about the potential actions of third party claimants and courts. Currently, we do not believe that any of our pending legal proceedings or claims will have a material impact on our financial position or results of operations.

Consolidated Results of Operations

We report financial data for three reportable segments: television, radio and Fisher Plaza. The television segment includes the operations of our owned and operated 20 network-affiliated television stations (including a 50%-owned television station) and Internet business. The radio segment includes the operations of our three Seattle radio stations and five radio stations in Montana. Corporate expenses of the broadcasting business unit are allocated to the television and radio reportable segments based on actual expenditures incurred or based on a ratio that approximates historic revenue and operating expenses of the segments. The Fisher Plaza segment consists of the operations of Fisher Plaza. 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 segments.

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The following table presents our results of operations for the years ended December 31, 2008, 2007 and 2006 and percentage variances between periods. Percentage comparisons have been omitted within the following table where they are not considered meaningful.

	Year Ended December 31,						2008 – 2007 Variance					Year Ended December 31, 2006			2007 – 2006 Variance
(dollars in thousands)	2008			2007			$			%					$			%
Revenue
Television	$	124,001		$	110,790		$	13,211		11.9	%	$	107,457		$	3,333		3.1	%
Radio		36,719			40,303			(3,584	)	-8.9	%		39,453			850		2.2	%
Fisher Plaza		13,122			11,326			1,796		15.9	%		9,406			1,920		20.4	%
Corporate and eliminations		(51	)		(153	)		102					221			(374	)
Consolidated		173,791			162,266			11,525		7.1	%		156,537			5,729		3.7	%
Direct operating costs
Television		52,627			45,838			6,789		14.8	%		42,955			2,883		6.7	%
Radio		11,420			10,898			522		4.8	%		10,675			223		2.1	%
Fisher Plaza		3,719			3,443			276		8.0	%		3,242			201		6.2	%
Corporate and eliminations		2,044			1,875			169		9.0	%		1,656			219		13.2	%
Consolidated		69,810			62,054			7,756		12.5	%		58,528			3,526		6.0	%
Selling, general and administrative expenses
Television		39,259			29,910			9,349		31.3	%		26,449			3,461		13.1	%
Radio		16,683			16,953			(270	)	-1.6	%		15,903			1,050		6.6	%
Fisher Plaza		814			512			302		59.0	%		508			4		0.8	%
Corporate and eliminations		9,103			7,868			1,235		15.7	%		6,770			1,098		16.2	%
Consolidated		65,859			55,243			10,616		19.2	%		49,630			5,613		11.3	%
Amortization of program rights
Television		8,538			8,186			352		4.3	%		8,396			(210	)	-2.5	%
Radio		10,750			10,500			250		2.4	%		10,250			250		2.4	%
Consolidated		19,288			18,686			602		3.2	%		18,646			40		0.2	%
Impairment of goodwill and intangible assets
Television		75,332			—			75,332					—			—
Radio		1,410			—			1,410					—			—
Consolidated		76,742			—			76,742					—			—
Impairment of investment in equity investee
Television		1,468			—			1,468					—			—
Consolidated		1,468			—			1,468					—			—
Depreciation and amortization
Television		8,053			6,990			1,063		15.2	%		6,016			974		16.2	%
Radio		1,018			937			81		8.6	%		918			19		2.1	%
Fisher Plaza		3,117			3,305			(188	)	-5.7	%		3,116			189		6.1	%
Corporate and eliminations		515			286			229		80.1	%		257			29		11.3	%
Consolidated		12,703			11,518			1,185		10.3	%		10,307			1,211		11.7	%
Income (loss) from operations
Television		(61,276	)		19,866			(81,142	)				23,641			(3,775	)
Radio		(4,562	)		1,015			(5,577	)				1,707			(692	)
Fisher Plaza		5,472			4,066			1,406					2,540			1,526
Corporate and eliminations		(11,713	)		(10,182	)		(1,531	)				(8,462	)		(1,720	)
Consolidated		(72,079	)		14,765			(86,844	)				19,426			(4,661	)
Other income, net		156,570			45,688			110,882					3,880			41,808
Interest expense, net		(13,928	)		(13,671	)		(257	)				(13,956	)		285
Income from continuing operations before income taxes		70,563			46,782			23,781					9,350			37,432
Provision for federal and state income taxes		24,833			15,903			8,930					2,823			13,080
Income from continuing operations		45,730			30,879			14,851					6,527			24,352
Income (loss) from discontinued operations, net of income taxes		(1,072	)		995			(2,067	)				10,309			(9,314	)
Net Income	$	44,658		$	31,874		$	12,784				$	16,836		$	15,038

Certain reclassifications have been made to prior period financial information to conform to the current presentation. Reclassifications include certain employment-related expenses from “Selling, general and

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administrative expenses” to “Direct operating costs” (See Note 1 to our Consolidated Financial Statements), the results of Pegasus News, Inc. from continuing operations to discontinued operations (See Note 2 to our Consolidated Financial Statements), and the results of our five remaining small-market radio stations from discontinued operations to continuing operations (See Note 2 to our Consolidated Financial Statements). These reclassifications have no effect on previously reported net income.

Comparison of Fiscal Years Ended December 31, 2008, December 31, 2007, and December 31, 2006

Revenue

Television revenue increased in 2008 as compared to 2007, primarily due to increased political advertising offset by a decrease in non-political national and local advertising revenue due to overall weak advertising demand in the economic downturn. The acquisition of our two Bakersfield, California television stations in January 2008 contributed $10.2 million in additional television revenue for the year ended December 31, 2008.

Revenues from our ABC-affiliated stations were relatively flat for the year ended December 31, 2008, as compared to 2007, due primarily to increases in political advertising offset by weak demand in non-political national and local advertising. Revenues from our CBS-affiliated stations increased 1% over the same period, excluding the addition of our Bakersfield CBS station due to weak demand in non-political national and local advertising at our other CBS stations.

In May 2005, we signed agreements with ABC to renew the 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 which we recognize on a straight-line basis over the term of the agreements. Television network compensation revenue was approximately $1.0 million in each of 2008, 2007 and 2006. In November 2006, we entered into affiliation agreements with Univision for our Spanish-language television stations for terms extending into 2011.

Television revenue increased in 2007 as compared to 2006, primarily due to the acquisition of Spanish-language television stations late in 2006. These stations contributed $3.3 million in additional television revenue for the year ended December 31, 2007. In addition, revenues from our growing Internet business (which is included in our television segment) have increased. Revenues from our ABC-affiliated stations decreased 2.1% for the year ended December 31, 2007, as compared to 2006, due primarily to lower political advertising, partially offset by increases in non-political national and local advertising. Revenues from our CBS-affiliated stations increased 1.6% over the same period, due primarily to increased non-political local and national advertising.

Radio revenue decreased in 2008, as compared to 2007, primarily as a result of a decline in local advertising revenue and in revenue attributed to our broadcasting of Seattle Mariners baseball games. As discussed above, the 2008 season was the last year of our broadcasting of Seattle Mariners baseball games. Excluding revenue specifically attributable to our Mariners broadcast agreement, radio revenue decreased 8.4% for the year ended December 31, 2008, as compared to 2007. We attribute the decrease to weak demand for non-political revenues across all categories. Revenue and expenses from our small-market Great Falls, Montana radio operations have been included in the regular operations of the radio segment as we no longer consider them held-for-sale. This change has been reflected in the prior year comparisons as well.

Radio revenue increased in 2007 as compared to 2006, primarily as a result of increases in non-political national advertising. Excluding revenue specifically attributable to our broadcasting of Mariners baseball games, radio revenue increased 6.0% in 2007, as compared to 2006. We attribute this increase to improved ratings and a growth in national market share. Revenue and expenses from our small-market Great Falls, Montana radio operations have been included in the regular operations of the radio segment as we no longer consider them held-for-sale.

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The revenue increases at Fisher Plaza in 2008 and 2007 as compared to the prior years, were due primarily to increased rental and service fees, as well as increased electrical infrastructure fees, parking garage fees and tenant reimbursements.

Occupancy levels have increased at Fisher Plaza over the past three years, and recurring third-party rental and service revenues have also increased. Fisher Plaza occupancy was 97% as of December 31, 2008 and 2007, and 93% as of December 31, 2006.

Direct operating costs

Direct operating costs are expenses required 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 2008 as compared to 2007 was primarily the result of expenses associated with operating our new Bakersfield television stations, as well as increased promotional spending. In addition, expenses rose as we invested in our television news product and incurred news costs associated with our growing Internet business.

The increase in direct operating costs for the television segment in 2007 compared to 2006 was primarily the result of costs associated with operating our Spanish-language television stations, as well as increased promotional expenses. Expenses also increased because we invested in our television news product and incurred news costs associated with our growing Internet business.

Increased direct operating costs at our radio segment for 2008 as compared to 2007 and for 2007 as compared to 2006 were primarily due to increased labor costs.

The increase in direct operating costs at Fisher Plaza in 2008 as compared to 2007 was primarily attributable to increased property taxes, maintenance costs and utilities expenses. The increase in direct operating costs in 2007 as compared to 2006 was primarily attributable to increased property taxes and utilities expenses.

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-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 2008 as compared to 2007 was due primarily to the addition of our two Bakersfield stations, as well as an increase in commissions, market research and development expenses and selling costs associated with our growing Internet business.

The increase in selling, general and administrative expenses in 2007 as compared to 2006 was due primarily to the addition of the Spanish-language stations, and an increase in commissions, market research and development expenses and selling costs associated with our growing Internet business.

Broadcasters may periodically terminate existing agreements with national advertising representation firms; under such circumstances, the successor firm generally satisfies the broadcaster’s contractual termination obligation to the predecessor firm with no cash payment made by the broadcaster. When we terminate national advertising representation agreements with contractual termination penalties, we record a non-cash charge to selling, general and administrative expense and amortize the resulting liability over the term of the new agreement. Based on this policy, we recognized a non-cash charge of approximately $5 million in the second quarter of 2008 and will recognize a non-cash benefit on a straight-line basis over the five-year term of the new contract.

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Selling, general and administrative expenses at our radio segment in 2008 were flat compared to 2007.

The increase in 2007 as compared to 2006 was due primarily to Mariners merchandising expense and commissions.

Total Selling, general and administrative expenses at Fisher Plaza increased in 2008 as compared to 2007 due primarily to costs incurred to market the Fisher Plaza during the summer of 2008. As of December 31, 2008, approximately 97% of Fisher Plaza was occupied or committed for occupancy (97% at December 31, 2007 and 93% at December 31, 2006) and, consequently, broad-based selling and marketing initiatives have been reduced.

The corporate group incurred higher selling, general and administrative expenses in 2008 as compared to 2007, due primarily 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 services fees, retirement plan costs and stock-based compensation, partially offset by reduced incentive compensation.

The corporate group incurred higher selling, general and administrative expenses in 2007 as compared to 2006, due primarily to higher legal and professional services fees, compensation and payroll-related expenses and stock-based compensation, partially offset by reductions in severance and recruiting costs.

Amortization of program rights

Amortization of program rights for the television segment increased in 2008 as compared to 2007, due primarily to our acquisition of the two Bakersfield television stations.

Amortization of program rights for the radio segment are related the agreement to broadcast Seattle Mariners baseball games, which increased slightly in 2008, as compared to 2007.

Impairment of goodwill and intangible assets

We recorded an impairment charge of $76.7 million during the fourth quarter of 2008 that included a $38.0 million impairment to the carrying values of FCC licenses, related to five of the Company’s television stations and two of the Company’s radio stations; a $340,000 impairment to the carrying value of a network affiliation agreement, related to one of the Company’s television stations; and a $38.4 million impairment to the carrying values of goodwill, related to six reporting units consisting of 11 of the Company’s television stations and five of the Company’s radio stations. As required by SFAS 142, the Company tested its FCC licenses and goodwill for impairment at December 31, 2008, between the annual impairment tests, because the Company believed events had occurred and circumstances changed that would more likely than not reduce the fair value of the Company’s reporting units below their carrying amounts and that the Company’s FCC licenses might be impaired. These events included: (a) the decline of the price of the Company’s common stock as of December 31, 2008; (b) the deterioration in overall economic conditions; and (c) the decline in advertising revenues at the Company’s radio and television stations.

Impairment of investment in equity investee

We recorded an impairment charge of $1.5 million in the fourth quarter of 2008 on the investment in equity investee as part of our fourth quarter impairment review.

As such, we recorded total impairments of $78.2 million in 2008.

Depreciation and amortization

Depreciation for all segments except Fisher Plaza increased in 2008 as compared to 2007, due primarily to significant television broadcast and information technology additions in 2008. Depreciation for the Fisher Plaza

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segment declined in 2008 as compared to 2007, primarily as a result of certain assets becoming fully depreciated. Depreciation for all segments increased in 2007 as compared to 2006, due primarily to significant television broadcast and Fisher Plaza asset additions in late 2006.

Other income, net

Other income, net, includes a gain on the sale of marketable securities, dividends received on marketable securities and, to a lesser extent, interest and miscellaneous income received. The significant increase in 2008 as compared to 2007 was due primarily to the June and July 2008 sales of our remaining 2.3 million shares of Safeco Corporation common stock, resulting in a pre-tax gain of $152.6 million.

The significant increase in 2007 as compared to 2006 was due primarily to the December 2007 sale of 699,700 shares of Safeco common stock, resulting in a pre-tax gain of $40.4 million. In addition, a portion of the increase was due to an increase in the dividend rate on our investment in Safeco shares prior to our sale of the shares.

Interest expense, net

Interest expense, net consists primarily of interest on our senior notes, amortization of loan fees, and interest on borrowings under our former $20.0 million senior credit facility.

The increase in interest expense in 2008 as compared to 2007 was due primarily to interest expense related to borrowings on our $20 million senior credit facility, which we terminated in December 2008. This increase in interest expense included the $150,000 in unamortized transaction costs charged to expense upon our termination of the credit facility.

The decrease in interest expense in 2007 as compared to 2006 was due primarily to interest expense related to uncertain tax positions and borrowings on our $20 million senior credit facility in 2006. This borrowing facilitated the purchase of three television stations in Oregon and Washington in 2006.

Provision (benefit) for federal and state income taxes

Our effective tax increased to 35.2% in 2008 as compared to 34.0% in 2007 due primarily to an increase in permanent differences. Our effective tax rate is calculated on the statutory rate of 35% being increased or decreased for estimated permanent differences, including dividend deductions and non-deductible expenses, and changes in discrete or other non recurring items, including federal or state tax audit adjustments. In 2007 we recognized additional federal income tax expense of $448,000 as a result of IRS examinations of prior year tax returns.

Our effective tax rate in 2007 increased to 34% from the 30% effective tax rate in 2006. The increase in tax rate was due primarily to increase in permanent differences and IRS audit adjustments. In 2006 we recognized additional federal income tax expense of $388,000 as a result of IRS examinations of prior year tax returns.

Due to the uncertainty of our ability to generate sufficient state taxable income to realize our deferred state tax assets, a 100% valuation allowance has been established for these deferred tax assets. As a result, our effective tax rate is not affected by changes in the state tax rates.

Income (loss) from discontinued operations, net of income taxes

The loss from discontinued operations in 2008 was related primarily to our sale of Pegasus News, Inc. in December 2008. We sold Pegasus News for a net after-tax loss of $21,000. In addition, we recognized an after-tax loss of $171,000 upon final settlement of a dispute related to the sale of 18 small-market radio stations in 2006.

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The income from discontinued operations in 2007 was related to the operations of Pegasus News, in addition to the small-market radio stations which we sold in 2007, and is presented net of income taxes. In June 2007, we closed the sale of one of these radio stations and recognized a gain on sale of $1.5 million, net of tax. In October 2006, we closed the sale of 18 of these stations and recognized a gain on sale of $10.0 million, net of tax.

Liquidity and Capital Resources

Liquidity

Our liquidity is primarily dependent upon our net cash from operating activities and short-term investments. Our net cash from operating activities is sensitive to many factors, including changes in working capital and the timing and magnitude of capital expenditures. Working capital at any specific point in time is dependent upon many variables, including operating results, receivables, capital expenditures, the timing of cash receipts and payments.

The extensive weakening of the U.S. economy and tightening investment and credit markets has had a significant impact on advertising spending by our customers in various categories. If the current challenging general economic conditions continue, we believe that our revenue, cash flow from operations and net income will be negatively impacted and may decline from historical levels.

We expect cash flows from operations, cash, cash equivalents and short-term investments to provide sufficient liquidity to meet our cash requirements for operations, projected working capital requirements, planned capital expenditures and commitments for at least the next twelve months.

Capital Resources

Cash, cash equivalents and short-term investments were approximately $91.5 million as of December 31, 2008 compared to $6.5 million as of December 31, 2007.

In June and July 2008, we sold our remaining 2,302,676 shares of Safeco common stock. The shares were sold at an average price of $66.65 per share, resulting in pre-tax net proceeds to the Company of $153.4 million.

Our senior notes indenture contains provisions that limit our ability to distribute proceeds from asset sales, which includes the proceeds from the sale of our shares of Safeco Corporation common stock. In the event that we do not use the proceeds from asset sales for qualifying purposes (as specified in the indenture) within 360 days from the date of sale, we will be required to offer to repurchase our outstanding senior notes at par value to the extent of such unused proceeds (the “Excess Proceeds”). Under the indenture, qualifying purposes include: (i) repayment of secured indebtedness; (ii) purchase of assets used or useful in our business; (iii) certain acquisitions of other companies; (iv) expenditures used or useful in our business; and (v) certain investments in the Company or our subsidiaries. We expect that the Company will have used all of the proceeds from the sale of Safeco shares for qualifying purposes and therefore will not have any Excess Proceeds that would require us to offer to repurchase the notes.

On July 30, 2008 our Board of Directors declared a special cash dividend of $3.50 per share on our common stock, which was paid on August 29, 2008 to shareholders of record on August 15, 2008. The dividend amount was $30.7 million in the aggregate.

In December 2008, we terminated our $20.0 senior credit facility. The credit facility was collateralized by substantially all of our assets (excluding certain real property). No amounts were outstanding under this credit facility as of December 31, 2008. In the future, we may obtain a replacement facility depending on market conditions and our current needs.

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In 2004, we issued 8.625% senior notes due 2014 in the aggregate principal amount of $150 million (the “Notes”). The Notes are 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. We are subject to various debt covenants and other restrictions, the violation of which could require repayment of outstanding borrowings and affect our credit rating and access to other financing. We were in compliance with all debt covenant requirements at December 31, 2008 and 2007.

In the first quarter of 2009, we repurchased $15.150 million aggregate principal amount of our 8.625% senior notes due 2014 for an aggregate total consideration of $13.050 million in cash. We will record a gain of $1,792,000 in 2009 in connection with these repurchases, net of a charge for related unamortized debt issuance costs of $308,000. We may repurchase additional Notes in 2009.

Net Cash Provided by (used in) operating activities

Net cash used in operating activities during 2008 was $29.2 million, compared to cash provided by operating activities of $17.2 million in 2007 and $24.7 million in 2006. Net cash provided by (used in) operating activities consists of our net income, adjusted by non-cash expenses such as depreciation and amortization, stock-based compensation and loss on impairment of goodwill, intangible assets and equity investment (for the 2008 period), further reduced by gain on sale of Safeco shares (for the 2008 and 2007 periods) and gain on sale of radio stations (for the 2007 and 2006 periods), changes in deferred income tax and changes in operating assets and liabilities.

Net Cash Provided by (used in) investing activities

Net cash provided by investing activities during 2008 was $85.4 million, compared to net cash used in investing activities of $18.1 million in 2007 and $37.4 million in 2006. During 2008, cash flows related to investing activities consisted primarily of proceeds of $153.5 million from the sale of marketable securities (primarily Safeco shares) and a decrease in restricted cash of $52.4 million, offset by $52.4 million for the purchase of television stations, $58.9 million in purchases of short-term investments and $10.3 million in purchases of property, plant and equipment. During 2007, cash flows related to investing activities consisted primarily of a $43.9 million increase in restricted cash, $9.3 million in purchases of property, plant and equipment, $4.9 million paid for the purchase of television stations, $2.75 million paid as a deposit on the purchase of television stations, $1.5 million paid for the purchase of an online news service and $924,000 paid for purchases of marketable securities, partially offset by proceeds of $41.0 million from the sale of marketable securities, $2.9 million from the sale of a radio station and $1.25 million in proceeds from the sale of property, plant and equipment. Net cash used in investing activities during 2006 included $23.2 million in proceeds from the sale of 18 small market radio stations, less an $8.5 million increase in restricted cash that was set aside from this transaction for further purchases of television stations under a like-kind tax exchange. In addition, investing activities included $16.1 million paid as an investment in African-American Broadcasting of Bellevue, Inc., $1.1 million paid for options to purchase additional television stations, $19.6 million paid for the purchase of the Oregon television stations from Equity Broadcasting Corporation, and $15.4 million used to purchase property, plant and equipment.

Net Cash Provided by (used in) financing activities

Net cash used in financing in 2008 was $30.8 million due primarily to the special cash dividend payment to shareholders in August 2008. Net cash used in financing activities during 2007 was $6,000, and net cash provided by financing activities in 2006 was $569,000, consisting primarily of proceeds from exercise of stock options.

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Contractual Obligations

As of December 31, 2008, the following table presents our contractual obligations:

12 Months Ending December 31	Debt Maturities		Interest Payments		Broadcast Rights		Other Obligations		Lease Obligations		Total
2009				12,938		9,895		1,920		2,586		27,339
2010				12,938		11,570		1,920		2,251		28,679
2011				12,938		9,136		960		2,025		25,059
2012				12,938		3,753				1,830		18,521
2013				12,938		69				1,757		14,764
Thereafter		150,000		12,935						2,157		165,092
	$	150,000	$	77,625	$	34,423	$	4,800	$	12,606	$	279,454

Commitments for broadcasting rights consist of $6.2 million recorded in the consolidated balance sheet as television and radio broadcast rights payable as of December 31, 2008 and $28.2 million for future rights to broadcast television and radio programs. Other obligations consist of $4.8 million for commitments under joint sales agreements.

Recent Accounting Pronouncements

In December 2008, the FASB issued Staff Position SFAS No. 132(R)-1, Employers’ Disclosures about Postretirement Benefit Plan Assets, which provides guidance on disclosures about plan assets of a defined benefit pension or other post retirement plan. The requirements of FSP 132(R)-1 are effective for fiscal years ending after December 15, 2009. We do not expect that FSP 132(R)-1 will have a material impact on our financial position or results of operations.

In June 2008, the FASB issued Staff Position No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities, which addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and therefore, need to be included in the earnings allocation in computing earnings per share under the two-class method under FASB Statement No, 128, Earnings per Share. The requirements of FSP No. EITF 03-6-1 are effective for fiscal years beginning after December 15, 2008. This FSP classifies unvested share based payment grants containing non-forfeitable rights to dividends as participating securities that will be included in the computation of earnings per share. As of December 31, 2008, we had approximately 29,000 restricted shares with non-forfeitable dividend rights. We will adopt FSP No. EITF 03-6-1 as of January 1, 2009.

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 apply 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 our consolidated financial statements 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

50

liabilities include, among other things: intangible assets acquired through business combinations; long-lived assets when assessing potential impairment; and liabilities associated with restructuring activities. We will continue to evaluate the potential impact of the adoption of SFAS 157 related to our nonfinancial assets and liabilities.

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 our consolidated financial statements will depend upon the nature, terms and size of the acquisitions completed after the effective date.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

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 2004 placement of $150.0 million aggregate principal amount of 8.625% senior notes due 2014, substantially all of our debt as of December 31, 2008, is at a fixed rate. 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 December 31, 2008 was approximately $123.0 million, which was approximately $27.0 million less than its carrying value. Market risk is estimated as the potential change in fair value resulting from a hypothetical 10% change in interest rates and, as of December 31, 2008, amounted to approximately $7.0 million. Fair market values are determined based on market quotes by brokers. For fixed-rate debt, interest rate changes do not impact book value, operations, or cash flows.

As of December 31, 2007, our fixed-rate debt totaled $150.0 million. The estimated fair value of our long-term debt at December 31, 2007 was approximately $153.0 million, which was approximately $3.0 million more than its carrying value. Market risk is estimated as the potential change in fair value resulting from a hypothetical 10% change in interest rates and, as of December 31, 2007, amounted to approximately $6.6 million.

Our short-term investments are comprised of commercial paper with original maturities of greater than 91 days but less than one year, and we have classified our short-term investments as held-to-maturity. The securities are carried at amortized cost using the specific identification method, and interest income is recorded using an effective interest rate with the associated discount amortized to interest income. Commercial paper prices are susceptible to changes in market interest rates. However, the relatively short-term nature of these investments minimizes interest rate risk. Our short-term investments are classified as held-to-maturity and carried at amortized cost; therefore, fluctuations in market interest rates do not affect the carrying value or interest income recognized. Due to the short duration and nature of these instruments, we do not believe that we have a significant exposure to interest rate risk

51

related to our short-term investments. As of December 31, 2008, our short-term investments carrying value of $59.7 million approximated fair value. Fair values for these instruments are estimated using best available evidence including broker quotes, prices for similar investments, interest rates and credit risk.

Marketable Securities Exposure

In 2008 we sold our remaining 2.3 million shares of Safeco Corporation common stock. Our investment in Safeco represented nearly all of our investments in marketable securities. Accordingly, our exposure to market risk in the area of securities prices was not significant as of December 31, 2008. As of December 31, 2007, the fair value of our investments in marketable securities, consisting primarily of 2.3 million shares of Safeco common stock, was $129.2 million.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements and related documents listed in the index set forth in Item 15 in this report are filed as part of this report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

ITEM 9A. CONTROLS AND PROCEDURES

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our 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 our fiscal year ended December 31, 2008. Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of our fiscal year ended December 31, 2008, our 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 our management, including our 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 fourth fiscal quarter of 2008 that 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.

Management’s Report on Internal Control Over Financial Reporting

Fisher Communications, Inc.’s management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. We assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2008. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on our assessment using those criteria, we determined that as of December 31, 2008, Fisher Communications, Inc.’s internal control over financial reporting was effective.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2008 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears elsewhere in this report.

52

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

ITEM 9B. OTHER INFORMATION

None

53

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item will be contained in the sections entitled “Information With Respect to Nominees and Directors Whose Terms Continue,” “Executive Officers of the Company,” “Section 16(a) Beneficial Ownership Reporting Compliance,” “Information Regarding the Board of Directors and its Committees—Code of Conduct and Code of Ethics” and “Information Regarding the Board of Directors and its Committees—Committees of the Board of Directors—Audit Committee” of the definitive Proxy Statement for our Annual Meeting of Shareholders to be held on April 28, 2009, and is incorporated herein by reference.

We have a Code of Ethics for our Chief Executive Officer, senior financial officers, general managers, station managers and business managers. The Code of Ethics is available on our website at www.fsci.com under the section heading “Investor Information.” We intend to post any amendments to or waivers of our Code of Ethics at this location on our website.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item will be contained in the sections entitled “Compensation Discussion and Analysis,” “Compensation Committee Report,” “Summary Compensation Table,” “2008 Grants of Plan-Based Awards Table,” “2008 Outstanding Equity Awards at Fiscal-Year End Table,” “2008 Option Exercises and Stock Vested Table,” “Potential Payments upon Termination of Employment or Change of Control,” “Estimated Potential Value of Acceleration Under Equity Compensation Plans,” “2008 Non-Employee Director Compensation” and “Information Regarding the Board of Directors and its Committees—Compensation Committee Interlocks and Insider Participation” of the definitive Proxy Statement for our Annual Meeting of Shareholders to be held on April 28, 2009, and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Except for the discussion below, the information required by this Item will be contained in the section entitled “Security Ownership of Certain Beneficial Owners and Management” of the definitive Proxy Statement for our Annual Meeting of Shareholders to be held on April 28, 2009, and is incorporated herein by reference.

Securities authorized for issuance under equity compensation plans

The Company maintains three incentive plans (the “Plans”), the Amended and Restated Fisher Communications Incentive Plan of 1995 (the “1995 Plan”), the Fisher Communications Incentive Plan of 2001 (the “2001 Plan”), and the Fisher Communications Amended and Restated 2008 Equity Incentive Plan (the “2008 Plan”). The 1995 Plan provided that up to 560,000 shares of the Company’s common stock could be issued to eligible key management employees pursuant to options and rights through 2002. As of December 31, 2008, options and rights for 123,173 shares, net of forfeitures, had been issued. No further equity awards may be issued pursuant to the 1995 Plan. The 2001 Plan provided that up to 600,000 shares of the Company’s common stock could be issued to eligible key management employees or directors pursuant to awards, options and rights through April 26, 2008. No further equity awards may be issued pursuant to the 2001 Plan. As of December 31, 2008, awards, options and rights for 356,988 shares had been issued, net of forfeitures. No further options and rights will be issued pursuant to the 2001 Plan. The 2008 Plan provides that up to 300,000 shares of the Company’s common stock may be issued to eligible key management employees or directors pursuant to awards, options and rights through 2018. As of December 31, 2008, awards, options and rights for 23,045 shares had been issued, net of forfeitures. The plans were approved by shareholders and no non-plan awards are outstanding (see Note 12 to the consolidated financial statements for further information).

54

The following table summarizes information with respect to options and other equity awards under Fisher’s equity compensation plans as of December 31, 2008.

Equity Compensation Plan Information

Plan Category	(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights		(b) Weighted average exercise price of outstanding options, warrants and rights			(c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders	292,439	(1)	$	38.28	(2)	276,955	(3)(4)
Equity compensation plans not approved by security holders	—			—		—
Total	292,439	(1)	$	38.28	(2)	276,955	(3)(4)

(1) Includes 260,436 shares subject to outstanding stock options and 32,003 outstanding restricted stock rights under the 2001 Plan, the 1995 Plan and the 2008 Plan.

(2) Includes restricted stock rights, which have no exercise price. The weighted-average exercise excluding the restricted stock rights is $42.98.

(3) Represents shares available under the 2008 Plan. In addition to stock options, the 2008 Plan permits the granting of stock appreciation rights, stock awards, restricted stock, restricted stock rights, stock units, performance shares, performance units and other stock or cash-based awards. The type of awards and the number of shares of common stock subject to the awards granted under the 2008 Plan is in the discretion of the Compensation Committee of the Board of Directors, as administrator of the plan.

(4) Each non-employee director receives 25% of his or her annual retainer in the form of a fully vested stock award under the 2008 Plan for the number of shares of the Company’s common stock determined by dividing the amount of cash compensation to be received in the form of a stock award by the fair market value of the Company’s common stock on the last trading day of each quarter. Non-employee directors also are permitted to elect to receive all or any portion of their remaining annual retainer, committee Chair retainer(s), Board of Directors meeting fees and committee meeting fees in the form of a fully vested stock award under the 2008 Plan.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item will be contained in the sections entitled “Transactions with Related Parties,” “Review, Approval or Ratification of Transactions with Related Persons,” “Information With Respect to Nominees and Directors Whose Terms Continue” and “Information Regarding the Board of Directors and its Committees” of the definitive Proxy Statement for our Annual Meeting of Shareholders to be held on April 28, 2009, and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item will be contained in the sections entitled “Audit and Non-Audit Fees” and “Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent Auditor” of the definitive Proxy Statement for our Annual Meeting of Shareholders to be held on April 28, 2009, and is incorporated herein by reference.

55

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) (1)    Consolidated Financial Statements:

• Report of Independent Registered Public Accounting Firm

• Consolidated Statements of Operations for the years ended December 31, 2008, 2007, and 2006

• Consolidated Balance Sheets at December 31, 2008 and 2007

• Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2008, 2007, and 2006

• Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007, and 2006

• Consolidated Statements of Comprehensive Income for the years ended December 31, 2008, 2007, and 2006

• Notes to Consolidated Financial Statements

(2) Financial Statement Schedules:

• Schedule II—Valuation and Qualifying Accounts for the years ended December 31, 2008, 2007, and 2006

All other schedules have been omitted because of the absence of the conditions under which they are required or because the information required is included in financial statement schedules, the financial statements or notes thereto.

(3) Exhibits: See “Exhibit Index.”

56

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

of Fisher Communications, Inc.

In our opinion, the consolidated financial statements listed in the accompanying index appearing under Item I5(a)(1) present fairly, in all material respects, the financial position of Fisher Communications, Inc. and its subsidiaries at December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP

Seattle, Washington

March 16, 2009

57

FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31
(in thousands, except per-share amounts)	2008			2007			2006
Revenue	$	173,791		$	162,266		$	156,537
Costs and expenses
Direct operating costs (exclusive of annual depreciation and amortization of $10,470, $9,515 and $8,518, respectively, and amortization of program rights of $19,288, $18,686 and $18,646, respectively, reported separately below)		69,810			62,054			58,528
Selling, general and administrative expenses		65,859			55,243			49,630
Impairment of goodwill and intangible assets		76,742			—			—
Impairment of investment in equity investee		1,468			—			—
Amortization of program rights		19,288			18,686			18,646
Depreciation and amortization		12,703			11,518			10,307
		245,870			147,501			137,111
Income (loss) from operations		(72,079	)		14,765			19,426
Other income, net		156,570			45,688			3,880
Interest expense, net		(13,928	)		(13,671	)		(13,956	)
Income from continuing operations before income taxes		70,563			46,782			9,350
Provision for federal and state income taxes		24,833			15,903			2,823
Income from continuing operations		45,730			30,879			6,527
Income (loss) from discontinued operations, net of income taxes		(1,072	)		995			10,309
Net income	$	44,658		$	31,874		$	16,836
Income (loss) per share:
From continuing operations	$	5.23		$	3.54		$	0.75
From discontinued operations		(0.12	)		0.11			1.18
Net income per share	$	5.11		$	3.65		$	1.93
Income (loss) per share assuming dilution:
From continuing operations	$	5.23		$	3.54		$	0.75
From discontinued operations		(0.12	)		0.11			1.18
Net income per share assuming dilution	$	5.11		$	3.65		$	1.93
Weighted average shares outstanding		8,732			8,723			8,713
Weighted average shares outstanding assuming dilution		8,735			8,728			8,716
Dividends declared per share	$	3.50		$	—		$	—

See accompanying notes to consolidated financial statements.

58

FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per-share amounts)	December 31 2008			December 31 2007
ASSETS
Current Assets
Cash and cash equivalents	$	31,835		$	6,510
Short-term investments		59,697
Receivables, net		26,044			30,498
Income taxes receivable		2,763
Deferred income taxes		1,763			785
Prepaid expenses and other assets		2,200			3,855
Television and radio broadcast rights		6,106			5,934
Assets held for sale					37
Total current assets		130,408			47,619
Restricted cash					52,365
Marketable securities, at market value		769			129,223
Cash value of life insurance and retirement deposits		17,425			16,809
Television and radio broadcast rights		48			7
Goodwill		13,293			37,361
Intangible assets		41,015			42,782
Investment in equity investee		1,300			2,635
Deferred financing fees and other assets		4,838			9,072
Deferred income taxes		13,757
Assets held for sale					2,053
Property, plant and equipment, net		148,440			146,008
Total Assets	$	371,293		$	485,934
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Trade accounts payable	$	4,339		$	3,737
Accrued payroll and related benefits		4,301			7,614
Interest payable		3,773			3,773
Television and radio broadcast rights payable		6,124			4,940
Income taxes payable					3,959
Current portion of accrued retirement benefits		1,254			1,230
Other current liabilities		5,712			4,218
Liabilities of businesses held for sale					100
Total current liabilities		25,503			29,571
Long-term debt		150,000			150,000
Accrued retirement benefits		19,439			18,552
Deferred income taxes					45,274
Other liabilities		11,607			9,140
Commitments and Contingencies
Stockholders’ Equity
Common stock, shares authorized 12,000,000, $1.25 par value; issued and outstanding 8,737,281 in 2008 and 8,725,516 in 2007		10,922			10,907
Capital in excess of par		11,140			10,220
Accumulated other comprehensive income (loss)—net of income taxes:
Unrealized gain on marketable securities		(158	)		82,818
Accumulated loss		(2,545	)		(1,958	)
Prior service cost		(178	)		(181	)
Retained earnings		145,563			131,591
Total Stockholders’ Equity		164,744			233,397
Total Liabilities and Stockholders’ Equity	$	371,293		$	485,934

See accompanying notes to consolidated financial statements.

59

FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands except share amounts)	Common Stock			Capital in Excess of Par			Deferred Compensation			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total Equity
	Shares	Amount
Balance December 31, 2005	8,705,041	$	10,881	$	8,590		$	(159	)	$	107,428		$	82,881		$	209,621
Net loss														16,836			16,836
Other comprehensive income											12,066						12,066
Elimination of deferred stock-based compensation upon adoption of SFAS 123R					(159	)		159
Stock-based compensation					473												473
Issuance of common stock under rights and options, and related tax benefit	15,050		19		550												569
Balance December 31, 2006	8,720,091		10,900		9,454			—			119,494			99,717			239,565
Net income														31,874			31,874
Other comprehensive loss											(38,815	)					(38,815	)
Stock-based compensation					733												733
Issuance of common stock under awards, rights and options, and related tax benefit	5,425		7		33												40
Balance December 31, 2007	8,725,516		10,907		10,220			—			80,679			131,591			233,397
Net income														44,658			44,658
Cash dividends paid														(30,686	)		(30,686	)
Other comprehensive loss											(83,560	)					(83,560	)
Stock-based compensation					918												918
Issuance of common stock under awards, rights and options, and related tax benefit	11,765		15		2												17
Balance December 31, 2008	8,737,281	$	10,922	$	11,140		$	—		$	(2,881	)	$	145,563		$	164,744

See accompanying notes to consolidated financial statements.

60

FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31
(in thousands)	2008			2007			2006
Cash flows from operating activities
Net income	$	44,658		$	31,874		$	16,836
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation and amortization		12,786			11,552			10,385
Deferred income taxes		(15,318	)		10,760			2,636
Equity in operations of equity investees		(134	)		4			(30	)
Amortization of deferred financing fees		782			633			633
Amortization of program rights		19,288			18,686			18,646
Payments for television and radio broadcast rights		(18,154	)		(17,645	)		(17,633	)
Gain on sale of radio stations					(1,491	)		(9,971	)
Gain on sale of marketable securities		(152,610	)		(40,421	)
Amortization of short-term investment discount		(789	)
Impairment of goodwill and intangible assets		76,742
Impairment of investment in equity investee		1,468
Net non-cash contract termination fee		4,990
Amortization of non-cash contract termination fee		(1,264	)		(869	)		(869	)
Dividends from equity investee					150
Stock-based compensation		918			733			473
Other		(179	)		(21	)		224
Change in operating assets and liabilities
Receivables		4,399			(356	)		(1,964	)
Prepaid expenses and other assets		1,481			(281	)		201
Cash value of life insurance and retirement deposits		(616	)		(850	)		(656	)
Other assets		698			693			(440	)
Trade accounts payable, accrued payroll and related benefits, interest payable, and other current liabilities		(1,921	)		57			1,012
Income taxes receivable and payable		(6,722	)		3,473			1,472
Accrued retirement benefits		911			196			(618	)
Other liabilities		(643	)		286			4,396
Net cash provided by (used in) operating activities		(29,229	)		17,163			24,733
Cash flows from investing activities
Purchase of marketable securities		(104	)		(924	)
Proceeds from sale of marketable securities		153,513			41,009
Purchase of short-term investments		(58,909	)
Restricted cash		52,365			(43,892	)		(8,473	)
Proceeds from sale of radio stations					2,869			23,238
Payment for options to purchase television stations								(1,100	)
Deposits paid for purchase of television stations					(2,750	)
Purchase of television stations		(52,365	)		(4,931	)		(35,681	)
Purchase of online news service					(1,482	)
Proceeds from sale of online news service		1,460
Purchase of intangible assets		(285	)
Proceeds from sale of commercial property and property, plant and equipment					1,250
Purchase of property, plant and equipment		(10,291	)		(9,273	)		(15,431	)
Net cash provided by (used in) investing activities		85,384			(18,124	)		(37,447	)
Cash flows from financing activities
Borrowings under borrowing agreements		21,000			6,000			15,000
Payments on borrowing agreements		(21,000	)		(6,000	)		(15,000	)
Payment of capital lease obligation		(144	)		(45	)
Proceeds from exercise of stock options					39			546
Excess tax benefit from exercise of stock options								23
Cash dividends paid		(30,686	)
Net cash provided by (used in) financing activities		(30,830	)		(6	)		569
Net increase (decrease) in cash and cash equivalents		25,325			(967	)		(12,145	)
Cash and cash equivalents, beginning of period		6,510			7,477			19,622
Cash and cash equivalents, end of period	$	31,835		$	6,510		$	7,477

See accompanying notes to consolidated financial statements.

61

FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

	Year Ended December 31
(in thousands)	2008			2007			2006
Net income	$	44,658		$	31,874		$	16,836
Other comprehensive income:
Unrealized gain (loss) on marketable securities		24,953			(18,998	)		18,217
Effect of income taxes		(8,733	)		6,649			(6,377	)
Accumulated loss		(903	)		(343	)		673
Effect of income taxes		316			120			(235	)
Prior service cost		4			48			(326	)
Effect of income taxes		(1	)		(17	)		114
Reclassification adjustment for gains included in net income		(152,610	)		(40,421	)
Effect of income taxes		53,414			14,147
Other comprehensive income (loss)		(83,560	)		(38,815	)		12,066
Comprehensive income (loss)	$	(38,902	)	$	(6,941	)	$	28,902

See accompanying notes to consolidated financial statements.

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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1

Operations and Accounting Policies

The principal operations of Fisher Communications, Inc. and subsidiaries (the Company) are television and radio broadcasting. The Company also owns and operates Fisher Plaza, a mixed-use facility that houses a variety of office, retail, technology and other media and communications companies. The Company conducts its business primarily in Washington, Oregon, Idaho, California and Montana. A summary of significant accounting policies is as follows:

Principles of consolidation    The Consolidated Financial Statements are presented on an accrual basis in accordance with accounting principles generally accepted in the United States of America (GAAP) and include the accounts of Fisher Communications, Inc. and its wholly-owned subsidiaries. Television and radio broadcasting are conducted through Fisher Broadcasting Company. Fisher Media Services Company operates Fisher Plaza. All material intercompany balances and transactions have been eliminated.

Estimates    The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates including, but not limited to, among others, those affecting revenues, goodwill and intangibles impairment, the useful lives of tangible and intangible assets, valuation allowances for receivables and broadcast rights, stock-based compensation expense, valuation allowances for deferred income taxes and liabilities and contingencies. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form its basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, or if management made different judgments or utilized different estimates.

Television and radio broadcast licenses    The Company’s broadcast operations are subject to the jurisdiction of the Federal Communications Commission (the “FCC”) under the Communications Act of 1934, as amended (the “Communications Act”). The Communications Act empowers the FCC to regulate many aspects of the broadcasting industry, including the granting and renewal of broadcast licenses. The cost of certain acquired indefinite-lived television licenses is included in Intangible Assets in the Consolidated Balance Sheets.

Revenue recognition    Television and radio revenue is recognized, net of advertising agency commissions, when the advertisement is broadcast. The Company may trade certain advertising time for products or services, as well as barter advertising time for program material. Trade transactions are generally reported at the estimated fair value of the product or service received, while barter transactions are reported at management’s estimate of the value of the advertising time exchanged, which approximates the fair value of the program material received. Revenue is reported on trade and barter transactions when commercials are broadcast; expenses are reported when products or services are utilized or when programming airs. The Company receives consideration from certain satellite, cable and wireless providers in return for consent to the retransmission of the signals of the Company’s television stations. Retransmission consent revenue is recognized as earned over the life of the contract. Revenue from production of broadcast media content is recognized when a contracted production is available for distribution. Revenue from satellite transmission services is recognized when the service is performed. Website advertising revenue is recognized ratably over the contract period or as services are delivered, as appropriate. Rentals from real estate leases are recognized on a straight-line basis over the term of the lease, while revenue from related service fees is recognized when the services are delivered.

Termination of national advertising representation firms    Broadcasters may periodically terminate existing agreements with national advertising representation firms; under such circumstances, the successor firm generally satisfies the broadcaster’s contractual termination obligation to the predecessor firm with no cash

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payment made by the broadcaster. When the Company terminates national advertising representation agreements with contractual termination penalties, the Company recognizes a non-cash termination charge to selling, general and administrative expenses and amortizes the resulting liability as a reduction of expense over the term of the new agreement. In the second quarter of 2008, the Company recognized a net non-cash termination charge of $5.0 million and will recognize a non-cash benefit over the five year term of the new agreement.

Cash and cash equivalents    The Company considers all highly liquid investments that have remaining maturities at the date of purchase of 90 days or less to be cash equivalents. The Company’s cash equivalents are comprised primarily of money market funds.

Short-term investments    The Company’s short-term investments are comprised of commercial paper with original maturities of greater than 91 days but less than one year. The Company has classified its short-term investments as held-to-maturity as the Company has the intent and ability to hold these securities to maturity. The securities are carried at amortized cost using the specific identification method, and interest income is recorded using an effective interest rate with the associated discount amortized to interest income. The carrying value of $59.7 million approximates fair value at December 31, 2008. Fair values for these investments are estimated using best available evidence including broker quotes, prices for similar investments, interest rates and credit risk. Investments are reviewed periodically to determine if a permanent decline in fair value has occurred that would require impairment of the investment carrying value. No impairments on investments have been recorded.

Restricted cash    Restricted cash at December 31, 2007 consists of segregated funds designated for financing the close of the Company’s purchase of two television stations in Bakersfield, California. These funds were utilized to finance the acquisition of the stations in January 2008.

Marketable securities    Marketable securities at December 31, 2007 consist primarily of shares of Safeco Corporation common stock, valued based on the closing per-share sale price on the specific-identification basis as reported on the New York Stock Exchange. As of December 31, 2007, these shares represented 2.6% of the outstanding common stock of Safeco Corporation. The Company sold all of its remaining shares of Safeco Corporation common stock in 2008 (see Note 3). The Company has classified its investments in marketable securities as available-for-sale under applicable accounting standards, and those investments are reported at fair market value. Unrealized gains and losses are a separate component of stockholders’ equity, net of any related income tax effect. Dividends received of $2,104,000, $4,213,000 and $3,348,000 are included in other income, net for 2008, 2007 and 2006, respectively.

Concentration of credit risk    Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents and accounts receivable. The Company maintains its cash and cash equivalents in accounts primarily with one major financial institution, in the form of demand deposits, money market funds and other cash and cash equivalents. Deposits in these institutions may exceed the amounts of insurance provided on such deposits, however, the risk of loss is mitigated by the size and financial health of the organizations. Concentrations of credit risk with respect to the receivables are limited due to the large number of customers in the Company's customer base and their dispersion across different industries and geographic areas. The Company does not generally require collateral or other security for its accounts receivable.

Television and radio broadcast rights    Television and radio broadcast rights are recorded as assets when the license period begins and the programs are available for broadcast, at the gross amount of the related obligations (or, for non-sports first-run programming, at the amount of the annual obligation). Costs incurred in connection with the purchase of programs to be broadcast within one year are classified as current assets, while costs of those programs to be broadcast after one year are considered non-current. These programming costs are charged to operations over their estimated broadcast periods using either the straight-line method or in proportion to estimated revenue of the related program. Program obligations are classified as current or non-current in accordance with the payment terms of the license agreement. The Company periodically assesses impairment of broadcast rights on a program-by-program basis; any impairment found is charged to operations in the period of the impairment (See Note 11).

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Investments in equity investees    Investments in equity investees represent investments in entities over which the Company does not have control, but has significant influence and owns 50% or less. Such investments are accounted for using the equity method of accounting (See Note 7). An impairment on the investment in equity investee is recognized if the decline in value is other than temporary.

Goodwill and indefinite-lived intangible assets    Goodwill represents the excess of purchase price of certain media properties over the fair value of acquired tangible and identifiable intangible net assets. Indefinite-lived intangible assets consist of certain television licenses. In making estimates of fair values for the purposes of allocating the purchase price, the Company relies primarily on its extensive knowledge of the market and if considered appropriate, will obtain appraisals from independent appraisers. In estimating the fair value of the tangible and intangible assets acquired, the Company considers information obtained about each property as a result of pre-acquisition due diligence, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective assets. The Company tests goodwill and indefinite-lived intangible assets at least annually, or whenever events indicate that an impairment may exist.

The goodwill impairment test involves a comparison of the fair value of each of the Company’s reporting units with the carrying amounts of net assets, including goodwill, related to each reporting unit. If the carrying amount exceeds a reporting unit's fair value, the second step of the impairment test is performed to measure the amount of impairment loss, if any. The impairment loss is measured based on the amount by which the carrying amount of goodwill exceeds the implied fair value of goodwill in the reporting unit being tested. Fair values are determined based on valuations that rely primarily on the discounted cash flow method and market multiples of current earnings. This method uses future projections of cash flows from each of the Company’s reporting units and includes, among other estimates, projections of future advertising revenue and operating expenses, market supply and demand, projected capital spending and an assumption of the Company’s weighted average cost of capital. The Company’s indefinite-lived assets (broadcast licenses), which are not subject to amortization, are tested for impairment at least on an annual basis by applying a fair-value-based test as required by Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets (“SFAS 142”). The Company’s evaluations of fair values include analyses based on the estimated future cash flows generated by the underlying assets, estimated trends, and other relevant determinants of fair value for these assets. If the fair value of the asset is less than its carrying amount, a loss is recognized for the difference between the fair value and its carrying value. Changes in any of these estimates, projections and assumptions could have a material effect on the fair value of these assets in future measurement periods and result in an impairment of goodwill or indefinite-lived intangibles which could materially affect the Company’s results of operations.

Property, plant and equipment, net    Replacements and improvements are capitalized, while maintenance and repairs are charged as expense when incurred. Property, plant and equipment are stated at historical cost, net of related accumulated depreciation. Gains or losses on dispositions of property, plant and equipment are included in operating income, or in discontinued operations, based on the nature of the disposition.

Real estate taxes, interest expense, and certain other costs related to real estate projects constructed for lease to third parties are capitalized as a cost of such projects until the project, including major tenant improvements, is substantially completed. A project is generally considered to be substantially completed when a predetermined occupancy level has been reached or the project has been available for occupancy for a period of one year. Costs, including depreciation, applicable to a project are charged to expense based on the ratio of occupied space to total rentable space until the project is substantially completed, after which such costs are expensed as incurred.

For financial reporting purposes, depreciation of property, plant and equipment is determined primarily by the straight-line method over the estimated useful lives of the assets as follows:

Buildings and improvements	10–55 years
Machinery and equipment	3–25 years
Land improvements	10–30 years

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The Company classifies the net carrying values of stations as held for sale when the stations are actively marketed, their sale is considered probable within one year and various other criteria relating to their disposition are met. The Company discontinues depreciation of the stations at that time, but continues to recognize operating revenues and expenses until the date of sale. In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS 144”), the Company reports revenues and expenses of stations classified as held for sale in discontinued operations for all periods presented if the Company will sell or has sold the stations on terms where the Company has no continuing involvement with them after the sale. If active marketing ceases or the stations no longer meet the criteria to be classified as held for sale, the Company reclassifies the stations as held for use, resumes depreciation and recognizes the expense for the period that the Company classified the properties as held for sale. In addition, deferred selling costs, if any, are charged to expense.

Tangible long-lived assets    The Company evaluates the recoverability of the carrying amount of long-lived tangible assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable as required by SFAS 144. The Company uses its judgment when applying the impairment rules to determine when an impairment test is necessary. Factors the Company considers which could trigger an impairment review include significant underperformance relative to historical or forecasted operating results, a significant decrease in the market value of an asset, a significant change in the extent or manner in which an asset is used, and significant negative cash flows or industry trends.

Impairment losses are measured as the amount by which the carrying value of an asset exceeds its estimated fair value, which is primarily based on market transactions for comparable businesses, discounted cash flows, and a review of the underlying assets of the reporting unit. In estimating these future cash flows, the Company uses future projections of cash flows directly associated with, and that were expected to arise as a direct result of, the use and eventual disposition of the assets. These projections may contain estimates and management judgments that are significant and subjective. If it is determined that a long-lived asset is not recoverable, an impairment loss would be calculated based on the excess of the carrying amount of the long-lived asset over its fair value. Changes in any of the Company’s estimates could have a material effect on the estimated future cash flows expected to be generated by the asset and could result in a future impairment of the involved assets with a material effect on the Company’s future results of operations.

Fair value of financial instruments    The carrying amount of cash and cash equivalents, restricted cash, short-term investments, receivables, marketable securities, trade accounts payable, and television and radio broadcast rights asset and payable approximate the fair values due to their short maturities.

The estimated fair value of the Company’s long-term debt at December 31, 2008 and 2007 was $123.0 million and $153.0 million, respectively. The fair value of long-term debt is based on estimates made by investment bankers based on the fair value of the Company’s fixed rate long-term debt.

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 provides 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.

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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.

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 $769,000 at December 31, 2008 is measured using Level 1 inputs.

Deferred financing costs    The Company capitalizes costs associated with financing activities and amortizes such costs to interest expense using the effective interest method over the term of the underlying financing arrangements. Such costs associated with the senior notes issued in 2004 are amortized over the 10-year life of the senior notes; costs corresponding to the Company’s $20 million revolving credit facility, which was terminated in 2008, were being amortized over the original 6-year availability of this financing agreement. Upon termination in December 2008, $150,000 in unamortized costs related to the revolving credit facility were charged to interest expense.

Variable interest entities    The Company may enter into Joint Sales Agreements (“JSAs”) or Local Marketing Agreements (“LMAs”) with non-owned stations. Under the terms of these agreements, the Company makes specific periodic payments to the station’s owner-operator in exchange for the right to provide programming and/or sell advertising on a portion of the station’s broadcast time. Nevertheless, the owner-operator retains control and responsibility for the operation of the station, including responsibility over all programming broadcast on the station. Generally, the Company continues to operate the station under the agreement until the termination of such agreement. As a result of these agreements, the Company may determine that the station is a Variable Interest Entity (“VIE”) as defined by the Financial Accounting Standards Board (“FASB”) Interpretation No. (“FIN”) 46R, Consolidation of Variable Interest Entities, and that the Company is the primary beneficiary of the variable interest. This typically occurs if the Company has an agreement to acquire a station and the conditions to close are considered to be perfunctory. The Company also may determine that a station is a VIE in connection with other types of local service agreements entered into with stations in markets in which the Company owns and operates a station. The Company did not have any VIE’s in 2008 or 2007.

Advertising    The Company expenses advertising costs at the time the advertising first takes place. Advertising expense was $3,083,000, $2,881,000 and $3,085,000 in 2008, 2007, and 2006, respectively.

Operating leases    The Company has operating leases for television and radio transmitting facilities, tower locations, administrative offices and certain other operational and administrative equipment. The television and radio transmitting facilities lease agreements are for periods up to 30 years, with certain renewal options. The Company recognizes lease expense on a straight-line basis when cash payments fluctuate over the term of the lease.

Capital leases    For equipment under capital lease arrangements, an asset is established on the balance sheet based on the present value of the lease payments, which may not exceed the fair value of the underlying leased equipment, and a corresponding long-term liability is recorded. Lease payments are allocated between principal and interest on the lease obligation and the capital lease asset is depreciated over the term of the lease.

Income taxes    Deferred income taxes are provided for temporary differences in reporting for financial reporting purposes versus income tax reporting purposes. The Company evaluates both positive and negative evidence that it believes is relevant in assessing whether the Company will realize the deferred tax assets. The Company provides valuation allowances for deferred taxes when it does not consider realization of such assets to be more likely than not.

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The Company accounts for uncertain tax positions in accordance with Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”)—an interpretation of FASB Statement No. 109 (“SFAS 109”). FIN 48 clarifies a recognition threshold that a tax position is required to meet before being recognized in the financial statements. The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are sometimes ambiguous. As such, the Company is required to make certain subjective assumptions and judgments regarding its income tax exposures. Interpretations of and guidance surrounding income tax laws and regulations change over time. As such, changes in the Company’s subjective assumptions and judgments can materially affect amounts recognized in the consolidated balance sheets and statements of operations. See Note 13 for additional detail on the Company’s uncertain tax positions.

Earnings per share    Net income per share represents net income divided by the weighted average number of shares outstanding during the year. Net income per share assuming dilution represents net income 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.

A reconciliation of net income per share and net income per share assuming dilution is as follows (in thousands, except per-share amounts):

	Year Ended December 31
	2008		2007		2006
Net income	$	44,658	$	31,874	$	16,836
Weighted average shares outstanding—basic		8,732		8,723		8,713
Weighted effect of dilutive options and rights		3		5		3
Weighted average shares outstanding assuming dilution		8,735		8,728		8,716
Basic net income per share	$	5.11	$	3.65	$	1.93
Diluted net income per share	$	5.11	$	3.65	$	1.93

The effect of 12,528 restricted stock rights and options to purchase 249,757 shares are excluded from the calculation of weighted average shares outstanding for the year ended December 31, 2008 because such options were anti-dilutive. The effect of options to purchase 172,005 shares are excluded from the calculation of weighted average shares outstanding for the year ended December 31, 2007 because such options were anti-dilutive. The effect of 13,250 restricted stock rights and options to purchase 190,185 shares are excluded for the year ended December 31, 2006 because such rights and options were anti-dilutive.

Stock-based compensation    The Company uses the Black-Scholes option pricing model as its method of valuation for stock option awards. The Company’s determination of the fair value of stock option awards on the date of grant using an option pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the expected life of the award, the Company’s expected stock price volatility over the term of the award, forfeitures, and projected exercise behaviors. Although the fair value of stock option awards is determined in accordance with SFAS 123(R), the Black-Scholes option pricing model requires the input of subjective assumptions, and other reasonable assumptions could yield differing results.

Reclassifications    Certain amounts in the 2007 and 2006 Consolidated Statements of Operations have been reclassified to conform to the 2008 presentation. Certain employment-related expenses totaling $5.9 million and $5.5 million for 2007 and 2006, 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.

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Recent accounting pronouncements

In December 2008, the FASB issued Staff Position SFAS No. 132(R)-1, Employers’ Disclosures about Postretirement Benefit Plan Assets, which provides guidance on disclosures about plan assets of a defined benefit pension or other post retirement plan. The requirements of FSP 132(R)-1 are effective for fiscal years ending after December 15, 2009. The Company does not expect that FSP 132(R)-1 will have a material impact on its financial position or results of operations.

In June 2008, the FASB issued Staff Position No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities, which addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and therefore, need to be included in the earnings allocation in computing earnings per share under the two-class method under FASB Statement No, 128, Earnings per Share. The requirements of FSP No. EITF 03-6-1 are effective for fiscal years beginning after December 15, 2008. This FSP classifies unvested share based payment grants containing non-forfeitable rights to dividends as participating securities that will be included in the computation of earnings per share. As of December 31, 2008, we had approximately 29,000 restricted shares with non-forfeitable dividend rights. The Company will adopt FSP No. EITF 03-6-1 as of January 1, 2009.

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 apply 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 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 continues to evaluate the potential impact of the adoption of SFAS 157 related to its nonfinancial assets and liabilities.

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 will depend upon the nature, terms and size of the acquisitions completed after the effective date.

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NOTE 2

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 Company received $24.4 million in cash, and $1.6 million was placed in escrow with respect to certain standard representations and warranties made by the Company. In 2006, the Company included the escrowed amount in the calculation of the gain on sale of the radio stations due to the Company’s assessment that no liabilities would arise under the indemnification provisions of the agreement. In 2008, the Company recorded a charge of $262,500 for the settlement amount rendered upon final resolution of claims made by the buyer against the escrow amount, which is included in loss from discontinued operations. The funds held in escrow as of December 31, 2008 and 2007 ($761,000 and $1.0 million, respectively) are included in prepaid expenses and other assets in the accompanying Consolidated Balance Sheets. Of the $24.4 million in cash received, $18.0 million was deposited directly with a Qualified Intermediary (“QI”) in order to facilitate a tax deferred exchange under Internal Revenue Code Section 1031. The sale of one additional Montana station to the same buyer closed on June 1, 2007, for $3.0 million.

From the time of the initial agreement in 2006 until the fourth quarter of 2008, the Company continued to actively market the remaining small market radio stations and engaged in substantive negotiations with potential purchasers for the sale of the remaining five stations. However, ultimately, the Company has not completed the divestiture due to declining advertising revenues in 2008 resulting in poor operating performance and by the significant tightening of liquidity in the U.S. credit markets in 2008. During the fourth quarter, the Company determined that in view of the uncertainty around the timing or probability of a sale of the remaining five stations, the requirements of SFAS 144 necessary to classify the remaining five radio stations as discontinued operations were no longer met and that it was appropriate to present the stations as held for use in the Company’s continuing operations as of the fourth quarter of 2008 and going forward. The assets and liabilities of the five stations have been classified as held for use in the consolidated balance sheet as of December 31, 2008, and the results of operations of the five stations through December 31, 2008 have been classified as continuing operations in the Company’s radio segment in the consolidated statements of operations for all periods presented.

Operational data for the remaining small market radio stations included in discontinued operations is summarized as follows (in thousands):

	Year Ended December 31
	2008			2007			2006
Revenue	$	—		$	60		$	6,669
Income from discontinued operations:
Discontinued operating activities	$	—		$	(126	)	$	521
Gain (loss) on sale		(263	)		2,294			15,339
		(263	)		2,168			15,860
Income tax effect		92			(759	)		(5,551	)
Income (loss) from discontinued operations	$	(171	)	$	1,409		$	10,309

The loss from discontinued operations during 2008 reflects the settlement amount rendered upon final resolution of claims made by the buyer against the escrow amount.

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

	December 31 2007
Goodwill	$	645
Property, plant and equipment, net		643
Intangible assets		765
Other assets		37
Assets held for sale	$	2,090
Liabilities of businesses held for sale	$	100

In July 2007, the Company entered into an agreement with Pegasus News, Inc. (“Pegasus”) to acquire, for approximately $1.5 million, substantially all of the assets used or held for use by Pegasus in connection with its business and operations. Pegasus is a local news service, specializing in providing personalized online local news, information and advertising in Dallas, Texas. The excess of the purchase price of the assets over the fair value of the tangible and intangible net assets was recorded as goodwill. The purchase price, including direct costs of the acquisition and net of cash acquired, has been allocated as follows (in thousands):

Intangible assets—Technology (useful life of 4 years)	$	270
Goodwill (non-amortizing, tax deductible)		1,231
Property, plant and equipment		15
Other		4
	$	1,520

On December 31, 2008, the Company entered into an agreement and sold Pegasus for net proceeds of $1.46 million. As consideration for the sale, the buyer paid Fisher Broadcasting $1.5 million in cash and granted the Company and its affiliates a royalty-free, non-exclusive, non-transferable license to use certain related technology in its existing television and radio markets to deliver personalized online local news, information and advertising. In accordance with SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Company has reported the results of operations of Pegasus as discontinued operations in the accompanying consolidated statement of operations as of December 31, 2008 for all periods presented. The operations of Pegasus were included in the Company’s television segment.

Operational data for Pegasus included in discontinued operations is summarized as follows (in thousands):

	Year Ended December 31
	2008			2007
Revenue	$	216		$	27
(Loss) from discontinued operations:
Discontinued operating activities		(1,351	)		(636	)
(Loss) on sale		(33	)
		(1,384	)		(636	)
Income tax effect		483			222
(Loss) from discontinued operations	$	(901	)	$	(414	)

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NOTE 3

Sale of Safeco Corporation Common Stock

In December 2007, the Company sold 699,700 shares of Safeco Corporation common stock, which represented 23.3% of the Company’s total Safeco holdings. The shares were sold at an average price of $58.05 per share, resulting in pre-tax net proceeds to the Company of approximately $40.6 million. The book basis of the shares sold totaled approximately $237,000, resulting in a pre-tax gain on sale of $40.4 million, which is included in other income, net for 2007. The net proceeds from the sale were utilized to fund the January 2008 acquisition of two television stations in Bakersfield, California (See Note 4).

In June and July 2008, the Company sold the remaining 2,302,676 shares of Safeco Corporation common stock. The shares were sold at an average price of $66.65 per share, resulting in pre-tax net proceeds to the Company of $153.4 million. The book basis of the shares sold totaled $782,000, resulting in a pre-tax gain on sale of $152.6 million, which is included in other income, net for 2008.

The Company’s senior notes indenture contains provisions that limit its ability to distribute proceeds from asset sales, which includes the proceeds from the sale of the Company’s shares of Safeco Corporation common stock. In the event that the Company does not use the proceeds from asset sales for qualifying purposes (as specified in the indenture) within 360 days from the date of sale, the Company will be required to offer to repurchase its outstanding senior notes at par value to the extent of such unused proceeds (the “Excess Proceeds”). Under the indenture, qualifying purposes include: (i) repayment of secured indebtedness; (ii) purchase of assets used or useful in the Company’s business; (iii) certain acquisitions of other companies; (iv) expenditures used or useful in the Company’s business; and (v) certain investments in the Company or its subsidiaries. The Company expects that it will have used all of the proceeds from the sale of Safeco shares for qualifying purposes and therefore will not have any Excess Proceeds that would require us to offer to repurchase the notes.

NOTE 4

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 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. As of December 31, 2007 a deposit of $2.75 million was held in escrow on this transaction and was included in deferred financing fees and other assets in the Consolidated Balance Sheet. As of December 31, 2007, $52.4 million of cash was segregated and designated for financing the close of the transaction and was reported as restricted cash in the Consolidated Balance Sheet. 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

In July 2006, the Company entered into a Local Marketing Agreement (“LMA”) with WatchTV, Inc. to manage four of their television stations located in Eastern Washington. The stations provide Spanish-language programming to the Yakima-Pasco-Richland-Kennewick television market through an affiliation with Univision.

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Contemporaneously with the LMA, the Company entered into an option agreement with WatchTV to acquire the stations. On February 15, 2007 the Company exercised its option to purchase these television stations for $5.0 million, and on April 26, 2007 the Company finalized the asset purchase of the stations. 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 purchase price of the stations, including direct costs of the acquisition, has been allocated as follows (in thousands):

Intangible assets—FCC license (indefinite life, non-amortizing)	$	1,400
Goodwill (non-amortizing, tax deductible)		3,417
Property, plant and equipment		214
	$	5,031

On June 26, 2006, the Company entered into a stock purchase agreement with African-American Broadcasting of Bellevue, Inc. (“AABB”), and its owner Christopher J. Racine. Under this agreement, the Company acquired an immediate 25 percent equity interest in AABB for $4.0 million and the rights and obligation to acquire the remaining equity interest in AABB pending FCC approval of the transaction and the fulfillment of certain other closing conditions by AABB. On September 26, 2006, the Company acquired the remaining 75 percent equity interest in AABB for $12.0 million. The purchase price of AABB, including liabilities assumed and direct costs of the acquisition, has been allocated as follows (in thousands):

Intangible assets—FCC license (indefinite life, non-amortizing)	$	24,012
Property, plant and equipment		790
Deferred tax liabilities		(8,626	)
	$	16,176

On September 22, 2006, the Company entered into a second amendment to an asset purchase agreement dated December 7, 2005 with Equity Broadcasting Corporation and entities owned or controlled by EBC (“EBC”). The amendment provided, among other things, that the Company paid an additional $6.0 million non-refundable fee in consideration for deferring the consummation of the acquisition of two television stations in Oregon (the “Oregon Closing”) to November 1, 2006, to be applied toward the purchase price of $19.3 million. As a result of the amended terms of the agreement and the JSA, the Company determined that it was the primary beneficiary of the two Oregon stations and as a result consolidated the operations and assets at their fair values as of September 22, 2006. On November 1, 2006, the Company finalized the Oregon Closing with EBC for $19.3 million. 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 purchase price of the Oregon stations, including direct costs of the acquisition, has been allocated as follows (in thousands):

Intangible assets—FCC license (indefinite life, non-amortizing)	$	16,800
Goodwill (non-amortizing, tax deductible)		2,593
Property, plant and equipment		161
	$	19,554

A second amendment to the purchase agreement included an additional $1.0 million payment for an option to purchase one to three additional 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.

Proforma information is not provided as the Company considers the acquisitions, individually and in the aggregate to be immaterial.

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NOTE 5

Trade and Barter Transactions

Trade transactions represent the exchange of commercial air time for products or services, while barter transactions represent the exchange of commercial air time for programming. Trade transactions are generally reported at the estimated fair value of the product or service received, while barter transactions are reported at management’s estimate of the value of the advertising time exchanged, which approximates the fair value of the program material received. Revenue is reported on trade and barter transactions when commercials are broadcast; expenses are reported when products or services are utilized or when programming airs. Trade and barter revenue totaled approximately $3.3 million, $2.5 million and $3.0 million for the years ended December 31, 2008, 2007 and 2006, respectively. Trade and barter expense totaled approximately $3.1 million, $2.5 million and $2.9 million for the years ended December 31, 2008, 2007 and 2006, respectively.

NOTE 6

Receivables

Receivables are summarized as follows (in thousands):

December 31	2008		2007
Trade accounts	$	26,083	$	29,580
Other		1,515		1,769
		27,598		31,349
Less-allowance for doubtful accounts		1,554		851
Total receivables	$	26,044	$	30,498

The Company makes estimates of the uncollectability of accounts receivable, specifically analyzing accounts receivable and historical bad debts, customer credit-worthiness, current economic trends and changes in customer payment terms, when evaluating the adequacy of the allowance for doubtful accounts. In addition to the identification of specific doubtful accounts receivable, the Company provides allowances calculated as a percentage of past-due balances based on historical collection experience.

NOTE 7

Investments in Equity Investee

Investments in entities over which the Company does not have control, but has significant influence, are accounted for using the equity method of accounting. The Company’s investments are reported in the Consolidated Balance Sheets as investment in equity investee and its proportionate share of income or losses is reported as a component of other income, net in the Consolidated Statements of Operations.

The Company owns 50% of the outstanding stock of South West Oregon Broadcasting Corporation (“South West Oregon Television”), licensee of a television station in Roseburg, Oregon. The broadcasting subsidiary serves as manager of the station. The Company’s investment in South West Oregon Television is carried at the initial allocated purchase price, increased by the Company’s 50% share of net operating income, and decreased by distributions received.

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Investment in South West Oregon Television is summarized as follows (in thousands):

Balance, December 31, 2005	$	2,759
Equity in net income		30
Balance, December 31, 2006		2,789
Dividends		(150	)
Equity in net loss		(4	)
Balance, December 31, 2007		2,635
Equity in net income		133
Impairment of investment		(1,468	)
Balance, December 31, 2008	$	1,300

During the fourth quarter of 2008, the Company recognized an impairment charge of $1.5 million on the investment in equity investee as the decline in value of the investment was other than temporary.

NOTE 8

Goodwill and Intangible Assets

The following table summarizes the carrying amount of goodwill and intangible assets (in thousands):

	December 31, 2008							December 31, 2007
	Gross carring amount		Accumulated amortization			Net		Gross carring amount		Accumulated amortization			Net
Goodwill (1)	$	13,293	$	—		$	13,293	$	37,361	$	—		$	37,361
Intangible assets:
Broadcast licenses (1)	$	37,430	$	—		$	37,430	$	42,543	$	—		$	42,543
Intangible assets subject to amortization (2)
Network affiliation agreement		3,560		(260	)		3,300		—		—			—
Other intangible assets		285		—			285		270		(31	)		239
		3,845		(260	)		3,585		270		(31	)		239
Total intangible assets	$	41,275	$	(260	)	$	41,015	$	42,813	$	(31	)	$	42,782

(1) Goodwill and broadcast licenses are considered indefinite-lived assets for which no periodic amortization is recognized. The television and radio broadcast licenses are issued by the FCC and provide the Company with the exclusive right to utilize certain frequency spectrum to air its stations' programming. While FCC licenses are issued for only a fixed time, renewals of FCC licenses have occurred routinely and at nominal cost. Moreover, the Company has determined that there are currently no legal, regulatory, contractual, competitive, economic or other factors that limit the useful lives of its FCC licenses.

(2) Intangible assets subject to amortization are amortized on a straight-line basis. Total amortization expense for intangible assets subject to amortization for the years ended December 31, 2008 and 2007 was $328,000 ($68,000 of which is included in discontinued operations) and $31,000 (all of which is included in discontinued operations), respectively. No amortization was recognized in 2006.

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The following table presents the Company's estimate of amortization expense for each of the next five years and thereafter for intangible assets subject to amortization recorded on its books as of December 31, 2008 (in thousands):

Year ending December 31,
2009	$	293
2010		293
2011		293
2012		293
2013		293
Thereafter		2,120
	$	3,585

The change in the carrying amount of goodwill for the years ended December 31, 2008 and 2007 was as follows (in thousands):

	December 31,
	2008			2007
Beginning balance	$	37,361		$	32,714
Acquisition		14,933			4,647
Disposal		(1,230	)		—
Reclassification of asset		645			—
Impairment		(38,416	)		—
	$	13,293		$	37,361

The change in the carrying amount of intangible assets for the years ended December 31, 2008 and 2007 was as follows (in thousands):

	December 31,
	2008			2007
Beginning balance	$	42,782		$	41,142
Acquisition		36,385			1,671
Disposal		(263	)		—
Amortization		(328	)		(31	)
Reclassification of asset		765			—
Impairment		(38,326	)		—
	$	41,015		$	42,782

The Company follows SFAS 142, which requires the Company to test goodwill and intangible assets for impairment at least annually, or whenever events indicate that impairment may exist. The Company has determined that the impairment test should be conducted at the operating segment level (which is at a reporting unit level), which, with respect to the broadcast operations, requires separate assessment of each of the Company’s television and radio station groups. The Company determines fair value based on valuation methodologies that include an analysis of market transactions for comparable businesses, discounted cash flows, and a review of the underlying assets of the reporting unit.

The Company recorded an impairment charge of $76.7 million during the fourth quarter of 2008 that included an impairment to the carrying values of FCC licenses of $38.0 million, related to five of the Company’s television stations and two of the Company’s radio stations; an impairment to the carrying value of a network affiliation agreement of $340,000, related to one of the Company’s television stations; and an impairment to the

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carrying values of goodwill of $38.4 million, related to six reporting units consisting of 11 of the Company’s television stations and five of the Company’s radio stations. As required by SFAS 142, the Company tested its FCC licenses and goodwill for impairment at December 31, 2008, between the annual impairment tests, because the Company believed events had occurred and circumstances changed that would more likely than not reduce the fair value of the Company’s reporting units below their carrying amounts and that the Company’s FCC licenses might be impaired. These events included: (a) the decline of the price of the Company’s common stock as of December 31, 2008; (b) the decline in overall economic conditions; and (c) the decline in advertising revenues at the Company’s radio and television stations.

In accordance with SFAS 144, the Company tests its network affiliation agreement whenever events or changes in circumstances indicate that its carrying amount may not be recoverable, relying on a number of factors including operating results, business plans, economic projections and anticipated future cash flows. An impairment in the carrying amount of a network affiliation agreement is recognized when the expected future operating cash flow derived from the operation to which the asset relates to is less than its carrying value. The impairment test for a network affiliation agreement consists of a comparison of the carrying amount of the network affiliation agreement with its fair value, using a discounted cash flow analysis.

The impairment test for FCC licenses consists of a station-by-station comparison of the carrying amount of FCC licenses with their fair value, using a discounted cash flow analysis.

The impairment step for goodwill utilizes a two-step fair value approach. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of the combined stations in a market (“reporting unit”) to its carrying amount. The fair value of a reporting unit is determined using a discounted cash flow analysis. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered impaired. If the carrying amount of the reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. The implied fair value of goodwill is determined by performing an assumed purchase price allocation, using the reporting unit’s fair value (as determined in Step 1) as the purchase price. If the carrying amount of goodwill exceeds the implied fair value, an impairment loss is recognized in an amount equal to that excess.

Determining the fair value of our reporting units requires the Company’s management to make a number of judgments about assumptions and estimates that are highly subjective and that are based on unobservable inputs. The actual results may differ from these assumptions and estimates; and it is possible that such differences could have a material impact on the Company’s financial statements. In addition to the various inputs (i.e. market growth, operating profit margins, discount rates) that the Company uses to calculate the fair value of its FCC licenses and reporting units, the Company evaluates the reasonableness of its assumptions by comparing the total fair value of all its reporting units to the Company’s total market capitalization; and by comparing the fair value of its reporting units and FCC licenses to recent sale transactions.

The Company used the income approach to test its FCC licenses for impairments as of December 31, 2008 with the following assumptions: (a) a discount rate of 13.0%; (b) market growth rates ranging from 1.0% – 2.0%; and (c) operating profit margins ranging from 18.0% – 48.0%.

The Company used the income approach to test goodwill for impairments as of December 31, 2008 with the following assumptions: (a) a discount rate of 13.0%; (b) market growth rates ranging from (0.4)% – 2.0%; and (c) operating profit margins ranging from (9.0)% – 48.0%. These assumptions are based on: (a) the actual historical performance of the Company’s stations; (b) management’s estimates of future performance of the Company’s stations; and (c) the same market growth assumptions used in the calculation of the fair value of the Company’s FCC licenses.

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The Company used the income approach to determine the fair value of the network affiliation agreement as of December 31, 2008 with the following assumptions: (a) a discount rate of 13.0%; (b) market growth rate of 1.1%; and (c) operating profit margin of 29.0% – 37.0%.

At December 31, 2008, our total market capitalization was $15.6 million more than our equity book value. We believe that this difference can be attributed to the recent volatility of our stock price in the current economic environment and to the control premium that a market participant may pay to acquire us. Further decreases in our market capitalization could trigger us to test our broadcast licenses and goodwill for further impairment.

As noted above, the Company is required under SFAS 142 to test its indefinite-lived intangible assets on an annual basis or whenever events or changes in circumstances indicate that these assets might be impaired. As a result, if the current economic trends continue and the credit and capital markets continue to be disrupted, it is possible that the Company may need to record further impairments in 2009.

NOTE 9

Property, Plant and Equipment

Property, plant and equipment are summarized as follows (in thousands):

December 31	2008		2007
Building and improvements	$	134,737	$	132,865
Machinery and equipment		123,168		119,478
Land and improvements		8,294		7,369
		266,199		259,712
Less-Accumulated depreciation		117,759		113,704
Total	$	148,440	$	146,008

In 2007, the Company completed a sale-leaseback transaction involving one of its news helicopters. The resulting lease qualifies and is accounted for as a capital lease (See Note 16). The gain on sale of $663,000 has been deferred and is being amortized as an offset to depreciation expense over the life of the lease. Machinery and equipment includes $1,250,000 recorded under this capital lease, offset by deferred gain of $537,000 at December 31, 2008. Accumulated depreciation associated with the capital lease asset totals $238,000 at December 31, 2008.

Property, plant and equipment includes property leased to third parties and to other subsidiaries of the Company. The investment in property held for lease to third parties as of December 31, 2008, consists of Fisher Plaza and includes buildings, equipment and improvements of $143,353,000, and land and improvements of $4,354,000, less accumulated depreciation of $36,384,000. The Company receives rental income principally from the lease of data center, office and retail space under leases and agreements, which expire at various dates through 2019. These leases and agreements are accounted for as operating leases. Minimum future rentals from leases and agreements, which were in effect at December 31, 2008, are as follows (in thousands):

Year	Rentals
2009		4,064
2010		3,920
2011		3,506
2012		3,173
2013		2,380
Thereafter		9,524
	$	26,567

The Company did not capitalize any interest expense in 2008, 2007 or 2006.

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NOTE 10

Long Term Debt

Long-term debt and borrowing agreements

In 2004, the Company issued $150.0 million of 8.625% senior notes due 2014. The notes are unconditionally guaranteed, jointly and severally, on an unsecured, senior basis by the current and future material domestic subsidiaries of the Company (See Note 19). Interest on the notes is payable semiannually in arrears on March 15 and September 15 of each year, commencing March 15, 2005.

Except as described below the notes are not redeemable at the Company’s option prior to September 15, 2009. On or after September 15, 2009, the Company may redeem all or a part of the notes at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest thereon, to the applicable redemption date, if redeemed during the twelve-month period beginning on September 15 of the years indicated below:

Year	Percentage
2009	104.3125	%
2010	102.8750	%
2011	101.4375	%
2012 and thereafter	100.0000	%

The indenture under which the notes were issued contains covenants that, among other things, limit the Company’s ability to:

• incur additional indebtedness;

• make certain asset dispositions;

• make investments or other restricted payments;

• pay dividends or make other distributions on, redeem or repurchase, capital stock;

• issue capital stock of our restricted subsidiaries;

• enter into transactions with affiliates or related persons;

• incur certain liens on assets to secure debt; and

• enter into a merger, sale or consolidation.

These covenants are subject to a number of important qualifications and exceptions as described in the indenture.

On September 20, 2004 the Company also entered into a six-year senior credit facility (the “Revolver”). In December 2008, the Company terminated the Revolver. The Revolver provided for borrowings up to $20.0 million and was secured by substantially all of the Company’s assets (excluding certain real property and the Company’s investment in shares of Safeco Corporation common stock) and by all of the voting stock of its subsidiaries. The Revolver placed limitations on various aspects of the Company’s operations (including, among other things, the payment of dividends to Company stockholders and the Company’s ability to consolidate, merge or sell a substantial part of its assets), required compliance with a cash flow ratio, and required prepayment upon the occurrence of certain events. Amounts borrowed under the Revolver bore interest at variable rates based at the Company’s option, on either (1) the LIBOR rate plus a margin of 250 basis points, or (2) the higher of the prime rate plus 175 basis points or the overnight federal funds rate plus 225 basis points. The Company was in compliance with all debt covenant requirements at December 31, 2007, and no amounts were outstanding under the Revolver as of the termination.

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Total transaction costs of $5,978,000 were capitalized, of which $5,457,000 related to the senior notes, and $521,000 related to the Revolver. The capitalized balances are amortized to interest expense using the effective interest method over 10 years for the senior notes and over 6 years for the Revolver. Upon termination in December 2008, $150,000 in unamortized transaction costs related to the Revolver were charged to interest expense.

Cash paid for interest during 2008, 2007, and 2006 was $13,281,000, $13,428,000 and $13,076,000, respectively.

NOTE 11

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 revenues can change significantly and, accordingly, are reviewed periodically to determine whether impairment is expected over the life of the contract.

At December 31, 2008, the Company had commitments under license agreements amounting to $28,173,000 for future rights to broadcast television and radio programs through 2013. The broadcasting subsidiary has exclusive rights to sell available advertising time for a radio station in Seattle (“Joint Sales Agreement”). Under Joint Sales Agreements, the Company has commitments for monthly payments totaling $4,800,000 through 2011.

Television and radio broadcast rights acquired under contractual arrangements were $18,705,000 and $16,911,000 in 2008 and 2007, respectively. The Company periodically performs impairment tests of its capitalized broadcast rights and as a result recorded a charge of $163,000 in 2008, to write the asset balance down to its estimated net realizable value. No such charges were recorded in 2007 or 2006.

NOTE 12

Stockholders’ Equity

Stock-based compensation cost is measured at grant date, based on the fair value of the award, and recognized over the requisite service period. The Company applied the alternative transition (shortcut) method in calculating its pool of excess tax benefits (APIC pool), as provided for in FASB Staff Position FAS 123(R)-3, Transition Election Accounting for the Tax Effects of Share-Based Payment Awards.

The Company maintains three incentive plans (the “Plans”), the Amended and Restated Fisher Communications Incentive Plan of 1995 (the “1995 Plan”), the Fisher Communications Incentive Plan of 2001 (the “2001 Plan”), and the Fisher Communications Amended and Restated 2008 Equity Incentive Plan (the “2008 Plan”). The 1995 Plan provided that up to 560,000 shares of the Company’s common stock could be issued to eligible key management employees pursuant to options and rights through 2002. The Company issues new shares of common stock upon stock award, option exercise or rights vesting. As of December 31, 2008, options and rights for 123,173 shares, net of forfeitures, had been issued. No further equity awards may be issued pursuant to the 1995 Plan. The 2001 Plan provided that up to 600,000 shares of the Company’s common stock could be issued to eligible key management employees or directors pursuant to awards, options and rights through April 2008. No further equity awards may be issued pursuant to the 2001 Plan. As of December 31, 2008, awards, options and rights for 356,988 shares had been issued, net of forfeitures. No further options and rights will be issued pursuant to the 2001 Plan. The 2008 Plan provides that up to 300,000 shares of the Company’s common stock may be issued to eligible key management employees or directors pursuant to awards, options and rights through 2018. As of December 31, 2008, awards, options and rights for 23,045 shares had been issued, net of forfeitures.

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Stock options    The Plans provide that eligible key management employees may be granted options to purchase the Company’s common stock at the fair market value on the date the options are granted. The outstanding options generally vest over four or five years and generally expire ten years from the date of grant. Non-cash compensation expense of $453,000 ($295,000 after-tax), $372,000 ($242,000 after- tax) and $382,000 ($248,000 after-tax) related to the options was recorded for 2008, 2007 and 2006, respectively.

Restricted stock rights    The Plans also provide that eligible key management employees may be granted restricted stock rights which entitle such employees to receive a stated number of shares of the Company’s common stock. The outstanding rights generally vest over four or five years and expire upon termination of employment. Non-cash compensation expense of $264,000 ($171,000 after-tax), $204,000 ($133,000 after-tax), and $91,000 ($59,000 after-tax) related to the rights was recorded during 2008, 2007 and 2006, respectively.

Stock awards    Beginning with the annual retainer payable for the second quarter of 2007, the Company’s non-employee directors began receiving 25% of their annual retainer in the form of a fully vested stock award for the number of shares of the Company’s common stock determined by dividing the amount of cash compensation to be received in the form of a stock award by the fair market value of the Company’s common stock on the last trading date of each quarter. Non-employee directors are permitted to elect to receive all or any portion of their remaining annual retainer, committee Chair retainer(s), Board of Directors meeting fees and committee meeting fees in the form of a fully vested stock award. In 2008, 4,243 shares of common stock were issued to non-employee directors associated with compensation earned in the first, second and third quarters of 2008, while 2,579 shares were issued in January 2009 associated with director compensation earned in the fourth quarter of 2008. In 2007, 2,025 shares of common stock were issued to non-employee directors associated with compensation earned in the second and third quarters of 2007, while 1,442 shares were issued in January 2008 associated with director compensation earned in the fourth quarter of 2007. Non-cash compensation expense of $201,000 ($131,000 after-tax) and $157,000 ($102,000 after-tax) related to the awards was recorded during 2008 and 2007, respectively.

Determining Fair Value Under SFAS 123(R)

Valuation and Amortization Method.    The Company estimates the fair value of stock option awards granted using the Black-Scholes option valuation model. The Company amortizes the fair value of all awards on a straight-line basis over the requisite service periods, which are generally the vesting periods.

Expected Life.    The expected life of awards granted represents the period of time that they are expected to be outstanding. The Company determines the expected life based primarily on historical experience with similar awards, giving consideration to the contractual terms, vesting schedules, expected exercises and post-vesting forfeitures. Outstanding stock options granted by the Company generally vest 20% per year over five years or 25% per year over four years and have contractual terms of ten years.

Expected Volatility.    The Company estimates the volatility of its common stock at the date of grant based on the historical volatility of its common stock. The volatility factor the Company uses in the Black-Scholes option valuation model is based on its historical stock prices over the most recent period commensurate with the estimated expected life of the award.

Risk-Free Interest Rate.    The Company bases the risk-free interest rate used in the Black-Scholes option valuation model on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award.

Expected Dividend Yield.    The Company uses an expected dividend yield of zero in the Black-Scholes option valuation model.

Expected Forfeitures.    The Company primarily uses historical data to estimate pre-vesting option forfeitures. The Company records stock-based compensation only for those awards that are expected to vest.

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The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. A summary of the weighted average assumptions and results for options granted during the periods presented is as follows:

	Year Ended December 31
	2008			2007			2006
Assumptions:
Weighted average risk-free interest rate		2.8	%		4.5	%		4.6	%
Expected dividend yield		0.00	%		0.00	%		0.00	%
Expected volatility		24.1	%		28.6	%		31.3	%
Expected life of options		6 years			6 years			6 years
Weighted average fair value at date of grant	$	9.17		$	17.15		$	17.25

Stock-based Compensation Under SFAS 123(R)

Stock-based compensation expense related to stock-based awards under SFAS 123(R) for 2008, 2007 and 2006 totaled $918,000, $733,000 and $473,000, respectively, which is included in selling, general and administrative expenses in the Company’s Consolidated Statements of Operations.

As of December 2008, 2007 and 2006, the Company had approximately $2,313,000, $1,554,000 and $1,863,000 respectively, of total unrecognized compensation cost related to non-vested stock-based awards granted under all equity compensation plans. Total unrecognized compensation cost will be adjusted for any future changes in estimated forfeitures. The Company expects to recognize this cost over a period of approximately five years (or a weighted average period of 1.77 years). For awards granted prior to January 1, 2006, the Company utilizes the provisions of APB 25 for which compensation cost is recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award, while compensation cost for awards granted after December 31, 2005 is recognized on a straight-line basis over the requisite service period for the entire award.

Stock Award Activity

A summary of stock options and restricted stock rights for the Plans is as follows:

	Stock Options							Restricted Stock Rights
	Number of Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value		Number of Shares		Weighted Average Grant- Date Fair Value
Outstanding at December 31, 2007	199,505			49.52				17,120			44.73
Options and stock rights granted	100,621			31.07				25,483			30.56
Options exercised/stock rights vested	—							(3,530	)		44.49
Options expired	(25,830	)		37.29				—
Options and stock rights forfeited	(13,860	)		61.31				(7,070	)		37.38
Outstanding at December 31, 2008	260,436		$	42.98	6.42	$	—	32,003		$	35.28
Exercisable at December 31, 2008	120,525		$	50.65	3.90	$	—

The aggregate intrinsic value of options outstanding at December 31, 2008 is calculated as the difference between the market price of the underlying common stock and the exercise price of the options for options that had exercise prices that were lower than the $20.64 closing market price of the Company’s common stock at December 31, 2008. As there were no options with exercise prices lower than the closing market price of the Company’s common stock, the intrinsic value of outstanding options is zero as of December 31, 2008.

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No options were exercised in 2008. The total intrinsic value of options exercised during 2007 and 2006 was $2,000 and $69,000, respectively, determined as of the date of exercise. During 2008, 3,530 restricted stock rights vested, with a total fair value of $98,000. During 2007, 4,630 restricted stock rights vested, with a total fair value of $192,000. During 2006, 850 restricted stock rights vested, with a total fair value of $34,000.

NOTE 13

Income Taxes

Income taxes have been provided as follows (in thousands):

	Year Ended December 31
	2008			2007		2006
Current tax expense (benefit)
Continuing operations	$	39,429		$	3,959	$	465
Discontinued operations		—			—		21
		39,429			3,959		486
Deferred tax expense (benefit)
Continuing operations		(14,596	)		11,944		2,358
Discontinued operations		(575	)		537		5,530
		(15,171	)		12,481		7,888
Total	$	24,258		$	16,440	$	8,374
Income taxes are allocated as follows:
Continuing operations	$	24,833		$	15,903	$	2,823
Discontinued operations		(575	)		537		5,551
	$	24,258		$	16,440	$	8,374

Reconciliation of income taxes computed at federal statutory rates to the reported provisions for income taxes on continuing operations is as follows (in thousands):

	Year Ended December 31
	2008			2007			2006
Normal expense computed at 35% of pretax income	$	24,697		$	16,373		$	3,273
Dividends received deduction		(516	)		(1,022	)		(820	)
State taxes, net of federal tax benefit		(1,390	)		209			733
Change in state tax valuation allowance		2,406			(209	)		(733	)
Pension death and disability benefits, and increases in pension values		(182	)		(276	)		(301	)
Non-deductible expenses		274			361			325
Other		(456	)		467			346
	$	24,833		$	15,903		$	2,823

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Deferred tax liabilities are summarized as follows (in thousands):

December 31	2008			2007
Assets
Accrued employee benefits	$	6,919		$	8,697
Goodwill and intangible assets		14,271
Allowance for doubtful accounts		569			324
Net operating loss carryforwards		1,021			947
Contract termination charge		2,319			1,827
Stock-based compensation		514
Deferred income		3,256
Other		552
		29,421			11,795
Liabilities
Marketable securities					(35,675	)
Property, plant and equipment		(10,411	)		(8,711	)
Goodwill and intangible assets					(10,610	)
Prepaid insurance		(5	)		(424	)
Other		(688	)		(476	)
		(11,104	)		(55,896	)
Valuation allowance		(2,797	)		(388	)
Net	$	15,520		$	(44,489	)
Current		1,763			785
Noncurrent		13,757			(45,274	)
	$	15,520		$	(44,489	)

Due to the uncertainty of the Company’s ability to generate sufficient state taxable income to realize its deferred state tax assets, a valuation allowance has been established for financial reporting purposes. The valuation allowance was $2.8 million and $388,000 at December 31, 2008 and 2007, respectively. As of December 31, 2007, the Company had utilized all of its prior year federal net operating losses.

Net cash paid for income taxes during 2008 was $46.0 million and cash paid for income taxes during 2007 was $1.3 million. Net cash received from income tax refunds during 2006 was $1.0 million.

The Company adopted the provisions of FIN 48 on January 1, 2007. As a result of the implementation of FIN 48, the Company recognized no adjustment in the liability for unrecognized income tax benefits. The U.S. federal statute of limitations remains open for the year 2006 and onward. The IRS is currently conducting a field examination of the Company’s 2006 and 2007 U.S. tax returns. The IRS completed a field examination of the Company’s 2003, 2004 and 2005 U.S. tax returns during March 2008, and the Company paid final notice of settlement in the amount of $68,000. In April 2007, the IRS completed its fieldwork with regards to its examination of the Company’s consolidated federal income tax returns for tax years 1999 – 2002, and the Company agreed upon and paid a final settlement in the amount of $1.1 million. The Company recognizes tax expense related to agreed-upon tax adjustments currently as part of its income tax provision. The Company continues to recognize interest and penalties related to uncertain tax positions in interest expense. A net reduction in interest expense of $135,000, $6,000 and an increase in interest expense of $242,000 was recognized for years ended December 31, 2008, 2007 and 2006, respectively. The revisions to interest expense are a result of final settlement of the IRS examination of the Company’s 1999 – 2005 income tax returns. As of December 31, 2007, the Company had approximately $218,000 of accrued interest related to uncertain tax positions. No such interest was accrued as of December 31, 2008.

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NOTE 14

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 or disability 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 continues to recognize periodic pension cost related to the program, but the amount is lower as a result of the curtailment.

The following provides a reconciliation of benefit obligation and funded status of the Company’s supplemental retirement program (in thousands):

	Year Ended December 31
	2008			2007
Projected benefit obligation, beginning of year	$	19,291		$	18,935
Interest cost		1,099			1,063
Assumption changes		815			192
Actuarial loss		297			240
Benefit payments		(1,198	)		(1,139	)
Projected benefit obligation, end of year	$	20,304		$	19,291
Unfunded status	$	20,304		$	19,291
Accumulated loss		(4,164	)		(3,111	)
Net amount recognized	$	16,140		$	16,180

Amounts recognized in consolidated balance sheets consist of (in thousands):

December 31	2008			2007
Accrued pension liability	$	20,304		$	19,291
Accumulated other comprehensive loss		(4,164	)		(3,111	)
Net amount recognized	$	16,140		$	16,180
Assumptions used to determine pension obligations are as follows:
	2008			2007
Discount rate		5.50	%		5.88	%
Rate of compensation increase		N/A			N/A

In selecting the discount rate, the Company’s policy is to refer to yields available on high-quality, long-term U.S. corporate bonds on the measurement date of December 31, and is intended to reflect prevailing market conditions. At December 31, 2008 and 2007, the Company has estimated its discount rate based on the Moody’s AA long-term corporate bond yield, which is a well established and credible source based upon bonds of appropriate credit quality and similar duration to the Company’s pension obligations.

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

	Year Ended December 31
	2008		2007		2006
Interest cost	$	1,099	$	1,063	$	1,039
Amortization of loss		60		43		154
Net periodic pension cost	$	1,159	$	1,106	$	1,193

Assumptions used to determine net periodic pension costs are as follows:

Weighted-average assumptions used to determine net periodic benefit cost at December 31

	2008		2007		2006
Discount rate	5.88	%	5.80	%	5.48	%
Rate of compensation increase	NA		NA		NA

The accumulated benefit obligation of the Company’s supplemental retirement program was $20,304,000 and $19,291,000 as of December 31, 2008 and 2007, respectively. At December 31, 2008 and 2007, the accumulated benefit obligation of the Company’s supplemental retirement program exceeded plan assets.

Health insurance benefits are provided to certain employees who retire before age 65 and, in certain cases, spouses of retired employees. The accrued postretirement benefit cost was $403,000 and $510,000 as of December 31, 2008 and 2007, respectively. The Company has not accepted new participants into this benefit program since 2001.

The Company estimates that benefits expected to be paid to participants under the supplemental retirement program and postretirement health insurance program are as follows (in thousands):

	Supplemental Retirement Program	Postretirement Health Insurance Program
2009	1,198	56
2010	1,197	60
2011	1,232	65
2012	1,310	70
2013	1,363	47
Next 5 years	7,637	189

The aggregate expected contributions by the Company to fund the supplemental retirement program and postretirement health insurance program for 2009 are $1,198,000 and 56,000, respectively.

The Company has a defined contribution retirement plan which is qualified under Section 401(k) of the Internal Revenue Code. All U.S. employees are eligible to participate. The Company may make a discretionary profit-sharing contribution. Employer contributions to the plan were $818,000 and $735,000 in 2008 and 2007, respectively. The Company did not make a contribution during 2006.

NOTE 15

Segment Information

The Company reports financial data for three reportable segments: television, radio, and Fisher Plaza. The television reportable segment includes the operations of the Company’s owned and operated 20 network-affiliated television stations (including a 50%-owned station) and Internet business, excluding the operations of Pegasus which

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are reported as discontinued operations. The radio reportable segment includes the operations of the Company’s three Seattle radio stations and five radio stations in Montana. Corporate expenses of the broadcasting business unit are allocated to the television and radio reportable segments based on actual expenditures incurred or based on a ratio that approximates historic revenue and operating expenses of the segments. The Fisher Plaza reportable 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.

Certain reclassifications have been made to prior period financial information to conform to the current presentation. Reclassifications include the results of Pegasus News, Inc. from continuing operations to discontinued operations (See Note 2), and the results of the five remaining small-market radio stations from discontinued operations to continuing operations (See Note 2). These reclassifications have no effect on previously reported net income (loss).

Operating results and other financial data for each segment are as follows (in thousands):

Revenue

	Year Ended December 31
Year Ended December 31	2008			2007			2006
Television	$	124,001		$	110,790		$	107,457
Radio		36,719			40,303			39,453
Fisher Plaza		13,122			11,326			9,406
Corporate and eliminations		(51	)		(153	)		221
	$	173,791		$	162,266		$	156,537

Depreciation and amortization

	Year Ended December 31
Year Ended December 31	2008		2007		2006
Television	$	8,053	$	6,990	$	6,016
Radio		1,018		937		918
Fisher Plaza		3,117		3,305		3,116
Corporate and eliminations		515		286		257
	$	12,703	$	11,518	$	10,307

The following table shows segment income (loss) from continuing operations before interest and income taxes (in thousands):

	Year Ended December 31
	2008			2007		2006
Television	$	(61,060	)	$	20,256	$	23,903
Radio		(4,551	)		1,065		1,794
Fisher Plaza		5,472			4,068		2,542
Corporate and eliminations		144,630			35,064		(4,933	)
Total segment income (loss) from continuing operations before interest and income taxes	$	84,491		$	60,453	$	23,306

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

	Year Ended December 31
	2008			2007			2006
Total segment income (loss) from continuing operations before interest and income taxes	$	84,491		$	60,543		$	23,306
Interest expense		(13,928	)		(13,671	)		(13,956	)
Consolidated income (loss) from continuing operations before income taxes	$	70,563		$	46,872		$	9,350

The following tables provide further segment data, as indicated (in thousands):

Total assets

December 31	2008		2007
Television	$	125,633	$	136,341
Radio		16,838		20,030
Fisher Plaza		112,683		117,688
Corporate and eliminations		116,139		209,785
		371,293		483,844
Assets held for sale		—		2,090
	$	371,293	$	485,934

Goodwill

December 31	2008		2007
Television	$	5,077	$	29,145
Radio		8,216		8,216
	$	13,293	$	37,361

Capital expenditures

	Year Ended December 31
	2008		2007		2006
Television	$	6,918	$	4,833	$	8,304
Radio		290		438		841
Fisher Plaza		688		3,488		6,120
Corporate and eliminations		2,395		514		166
	$	10,291	$	9,273	$	15,431

Inter-segment sales amounted to $51,000, $153,000, and $162,000 in 2008, 2007 and 2006, respectively, related primarily to telecommunications fees charged from Fisher Plaza. Corporate assets are principally marketable securities. Capital expenditures are reported exclusive of acquisitions.

No geographic areas outside the United States were significant relative to consolidated sales and other revenue, income from operations or identifiable assets.

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NOTE 16

Commitments and Contingencies

The Company leases office space and equipment under non-cancelable leases. Rental expense was $1,229,000, $1,213,000 and $910,000 in 2008, 2007 and 2006, respectively. Amortization of assets recorded under capital leases was included in depreciation expense. Minimum future payments for all capital and operating leases as of December 31, 2008 are as follows (in thousands):

Year	Capital Leases			Operating Leases
2009		900			1,686
2010		926			1,325
2011		954			1,071
2012		983			847
2013		1,012			745
Thereafter		608			1,549
		5,383		$	7,223
Less executory costs		(4,069	)
Net minimum lease payments		1,314
Less amounts representing interest		(253	)
Present value of net minimum lease payments		1,061
Less current portion of obligations under capital leases		(155	)
Long-term portion of obligations under capital leases	$	906

The current portion of obligations under capital lease is included in other current liabilities in the Consolidated Balance Sheet at December 31, 2008, while the long-term portion is included in other liabilities.

The Company is subject to certain legal proceedings that have arisen in the ordinary course of its business. Management does not anticipate that disposition of these proceedings will have a material effect on the consolidated financial position, results of operations, or cash flows of the Company.

NOTE 17

Subsequent Event

In the first quarter of 2009, the Company repurchased $15.150 million aggregate principal amount of its 8.625% senior notes due 2014, for total consideration of $13.050 million in cash. The Company will record a gain of $1,792,000 in 2009 in connection with these repurchases, net of a charge for related unamortized debt issuance costs of $308,000.

NOTE 18 (unaudited)

Interim Financial Information

The Company separately reports as discontinued operations the historical operating results attributable to media properties sold or held for sale and the applicable gain or loss on the disposition of the properties.

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Quarterly financial information for fiscal 2008 and 2007 is presented in the following table. Data may not add due to rounding (in thousands, except per-share amounts).

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Annual
Revenue
2008	$	38,055		$	45,694		$	42,297		$	47,745		$	173,791
2007	$	34,673		$	41,786		$	41,286		$	44,521		$	162,266
Income (loss) from continuing operations
2008	$	(820	)	$	63,930		$	29,993		$	(47,373	)	$	45,730
2007	$	(1,228	)	$	775		$	(336	)	$	31,668		$	30,879
Income from discontinued operations
2008	$	(246	)	$	(256	)	$	(218	)	$	(352	)	$	(1,072	)
2007	$	(17	)	$	1,481		$	(197	)	$	(272	)	$	995
Net income (loss)
2008	$	(1,066	)	$	63,674		$	29,775		$	(47,725	)	$	44,658
2007	$	(1,245	)	$	2,256		$	(533	)	$	31,396		$	31,874
Income (loss) per share—basic:
From continuing operations
2008	$	(0.09	)	$	7.32		$	3.43		$	(5.42	)	$	5.23
2007	$	(0.14	)	$	0.09		$	(0.04	)	$	3.63		$	3.54
From discontinued operations
2008	$	(0.03	)	$	(0.03	)	$	(0.02	)	$	(0.04	)	$	(0.12	)
2007	$	—		$	0.17		$	(0.02	)	$	(0.03	)	$	0.11
Net income (loss)
2008	$	(0.12	)	$	7.29		$	3.41		$	(5.46	)	$	5.11
2007	$	(0.14	)	$	0.26		$	(0.06	)	$	3.60		$	3.65
Income (loss) per share, assuming dilution:
From continuing operations
2008	$	(0.09	)	$	7.32		$	3.43		$	(5.42	)	$	5.23
2007	$	(0.14	)	$	0.09		$	(0.04	)	$	3.63		$	3.54
From discontinued operations
2008	$	(0.03	)	$	(0.03	)	$	(0.02	)	$	(0.04	)	$	(0.12	)
2007	$	—		$	0.17		$	(0.02	)	$	(0.03	)	$	0.11
Net income (loss)
2008	$	(0.12	)	$	7.29		$	3.41		$	(5.46	)	$	5.11
2007	$	(0.14	)	$	0.26		$	(0.06	)	$	3.60		$	3.65

Income from continuing operations for the second quarter of 2008 includes a $103.6 million pre-tax gain resulting from the sale of 1,548,956 shares of Safeco Corporation common stock, and is net of a $5.0 million pre-tax non-cash charge resulting from the change in national advertising representation firm and a $1.0 million pre-tax charge for the forfeiture of a non-refundable deposit to purchase television stations. Income from continuing operations for the third quarter of 2008 includes a $49.0 million pre-tax gain resulting from the sale of 753,720 shares of Safeco Corporation common stock. Income from continuing operations for the fourth quarter of 2008 is net of a $78.2 million pre-tax charge for impairment of goodwill, intangible assets and investment in equity investee.

Income from continuing operations for the fourth quarter of 2007 includes a $40.4 million pre-tax gain resulting from the sale of 699,700 shares of Safeco Corporation common stock. Income from discontinued operations for the second quarter of 2007 includes a gain on sale of a radio station of $1.5 million, net of income taxes.

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Certain reclassifications have been made to prior period financial information to conform to the current presentation. Reclassifications include the results of Pegasus News, Inc. from continuing operations to discontinued operations (See Note 2), and the results of the five remaining small-market radio stations from discontinued operations to continuing operations (See Note 2). These reclassifications have no effect on previously reported net income (loss).

NOTE 19

Financial Information for Guarantors

In 2004 the Company completed the private placement of $150.0 million of 8.625% senior notes due 2014 to qualified institutional buyers pursuant to Rule 144A of the Securities Act. The Company exchanged the notes for freely tradable notes registered under the Securities Act on February 2, 2005. The notes are unconditionally guaranteed, jointly and severally, on an unsecured, senior basis by the current and future material domestic subsidiaries of the Company. Interest on the notes is payable semiannually in arrears on March 15 and September 15 of each year, commencing March 15, 2005.

Presented below are condensed consolidated statements of operations and cash flows for 2008, 2007 and 2006 and the condensed consolidated balance sheets as of December 31, 2008 and 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.

Certain reclassifications have been made to prior period financial information to conform to the current presentation. Reclassifications include certain employment-related expenses from “Selling, general and administrative expenses” to “Direct operating costs” (See Note 1), the results of Pegasus News, Inc. from continuing operations to discontinued operations (See Note 2), and the results of the five remaining small-market radio stations from discontinued operations to continuing operations (See Note 2). These reclassifications have no effect on previously reported net income (loss), shareholders’ equity, cash flows from operating, or investing or financing activities.

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Financial Information for Guarantors

Condensed Consolidated Statement of Operations

for the year ended December 31, 2008

(in thousands, except per-share amounts)	Fisher Communications, Inc.			100% Owned Guarantor Subsidiaries			Eliminations			Fisher Communications, Inc. and Subsidiaries
Revenue	$			$	173,798		$	(7	)	$	173,791
Costs and expenses
Direct operating costs		347			69,265			198			69,810
Selling, general and administrative expenses		12,276			53,788			(205	)		65,859
Impairment of goodwill and intangible assets					76,742						76,742
Impairment of investment in equity investee					1,468						1,468
Amortization of program rights					19,288						19,288
Depreciation and amortization		1,118			11,585						12,703
		13,741			232,136			(7	)		245,870
Income (loss) from operations		(13,741	)		(58,338	)					(72,079	)
Other income, net		156,357			213						156,570
Equity in income of subsidiaries		(39,435	)					39,435			—
Interest expense, net		(13,840	)		(88	)					(13,928	)
Income (loss) from continuing operations before income taxes		89,341			(58,213	)		39,435			70,563
Provision for federal and state income taxes		44,683			(19,850	)					24,833
Income (loss) from continuing operations		44,658			(38,363	)		39,435			45,730
Income from discontinued operations net of income taxes					(1,072	)					(1,072	)
Net income (loss)	$	44,658		$	(39,435	)	$	39,435		$	44,658

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Financial Information for Guarantors

Condensed Consolidated Statement of Operations

for the year ended December 31, 2007

(in thousands, except per-share amounts)	Fisher Communications, Inc.			100% Owned Guarantor Subsidiaries			Eliminations			Fisher Communications, Inc. and Subsidiaries
Revenue	$			$	162,285		$	(19	)	$	162,266
Costs and expenses
Direct operating costs					61,855			199			62,054
Selling, general and administrative expenses		9,893			45,568			(218	)		55,243
Amortization of program rights					18,686						18,686
Depreciation and amortization		286			11,232						11,518
		10,179			137,341			(19	)		147,501
Income (loss) from operations		(10,179	)		24,944						14,765
Other income, net		45,209			479						45,688
Equity in income of subsidiaries		17,083						(17,083	)		—
Interest expense, net		(13,639	)		(32	)					(13,671	)
Income (loss) from continuing operations before income taxes		38,474			25,391			(17,083	)		46,782
Provision (benefit) for federal and state income taxes		6,600			9,303						15,903
Income (loss) from continuing operations		31,874			16,088			(17,083	)		30,879
Income from discontinued operations net of income taxes					995						995
Net income (loss)	$	31,874		$	17,083		$	(17,083	)	$	31,874

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Financial Information for Guarantors

Condensed Consolidated Statement of Operations

for the year ended December 31, 2006

(in thousands, except per-share amounts)	Fisher Communications, Inc.			100% Owned Guarantor Subsidiaries			Eliminations			Fisher Communications, Inc. and Subsidiaries
Revenue	$			$	156,550		$	(13	)	$	156,537
Costs and expenses
Direct operating costs					58,351			177			58,528
Selling, general and administrative expenses		8,496			41,324			(190	)		49,630
Amortization of program rights					18,646						18,646
Depreciation and amortization		257			10,050						10,307
		8,753			128,371			(13	)		137,111
Income (loss) from operations		(8,753	)		28,179						19,426
Other income, net		3,498			382						3,880
Equity in income of subsidiaries		28,577						(28,577	)
Interest expense, net		(13,951	)		(5	)					(13,956	)
Income (loss) from continuing operations before income taxes		9,371			28,556			(28,577	)		9,350
Provision (benefit) for federal and state income taxes		(7,465	)		10,288						2,823
Income (loss) from continuing operations		16,836			18,268			(28,577	)		6,527
Income from discontinued operations net of income taxes					10,309						10,309
Net income (loss)	$	16,836		$	28,577		$	(28,577	)	$	16,836

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Financial Information for Guarantors

Condensed Consolidated Balance Sheet

as of December 31, 2008

(in thousands)	Fisher Communications, Inc.			100% Owned Guarantor Subsidiaries		Eliminations			Fisher Communications, Inc. and Subsidiaries
ASSETS
Current Assets
Cash and cash equivalents	$	31,141		$	694	$			$	31,835
Short term investments		59,697								59,697
Receivables, net					26,044					26,044
Due from affiliate					14,473		(14,473	)
Income tax receivable		2,462			301					2,763
Deferred income taxes		520			1,243					1,763
Prepaid expenses and other assets		176			2,024					2,200
Television and radio broadcast rights					6,106					6,106
Total current assets		93,996			50,885		(14,473	)		130,408
Restricted cash
Marketable securities, at market value					769					769
Investment in consolidated subsidiaries		231,282					(231,282	)
Cash value of life insurance and retirement deposits		17,425								17,425
Television and radio broadcast rights					48					48
Goodwill, net					13,293					13,293
Intangible assets					41,015					41,015
Investments in equity investee					1,300					1,300
Deferred income taxes		8,622			5,135					13,757
Deferred financing fees and other assets		3,123			1,715					4,838
Property, plant and equipment, net		2,908			145,532					148,440
Total Assets	$	357,356		$	259,692	$	(245,755	)	$	371,293
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Trade accounts payable	$	1,002		$	3,337	$			$	4,339
Due to affiliate		14,473					(14,473	)
Accrued payroll and related benefits		499			3,802					4,301
Interest payable		3,773								3,773
Television and radio broadcast rights payable					6,124					6,124
Current portion of accrued retirement benefits		1,254								1,254
Other current liabilities		1,855			3,857					5,712
Total current liabilities		22,856			17,120		(14,473	)		25,503
Long-term debt		150,000								150,000
Accrued retirement benefits		19,439								19,439
Other liabilities		317			11,290					11,607
Stockholders’ Equity
Common stock		10,922			1,131		(1,131	)		10,922
Capital in excess of par		11,140			164,234		(164,234	)		11,140
Accumulated other comprehensive income—net of income taxes:
Unrealized gain on marketable securities		(158	)							(158	)
Accumulated loss		(2,545	)							(2,545	)
Prior service cost		(178	)							(178	)
Retained earnings		145,563			65,917		(65,917	)		145,563
Total Stockholders’ Equity		164,744			231,282		(231,282	)		164,744
Total Liabilities and Stockholders’ Equity	$	357,356		$	259,692	$	(245,755	)	$	371,293

95

Financial Information for Guarantors

Condensed Consolidated Balance Sheet

as of December 31, 2007

(in thousands)	Fisher Communications, Inc.			100% Owned Guarantor Subsidiaries		Eliminations			Fisher Communications, Inc. and 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, net					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

96

Financial Information for Guarantors

Condensed Consolidated Statement of Cash Flows

for the Year Ended December 31, 2008

(in thousands)	Fisher Communications, Inc.			100% Owned Guarantor Subsidiaries			Eliminations		Fisher Communications, Inc. and Subsidiaries
Net cash provided by operating activities	$	(36,077	)	$	6,848		$		$	(29,229	)
Cash flows from investing activities
Purchase of marketable securities					(104	)				(104	)
Purchase of investments held for sale		(58,909	)							(58,909	)
Proceeds from sale of marketable securities		153,403			110					153,513
(Increase) decrease in restricted cash		52,365								52,365
Proceeds from sale of radio stations					1,460					1,460
Deposit paid for purchase of television stations										—
Purchase of television stations		(52,365	)							(52,365	)
Purchase of online news service										—
Proceeds from sale of property, plant and equipment										—
Purchase of domain names					(285	)				(285	)
Purchase of property, plant and equipment		(2,394	)		(7,897	)				(10,291	)
Net cash used in investing activities		92,100			(6,716	)		—		85,384
Cash flows from financing activities
Borrowings under borrowing agreements		21,000								21,000
Payments on borrowing agreements		(21,000	)							(21,000	)
Cash dividends paid		(30,686	)							(30,686	)
Payment of capital lease obligation					(144	)				(144	)
Net cash provided by (used in) financing activities		(30,686	)		(144	)				(30,830	)
Net increase (decrease) in cash and cash equivalents		25,337			(12	)				25,325
Cash and cash equivalents, beginning of period		5,804			706					6,510
Cash and cash equivalents, end of period	$	31,141		$	694				$	31,835

97

Financial Information for Guarantors

Condensed Consolidated Statement of Cash Flows

for the Year Ended December 31, 2007

(in thousands)	Fisher Communications, Inc.			100% Owned Guarantor Subsidiaries			Eliminations			Fisher Communications, Inc. and Subsidiaries
Net cash provided by operating activities	$	9,492		$	6,604		$	1,067		$	17,163
Cash flows from investing activities
Purchase of marketable securities					(924	)					(924	)
Proceeds from sale of marketable securities		40,598			411						41,009
(Increase) decrease in restricted cash		(52,365	)		8,473						(43,892	)
Proceeds from sale of radio stations					2,869						2,869
Deposit paid for purchase of television stations					(2,750	)					(2,750	)
Purchase of television stations					(4,931	)					(4,931	)
Purchase of online news service					(1,482	)					(1,482	)
Proceeds from sale of property, plant and equipment					1,250						1,250
Purchase of property, plant and equipment		(504	)		(8,769	)					(9,273	)
Net cash used in investing activities		(12,271	)		(5,853	)					(18,124	)
Cash flows from financing activities
Borrowings under borrowing agreements		6,000									6,000
Payments on borrowing agreements		(6,000	)								(6,000	)
Payment of capital lease obligation					(45	)					(45	)
Proceeds from exercise of stock options		39									39
Net cash provided by (used in) financing activities		39			(45	)		—			(6	)
Net increase (decrease) in cash and cash equivalents		(2,740	)		706			1,067			(967	)
Cash and cash equivalents, beginning of period		8,544						(1,067	)		7,477
Cash and cash equivalents, end of period	$	5,804		$	706		$	—		$	6,510

98

Financial Information for Guarantors

Condensed Consolidated Statement of Cash Flows

for the Year Ended December 31, 2006

(in thousands)	Fisher Communications, Inc.			100% Owned Guarantor Subsidiaries			Eliminations			Fisher Communications, Inc. and Subsidiaries
Net cash provided by (used in) operating activities	$	4,481		$	21,319		$	(1,067	)	$	24,733
Cash flows from investing activities
Proceeds from sale of radio stations					23,238						23,238
Purchase of television stations					(35,681	)					(35,681	)
Option payment for purchase of television stations					(1,100	)					(1,100	)
Increase in restricted cash					(8,473	)					(8,473	)
Purchase of property, plant and equipment		(166	)		(15,265	)					(15,431	)
Net cash used in investing activities		(166	)		(37,281	)					(37,447	)
Cash flows from financing activities
Borrowings under borrowing agreements		15,000									15,000
Payments on borrowing agreements		(15,000	)								(15,000	)
Excess tax benefit from exercise of stock options		23									23
Proceeds from exercise of stock options		546									546
Net cash provided by financing activities		569			—						569
Net increase (decrease) in cash and cash equivalents		4,884			(15,962	)		(1,067	)		(12,145	)
Cash and cash equivalents, beginning of period		3,660			15,962						19,622
Cash and cash equivalents, end of period	$	8,544		$	—		$	(1,067	)	$	7,477

99

Schedule II

FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

Valuation and Qualifying Accounts

(in thousands)

Year Ended December 31	2008			2007			2006
Allowance for doubtful accounts
Balance at beginning of year	$	851		$	461		$	503
Additions charged to expense		1,813			681			694
Balances written off, net of recoveries		(1,110	)		(291	)		(736	)
Balance at end of year	$	1,554		$	851		$	461

100

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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, on the 16th day of March, 2009.

FISHER COMMUNICATIONS, INC. (Registrant)
By:	/s/    COLLEEN B. BROWN
	Colleen B. Brown President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:

Signatures	Title	Date
/s/    COLLEEN B. BROWN         Colleen B. Brown	President, Chief Executive Officer and Director (Principal Executive Officer)	March 16, 2009
/s/    JOSEPH L. LOVEJOY         Joseph L. Lovejoy	Senior Vice President and Chief Financial Officer (Principal Financial Officer)	March 16, 2009
/s/    HASSAN N. NATHA         Hassan N. Natha	Vice President Finance (Principal Accounting Officer)	March 16, 2009
/s/    DEBORAH L. BEVIER         Deborah L. Bevier	Director	March 16, 2009
/s/    PHELPS K. FISHER         Phelps K. Fisher	Director	March 16, 2009
/s/    DONALD G. GRAHAM, III         Donald G. Graham, III	Director	March 16, 2009
/s/    RICHARD L. HAWLEY         Richard L. Hawley	Director	March 16, 2009
/s/    BRIAN P. MCANDREWS         Brian P. McAndrews	Director	March 16, 2009
Jerry A. St. Dennis	Director
/s/    GEORGE F. WARREN, JR.         George F. Warren, Jr.	Director	March 16, 2009
/s/    WILLIAM W. WARREN, JR.         William W. Warren, Jr.	Director	March 16, 2009
/s/    MICHAEL D. WORTSMAN         Michael D. Wortsman	Director	March 16, 2009

101

EXHIBIT INDEX

Exhibit No.	Description
2.1*	Asset Purchase Agreement dated August 3, 2007 between Westwind Communications L.L.C. and Fisher Broadcasting Company (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 (File No. 000-22439)).
3.1*	Articles of Incorporation, as amended to date (filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 (File No. 000-22439)).
3.2*	Bylaws as of April 26, 2007 (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 2, 2007 (File No. 000-22439)).
4.1*	Indenture relating to Fisher Communications, Inc.’s 8.625% Senior Notes Due 2014, dated as of September 20, 2004 (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on September 21, 2004 (File No. 000-22439)).
4.2*	Form of Fisher Communications, Inc.’s 8.625% Exchange Note due 2014 (filed as Exhibit 4.3 to the Company’s Registration Statement on Form S-4 filed on December 20, 2004 (Registration No. 333-121432)).
4.3*	Form of Common Stock Certificate (filed as Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 (File No. 000-22439)).
4.4*	Registration Rights Agreement among Fisher Communications, Inc., its domestic subsidiaries listed on Schedule 1 thereto, and Wachovia Securities, Inc., dated September 20, 2004 (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated September 20, 2004) (File No. 000-22439)).
10.1*+	Amended and Restated Fisher Communications, Inc. Supplemental Pension Plan, dated December 31, 2005 (filed as Exhibit 3.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005 (File No. 000-22439)).
10.2+	First Amendment to Amended and Restated Fisher Communications, Inc. Supplemental Pension Plan, dated as of December 3, 2007 (filed herewith)
10.3*	Form of Affiliation Agreement between CBS Television Network and Retlaw Enterprises, Inc. regarding KIMA-TV, KBCI-TV, KIDK-TV, KVAL-TV, KCBY-TV and KPIC-TV (filed as Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999 (File No. 000-22439)).
10.4*	Primary Television Affiliation Agreement, dated April 17, 1995, between the Company and American Broadcasting Companies, Inc. (“ABC”) regarding KOMO-TV (filed as Exhibit 10.1 to the Company’s Registration Statement on Form 10 filed on April 25, 1997 (File No. 000-22439)).
10.5*	Primary Television Affiliation Agreement, dated April 17, 1995, between the Company and ABC regarding KATU-TV (filed as Exhibit 10.2 to the Company’s Registration Statement on Form 10 filed on April 25, 1997 (File No. 000-22439)).
10.6	Station Affiliation Agreement, dated December 9, 2005, as amended on December 10, 2005, between FOX Broadcasting Company and Westwind Communications, L.L.C. regarding KBFX-CA (filed herewith).
10.7	Affiliation Agreement, dated as of December 4, 1995, as amended, between CBS Television Network and Westwind Communications, L.L.C. regarding KBAK-TV (filed herewith).
10.8*+	Amended and Restated Fisher Communications Incentive Plan of 1995 (filed as Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 (File No. 000-22439)).

102

Exhibit No.	Description
10.9*+	Amended and Restated Fisher Communications Incentive Plan of 2001 (filed as Appendix A to the Company’s definitive proxy statement on Schedule 14A filed on March 21, 2007 (File No. 000-22439)).
10.10*+	Fisher Communications, Inc. Amended and Restated 2008 Equity Incentive Plan (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 23, 2008 (File No. 000-22439)).
10.11*+	Form of Non-Qualified Stock Option Contract for grants made pursuant to the Amended and Restated Fisher Communications Incentive Plan of 2001 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 13, 2005 (File No. 000-22439)).
10.12*+	Form of Restricted Stock Rights Agreement for grants made pursuant to the Amended and Restated Fisher Communications Incentive Plan of 2001 (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 13, 2005 (File No. 000-22439)).
10.13*+	Form of Stock Option Grant Notice and Agreement for grants made pursuant to the Fisher Communications, Inc. Amended and Restated 2008 Equity Incentive Plan (filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 (File No. 000-22439)).
10.14*+	Form of Restricted Stock Unit Award Notice and Agreement for grants made pursuant to the Fisher Communications, Inc. Amended and Restated 2008 Equity Incentive Plan (filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 (File No. 000-22439)).
10.15*+	Terms of Equity Grant Program for Non-Employee Directors under the Fisher Communications, Inc. Amended and Restated 2008 Equity Incentive Plan (filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 (File No. 000-22439)).
10.16*†	Renewal Letter Agreements dated May 6, 2005 between American Broadcasting Companies, Inc. and Fisher Broadcasting Company, Inc. (filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 (File No. 000-22439)).
10.17*†	Renewal Letter Agreement dated January 6, 2006 between CBS Television and Fisher Broadcasting—Oregon TV LLC (filed as Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 000-22439)).
10.18*†	Renewal Letter Agreement dated January 6, 2006 between CBS Television and Fisher Broadcasting—Washington TV LLC. (filed as Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 000-22439)).
10.19*†	Renewal Letter Agreement dated January 6, 2006 between CBS Television and Fisher Broadcasting - Idaho TV LLC (filed as Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 000-22439)).
10.20*†	Renewal Letter Agreement dated January 6, 2006 between CBS Television and Fisher Broadcasting - S.E. Idaho TV LLC (filed as Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 000-22439)).
10.21*	Renewal Letter Agreements dated May 6, 2005 between ABC and the Company regarding KOMO-TV and KATU-TV (filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2005 (File No. 000-22439)).
10.22+	Amended and Restated Change in Control Severance Agreement with Colleen B. Brown, effective as of December 31, 2008 (filed herewith).
10.23*+	Offer Letter to Colleen B. Brown, dated October 3, 2005 (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 7, 2005 (File No. 000-22439)).

103

Exhibit No.	Description
10.24*+	Offer Letter to Hassan N. Natha, dated November 6, 2008 (filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on December 16, 2008 (File No. 000-22439)).
10.25+	Fisher Communications, Inc. 2008 Management Short-Term Incentive Plan, as amended and restated on December 9, 2008 (filed herewith).
10.26*+	Summary of Non-Employee Director Fees (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 (File No. 000-22439)).
10.27*+	Offer Letter to S. Mae Fujita Numata, dated October 20, 2006 (filed as Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006 (File No. 000-22439)).
10.28+	Fisher Communications, Inc. 2009 Management Short-Term Incentive Plan (filed herewith).
21.1	Subsidiaries of the Registrant.
23.1	Consent of PricewaterhouseCoopers LLP.
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
32.1	Section 1350 Certification of Chief Executive Officer.
32.2	Section 1350 Certification of Chief Financial Officer.

* Incorporated herein by reference.

+ Management contract or compensatory plan or arrangement.

† Certain information in this exhibit has been omitted and filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request under 17 C.F.R. Sections 200.80(b)(4), 200.83 and 230.406.

104

EX-10.2

Exhibit 10.2

FIRST AMENDMENT TO THE

AMENDED AND RESTATED

FISHER COMMUNICATIONS, INC.

SUPPLEMENTAL PENSION PLAN

THIS FIRST AMENDMENT (“First Amendment”) is made this 3^rd day of December, 2007 by Fisher Communications, Inc. (“Company”), a corporation duly organized and existing under the laws of the state of Washington.

Recitals

A. Company is the sponsor of the Amended and Restated Fisher Communications, Inc. Supplemental Pension Plan (“Restated Plan”).

B. The original Plan was established as of the 29^th day of February, 1996, and restated on December 5, 2001, and again on February 12, 2005. It was subsequently amended on December 1, 2004 and again on June 10, 2005. It was last amended and restated as of the 31^st day of December, 2005.

C. Pursuant to and as permitted by Section 21 of the Restated Plan, Company wishes to amend the Restated Plan to comply with the requirements imposed on nonqualified deferred compensation plans by the American Jobs Creation Act of 2004, as codified in § 409A of the U.S. Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder, and to correct a clerical error in the Restated Plan.

Amendments

1. Section 2(c)(iii) of Restated Plan Amended. Section 2(c)(iii) of the Restated Plan is hereby amended to read as follows in its entirety:

“(iii) Elective Contributions. Elective contributions are amounts excludable from the employee’s gross income under Code § 125or treated as an “elective deferral” under Code § 402(g)(3) and contributed by the employer, at the employee’s election, to a Code § 401(k) arrangement or cafeteria plan.”

2. Section 3, Third Full Paragraph, of Restated Plan Amended. The third full paragraph of Section 3 of the Restated Plan is hereby amended to read as follows in its entirety:

“If a Participant’s employment with the Company is terminated, other than voluntarily, prior to attaining age sixty-five (65), for any reason other than death or total and permanent disability, the Participant’s accrued benefit shall be paid in the form of a monthly annuity commencing at age sixty-five (65). Any annuity shall be payable under the same terms and conditions as contemplated by Paragraph 2 of this Plan; provided, however that payments shall only continue until the death of the Participant’s surviving spouse if (i) the beneficiary designated in Paragraph 7 below is the Participant’s surviving spouse, and (ii) the Participant was married to said spouse on the Participant’s termination date.”

1

Exhibit 10.2

3. New Section 5(d) Added to Restated Plan. The following new Section 5(d) is hereby added to the Restated Plan:

“(d) Notwithstanding any contrary provisions of this Plan, whenever the terms “disabled” and “disability” are used in the Plan, such terms shall mean, with respect to a Participant, that the Participant is (i) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company.”

4. Section 8(b) of Restated Plan Deleted. Section 8(b) of the Restated Plan is hereby deleted in its entirety.

5. Remaining Provisions of Restated Plan Unchanged. Except as specifically described in this First Amendment, the Plan shall remain in full force and effect as before the Amendment.

6. Effective Date. This First Amendment is intended to bring the Restated Plan into compliance with § 409A of the U.S. Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder and shall have retroactive effect to January 1, 2004.

IN WITNESS WHEREOF, the Company has executed this Amendment on the date set forth in the first paragraph hereof.

FISHER COMMUNICATIONS, INC. a Washington corporation
By	/s/ Colleen B. Brown
	Colleen B. Brown
	President and Chief Executive Officer

2

EX-10.6

Exhibit 10.6

AMENDMENT TO FOX BROADCASTING COMPANY (“FOX”)

STATION AFFILIATION AGREEMENT REGARDING

NETWORK NONDUPLICATION PROTECTION

For and in consideration of their mutual undertakings, the undersigned parties hereby agree to amend their Station Affiliation Agreement as follows:

As provided in the FCC’s network nonduplication rules, Licensee shall by the terms of this Amendment be entitled to invoke protection against the simultaneous duplication of Fox programming by any other television signal carried by a cable system located, in whole or in part, within the geographic zone described herein. For the duration of the Fox Station Affiliation Agreement for Television Station KBFX-TV (the term of which commences on the date upon which the FCC Broadcast License for Station, and ownership of Station, is transferred to Westwind Communications L.L.C.), such right shall apply to all Fox programming broadcast “in pattern” by Television Station KBAK-DT; provided, however, that each time, if any, that Fox elects to extend the duration of said Affiliation Agreement for an additional two (2) year period, pursuant to said Affiliation Agreement, Fox may elect, in its sole discretion, to terminate this Amendment (while extending said Affiliation Agreement) effective as of the expiration of the then-current contract period under said Affiliation Agreement, by written notice given to Licensee at the time Fox makes said election to extend said Afiliation Agreement. Licensee shall be entitled to invoke nonduplication protection in the area within 55 miles of the FCC’s reference point for Bakersfield, CA; provided, however, that Licensee shall not invoke said nonduplication protection beyond the boundaries designated as the Bakersfield, CA Designated Market Area (“DMA”) as defined by Nielsen in May, 1999.

Date:     12/10/05	/s/ SIGNATURE
	For Westwind Communications, L.L.C.
Date:     12/10/05	/s/ SIGNATURE
	For Fox Broadcasting Company

Exhibit 10.6

FOX BROADCASTING COMPANY

STATION AFFILIATION AGREEMENT

December 9, 2005

Westwind Communications L.L.C.

KBFX-LP-TV

1901 Westwind DriveBakersfield, CA 93301

Attention:    General Manager

This sets forth the terms and conditions of the agreement between Fox Broadcasting Company (“Fox”), on behalf of itself, and Fox News Network, L.L.C. (“FNN”), on the one hand, and Westwind Communications L.L.C. (“Licensee”), on the other hand, for the carriage of programming over the facilities of Licensee’s television station KBFX-LP-TV (“Station”). As used in this Agreement, the terms “program”, “programming” and “Fox programming” and any derivations thereof shall mean, unless specifically indicated otherwise, the programming of Fox.

1. Fox Programming: Fox will deliver to the Station for free over-the-air television broadcasting, programming which Fox makes available to Station for broadcasting in the community to which Station is presently licensed by the FCC, which is Bakersfield, CA. The selection, scheduling, substitution and withdrawal of any program or portion thereof shall at all times remain within Fox’s sole discretion and control. Licensee shall not and shall not authorize others to broadcast or otherwise use any program (or part thereof) or other material supplied by Fox except as specified in this Agreement, and without limiting the foregoing, Station may broadcast Fox programming only: (i) as scheduled by Fox, (ii) over Station’s facilities in the Community specified above in this Paragraph 1 (“Station’s Community”), and (iii) by free over-the-air television broadcasting.

2. Delivery: Fox will transmit the programming hereunder by satellite and shall keep Licensee apprised of both the satellite and transponder being used for that transmission. Any and all costs of whatever kind that Station incurs to pick up the programming from the satellite and rebroadcast it shall be the sole responsibility of Licensee.

3. Carriage & Preemption:

(a) (1) On the dates and at the times scheduled by Fox, Licensee agrees to broadcast over Station’s facilities in its entirety, in the form transmitted by Fox, without interruption, deletion, compression, addition, squeezing,

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Exhibit 10.6

alteration or other changes (except for adding Licensee’s commercial and public service announcements to the extent permitted by this Agreement) the Fox programs and Program-Related Material (as defined in Paragraph 3(a)(2) hereof), delivered by Fox to Station during Programmed Time Periods and New Programmed Time Periods in accordance with this Agreement (including without limitation, all commercial announcements, Fox i.d.’s, and Fox promos and credits).

(2)

Without limitation of subparagraph (1) immediately above, Station must not, in retransmitting the Fox programs or other content, degrade or otherwise alter the program’s or content’s video, audio and other components. Station acknowledges that upon commencement of operation of Station’s digital television signal (“DTV channel”), Station will, to the same extent as this Agreement provides for carriage of Fox programming on its analog channel, carry on such DTV channel the digital feed of such Fox programming as and in the technical format provided by Fox consistent with the ATSC standards and all Program-Related Material (collectively, the “Network Digital Feed”). As used herein, Program-Related Material shall mean the following content, data or information which is transmitted concurrently or substantially concurrently with the Fox programs: (i) closed-captioning information, (ii) program identification codes, (iii) the FCC Redistribution Control Descriptor and other such protection systems, (iv) program ratings information, (v) alternative language feeds related to the programming, (vi) Nielsen data, (vii) programming, data and other enhancements which are related to the programming and network advertisements provided in the Network Digital Feed, (viii) such other materials as has been agreed by a majority (calculated by DMA percentage) of Fox affiliated television stations (but not including stations owned and operated by corporate affiliates of Fox), (ix) such other material as may be provided by Fox that is necessary to provide the Network Digital Feed, (x) information and material directly associated with specific network commercial advertisements contained in the network programs included in the Network Digital Feed, and (xi) information and material designed to promote network programming. In the event that Fox proposes that any station or stations carry network multiplexed programming or ancillary data that is not Program-Related Material, Station agrees to negotiate in good faith with Fox regarding the terms pursuant to which such multiplexed programming or ancillary data may be carried. Station shall commence operation of Station’s digital television signal by the earlier of (i) within nine (9) months of the date that Station receives FCC authorization to broadcast a digital signal which decision shall have become a final decision not subject to review or appeal or (ii) the date the FCC requires commencement of operation of Station’s

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Exhibit 10.6

		digital television signal, or any extension or postponement of such date mandated or approved by the FCC; to the extent that a Station is not transmitting a DTV channel as of the earlier of such dates, Fox shall be permitted to offer the Network Digital Feed, together with any Program-Related Material or other material provided by Fox for digital transmission, to any licensee transmitting a DTV channel in Station’s DMA notwithstanding any other provision of this Agreement.
	(3)	Without limitation to the foregoing provisions of this subparagraph 3(a), each time, if any, that Station uses Fox’s NTSC feed of Fox programs or Program-Related Material for Station’s DTV Channel, Station must turn on the FCC Redistribution Control Descriptor unless Fox directs otherwise.
(b)	Except as noted hereafter, Fox commits to supply Station with programming throughout the term of this Agreement for the Programmed Time Periods. For purposes of this Agreement, the “Programmed Time Periods” are as follows (for programming other than Daytime programming, the specified times apply for the Eastern or Pacific Time Zones, and the Mountain and Central Time Zones are one hour earlier; for Daytime programming, the specified times apply to all Time Zones, unless Fox agrees otherwise):
	Daytime:		7-8 A.M. Monday thru Friday
			9-10 A.M. Monday thru Friday and Sunday
			3-5 P.M. Monday thru Friday
			8 A.M.-12:00 Noon Saturday
	Prime Time:		7-10 P.M. Sunday
			8-10 P.M. Monday thru Saturday
	Late Night:		11 P.M.-12 A.M. Monday thru Saturday
	Weekend, All-Star &
	Post Season Sports:		As scheduled for Station by Fox, including pre-game and post-game shows.
	Subject to the preemption rights in Paragraph 11 below, Licensee shall broadcast over Station for the term of this Agreement, for the Programmed Time Periods, all Fox programming specified by Fox, except to the extent that Licensee is broadcasting programming pursuant to (and within the specific limits of) a commitment expressly set forth on Exhibit A (for non-sports programming) or Exhibit B (for sports programming) to this Agreement (but not including any extension or renewal of such commitment by option extension or otherwise). If

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Exhibit 10.6

	any Fox programming is not broadcast in its Programmed Time Period due to any such commitment, Licensee shall broadcast that Fox programming in the “make good” time period specified in Exhibit A or B, as applicable. Fox has suspended providing Fox programming for the Programmed Time Periods 7-8 a.m. Monday through Friday, 9-10 a.m. Monday through Friday, 3-5 p.m. Monday though Friday and 11 p.m.-12 a.m. Monday through Friday. Licensee acknowledges that Fox intends to resume programming those time periods, and Licensee shall negotiate in good faith an amendment to this Agreement which would require carriage of such programming.
(c)	Without limiting subparagraph (b) above, each time that Licensee for any reason fails to (or advises Fox it will not) telecast any Fox programming as provided for in this Agreement, then upon Fox’s request, Licensee shall telecast that programming (or replacement programming selected by Fox) and the commercial announcements contained in it, in a substitute time period that is within the same Nielsen Media Research broadcast ratings week as, and that is of a quality and rating value as nearly as possible equal to that of, the time period during which the programming was not telecast. Licensee shall give Fox at least 72 hours advance notice that it intends not to broadcast any Fox programming and in such notice shall identify the substitute time period that Licensee selects, which time period shall be subject to Fox’s prior approval. Notwithstanding anything to the contrary in this Agreement, if Licensee does not fully comply with the foregoing, then, without limitation to any other rights of Fox under this Agreement or otherwise, Fox shall have the right to license the broadcast rights to the applicable omitted programming (or replacement programming) to another television station located in Station’s Community. In addition to the foregoing, with respect to programming for broadcast within the New Programmed Time Periods (as defined in subparagraph 3(e) below), Fox will provide Licensee with a minimum of six months notice for each program addition, and Licensee shall be required to advise Fox within ten days of receiving notification if Licensee does not wish to televise said programming as scheduled by Fox. If Licensee refuses to broadcast any program within a New Programmed Time Period for any reason other than (i) a program conflict specified in subparagraph 3(e) below, or (ii) those specified in Paragraph 11 below, then Fox shall have the right to terminate this Agreement upon six months prior notice to Licensee.
(d)	Under this Agreement, an “Approved Preemption” shall mean: any failure to broadcast due to force majeure under Paragraph 7 below, any preemption permitted by Exhibit A or B hereto that is “made good” in accordance therewith and any preemption permitted by Paragraph 11 below. Any other preemption or failure to broadcast any Fox programming is an “Unauthorized Preemption” and without limiting any other rights of Fox under this Agreement or otherwise, if within any 12-month period during the term of this Agreement, Station makes

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Exhibit 10.6

	three (3) or more Unauthorized Preemptions of any Fox programming, Fox may, upon 30 days prior written notice to Licensee, elect to either: (1) terminate Station’s right to broadcast any one or more series or other Fox programs, as Fox shall elect, and, to the extent and for the period(s) that Fox elects, thereafter license the broadcast rights to the applicable series or other Fox programs to any other television station or stations located in Station’s Community, or (2) terminate this Agreement.
(e)	Notwithstanding anything to the contrary set forth in subparagraph 3(c) or in this subparagraph (e), Licensee shall not be obligated to broadcast Fox programming during New Programmed Time Periods (as hereinafter defined) unless and until the Federal Communications Commission eliminates, or modifies to reduce the regulatory constraints of, Section 73.658(d) of its rules. In the event of such an elimination or modification of the rules, Licensee shall broadcast over Station’s facilities all Fox programming to be offered during time periods that are not specified in subparagraph 3(b) above as a Programmed Time Period (“New Programmed Time Periods”), subject to Fox providing to Licensee at least six months notice prior to delivering any additional programming within these time periods. Furthermore, in the event of such an elimination or modification of the rules, if Licensee has entered into any agreement(s) prior to an announcement by Fox to program a specific time period and the agreement(s) is (are) for barter programming that Licensee is required by the terms of the agreement(s) to broadcast during a New Programmed Time Period, then Licensee shall not be required to broadcast the new Fox programming within the same time period, and the provisions of subparagraph 3(c) of this Agreement shall govern; provided, however, in any such instance(s) Licensee agrees not to renew or otherwise extend its rights to broadcast such conflicting programming within a New Programmed Time Period. In the event that the Federal Communications Commission modifies but does not eliminate Section 73.658(d) of its rules, then Licensee shall be obligated to broadcast programming during New Programmed Time Periods to the extent permitted by such modification and this subparagraph 3(e) shall be amended if necessary to conform to such modification; provided, however, that in no event shall Licensee be obligated to broadcast Fox programming during New Programmed Time Periods at a date earlier than as provided for in this subparagraph 3(e).
(f)	Commencing seven days from each request by Fox to Licensee for such negotiation, Licensee and Fox will negotiate in good faith for a period of 60 days in connection with Licensee’s transmission or retransmission of Fox programs or other data, information or content (or any combination of the foregoing) using Station’s digital broadcast spectrum or signal capacity other than as provided for under subparagraph 3(a) above (the “New Plan”), which use will not commence earlier than six months from the date of such request.

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Exhibit 10.6

4. Promotion:

(a) Fox will provide Licensee with on-air promotional announcements, which may be for any Fox programming (“Fox Promos”), including without limitation, for broadcast in Station’s non-Fox programming. Licensee shall use its good faith, best efforts to provide an on-air promotional schedule consistent with Fox’s recommendations and in coordination with Fox, and to budget Station’s annual advertising funds so as to enable Station to participate, on a year-round basis, in Fox’s “co-op” advertising plan. Without limitation to the foregoing, in each instance, if any, that Fox determines that Station’s “Sweeps Rating” (as defined below) is below the average Sweeps Rating for all Fox affiliated stations, then Station shall be deemed to be “Performing Below Average” and (subject to the provisions of Paragraph 11 below) shall, within 15 days of Fox giving Licensee written notice thereof, commence full compliance with the following: (1) Station shall not broadcast, during each one-half hour of all periods that Station is not broadcasting Fox programming (the “Non-Fox Time Periods”), less than one (1) thirty (30) second promotional announcement (or promotional announcements aggregating 30 seconds, to the extent Fox so elects) for Station’s local, syndicated or Fox programming, and (2) during all Non-Fox Time Periods, Licensee shall broadcast Fox Promos for not less than 45% of 100% (the “Applicable Percentage”) of the total, aggregate “gross ratings points” for all the promotional announcements broadcast by Licensee (“Aggregate Promotional GRP’s”) within the Non-Fox Time Periods (the specific Fox Promos broadcast by Licensee and number of broadcasts of each Fox Promo shall be, to the extent Fox elects, as specified by Fox, and the broadcasts of the Fox Promos shall be made so that the GRP’s allocated thereto are distributed fairly and reasonably across the Non-Fox Time Periods); provided, however, that if Station’s Sweeps Rating ranks Station within the bottom 50% (ranked highest to lowest) of those Fox affiliated stations that are Performing Below Average, then the Applicable Percentage for Station shall be not less than 55% of 100% of said Aggregate Promotional GRP’s. Licensee’s full compliance with the immediately foregoing sentence shall continue until Licensee is no longer Performing Below Average, as determined by the most recent Sweeps Rating. For purposes hereof, the “Sweeps Rating” shall mean for each station the average Nielsen Media Research rating for the most-current completed “sweeps” period for Adults 18-49 for all prime time hours programmed by Fox. Licensee agrees to maintain complete and accurate records of all promotional announcements broadcast as provided herein. Within two (2) weeks following each request by Fox therefor, Licensee will submit copies of all such records to Fox. Notwithstanding anything to the contrary in (and without limitation to the above provisions of) this subparagraph 4(a), and as a material term of this Agreement, Licensee shall, in coordination with Fox, cause Station to broadcast in the one-half ( ¹/2) hour immediately preceding prime-time, not less than one (1) :30 promotional announcement for Fox programming provided by Fox hereunder.

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Exhibit 10.6

	(b)	In addition to providing the promotion announcements referred to above, Fox shall make available to Licensee, at reasonable costs, such other promotional and sales materials as Fox and Licensee may mutually consider appropriate. Licensee shall not delete any copyright, trademark, logo or other notice, or any credit, included in any materials delivered pursuant to this paragraph or otherwise, and Licensee shall not exhibit, display, distribute or otherwise use any trademark, logo or other material or item delivered pursuant to this paragraph or otherwise, except as instructed by Fox at the time.
	(c)	Licensee shall make annually, in accordance with each Nielsen Media Research “Sweeps” co-op plan determined by Fox during the term of this Agreement, not less than an amount determined by Fox in its sole discretion (the “Co-Op Commitment”) in local cash expenditures to promote Fox on Station. Subject to Licensee’s full performance of its obligations under this Paragraph 4, Fox will reimburse Licensee for 50% of such cash expenditures as are made in accordance with Fox’s co-op plan, up to a maximum annual Fox contribution equal to 50% of the Co-Op Commitment.
5. Commercial Announcements:
	(a)	In each individual Fox program, Fox will have the right in its sole discretion to determine: (1) the number and length of commercial announcement slots (including station breaks) that will be available to Fox affiliates for insertion of affiliate commercial announcements and (2) the terms and conditions applicable to the availability and use of the commercial announcement slots. Fox will make available to Licensee for Station’s use in each individual Fox program the same number and length of commercial announcements (including station breaks) as Fox makes available generally in that program to Fox affiliates on a national basis, on the terms and conditions that Fox generally applies to those affiliates on a national basis. Licensee agrees to be bound by Fox’s decisions as provided for in this Paragraph 5.
	(b)	Fox shall determine the placement, timing and format of Fox’s and Licensee’s commercial announcements. Fox shall have the right to include commercial announcements in all of the commercial time available in each hour of the programming other than that expressly allocated to Licensee in this Agreement.
	(c)	Licensee’s broadcast over the Station of all commercial announcements included by Fox in Fox programming is of the essence of this Agreement, and nothing contained in Paragraph 3 above or elsewhere in this Agreement (other than

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Exhibit 10.6

Paragraph 11 below) shall limit Fox’s rights or remedies at law or otherwise relating to failure to so broadcast said commercial announcements. Licensee agrees to maintain complete and accurate records of all commercial announcements broadcast as provided in this Agreement. Within two (2) weeks following each request by Fox therefor, Licensee will submit copies of all such records to Fox.

6. Supplemental Agreements: Each of the 1998 NFL Supplemental Agreement and the 1999 Prime-Time-Inventory-Purchase Supplemental Agreement, as each may be amended or extended, the presently existing (if any) Fox Network Non-Duplication Amendment for Station and the presently existing (if any) Fox Agreement and Amendment to Station Affiliation Agreement relating to retransmission consent, as they may have been amended or supplemented (collectively the “Supplementals”), between Licensee and Fox, are in full force and effect, and this Agreement is now deemed the applicable Station Affiliation Agreement referenced in the Supplementals. Licensee shall fully perform all terms and conditions of the Supplementals in their entirety throughout the term of this Agreement.

7. Force Majeure: Fox shall not be liable to Licensee for failure to supply any programming or any part thereof, nor shall Licensee be liable to Fox for failure to broadcast any such programming or any part thereof, by reason of any act of God, labor dispute, non-delivery by program suppliers or others, failure or breakdown of satellite or other facilities, legal enactment, governmental order or regulation or any other similar or dissimilar cause beyond their respective control (“force majeure event”). If, due to any force majeure event(s), Fox substantially fails to provide the programming to be delivered to Licensee under Paragraph 1 above, or Licensee substantially fails to broadcast such programming as scheduled by Fox, for 4 consecutive weeks, or for 6 weeks in the aggregate during any 12-month period, then the other party hereto (the “unaffected party”) may terminate this Agreement upon thirty (30) days prior written notice to the party so failing, which notice may be given at any time prior to the expiration of 7 days after the unaffected party’s receipt of actual notice that the force majeure event(s) has ended.

8. Assignment: This Agreement shall not be assigned by Licensee without the prior written consent of Fox, and any permitted assignment shall not relieve Licensee of its obligations hereunder. Any purported assignment by Licensee without such consent shall be null and void and not enforceable against Fox. Licensee also agrees that if any application is made to the Federal Communications Commission pertaining to an assignment or a transfer of control of Licensee’s license for the Station, or any interest therein, Licensee shall immediately notify Fox in writing of the filing of such application. Except as to “short form” assignments or transfers of control made pursuant to Section 73.3540(f) of the Rules and Regulations of the Federal Communications Commission, Fox shall have the right to terminate this Agreement, effective upon thirty (30) days notice to Licensee and the transferee or assignee of such termination, which notice may be given at any time within ninety (90) days after the later occurring of: (a) the date on which Fox learns that such assignment or transfer has become effective or (b) the date on which Fox receives written notice of such assignment or transfer. Licensee agrees, that upon

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Exhibit 10.6

Fox’s request, Licensee shall procure and deliver to Fox, in form satisfactory to Fox, the agreement of the proposed assignee or transferee that, upon consummation of the assignment or transfer of control of the Station’s authorization, the assignee or transferee will assume and perform this Agreement in its entirety without limitation of any kind. If Licensee fails to notify Fox of the proposed assignment or transfer of control of said Station’s authorization, or fails to procure the agreement of the proposed assignee or transferee in accordance with this Paragraph, then such failure shall be deemed a material breach of this Agreement. Without limitation to any other provision of this Agreement or to any of Fox’s rights or remedies, if, without Fox’s prior written consent, Licensee enters into any “Local Management Agreement”, “Time Brokerage Agreement” or similar arrangement or agreement pertaining to Station operations, or for the use (by lease or otherwise) by any party other than Licensee of any Programmed Time Period or New Programmed Time Period or any significant portion of Station’s broadcast time outside of those Fox Time Periods, Fox will have the right at any time to terminate this Agreement on thirty (30) days’ notice to Licensee.

9. Unauthorized Copying: Licensee shall not, and shall not authorize others to, record, copy or duplicate any programming or other material furnished by Fox hereunder, in whole or in part, and shall take all reasonable precautions to prevent any such recordings, copying or duplicating. Notwithstanding the foregoing, if Station is located in the Mountain Time Zone, Licensee may pre-record programming from the satellite feed for later telecast at the times scheduled by Fox. Licensee shall erase all such pre-recorded programming promptly after its scheduled telecast.

10. Term: The term of this Agreement shall commence the date upon which the FCC Broadcast License for Station, and ownership of Station, is transferred to Westwind Communications L.L.C., and shall continue through June 30, 2010 (the “initial period”). After the initial period, the term of this Agreement may be extended for additional successive periods of one (1) year each, by Fox, in its sole discretion, giving written notice of such extension (the “extension notice”) to Licensee at least one hundred twenty (120) days prior to the expiration of the then-current period; provided, however, that if, within thirty (30) days of Licensee’s receipt of the extension notice, Licensee, in its sole discretion, gives Fox written notice that Licensee rejects such extension, then the extension notice shall not be effective and this Agreement shall terminate upon expiration of the then-current period. Notwithstanding anything to the contrary contained in this Agreement, upon the termination or expiration of the term of this Agreement, all of Licensee’s and Station’s rights to broadcast or otherwise use any Fox program or any trademark, logo or other material or item hereunder shall immediately cease and neither Licensee nor Station shall have any further rights whatsoever with respect to any such program, material or item.

11. Applicable Law: Notwithstanding anything to the contrary in this Agreement, the obligations of Licensee and Fox under this Agreement are subject to all applicable federal, state, and local laws, rules and regulations (including, but not limited to, the Communications Act of 1934, as amended, and the rules and regulations of the Federal Communications Commission) and this Agreement shall be deemed to have been negotiated and entered into, and this

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Exhibit 10.6

Agreement and all matters or issues collateral thereto shall be governed by, the law of the State of California applicable to contracts negotiated, executed and performed entirely within that state. With respect to programs offered or already contracted for pursuant to this Agreement, nothing in any other Paragraph hereof shall be construed to prevent or hinder Licensee from (a) rejecting or refusing Fox programs which Licensee reasonably believes to be unsatisfactory, unsuitable or contrary to the public interest, or (b) substituting a program which, in Licensee’s opinion, is of greater local or national importance; provided, however, Licensee shall give Fox written notice of each such rejection or substitution, and the justification therefor, at least 72 hours in advance of the scheduled broadcast, or as soon thereafter as possible (including an explanation of the cause for any lesser notice). Notwithstanding anything to the contrary expressed or implied herein, the parties acknowledge that Station has the ultimate responsibility to determine the suitability of the subject matter of program content, including commercial, promotional or public service announcements, and to determine which programming is of greater local or national importance, consistent with 47 C.F.R. Section 73.658(e).

12. Station Acquisition by Fox: If Fox or any of Fox’s parent, affiliated, subsidiary or related companies or other entities enters into any agreement to acquire any significant ownership and/or controlling interest in any television broadcast station licensed to any community within Station’s television market, then Fox shall have the right at any time after that agreement is made, to terminate this Agreement upon not less than sixty (60) days notice to Licensee. Said termination shall be effective as of such date as Fox shall designate in said notice.

13. Change in Operations: If at any time Station’s transmitter location, power, frequency, programming format, hours of operation, technical quality of transmissions or any other material aspect of Station’s operations is changed such that Fox determines in its reasonable judgment that Station is of less value to Fox as a broadcaster of Fox programming than at the date of this Agreement, then Fox shall have the right to terminate this Agreement upon thirty (30) days prior written notice to Licensee, unless Licensee cures such change in Station’s operations during said thirty (30) day period to Fox’s reasonable satisfaction.

14. Non-Liability of Board Members: To the extent the Fox Broadcasting Company Affiliates’ Association Board of Governors (the “Board”) and its members are acting in their capacity as such, then the Board and each such member so acting shall not have any obligation or legal or other liability whatsoever to Licensee in connection with this Agreement, including without limitation, with respect to the Board’s or such member’s approval or non-approval of any matter, exercise or non-exercise of any right or taking of or failing to take any other action in connection therewith.

15. Warranties and Indemnities:

(a) Fox represents and warrants that Station’s broadcast, in accordance with this Agreement, of any Fox programming provided by Fox to Station shall not violate or infringe upon the trade name, trademark, copyright, literary or dramatic right,

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Exhibit 10.6

or right of privacy or publicity of any party, or constitute a libel or slander of any party; provided, however, that the foregoing representations and warranties shall not apply: (1) to public performance rights in music, (2) to any material furnished or added by any party other than Fox after delivery of the programming to Station or (3) to the extent such programming is changed or otherwise affected by deletion of any material by any party other than Fox after delivery of the programming to Station. Fox agrees to indemnify and hold harmless Station and its parents, affiliates, subsidiaries, successors and assigns, and the respective owners, officers, directors, agents and employees of each, from and against all liability, actions, claims, demands, losses, damages or expenses (including reasonable attorneys’ fees, but excluding Licensee’s or Station’s lost profits or consequential damages, if any) caused by or arising out of Fox’s breach of the representations and warranties set forth in the foregoing sentence. Fox makes no representations, warranties or indemnities, express or implied, except as expressly set forth in this subparagraph (a).

(b) Without limitation to any of Licensee’s other obligations and agreements under this Agreement, Licensee agrees to indemnify and hold harmless Fox and its parents, affiliates, subsidiaries, successors and assigns, and the respective owners, officers, directors, agents and employees of each, from and against all liability, actions, claims, demands, losses, damages or expenses (including reasonable attorneys’ fees, but excluding Fox’s lost profits or Fox’s consequential damages, if any) caused by or arising out of any matters excluded from Fox’s representations and warranties by subparagraphs (a)(1), (2) or (3) above, or any breach of any of Licensee’s representations, warranties or agreements hereunder or any programming broadcast by Station other than that provided by Fox hereunder.

(c) The indemnitor may assume, and if the indemnitee requests in writing shall assume, the defense of any claim, demand or action covered by indemnity hereunder, and upon the written request of the indemnitee, shall allow the indemnitee to cooperate in the defense at the indemnitee’s sole cost and expense. The indemnitee shall give the indemnitor prompt written notice of any claim, demand or action covered by indemnity hereunder. If the indemnitee settles any claim, demand or action without the prior written consent of the indemnitor, the indemnitor shall be released from the indemnity in that instance.

16. Notices: All notices to each party required or permitted hereunder to be in writing shall be deemed given when personally delivered (including, without limitation, upon delivery by overnight courier or other messenger or upon receipt of facsimile copy), upon the date of mailing postage prepaid or when delivered charges prepaid to the telegraph office for transmission, addressed as specified below, or addressed to such other address as such party may hereafter specify in a written notice given as provided herein. Such notices to Licensee shall be to the address set forth for Licensee on page 1 of this Agreement. Such notices to Fox shall be to: Fox

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Exhibit 10.6

Broadcasting Company, 10201 West Pico Boulevard, Los Angeles, CA 90035, Attn: Network Distribution; with a copy to: Fox Broadcasting Company, 10201 West Pico Boulevard, Los Angeles, CA 90035, Attn: Legal Affairs.

17. Retransmission Consent: Without Fox’s prior written approval, Licensee shall not grant its consent to the transmission or retransmission, by any cable system, satellite, other multichannel video programming distributor, telephone system, microwave carrier, wireless cable system or other technology wherever located, of Station’s broadcast of any Fox programming. Neither this Agreement nor any grant by Licensee of retransmission consent conveys any license or sublicense in or to the copyrights of Fox programming and Fox shall in no way be a party to or incur any duty or other obligation in connection with any retransmission consent granted by Licensee.

18. Change In Fox Operations: Notwithstanding anything to the contrary in this Agreement and without limitation to any of Fox’s rights, Fox reserves the right (other than with respect to: (i) the first and last sentences of Paragraph 3(e) above; and (ii) Paragraph 11 above) to make changes in its operations (and/or terms of doing business) that conflict with (or do not conform to) the terns of this Agreement and that will be applicable to its affiliates generally. Fox shall notify Licensee in writing that Fox has made such change and the effective date thereof, and as of said effective date, this Agreement will be deemed amended to reflect such change, unless within 10 days of Fox’s notification to Licensee of such change, Licensee notifies Fox in writing that Licensee rejects such change. If Licensee does so reject said change, then Fox shall have the right for a period of six months from Fox’s receipt of Licensee’s rejection notice to terminate this Agreement by providing not less than ninety (90) days’ written notice to Licensee.

19. Miscellaneous:

(a) Nothing contained in this Agreement shall create any partnership, association, joint venture, fiduciary or agency relationship between Fox and Licensee.

(b) No waiver of any failure of any condition or of the breach of any obligation hereunder shall be deemed to be a waiver of any preceding or succeeding failure of the same or any other condition, or a waiver of any preceding or succeeding breach of the same or any other obligation.

(c) In connection with Fox programming, Station shall at all times permit Fox, without charge, to place, maintain and use on Station’s premises, at Fox’s expense, such reasonable amounts of devices and equipment as Fox shall require, in such location and manner, as to allow Fox to economically, efficiently and accurately achieve the purposes of such equipment. Station shall operate such equipment for Fox, to the extent Fox reasonably requests, and no fee shall be charged by Station therefor.

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Exhibit 10.6

(d) This Agreement, together with the Supplementals, constitutes the entire understanding between Fox and Licensee concerning the subject matter hereof and shall not be amended, modified, changed, renewed, extended or discharged except by an instrument in writing signed by Fox and Licensee or as otherwise expressly provided herein or therein. Fox and Licensee each hereby acknowledges that neither is entering into this Agreement in reliance upon any term, condition, representation or warranty not stated herein. All actions, proceedings or litigation brought against Fox by Licensee shall be instituted and prosecuted solely within the County of Los Angeles, California. Licensee hereby consents to the jurisdiction of the state courts of California and the federal courts located in the Central District of California as to any matter arising out of, or related to this Agreement.

(e) Without limitation to Paragraph 1 above, for purposes of this Agreement, the term “programs” (and the derivations thereof including, without limitation, “programming”) will include, without limitation, to the extent Fox reasonably elects, television specials, made-for-television movies, television series and all other forms of television motion pictures and programs, as well as any other Program-Related Material, transmitted or otherwise communicated by Fox with the intent that it be perceived or otherwise received, visually or visually and aurally, by television receiver, television monitor or any other device or equipment whatsoever now known or hereafter devised.

(f) Each and all of the several rights and remedies of each party hereto under or contained in or by reason of this Agreement shall be cumulative, and the exercise of one or more of said rights or remedies shall not preclude the exercise of any other right or remedy under this Agreement, at law, or in equity. Notwithstanding anything to the contrary contained in this Agreement, in no event shall either party hereto be entitled to or recover any lost profits or consequential damages because of a breach or failure by the other party, and except as expressly provided in this Agreement to the contrary, neither Fox nor Licensee shall have any right against the other with respect to claims by any third person or other third entity.

(g) If any provision of this Agreement (the “Void Provision”), as applied to either Fox or Licensee or any circumstances, is found to be against public policy or otherwise void or unenforceable, or in conflict with any applicable federal, state or local law, rule or regulation (including without limitation any rule or regulation of the Federal Communications Commission), then commencing within 10 days following such finding, Fox and Licensee must negotiate in good faith for a period of 30 days regarding a provision to replace the Void Provision, which provision shall materially meet the intent of the parties as set forth in the Void Provision and essentially preserve the benefits provided by this Agreement to both parties. If the parties are unable to agree on such a replacement provision for any reason

13

Exhibit 10.6

whatsoever, including without limitation due to any constraints imposed by any law, rule or regulation, then either party will have the right to terminate this Agreement at any time on six months prior notice.

(h) Paragraph headings are inserted for convenience only and shall not be used to interpret this Agreement or any of the provisions hereof or given any legal or other effect whatsoever.

(i) Licensee acknowledges that Station’s rights contained in this Agreement are subject to and must be exercised consistent with the rights conveyed to Fox by the NFL, MLB, NASCAR or any other licensor of programming delivered under this Agreement and any limitations and restrictions thereon.

20. News Agreement:

(a) As a material term of this Agreement, Licensee shall continue to broadcast on Station, throughout the term of this Agreement, in consultation with Fox, either (i) a first-class, regularly scheduled, on-air, 10:00 PM, Monday through Friday, local newscast program of not less than 30 minutes per night that is self-produced ((i.e. Station shall originate said newscast program and shall not produce such newscast program pursuant to any news-sharing arrangement), or (ii) a shared-newscast program (i.e., Licensee shall enter into a news-sharing agreement for Station with a network-affiliated television station in Station’s television market (“Cooperating Station”) and broadcast such shared-newscast on Station pursuant to said news-sharing agreement, separately brand Station’s local newscast as a Fox news program and provide a customized news set, mic flags, music, graphics, supers and news promotion, local newscast producer and the exclusive services of a news anchor person(s) for Station’s local newscast).

(b) Licensee shall simultaneously with the execution of this Agreement execute and return with this Agreement four (4) copies of the standard News Service Agreement (and Addendum thereto executed by the appropriate representative of the Cooperating Station, if Licensee broadcasts on Station a newscast subject to subparagraph 20(a)(ii) above), collectively, the “News Agreement”, between Licensee and FNN, as provided to Licensee by FNN. Upon Licensee’s execution of the News Agreement, it shall be deemed attached to this Agreement as Exhibit E and incorporated herein by this reference. As a material term of this Agreement, whether or not Licensee broadcasts a local newscast program on Station, Licensee shall continue to pay to FNN, throughout the term of this Agreement, any and all license fees provided under the News Agreement. Without limitation to any provision of this Agreement or of the News Agreement, if the News Agreement is terminated for any reason other than the material breach of the News Agreement by FNN, Fox shall have the right to terminate this

14

Exhibit 10.6

Agreement effective upon such date as Fox may elect in its sole discretion. Any breach by Licensee of the News Agreement will be a breach by Licensee of this Agreement of equivalent materiality (e.g., a material breach of the News Agreement by Licensee will be a material breach of this Agreement by Licensee).

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

Fox Broadcasting Company (“Fox”)		Westwind Communications L.L.C. (“Licensee”)
By:	/s/ SIGNATURE	By:	/s/ SIGNATURE
Title:	EVP	Title:	CHAIRMAN

15

Exhibit 10.6

KBFX / BAKERSFIELD, CA 12/05/05

EXHIBIT A:

* No preemptions due to non-sports programming.

Licensee Initial & Date:	/s/ SIGNATURE 12/10
FBC Initial & Date:	/s/ SIGNATURE

AFFILIATION AGREEMENT / KBFX

Exhibit 10.6

KBFX / BAKERSFIELD, CA 12/05/05

EXHIBIT B:

* No preemptions due to local programming.

Licensee Initial & Date:	/s/ SIGNATURE 12/10
FBC Initial & Date:	/s/ SIGNATURE

AFFILIATION AGREEMENT / KBFX

EX-10.7

Exhibit 10.7

CBS TELEVISION NETWORK

A Division of CBS Inc.

AFFILIATION AGREEMENT

CBS TELEVISION NETWORK, A Division of CBS Inc., 51 West 52 Street, New York, New York 10019 (“CBS”), and WESTWIND COMMUNICATIONS L.L.C., 1901 Westwind Drive, Bakersfield, California 93301 (“Broadcaster”), licensed to operate television station KBAK-TV at Bakersfield, California on channel number 29 (“Affiliated Station”), hereby mutually covenant and agree, as of the 4th day of December, 1995, as follows:

1. Offer, Acceptance and Delivery of Network Programs.

Broadcaster shall have a “first call” on CBS network television programs (“Network Programs”) as follows:

(a) Offer of Network Programs.

CBS shall offer to Broadcaster “first call” on the right to broadcast by Affiliated Station Network Programs which are to be broadcast on a network basis by any television broadcast station licensed to operate in Affiliated Station’s community of license.

(b) Acceptance of Network Programs.

As to any offer described in Paragraph 1(a) of this Agreement, Broadcaster may accept such offer only by notifying CBS, by means of CBS’s computer-based communications system, of such acceptance within 72 hours (exclusive of Saturdays, Sundays and holidays), or such longer as CBS may specify therein, after such offer; provided, however, that, if the first broadcast referred to in such offer is scheduled to occur less than 72 hours after the making of the offer, Broadcaster shall notify CBS of the acceptance or rejection of such offer as promptly as possible and in any event prior to the first broadcast time specified in such offer. Such acceptance shall constitute Broadcaster’s agreement that Affiliated Station will broadcast such Network Program or Programs in accordance with the terms of this Agreement and of such offer, and so long as Affiliated Station so broadcasts such Network Program or Programs, CBS will not, subject to its rights in the program material, authorize the broadcast thereof on a network basis by any other television broadcast station licensed to operate in Affiliated Station’s community of license; provided, however, that CBS shall have the right to authorize any television broadcast station, wherever licensed to operate, to broadcast any Network Program consisting of an address by the President of the United States of America on a subject of public importance or consisting of coverage of a matter of immediate national concern. If, as to any Network Program offered hereunder, Broadcaster does not notify CBS of acceptance as provided for in this Paragraph 1(b), Broadcaster shall have no rights with respect to such Network Program, and CBS may offer such Network Program on the same or different terms to any other television broadcast station or stations licensed to operate in Affiliated Station’s community of license;

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Exhibit 10.7

provided, however, that, if any Network Program offered hereunder is accepted, by Affiliated Station, upon any other terms or conditions to which CBS agrees in writing, then the provisions of this Agreement shall apply to the broadcast of such Network Program except to the extent such provisions are expressly varied by the terms and conditions of such acceptance as so agreed to by CBS.

(c) Delivery of Network Programs.

Any obligation of CBS to furnish Network Programs for broadcasting by Affiliated Station is subject to CBS’s making of arrangements satisfactory to it for the delivery of Network Programs to Affiliated Station. CBS shall be responsible for providing and will pay for all uplink, transponder, landline or other costs of transmitting Network Programs to Affiliated Station, but will not be responsible for Affiliated Station’s downlinking or other reception of Network Programs.

2. Payment to Broadcasters.

(a) Definitions.

(i) “Live Time Period” means the time period or periods specified by CBS in its initial offer of a Network Program to Broadcaster for the broadcast of such Network Program over Affiliated Station; (ii) “Affiliated Station’s Network Rate” shall be $1,065 and is used herein solely for purposes of computing payments by CBS to Broadcaster; (iii) “Commercial Availability” means a period of time made available by CBS during a Network Commercial Program for one or more Network Commercial Announcements or local cooperative commercial announcements; and (iv) “Network Commercial Announcements” means a commercial announcement broadcast over Affiliated Station during a Commercial Availability and paid for by or on behalf of one or more CBS advertisers, but does not include announcements consisting of billboards, credits, public service announcements, promotional announcements and announcements required by law.

(b) Payment for Broadcast of Programs.

For each Network Commercial Program or portion thereof, except those specified in Paragraph 2(c) hereof, which is broadcast over Affiliated Station during the Live Time Period therefor and the Live Time Period for which is set forth in the table below, CBS shall pay Broadcaster the amount resulting from multiplying the following:

(i) Affiliated Station’s Network Rate; by

(ii) the percentage set forth below opposite such time period (which, unless otherwise specified, is expressed in Affiliated Station’s then-current local time); by

(iii) the fraction of an hour substantially occupied by such program or portion thereof; by

(iv) the fraction of the aggregate length of all Commercial Availabilities during such program or portion thereof occupied by Network Commercial Announcements

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Exhibit 10.7

Table

Monday through Friday
7:00 a.m. - 9:00 a.m.	11.2%
9:00 a.m. - 11:00 a.m.	15%
11:00 a.m. - 3:00 p.m.	6%
3:00 p.m. - 5:00 p.m.	12%
5:00 p.m. - 8:00 p.m.	15%
8:00 p.m. - 11:00 p.m.	30%
11:00 p.m. - 12:00 a.m.	15%
Saturday
7:00 a.m. - 8:00 a.m.	7%
8:00 a.m. - 5:00 p.m.	12%
5:00 p.m. - 8:00 p.m.	15%
8:00 p.m. - 11:00 p.m.	30%
11:00 p.m. - 12:00 a.m.	15%
Sunday
11:30 a.m. - 5:00 p.m.	12%
5:00 p.m. - 7:00 p.m.	15%
7:00 p.m. - 11:00 p.m.	30%
11:00 p.m. - 12:00 a.m.	15%

For each Network Program or portion thereof, except those specified in Paragraph 2(c) hereof, which is broadcast by Affiliated Station during a time period other than the Live Time Period therefor and the Live Time Period for which is set forth in the table above, CBS shall pay Broadcaster as if Affiliated Station had broadcast such program or portion thereof during such Live Time Period, except that:

(i) if the percentage set forth above opposite the time period during which Affiliated Station broadcast such program or portion thereof is less than that set forth opposite such Live Time Period, then CBS shall pay Broadcaster on the basis of the time period during which Affiliated Station broadcast such program or portion thereof; and

(ii) if the time period or any portion thereof during which Affiliated Station broadcast such program is not set forth in the table above, then CBS shall pay Broadcaster in accordance with Paragraph 2(c) hereof.

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Exhibit 10.7

(c) Payment for Broadcast of Other Programs.

For the following programs, the percentages listed below (rather than those daypart percentages set forth in the table in Paragraph 2(b) hereinabove) shall be used in computing payment to Affiliated Station:

Monday-Friday Daytime Game shows	15%
Monday-Friday Continuing Dramas	6%
Monday-Friday Late Night Day part	40.0% per telecast for live clearance or 5.0% per telecast for delayed clearance
Monday-Friday CBS EVENING NEWS	5%
CBS Sports programs	0%
CBS SUNDAY MORNING and FACE THE NATION	8%

Notwithstanding the payment obligations set forth in Paragraph 2(b) above, CBS shall pay Broadcaster such amounts as specified in CBS’s program offer for Network Programs broadcast by Affiliated Station consisting of (i) special event programs (including, but not limited to, such programs as awards programs, mini-series, movie specials, entertainment specials, special-time-period broadcasts of regularly-scheduled series, and news specials such as political conventions, election coverage, presidential inaugurations and related events), (ii) paid political programming, and (iii) programs for which CBS specified a Live Time Period, or which Affiliated Station broadcast during a time period, any portion of which is not set forth in the table above.

(d) Deduction.

From the amounts otherwise payable to Broadcaster hereunder, there shall be deducted, for each week of the term of this Agreement, a sum equal to 168% of Affiliated Station’s Network Rate.

(e) Omitted.

(f) Time of Payment.

CBS shall make the payments hereunder reasonably promptly after the end of each four-week or five-week accounting period of CBS for Network Commercial Programs broadcast during such accounting period.

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Exhibit 10.7

(g) Reports.

Broadcaster shall submit to CBS in the manner requested by CBS such reports as CBS may reasonably request concerning the broadcasting of Network Programs by Affiliated Station.

3. Term and Termination.

(a) Term.

The term of this Agreement shall be the period commencing on March 4, 1996 and expiring on March 3, 2006; provided, however, that, unless Broadcaster or CBS shall notify the other at least six months prior to the expiration of the original period or any subsequent five-year period that the party giving such notice does not wish to have the term extended beyond such period, the term of this Agreement shall be automatically extended upon the expiration of the original period and each subsequent extension thereof for an additional period of five years. Notwithstanding any provision of any offer or acceptance under Paragraph 1 hereof, upon the expiration or any termination of the term of this Agreement, Broadcaster shall have no right whatsoever to broadcast over Affiliated Station any Network Program.

(b) Termination on Transfer of License or Interest in Broadcaster.

Broadcaster shall notify CBS forthwith if any application is made to the Federal Communications Commission relating to a transfer of control of Broadcaster or the assignment of Broadcaster’s license for Affiliated Station. In the event that CBS shall reasonably disapprove of the proposed transferee, CBS shall have the right to terminate this Agreement effective as of the effective date of any such transfer (except a transfer within the provisions of Section 73.3540(f) of the Federal Communications Commission’s present Rules and Regulations) by giving Broadcaster notice thereof, and of its reasons for disapproving of the proposed transferee, within thirty days after the date on which Broadcaster gives CBS notice of the making of such application. If CBS does not so terminate this Agreement, Broadcaster shall, prior to the effective date of any such transfer of any interest in Broadcaster or of Broadcaster’s license for Affiliated Station, and as a condition precedent to such transfer, procure and deliver to CBS, in form reasonably satisfactory to CBS, the agreement of the proposed transferee that, upon consummation of the transfer, the transferee will unconditionally assume and perform all obligations of Broadcaster under this Agreement. Upon delivery of said agreement to CBS, in form satisfactory to it, the provisions of this Agreement applicable to Broadcaster shall, effective upon the date of such transfer, be applicable to such transferee and Broadcaster shall have no other liability or obligation to CBS under this Agreement.

Broadcaster’s obligations to procure the assumption of this Agreement by any transferee of Affiliated Station as a condition precedent to such transfer shall be deemed to be of the essence of this Agreement; further, Broadcaster expressly recognizes that money damages will be inadequate to compensate CBS for the breach of such obligation, and that CBS shall accordingly be entitled to equitable relief to enforce the same.

(c) Termination on Change of Transmitter Location, Power, Frequency or Hours of Operation of Affiliated Station.

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Exhibit 10.7

Broadcaster shall notify CBS forthwith if application is made to the Federal Communications Commission to modify the transmitter location, power or frequency of Affiliated Station so as to substantially reduce or increase the Station’s coverage area or Broadcaster plans to substantially reduce the hours of operation of Affiliated Station. CBS shall have the right to terminate this Agreement, effective upon the effective date of such modification, by giving Broadcaster notice thereof within thirty (30) days after the date on which Broadcaster gives CBS notice of the application or plan for such modification. If Broadcaster fails to notify CBS as required herein, then CBS shall have the right to terminate this Agreement by giving Broadcaster thirty (30) days’ notice thereof within thirty (30) days of the date on which CBS first learns of such application.

(d) Termination in the Event of Bankruptcy.

Upon one (1) month’s notice, CBS may terminate this Agreement if a petition in bankruptcy is filed by or on behalf of Broadcaster, or Broadcaster otherwise takes advantage of any insolvency law, or an involuntary petition in bankruptcy is filed against Broadcaster and not dismissed within thirty (30) days thereafter, or if a receiver or trustee of any of Broadcaster’s property is appointed at any time and such appointment is not vacated within thirty (30) days thereafter (it being understood that Broadcaster will have a similar right of termination upon the occurrence of any such event with respect to CBS).

(e) Termination in the Event of Breach.

Each party, effective upon notice to the other, may, in addition to its other rights, terminate this Agreement if any material representation, warranty or agreement of the other party contained in this Agreement has been breached.

4. Use of Network Programs.

(a) General.

Broadcaster shall not broadcast any Network Program over Affiliated Station unless such Network Program has first been offered by CBS to Broadcaster for broadcasting over Affiliated Station and has been accepted by Broadcaster in accordance with this Agreement. Except with the prior written consent of CBS, Broadcaster shall neither sell any Network Program, in whole or in part, or any time therein, for sponsorship, nor otherwise use Network Programs except as specifically authorized in this Agreement. Affiliated Station shall not broadcast any commercial announcement or announcements during any interval, within a Network Program, which is designated by CBS to Affiliated Station as being for the sole purpose of making a station identification announcement. Broadcaster shall, with respect to each Network Program broadcast over Affiliated Station, broadcast such Network Program in its entirety (including but not limited to commercial announcements, billboards, credits, public service announcements, promotional announcements and network identification), without interruption, alteration, compression, deletion or addition of any kind, from the beginning of the Network Program to the final system cue at the conclusion of the Network Program. Nothing herein shall be construed as preventing Broadcaster’s deletion of (i) part of a Network Program in order to broadcast an emergency announcement or

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Exhibit 10.7

news bulletin; (ii) a promotional announcement for a Network Program not to be broadcast over Affiliated Station (provided that Affiliated Station shall broadcast an alternative promotional announcement for CBS network programming in place of the deleted promotional announcement); (iii) such words, phrases or scenes as Broadcaster, in the reasonable exercise of its judgment, determines it would not be in the public interest to broadcast over Affiliated Station; provided, however, that Broadcaster shall not substitute for any material deleted pursuant to this clause (iii) any commercial or promotional announcement of any kind whatsoever; and provided further that Broadcaster shall notify CBS of every such deletion within 72 hours thereof. Broadcaster shall not, without CBS’s prior written consent, authorize or permit any Network Program, recording, or other material furnished by CBS to Broadcaster or Affiliated Station hereunder to be recorded, duplicated, rebroadcast, retransmitted or otherwise used for any purpose whatsoever other than broadcasting by Affiliated Station as provided herein; except that Broadcaster may assert a right to carriage of Affiliated Station’s signal by a cable system pursuant to the provisions of Section 4 of the Cable Consumer Protection and Competition Act of 1992 (“the 1992 Cable Act”) and may, to the extent permitted by paragraph 4(b) hereof, grant consent to the retransmission of such signal by a cable system or other multichannel video programming distributor, as defined by said Act, pursuant to the provisions of Section 6 thereof.

(b) Retransmission Consent.

Broadcaster may grant consent to the retransmission of Affiliated Station’s signal by a cable system or other multichannel video programming distributor pursuant to the provisions of Section 6 of the 1992 Cable Act (hereafter “retransmission consent”), provided that one of the following conditions applies at the time retransmission consent is granted:

(i) the cable system or other multichannel program service on which Affiliated Station’s signal is to be retransmitted serves television homes within Affiliated Station’s television market;

(ii) the majority of television homes served by the cable system or other multichannel program service on which Affiliated Station’s signal is to be retransmitted are within a county or community in which Affiliated Station’s signal is, and has been since October 5, 1992, “significantly viewed” as defined in Section 76.54 of the FCC’s rules; or

(iii) the cable system or other multichannel program service on which Affiliated Station’s signal is to be retransmitted carried such signal on October 5 , 1992, and does not receive such signal by satellite delivery.

Notwithstanding anything to the contrary in the foregoing, in no case shall retransmission consent be granted to a television receive-only satellite service, or a direct broadcast satellite service, if Affiliated Station’s signal is to be retransmitted by such service to television homes outside of Affiliated Station’s television market other than “unserved household(s),” as that term is defined in

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Exhibit 10.7

Section 119(d) of Title 17, United States Code, as in effect on October 5, 1992. For purposes of this paragraph, a station’s “television market” shall be defined in the same manner as set forth in Sections 76.55(e) and 76.59 of the FCC’s rules.

(c) Taped Recordings of Network Programs.

When authorized to make a taped delayed broadcast of a Network Program, Broadcaster shall use Broadcaster-owned tape to record the Network Program when transmitted by CBS only for a single broadcast by Affiliated Station and shall erase the Program recorded on the tape within 24 hours of broadcasting the Network Program and observe any limitations which CBS may place on the exploitation of the Network Program so recorded and erased.

5. Rejection, Refusal, Substitution and Cancellation of Network Programs.

(a) Rights of Broadcaster and CBS.

With respect to Network Programs offered to or already accepted hereunder by Broadcaster, nothing in this Agreement shall be construed to prevent or hinder:

(i) Broadcaster from rejecting or refusing any such Network Program which Broadcaster reasonably believes to be unsatisfactory or unsuitable or contrary to the public interest, or from substituting a program which, in Broadcaster’s opinion, is of greater local or national importance; or

(ii) CBS from substituting one or more other Network Programs, in which event CBS shall offer such substituted program or programs to Broadcaster pursuant to the provisions of Paragraph 1 hereof; or

(iii) CBS from canceling one or more Network Programs.

(b) Notice.

In the event of any such rejection, refusal, substitution or cancellation by either party hereto, such party shall notify the other thereof as soon as practicable by telex or by such computer-based communications system as CBS may develop for notifications of this kind. Notice given to CBS shall be addressed to CBS Affiliate Relations.

6. Disclosure of Information.

CBS shall, before furnishing any Network Program, disclose to Broadcaster information of which CBS has knowledge concerning the inclusion of any matter in such Network Program for which any money, service or other valuable consideration is directly or indirectly paid or promised to, or charged or accepted by, CBS or any employee of CBS or any other person with whom CBS deals in connection with the production or preparation of such Network Program, it being understood, however, that CBS’s inadvertent failure to provide such information shall not be deemed a material breach of this Agreement which shall afford Broadcaster any right to terminate this Agreement. As used in this paragraph 6, the term “service or other valuable consideration” shall not include any service or property furnished without charge or at a nominal charge for use in, or in connection

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Exhibit 10.7

with, any Network Program “unless it is so furnished in consideration for an identification in a broadcast of any person, product, service, trademark, or brand name beyond an identification which is reasonably related to the use of such service or property on the broadcast,” as such words are used in Section 317 of the Communications Act of 1934 as amended. The provisions of this Paragraph 6 requiring the disclosure of information shall not apply in any case where, because of a waiver granted by the Federal Communications Commission, an announcement is not required to be made under said Section 317. The inclusion in any such Network Program of an announcement required by said Section 317 shall constitute the disclosure to Broadcaster required by this Paragraph 6.

7. Indemnification.

CBS will indemnify Broadcaster, its advertisers and advertising agencies from and against any and all claims, damages, liabilities, costs and expenses of every kind whatsoever arising out of the broadcasting, pursuant to this Agreement, of Network Programs furnished by CBS including but not limited to claims, damages, liabilities, costs and expenses (i) based upon alleged libel, slander, defamation, invasion of the right of privacy, or violation or infringement of copyright or literary or dramatic rights; (ii) based upon the broadcasting of Network Programs as furnished by CBS, without any deletions by Broadcaster material to the claim in question; and (iii) not based upon any material added by Broadcaster to such Network Programs (as to which deletions and added material Broadcaster shall, to the like extent, indemnify CBS, all network advertisers, if any, on such Network Program, and the advertising agencies of such advertisers). Furthermore, each party will so indemnify the other only if such other party gives the indemnifying party prompt notice of any claim or litigation to which its indemnity applies; it being agreed that the indemnifying party shall have the right to assume the defense of any or all claims or litigation to which its indemnity applies and that the indemnified party will cooperate fully with the indemnifying party in such defense and in the settlement of such claim or litigation. Except as herein provided to the contrary, neither Broadcaster nor CBS shall have any rights against the other party hereto for claims by third persons or for the non-operation of facilities or the non-furnishing of Network Programs for broadcasting if such non-operation or non-furnishing is due to failure of equipment, action or claims by any third person, labor dispute or any cause beyond such party’s reasonable control.

8. News Reports Included in Affiliated Station’s Local News Broadcasts.

As provided in the agreements pertaining to CBS Newsnet and CBS regional news cooperatives (but as a separate obligation of this Affiliation Agreement as well), Broadcaster shall make available, on request by CBS News, coverage produced by Affiliated Station of news stories and breaking news events of national and/or regional interest, to CBS News and to regional news cooperatives operated by CBS News. Affiliated Station shall be compensated at CBS News’ then-prevailing rates for material broadcast by CBS News or included in the national Newsnet service.

9. Non-Duplication of Network Programs.

(a) For purposes of this paragraph, a television station’s “Network Exclusivity Zone” shall mean the zone within thirty-five (35) miles of the station’s reference points, or, in the case of a

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Exhibit 10.7

“small market television station,” as defined in Section 76.92 of the FCC rules, the zone within 55 a miles of said reference points; provided, however, that in no case shall the “Network Exclusivity Zone” include an area within the Area of Dominant Influence (ADI), as determined by Arbitron and published in the then-current edition of its Television ADI Market Guide, of another CBS Television Network Affiliate. A station’s “reference points” for purposes of this paragraph shall be as defined in Section 73.658(m) of the FCC rules, and shall be deemed to include, with respect to a station in a hyphenated market, the reference points of each named community in that market.

(b) Broadcaster shall be entitled to exercise, within Affiliated Station’s Network Exclusivity Zone, the protection against duplication of network programming, as provided by Sections 76.92 through 76.97 of the FCC rules, with respect to a Network Program during the period beginning one (1) day before and ending seven (7) days after the delivery of such Network Program by CBS to Broadcaster; provided, however, that such right shall apply only to Network Programs broadcast in the live time period as offered or on no more than a one day delay as accepted by CBS; and provided further that nothing herein shall be deemed to preclude CBS from granting to any other broadcast television station licensed to any other community similar network non-duplication rights within that station’s Network Exclusivity Zone, and Broadcaster’s aforesaid right of network non-duplication shall not apply with respect to the transmission of the programs of another CBS affiliate (current or future) by a “community unit,” as that term is defined by the rules of the FCC, located (wholly or partially) within the area in which Broadcaster’s Network Exclusivity Zone overlaps the Network Exclusivity Zone of that other CBS affiliate.

(c) Omitted.

10. Assignment, Conveyance and Conditions for Use of Descramblers.

(a) For value received, CBS hereby conveys, transfers, and assigns to Broadcaster, all of its rights, title and interest in and to the tangible personal property consisting of two (2) Videocipher 1B Descramblers (the “Descramblers”) subject to the following conditions:

(i) Broadcaster may not assign its rights in the Descramblers to any party without CBS’s written approval.

(ii) At the termination or expiration of this Agreement, Broadcaster’s rights in the Descramblers shall cease and Broadcaster shall take appropriate steps to assign the Descramblers to CBS.

(b) Broadcaster shall use the Descramblers solely in connection with the broadcast rights granted and specified in the Agreement.

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Exhibit 10.7

(c) CBS makes no warranties whatsoever, either express or implied, in respect of the equipment including, but not limited to, any warranties of merchantability or fitness for a particular purpose.

(d) Broadcaster shall be solely responsible for any and all installation and other related costs or charges in connection with the use and installation of the Descramblers. Broadcaster shall at all times use and maintain the Descramblers as instructed by CBS and the manufacturer and shall use its best efforts to assure that the Descramblers are kept in good condition and that no tampering with the Descramblers or other breach of security, as defined in subparagraph (g) below, occurs. Broadcaster shall promptly notify the CBS Satellite Management Center by telephone of any defect or failure in the operation of the Descramblers and shall follow such procedures as are established by CBS for the replacement or repair of the Descramblers. CBS shall be responsible for the cost of correcting any defect or of rectifying any failure of the Descramblers to operate during the Term of the Agreement, provided that Broadcaster shall be responsible for any costs associated with its failure to follow the prescribed procedures.

(e) In addition to its rights under paragraph 7 of the Agreement, CBS will not be liable for any damages resulting from the operation of the Descramblers or from the failure of the Descramblers to function properly or, any loss, cost or damage to Broadcaster or others arising from defects or non-performance of the Descramblers.

(f) If Broadcaster makes any use of the Descramblers in violation of the terms and conditions of this Agreement, said use shall be a material breach of this Agreement.

(g) Should Broadcaster’s willful acts or negligence result in any breach in the security of the two Descramblers covered by this Agreement, such breach of security shall be a material breach of this Agreement. Breach of security shall include but not be limited to any theft of all or part of the Descramblers, any unauthorized reproduction of all or part of the Descramblers, any unauthorized reproduction of the code involved in descrambling the network feed from CBS to Broadcaster, or any related misappropriation of the physical property or intellectual property contained in the Descramblers.

11. General.

(a) As of the beginning of the term hereof, this Agreement takes the place of, and is substituted for, any and all television affiliation agreements heretofore existing between Broadcaster and CBS concerning Affiliated Station, subject only to the fulfillment of any obligations thereunder relating to events occurring prior to the beginning of the term hereof. This Agreement cannot be changed or terminated orally and no waiver by either Broadcaster or CBS of any breach of any provision hereof shall be or be deemed to be a waiver of any preceding or subsequent breach of the same or any other provision of this Agreement.

(b) The obligations of Broadcaster and CBS under this Agreement are subject to all applicable federal, state and local law, rules and regulations (including but not limited to the Communications Act of 1934 as amended and the Rules and Regulations of the Federal Communications Commission) and this Agreement and all matters or issues collateral thereto shall be governed by the law of the State of New York applicable to contracts performed entirely therein.

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Exhibit 10.7

(c) Neither Broadcaster nor CBS shall be or be deemed to be or hold itself our as the agent of the other under this Agreement.

(d) Unless specified otherwise, all notices given hereunder shall be given in writing, by personal delivery, mail, telegram, telex system or private wire at the respective addresses of Broadcaster and CBS set forth above, unless either party at any time or times designates another address for itself by notifying the other party thereof by certified mail, in which case all notices to such party shall thereafter be given at its most recently so designated address. Notice given by mail shall be deemed given on the date of mailing thereof with postage prepaid. Notice given by telegram shall be deemed given on delivery of such telegram to a telegraph office with charges thereof prepaid or to be billed to the sender thereof. Notice given by private wire shall be deemed given on the sending thereof.

(e) The titles of the paragraphs in this Agreement are for convenience only and shall not in any way affect the interpretation of this Agreement.

(f) CBS agrees that the CBS Network Programs offered to Affiliated Station during the term of this Agreement will be the same as those offered on a national basis to other CBS Network affiliated television stations, it being understood that the foregoing is intended to apply only to CBS’s primary network service and not to any additional network service(s) which CBS may offer should the FCC’s rules so allow. CBS also agrees that the CBS Network Programs offered to Affiliated Station during the term of this Agreement will consist of a variety of entertainment, sports, children’s, news and public affairs programs of an overall quality, character and content consistent with the CBS Network Programs offered to Affiliated Station and other CBS affiliates on a national basis during the 1994-95 Network television season, it being understood that the ratings success of any such programs shall not be considered indicative of their overall quality and character.

(g) In the event that negotiations with the CBS Affiliates Advisory Board result in the revision of any provision of the standard form CBS Television Network Affiliation Agreement which revision would be more favorable to Affiliated Station than the comparable provision in this Affiliation Agreement, CBS will promptly offer in writing to amend this Agreement to conform to such more favorable provision.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

WESTWIND COMMUNICATIONS L.L.C.		CBS TELEVISION NETWORK A Division of CBS Inc.
By	/s/ SIGNATURE	By	/s/ SIGNATURE

- 12 -

Exhibit 10.7

WESTWIND COMMUNICATIONS L.L.C.

Bakersfield, California

Ladies and Gentlemen:

Reference is made to the CBS Television Network Affiliation Agreement between us, as amended, without limitation, by those certain letter agreements dated September 23, 1998 and October 22, 2001 (collectively, the “NFL Amendments”), relating to broadcast station KBAK-TV at Bakersfield, California, and other agreements between us with respect thereto (collectively, the “Affiliation Agreement”). You and we have agreed (the “2003 Agreement”) to further amend the Affiliation Agreement as follows. Capitalized terms not otherwise defined herein shall the meaning ascribed to them in the Affiliation Agreement.

1. CBS shall make available to Broadcaster for local sale two (2) additional 30-second prime-time units per week. One (1) 30-second unit shall be adjacent to or within “Without a Trace,” and the other such unit shall be adjacent to or within “Judging Amy,” it being understood that, in the event of cancellation of one or both of the foregoing programs, or a significant decrease in the ratings achieved by them from those prevailing during the 2003-2004 television season, the unit(s) shall be placed adjacent to or within another prime-time program(s) comparable to today’s ranking of the relevant above-mentioned program (provided, in no event shall a unit be relocated to another program that has a lower rank than the program from which it is being moved). This will create a new minimum of one hundred nine (109) 30-second units per week of Prime Time Inventory to be made available for sale by Broadcaster, which minimum will be reasonably equally distributed throughout Prime Time and will remain in place through and including December 31, 2014. In addition, CBS shall make available to Broadcaster for local sale three (3) additional 30-second units per week in “The CBS Evening News With Dan Rather,” or its sucessor program, with one such unit being scheduled as an internal break on each of Monday, Wednesday and Friday, subject to adjustment for significant ratings shortfall or gain.

To reflect this additional Inventory being made available to Broadcaster:

(a) The first and third sentence of Subparagraph 2 (h) (i) shall be amended by substituting “one hundred nine (109) 30-second units” for “one hundred seven (107) 30-second units.” In addition, the first clause of the first sentence of Subparagraph 2 (h) (i) shall be amended by substituting “Commencing on December 31, 2003 and continuing through December 31, 2014” for “Commencing on August 31, 1998, and thereafter during the NFL Broadcast Period”.

Exhibit 10.7

(b) The following shall be inserted before the final sentence of Subparagraph 2 (h) (i):

In addition, from December 31, 2003 through December 31, 2014, CBS shall make available to Broadcaster for local sale three (3) additional 30-second units per week in “The CBS Evening News Dan Rather” (or its successor program) (in addition to the amount of Inventory that is available for sale by broadcaster in such Network Program as the date hereof), with one such additional unit being scheduled on each of Monday, Wednesday and Friday, subject to adjustment for significant ratings shortfall or gain.

(c) The final sentence of Subparagraph 2 (h) (i) shall be revised to read:

Except as otherwise provided in the preceding sentence with respect to “The CBS Evening News with Dan Rather,” and in Subparagraph 2 (h) (ii) or (iii), nothing contained in this Paragraph 2(h) shall in any way establish or otherwise affect Affiliated Station’s right to Inventory during periods other than Prime Time.

In all other respects, Paragraph 2 (h) (i) will remain unchanged.

2. To reflect CBS’ recapture of units of Inventory in the Network Programs “Late Show With David Letterman”, “The Early Show” and “Late, Late Show with Craig Kilborn”, Paragraph 2 (h) (v) of the Affiliation Agreement shall be amended to read as follows:

Provided that nothing in this paragraph shall limit the final sentence of Subparagraph 2 (h) (i) hereof, Broadcaster hereby acknowledges and agrees that, effective December 31, 2003, CBS shall sell for its own account (A) one (1) additional 30-second unit of Inventory per weeknight in the “Late Show With David Letterman” (or its successor program) in commercial position #5 (B) two (2) additional 30-second units of Inventory per weekday in “The Early Show” (or its successor program); and (C) four (4) 30-second units of Inventory per weeknight in “Late, Late Show With Craig Kilborn” (or any successor program) in commercial positions #2 (one [1] unit), #4 (two [2] units) and (one [1] unit). The foregoing shall be in addition to the additional Inventory that has been sold by CBS for its own account since August 31, 1998, as contemplated by the 1998 Agreement.

3. The following new paragraph shall be added to the Affiliation Agreement immediately after the paragraph of the Affiliation Agreement titled “Affiliated Station Contribution to NFL Football Costs” (added by Paragraph A (14) of the 1998 Agreement), and shall become the next to last numbered paragraph of the Affiliation Agreement:

Annual NCAA Contribution.

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Exhibit 10.7

(i) Effective as of December 31, 2003, and continuing throughout the term or any renewal or extension of the Affiliation Agreement until December 31, 2014, Broadcaster shall make annual payments to CBS that shall be determined as set forth in clause (ii) below of this subparagraph (the “Annual NCAA Contribution”). When there is a change in the Network-Affiliated Station Licensee in a particular DMA, the Annual NCAA Contributions due from the former and new Network-Affiliated Station Licensees in such DMA shall be prorated between them based on the portion of the year, between the CBS Network’s initial presentation of an event (an “NCAA Event”) the broadcast rights to which have been acquired pursuant to that certain agreement between CBS Broadcasting Inc. and the NCAA, dated November 18, 1999 (the “NCAA Agreement”) and the CBS Network’s final presentation of an NCAA Event during the same year, during which each has been a Network-Affiliated Station Licensee.

(ii) Broadcaster’s Annual NCAA Contribution shall be an amount equal to (A) Eight Million Dollars ($8,000,000) multiplied by (B) a fraction, the numerator of which is the Affiliated Station’s Households (based on television households as of 2003/2004) and the denominator of which is the Adjusted CBS Households (based on television households as of 2003/2004) of all Network-Affiliated broadcast station affiliated with the CBS Network that are not owned or controlled, directly or indirectly, by CBS. The figure of $8,000,000 referred to in the preceding sentence reflects the total Annual NCAA Contributions of all Network Affiliated Station Licensees.

(iii) Commencing on December 31, 2003, Broadcaster’s Annual NCAA Contribution shall be $21,172, and shall either (A) be deducted in twelve equal installments from the amounts payable by CBS, if any, to Broadcaster under Paragraph 2 hereof or (B) be paid in twelve (12) equal installments by Broadcaster to CBS on a monthly basis in arrears on or before the 15^th day of each calendar month following the calendar month for which such payment is due (e.g., the first payment will be due February 15th). Within thirty (30) days after the date hereof, Broadcaster shall notify CBS in writing of the manner by which the Annual NCAA Contribution shall be paid. In the event that Broadcaster fails to so notify CBS within such thirty (30)-day period, Broadcaster shall be deemed to have elected to pay the Annual NCAA Contribution by means of a deduction against amounts payable by CBS hereunder as provider in Clause (A) of the first sentence of this Subsection (iii). CBS

3

Exhibit 10.7

shall have the right to offset against any amounts payable by CBS to Broadcaster under this Agreement any installment of the Annual NCAA Contribution that is more one hundred twenty (120) days past due. If the installments for the Annual NCAA Contribution are deducted from the amounts payable by CBS under Paragraph 2 hereof, such monthly installments will be itemized and labeled as the “Annual NCAA Contribution” on the remittance statement that accompanies the payment by CBS. Notwithstanding anything to the contrary in the foregoing, if the total amount of Broadcaster’s Annual NCAA Contribution or a monthly installment of such Annual NCAA Contribution exceeds or will exceed the amounts payable by CBS to Broadcaster under Paragraph 2 hereof for such period, CBS shall bill Broadcaster for such Annual NCAA Contribution or for such installment, as the case maybe.

4. Notwithstanding anything to the contrary contained in the NFL Amendments, subparagraphs 1(a), 1(b)(ii), 1(d) and 1(e) therein are hereby extended through December 31, 2006.

5. Except as provided in paragraph 4 above, the term of this 2003 Agreement shall commerce December 31, 2003 and be effective through December 31, 2014. During the foregoing period and the period provided in paragraph 4 above, the provision contained in this 2003 Agreement shall be incorporated, as applicable, in their entirely in any amendment without the approval of The Board of Directors of CBS Television Network Affiliates Association, which approval may be granted or withheld in its sole and absolute discretion.

5. CBS agrees to the formation of a “Futures Committee(s),” comprised of CBS executives having responsibility for issues relating to the digital spectrum, retransmission consent, programming and marketing (including such executive having principal responsibility for High Definition television), and representatives of the affiliate body appointed by The Board of Directors of CBS Television Network Affiliates Association, to discuss potential joint initiatives and mutual opportunities in these areas, including to the extent appropriate, issues of common concern with Congress and the FCC.

6. CBS agrees that it will not solicit Broadcaster or any other CBS affiliated Station Licensee for financial assistance for future program acquisitions unless it has first consulted The Board of Directors of CBS Television Network Affiliates Association which, in its sole discretion, may subject such request to a full and comprehensive review in the event of significantly changed marketplace conditions.

7. This Amendment is being submitted to all Network-Affiliated Station Licensee for approval. If this Amendment is rejected by the Network-Affiliated Station

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Exhibit 10.7

Lincensees whose television stations, in the aggregate, exceed 5% or more of the total DMA coverage (as determined by Nielsen Media Research, Inc.) of such Network-Affiliated Station Licensees, then, at the option of CBS, this Amendment may be declared null and void ab initio. Any Network-Affiliated Station Licensee from which CBS has not received an executed copy of this Agreement by December 15, 2003 will be deemed to have rejected the Agreement for purposes of this Paragraph. Within a reasonable time following such date, CBS shall notify Affiliated Station and The Board of Directors of CBS Television Network Affiliates Association of the satisfaction or the failure to satisfy the condition set forth in this Paragraph.

In all other respects, the terms of the Affiliation Agreement, as amended, are hereby confirmed and ratified. If the foregoing reflects your understanding of the agreement between you and CBS, please signify your agreement to the foregoing by executing the Agreement in the space indicated below, faxing such executed Agreement to the attention of Rhonda Troutman at Facsimile No. 212-975-4229 and returning one original executed copy of the same to Rhonda Troutman, Vice President, CBS Affiliate Relations, 7^th Floor, 51 West 52 Street, New York 10019.

Very truly yours,
CBS Affiliate Relations, A Unit of CBS Broadcasting Inc.
By:	/s/ Peter K. Schruth
Name:	Peter K. Schruth
Title:	President

Agreed and Accepted this 12 day of December, 2003.

WESTWIND COMMUNICATIONS L.L.C.
By:	/s/ Wayne W. Lansche
Name:	Wayne W. Lansche
Title:	President

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Exhibit 10.7

September 23, 1998

WESTWIND COMMUNICATIONS L.L.C.

Bakersfield, California

Gentlemen:

The purpose of this letter agreement (the “Agreement”) is to set forth our agreement as to certain amendments to that certain CBS Television Network Affiliation Agreement (the “Affiliation Agreement”) between you and us relating to broadcast station KBAK-TV at Bakersfield, California, and other agreements between you and us with respect thereto. Capitalized terms not otherwise defined in this letter agreement will have the meaning ascribed thereto in the Affiliation Agreement.

A. Amendments to Agreement. You and we agree that the Affiliation Agreement shall be amendment as follows:

1. Paragraph 1(a) of the Affiliation Agreement is hereby amended by adding a new sentence at the end of the paragraph which shall read in its entirely as follows:

CBS shall, during the NFL Broadcast Period, offer to Broadcaster for broadcasting by Affiliated Station those NFL Games the broadcast rights to which were acquired by CBS pursuant to the NFL Agreement.

2. In order to implement a new agreement regarding Affiliated Station’s exclusivity as to the transmission of Network Programs on non-broadcast media, Paragraph 1(b) of the Affiliation Agreement is amended by deleting the portion of paragraph 1(b) that begins after the first sentence of that Paragraph in its entirely and inserting the following in lieu thereof:

Such acceptance shall constitute Broadcaster’s agreement that Affiliated Station will broadcast such Network Program or Network Programs in accordance with the terms of this Agreement and of such offer, and so long as Affiliated Station so broadcasts such Network Program or Network Programs, CBS will not (i) authorize the broadcast thereof on a network basis by any other broadcast station licensed to operate in Affiliated Station’s community of license or (ii) except as otherwise provided in Paragraph 1(d) below, distribute, authorize or permit the distribution of Network Programs to or by means of any Video System available to viewers in Affiliated Station’s designated market area as defined by Nielsen Media Research, Inc. (“DMA”), at any time during the Exclusivity Period; provided, however, that the covenants and provisions set forth in clause (ii) of this Paragraph 1(b) (the “Exclusivity Arrangements” shall not be applicable to (A) any Network Program the broadcast rights to which were acquired prior to the date hereof or to the distribution arrangements described in that certain letter from Howard F. Jaeckel, Esq. to Kurt A. Wimmer, Esq., dated September 23, 1998, or (B) as to any Licensed Network Program not covered by Clause (A), excerpt as provided in Paragraph 1(e). If as to any Network Program offered hereunder. Broadcaster does not notify CBS as provided for in this Paragraph 1(b), Broadcaster shall have no rights with respect to such Network Program, and CBS may offer such Network Program on the same or different terms to any other television

Exhibit 10.7

broadcast station or stations license to operate in Affiliated Station’s community of license; provided, however, that, if any Network Program offered hereunder is accepted by Affiliated Station, upon any other terms or conditions to which CBS agrees in writing, then the provisions of this Agreement shall apply to the broadcast of such Network Program except to the extent such provisions are expressly varied by the terms and conditions of such acceptance as so agrees to by CBS.

3. Paragraph 1 of the Affiliation Agreement is hereby amended by adding a new Paragraph 1(d) thereto which shall read in its entirely as follows:

(d) Exception to the Exclusively Period. Notwithstanding Paragraph 1(b) to the contrary, Network Programs may be distributed by CBS to or by means of any Video Systems prior to the expiration of the Exclusivity Period in the limited circumstances described below provided that such Network Programs are distributed by CBS in accordance with the terms of this Paragraph 1(d).

(i) CBS-Produced News Footage and Segments. CBS may distribute to or by means of other Video Systems any News Segment or News Footage produced by or on behalf of CBS News Following the broadcast of such News Segment (which may include News Footage gathered by Affiliated Station pursuant to the news service and cooperative arrangement, currently doing business under the name “CBS NewsPath,” established by Schedule B to the Affiliation Agreement (the “NewsPath Service”)) or News Footage, as the case may be, on the CBS Network. Without effecting the meaning of “Network Program” as used in this Agreement and the Affiliation Agreement, nothing herein shall be construed as preventing CBS from (a) distributing to Video Systems, as part of the NewsPath Service, News Footage or News Segments concurrent with its delivery to Network Affiliated Licensees as part of such NewsPath Service or (b) from distributing to Video Systems archival material that has not previously been broadcast on the CBS Network.

(ii) Affiliated Station-Produced News Segments. CBS may distribute to or by means of other Video Systems any News Segment produced by Affiliated Station provided that (A) such News Segment has been broadcast on the CBS Network and (B) CBS has received the prior written consent of Affiliated Station to such distribution.

(iii) Affiliated Station-Produced News Footage. CBS may distribute to other Video Systems News Footage produced by Affiliated Station provided that (A) such News Footage has been provided for simultaneous broadcast on the CBS Network or has been provided to Network Affiliated Station Licensees under the NewsPath Service and (B) in cases in which the News Footage is “unique and exclusive,” CBS has received the prior written consent of Affiliated Station to such distribution. For purposes of this Agreement, News Footage is “unique and exclusive” if, in the reasonable judgment of Affiliated Station, no other media outlet other than Affiliated Station has visual or aural coverage of comparable content and/or quality of specific subject of such News Footage or if considerations unique to the business needs of Affiliated Station reasonably require that such footage not be distributed to other Video Systems. Broadcaster shall be required to provide reasonable notification to CBS that it regards any particular News Footage made available to CBS by Broadcasters as “unique and exclusive.”

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Exhibit 10.7

(iv) Talk Shows. CBS may distribute Talk Show episodes to or by means of any Video System provided that such episode is distributed no earlier than 90 days after the first broadcast date on which CBS offers such Talk Shows episode to Affiliated Station for simultaneous television broadcasting.

(v) Award Shows and Sporting Events. CBS may distribute any Award Show or Sporting Event to or by means of any Video System provided that such Award Show or Sporting Event is distributed no earlier that five days after the first broadcast date to which CBS offers such Award Show or Sporting Event to Affiliated Station for simultaneous television broadcasting.

(vi) Video on Demand. CBS may distribute any Network Program to any Video System that makes such Network Program available for viewing on a subscription or fee for viewing basis at the time of each individual subscriber’s own choosing as part of a general video-on-demand service, provided that net income received by CBS from such a service within Affiliated Station’s DMA is shared on a 50%-50% basis with Affiliated Station. At any time after September 25, 2001, CBS or the Advisory Board, by written notice to the other, shall have the right to renegotiate the income sharing provisions of this Subparagraph 1(d)(vi), as provided in Paragraph 3(f) hereof.

(vii) Events of National Importance. CBS may distribute to or by means of any Video System and may authorized the telecast by any broadcast station, wherever licensed to operate, any Network Program that consists of (A) an address by the President of the United States of America on a subject of national importance or (B) coverage of a matter if immediate national concern.

(viii) Pay-Per-View of Sporting Events. Nothing herein shall be construed to prevent CBS from distributing, authorizing or permitting the distribution of a Sporting Event offered as part of a package of such events for viewing nationally on a subscription or fee for viewing basis (a “Pay-Per-View Exhibition”); provided, however, that in so doing CBS shall cause the particular Sporting Event offered by the CBS Network for broadcasting by Affiliated Station to be blacked out for purposes of such Pay-Per-View Exhibition within Affiliated Station’s DMA.

(ix) Syndication. Notwithstanding anything to the contrary herein, once the episodes of a particular Network Program have entered the Syndication Window, the owner of the rights in such episodes may distribute, authorize or permit the distribution of any episodes of the Network Program for exhibition by means of any Video System, at any time subsequent to the Broadcast Season during which CBS first offers such episodes to CBS affiliates for simultaneous television broadcasting on the CBS Network.

(x) Home Video. Nothing in clause (ii) of Paragraph 1(b) hereof shall be applicable to the distribution or commercial sale to the general public of Network Programs for exhibition in the home by means of video cassettes, video discs or similar devices.

(xi) Cancellation of Program. The obligation of CBS under clause (ii) of Paragraph 1(b) and Paragraph 1(f) hereof shall expire with respect to each episodic Network Program (whether a Licensed Network Program or a CBS Owned Network Program) as of the date CBS ceases to broadcast such Network Program on a network basis.

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Exhibit 10.7

(xii) Additional Exclusions. Nothing in clause (ii) of Paragraph 1(b) hereof shall be applicable to the distribution by means of any Video Systems of Network Programs that are Theatrical Movies, Made-for-Television Movies, Non-Dramatic Specials or Mini-Series.

4. Paragraph 1 of the Affiliation Agreement is hereby amended by adding a new Paragraph 1(e) thereto which shall read in its entity as follows:

(c) Licensed Network Programs.

(i) Exclusivity Arrangements. CBS shall use its commercially reasonable efforts (which efforts shall not require the payment of additional consideration to third-party licensors) to obtain such contractual or other rights from third parties as may be necessary so that the Exclusivity Arrangements will apply to all Licensed Network Programs as if such Licensed Network Programs were CBS Owned Network Programs for purposes of clause (ii) of Paragraph 1(b) hereof. CBS shall provide Broadcaster with prompt written notice in the event that the Exclusivity Arrangements will not apply to any Licensed Network Program, which notice shall be dispatched no later than (A) the date that is seven days after the public announcement by CBS that it will carry such Licensed Network Program in its program schedule for the Broadcast Season, (B) if such Licensed Network Program was not originally included in the program schedule for the Broadcast Season, the date on which CBS offers such Licensed Network Program to CBS affiliates for simultaneous television broadcasting on the CBS Network, or (C) with respect to any such Licensed Network Program (other than a series pilot), the date that is seven days after CBS has entered any agreement that is inconsistent with the Exclusivity Arrangements.

(ii) Preemption. If the Exclusivity Arrangements do not apply to any Licensed Network Program for any reason, Broadcaster shall have the right to preempt such Licensed Network Program and substitute in its place a program selected by Broadcaster. Broadcaster shall notify CBS as far in advance as reasonably practicable of any such preemption and substitution. The preemption of a Licensed Network Program pursuant to this Paragraph 1(e) shall not be counted against any agreed limitation on preemptions of Network Programs (subject to Section 73.658 of the FCC’s rules) applicable to the Affiliated Station, or otherwise have any economic consequences that are adverse to Broadcaster under the Affiliation Agreement. For the avoidance of doubt, Broadcaster shall have the right to sell or otherwise dispose of, for its own account, all Inventory adjacent to any licensed Network Program preempted pursuant to Paragraph 1(e) hereof.

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Exhibit 10.7

5. Paragraph 1 of the Affiliation Agreement is hereby amended by adding a new Paragraph 1(f) thereto which shall read in its entirety as follows:

(f) Program Title. The title of any episode CBS Owned Network Program that is supplied to any Video System before such program has entered the Syndication Window will be changed to a title which is materially different from the title utilized in connection with the broadcast of such Network Program on the CBS Network.

6. Paragraph 1 of the Affiliation Agreement is hereby amended by adding a new Paragraph 1(g) thereto which shall read in its entirety as follows:

(g) Promotion. Except as otherwise require under any agreement between CBS available by CBS to Affiliated Station, on-air talent employed by or under contract to CBS appearing in any Network Program shall not within any Network Program or otherwise on the CBS Network (i) during any period in which television viewing in all markets in the United States is measured (commonly known as “sweep periods,” currently the month of July), cross-promote to specific programs or continuing coverage of news or other events appearing on channels or programs made available for viewing on other Video System(s) and (ii) at any time shall not mention the day, date or time at which any program appearing on channels or programs made available for viewing on other Video Systems is scheduled to appear. CBS shall use its commercially reasonable efforts (not to include the payment of additional consideration) to minimize the obligations of its on-air talent to promote programs made available for viewing on other Video System(s).

7. Paragraph 1 of the Affiliation Agreement is hereby amended by adding a new Paragraph 1(h) thereto which shall read in its entirety as follows:

(h) Satellite Distribution. This Agreement shall not be construed to provide Affiliated Station with exclusivity as to the distribution, under color of a compulsory license under Federal law, of Network Programs contained in the signals of television broadcast stations owned by or affiliated with CBS by direct broadcast satellite to residences, as to which CBS retains all exclusive rights.

8. Paragraph 1 of the Affiliation Agreement is hereby amended by adding new Paragraph 1(i) which shall read in its entirety as follows:

(i) Sunday Programming. CBS agrees to exercise commercially reasonable efforts to accommodate during the NFL season the Sunday morning programming needs to those television stations that are affiliated with the CBS Network and are located in the Pacific time zone by modifying its standard clearance guidelines for CBS Sunday Morning Network Program and Face The Nation Network Program (or any successors programs transmitted for broadcast during substantially the same time periods), so as to facilitate the scheduling of children’s programming, locally produced news or public affairs programming, or locally produced NFL-related programming by such affiliated television stations (including if applicable, Affiliated Station). No rescheduling of the aforementioned Network Programs contrary to CBS’s standard clearance guidelines shall be made by Affiliated Station without the prior approval of CBS, which shall not be unreasonably withheld.

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Exhibit 10.7

9. The title of Paragraph 2 of the Affiliation Agreement shall be changed to read “Payment to Broadcasters and Affiliated Station’s Commercial Inventory.”

10. Paragraph 2(e) of the Affiliation Agreement is hereby amended by adding a new sentence at the end of such Paragraph, which shall read in its entirety as follows:

CBS shall not reduce Broadcaster’s Network Rate to defray any expenses related to the production or acquisition of any Network Program, recoup its internal cost of the Inventory provided to Broadcaster pursuant to Paragraph 2(h) hereof, or otherwise to alter the balance of the benefits contained in this Agreement.

11. A new Paragraph 2(h) shall be added to the Affiliation Agreement which shall read in its entirety as follows:

(h) Affiliated Station’s Commercial Inventory.

(i) Minimum Available Advertising Inventory. Commencing on August 31, 1998, and thereafter during the NFL Broadcast Period, Broadcaster shall have the right to sell or otherwise dispose of, for its own account, no less than one hundred seven (107), 10-second “units” of Inventory occurring during regularly scheduled Prime Time Network Programs each calendar week (Monday through Sunday) (the “Prime Time Inventory”). The Prime Time Inventory shall include a 45-second local newsbreak occurring in the last hour of Prime Time each day of the calendar week, of which 30-seconds each calendar day may be used by Broadcaster as Inventory. Notwithstanding the forgoing provisions of this clause (i), the parties agree that the amount of Inventory available for sale by Broadcaster may be lower than said one hundred seven, 30 second units during those weeks in which the CBS Network schedules special news, sports or sponsor-provided programming of the type set forth, for illustrative purposes only, in Part II of Exhibit A hereof (“Special Programming”), and in which the amount of Inventory available for sale by Network-Affiliated Station Licensees has, in prior years, been less than in regularly scheduled Prime Time Network Programs; provided, however, that the amount of Special Programming in Network Programs provided by CBS to Affiliated Station in any given Broadcast Year shall be no greater than the amount of Special Programming in Network Programs provided by CBS to the television broadcast stations owned by CBS. Subject to the provisions of Subparagraph 2(h)(ii) hereof, the Inventory in regularly scheduled Prime Time Network Programs shall be allocated substantially in accordance with the programming schedule set forth in Part I of Exhibit A hereto; provided, however, that CBS shall have the right to reallocate a reasonable amount of Inventory among Network Programs so long as such reallocation does not result in the Prime Time Inventory having materially less value by virtue of its placement than the Inventory available to Broadcaster during each calendar week (Monday through Sunday) of Prime Time for the 12-month period ending August 31, 1998. CBS shall use commercially reasonable efforts to allocate in a fair and equitable manner the Prime Time Inventory among each Network Program, and the allocation of Prime Time Inventory in Prime Time programming provided by CBS to Affiliated Station shall be materially

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Exhibit 10.7

identical to the allocation of Prime Time Inventory provided by CBS to the television broadcast stations owned by CBS. Except as otherwise provided in Subparagraph 2(h)(ii) or (iii), nothing contained in this Paragraph 2(h) shall in any way establish or otherwise affect Affiliated Station’s right to Inventory during periods other than Prime Time.

(ii) Supplemental Prime Time Inventory. Except as otherwise provided in the immediately following sentence, commencing on August 31, 1998, and thereafter during the NFL Broadcast Period, one additional 30-second unit of Inventory (the “Supplemental Unit”) shall be allocated for sale by Broadcaster each day in regularly scheduled Prime Time Network Programs as follows: during the first full Broadcast Year occurring after August 31, 1998, such Supplemental Unit shall be made available to Affiliated Station during or adjacent to the third hour of Prime Time; during the second full Broadcast Year occurring after August 31, 1998, such Supplemental Unit shall be made available to Affiliated Station during or adjacent to the second hour of Prime Time; during the third full Broadcast Year occurring after August 31, 1998, such Supplemental Unit shall be made available to Affiliated Station during or adjacent to the first hour of Prime Time; and for each additional Broadcast Year thereafter, such Additional Units shall be made available to Affiliated Station in accordance with the foregoing annual, rotating schedule. In order to accommodate CBS’s Programming schedule for the 1998-1999 Broadcast Season, CBS and Broadcaster agree that during the first full Broadcast Year occurring after August 31, 1998, the Supplemental Unit shall be allocated each calendar week (Monday through Sunday) in Prime Time as set forth in Exhibit B hereto.

(iii) NFL Inventory

(A) In addition to the Prime Time Inventory, with respect to each single NFL Game that is scheduled by the NFL to begin prior to 4:00 p.m. New York City time and made available to Affiliated Station for broadcast by CBS, Broadcaster shall have the right to sell or otherwise dispose of, for its own account, no fewer than eighteen (18), 30-second units of Inventory in or adjacent to (i.e., no more than three (3), 30-second units immediately preceding the commencement of the NFL Game and no more than three (3), 30-second units of Inventory immediately following the conclusion of the coverage of the NFL Game) such NFL Game.

(B) In addition to the Prime Time Inventory, with respect to each single NFL Game that is scheduled by the NFL to begin on or after 4:00 p.m., New York City time and made available to Affiliated Station for broadcast (a “Late-Start NFL Game”), Broadcaster shall have the right to sell or otherwise dispose of, for its own account, no fewer than thirteen (13), 30-second units of Inventory in or immediately following (i.e., up to three (3), 30-second units of Inventory immediately following the conclusion of the coverage of the NFL Game) such NFL Game.

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Exhibit 10.7

(C) In addition to the Prime Time Inventory, with respect to back-to-back broadcasts of NFL Games occurring on the same calendar day that are provided to Broadcaster for broadcast by CBS on the same day, Broadcaster shall have the right to sell or otherwise dispose of, for its own account, no fewer than twenty-nine (29) 30-second units of Inventory in or adjacent to (i.e., no more than three (3), 30 second units immediately preceding the commencement of the NFL Game and no more than (3), 30-second units immediately following the conclusion of coverage of the NFL Game) such back-to-back NFL Games.

(D) In addition to the Inventory made available under the immediately preceding Subparagraph 2(h)(iii)(C), Broadcaster shall have the right to sell or otherwise dispose of, for its own account, one additional 30-second unit of Inventory adjacent to 60 Minutes (or any successor program transmitted for broadcast during substantially the same time period as 60 Minutes) on each Sunday on which a back-to-back broadcast of NFL Games is provided to Affiliated Station for broadcast by CBS.

(iv) NFL Game News Break. In addition to the foregoing, CBS shall make available an opportunity for Broadcaster to provide a three (3) minute and thirty-four (34) second local news broadcast (the “Local News Window”) during half time of the second game of back-to-back NFL Games provided to Affiliated Station for broadcast by CBS. The Local News Window will be comprised of a ninety-four (94) second station break, followed immediately by a two (2) minute period for use, at Broadcaster’s option, for a local news broadcast. CBS shall make available programming for broadcast during such two (2) minute period in the event that Broadcaster elect no to use it for a local news broadcast. If Broadcaster elects to air a local news broadcast during the Local News Window, Broadcaster may not schedule more than 90 seconds of local commercials during the Local News Window.

(v) New Network Inventory. Without limitation of the final sentence of Subparagraph 2(h)(i) hereof, Broadcaster hereby acknowledges and agrees that from and after August 31, 1998, CBS shall have the right to sell for its own account (A) two (2), 30-second units of Inventory per weeknight in the second half-hour of the Late Show With David Letterman Network Program (or any successor program transmitted for broadcast during substantially the same time period as the Late Show With David Letterman) and (B) two (2) 30-second units of Inventory per weekday in the second hour of the CBS This Morning Network Program (or any successor program transmitted for broadcast during substantially the same time period as CBS This Morning).

12. Paragraph 3 of the Affiliation Agreement is hereby amended by adding a new Paragraph 3(f) thereto which shall read in its entirety as follows:

(f) Renegotiation; Partial Expiration and Termination.

(i) Renegotiation of Preemption Rights. At any time after September 25, 2001, CBS or the Advisory Board will, by written notice to the other, have the right to seek a renegotiation of the provisions of Subparagraph 1(e)(ii) hereof. If, at the conclusion of such negotiations. CBS and the Advisory Board have reached agreement on replacement provisions for Subparagraph 1(e)(ii), a legally binding instrument

8

Exhibit 10.7

reflecting the agreed terms (the “Preemption Modification Agreement”) shall be submitted to all Network-Affiliated Station Licensees, including Broadcaster, for approval. If the Preemption Modification Agreement is rejected by the Network-Affiliated Station Licensees whose television stations, in the aggregate, exceed 5% or more of DMA coverage (as determined by Nielsen Media Research, Inc. ), then, at the option of CBS, the Preemption Modification Agreement will not be binding on CBS or Broadcaster. If CBS has not received an executed Preemption Modification Agreement from any Network-Affiliated Station Licensee within 30 days of its submission to the Network-Affiliated Station Licensees, such Network-Affiliated Station Licensee will be deemed to have rejected the Preemption Modification Agreement for purposes of this paragraph. CBS shall have 45 days following the conclusion of such thirty (30) day period to exercise the option granted with respect to the Preemption Modification Agreement set forth in clause (i) of this Paragraph 3(f)

(ii) Renegotiation of Income Sharing. At any time after September 25, 2001, CBS or the Advisory Board will, by written notice to the other, have the right to seek a renegotiation of the provisions of Subparagraph 1(d)(vi) hereof. If, at the conclusion of such negotiations, CBS and the Advisory Board have reached agreement on replacement provisions for Subparagraph 1(d)(vi), a legally binding instrument reflecting the agreed terms (the “Income Sharing Modification Agreement”) shall be submitted to all Network-Affiliated Station Licensees, including Broadcaster, for execution. If such Income Sharing Modification Agreement is not executed by Broadcaster within thirty (30) days of its submission to Broadcaster, or if CBS and the Advisory Board are unable to agree on replacement provisions for Subparagraph 1(d)(vi) after ninety (90) days of good faith negotiations, then the income-sharing provisions of Subparagraph 1(d)(vi) hereof shall terminate.

(iii) Termination in Part. If CBS elects not to be bound by the Preemption Modification Agreement following its rejection by Network-Affiliated Station Licensees pursuant to clause (i) of this Paragraph 3(f), or the Advisory Board and CBS are unable to agree on replacement provisions for Subparagraph l(e)(ii) following ninety (90) days of good faith negotiations, then: (A) the Exclusivity Arrangements shall terminate, (B) the obligations of Broadcaster to make payments to CBS to help defray the costs of the NFL Agreement as provided in the next to last numbered paragraph of this Affiliation Agreement shall terminate, (C) the obligations of CBS to provide Supplemental Units to Broadcaster pursuant to Subparagraph 2(h)(ii) hereof shall terminate; (D) the understandings set forth under Subparagraph 2(h)(v) hereof shall terminate, and Broadcaster shall thereafter have the right to sell for its own account two (2), 30-second units of Inventory per weeknight in the second half-hour of the Late Show With David Letterman Network Program (or any successor program transmitted for broadcast during substantially the same time period as the Late Show With David Letterman) and two (2) 30-second units of Inventory per weekday in the second hour of the CBS This Morning Network Program (or any successor program transmitted for broadcast during substantially the same time period as CBS This Morning), and (E) all other rights and obligations of the parties set forth in this Agreement shall remain in full force and effect during the term hereof, including without limitation the rights and obligations set forth in Subparagraphs l(a), 2(h)(i) and 2(h)(iii) hereof.

9

Exhibit 10.7

13. Paragraph 11 of the Affiliation Agreement is hereby amended by adding a new paragraph thereto, as the last lettered Subparagraph of such Paragraph, which shall read in its entirety as follows:

(    ) Except as otherwise provided in the immediately following sentence, this Agreement may be amended only by the parties hereto in writing. Broadcaster hereby acknowledges and agrees that Paragraphs 1(b), 1(d) and 1(e) of the Agreement shall be deemed to be amended to the extent that an amendment to this Agreement and to all other agreements by and between CBS and each of the Network-Affiliated Station Licensees containing substantially the same terms and conditions provided herein are approved both by CBS and by the Network-Affiliated Station Licensees whose television stations, in the aggregate, reach no less than 95% of the DMA coverage (as defined by Nielsen Media Research, Inc.) provided by markets served by the Network-Affiliated Station Licensees; provided, however, that no amendment that requires the payment by Broadcaster of additional funds, whether by direct payment or by a reduction in the compensation payment under the Agreement, shall be deemed effective as against Broadcaster unless Broadcaster shall have consented thereto.

14. The following new paragraph shall be added to the Affiliation Agreement as the next to last numbered Paragraph thereof and shall read in its entirety as follows:

    . Affiliated Station Contribution to NFL Football Costs.

(a) Broadcaster shall make annual payments to CBS to help defray the costs of the NFL Agreement (the “Annual NFL Contribution”), which shall be determined as set forth below. The obligation of Broadcaster to make the Annual NFL Contribution shall commence as of September 1, 1998 and expire at the end of the NFL Broadcast Period, unless earlier terminated as provided in Paragraph 3(f) hereof. When there is a change in the Network-Affiliated Station Licensee in a particular DMA, the Annual NFL Contributions due from the former and new Network-Affiliated Station Licensee in such DMA shall be prorated between them based on the portion of the then-current NFL season for which the respective stations shall have been a Network Affiliated Station Licensee.

(i) If Affiliated Station is licensed to the home city of an AFC Team, Broadcaster’s Annual NFL Contribution shall be an amount equal to (A) the product of (1) Twenty Eight Million Dollars ($28,000,000) and (2) a fraction, the numerator of which is the Affiliated Station’s Households and the denominator of which is the Adjusted CBS Households (such product, the “Base Amount”) plus (B) an amount equal to ten percent (10%) (the “NFC-NFL Surcharge”) of the Base Amount.

(ii) If Affiliated Station is licensed to the home city of an NFC Team, Broadcaster’s Annual NFL Contribution shall be an amount equal to (A) the Base Amount plus (B) an amount equal to five percent (5%) (the “NFC-NFL Surcharge”) of the Base Amount.

(iii) If Affiliated Station is not licensed to the home city of an AFC Team or NFC Team, Broadcaster’s Annual NFL Contribution shall be an amount equal to (A) Twenty Seven Million. Four Hundred Ten Thousand, Four Hundred Fifty Seven Dollars ($27,410,457) multiplied by (B) a fraction, the numerator of which is the Affiliated Station’s Households and the denominator of which is the Adjusted CBS Households. The figure of $27,410,457 referred to in the preceding sentence reflects the

10

Exhibit 10.7

total Annual NFL Contributions or all Network Affiliated Station Licensees (which does not include any contribution from any television station owned by CBS or any Affiliate thereof) of $28,000,000, reduced by the sum of all AFC-NFL Surcharges and NFC-NFL Surcharges (an amount equal to $589,543) to be received by CBS.

(iv) The amount of Affiliated Station’s Annual NFL Contribution (which shall not vary during the NFL Broadcast Period) and the manner by which such contribution was calculated are set forth on the attachment hereto labeled “NFL Contribution”.

(v) Commencing in the first calendar month that Broadcaster’s obligation to make the Annual NFL Contribution becomes effective, Broadcaster’s Annual NFL Contribution shall, at Broadcaster’s election, exercisable in its sole and absolute discretion; either (A) be deducted in twelve equal installments from the amounts payable by CBS to Broadcaster under Paragraph 2 hereof or (B) be paid in twelve (12) equal installments by Broadcaster to CBS on a monthly basis in arrears on or before the 15^th day of each calendar month following the calendar month for which such payment is due. Within thirty (30) days after the date hereof Broadcaster shall notify CBS in writing of the manner by which the Annual NFL Contribution shall be paid. In the event that Broadcaster fails to so notify CBS within such thirty (30)-day period, Broadcaster shall be deemed to have elected to pay the Annual NFL Contribution by means of a deduction against amounts payable by CBS hereunder as provided in Clause (A) of the first sentence of this Subsection (v). CBS shall have the right to offset against any amounts payable by CBS to Broadcaster under this Agreement any installment of the Annual NFL Contribution that is more than one hundred twenty (120) days past due. If the installments for the Annual NFL Contribution are deducted from the amounts payable by CBS under Paragraph 2 hereof, such monthly installments will be itemized and labeled as the “NFL Contribution” on the remittance statement that accompanies the payment by CBS. Notwithstanding anything to the contrary in the foregoing, if the total amount of Broadcaster’s Annual NFL Contribution or a monthly installment of such Annual NFL. Contribution exceeds or will exceed the amounts payable by CBS to Broadcaster under Paragraph 2 hereof for such period, CBS shall bill Broadcaster for such Annual NFL Contribution or for such installment, as the case may be.

(vi) The unpaid portion of the Annual NFL Contribution that has accrued prior to (A) the expiration of the NFL Broadcast Period, (B) the termination of Broadcaster’s obligation to make Annual NFL Contributions as provided in Paragraph 3(f) hereof, or (C) the termination of this Agreement, shall be due and payable by Broadcaster notwithstanding such expiration or termination. The full amount of the Annual NFL Contribution shall be deemed to accrue as of September 1 of each year during the NFL Broadcast Period; provided, however, that if Broadcaster’s obligation to make the Annual NFL Contribution is terminated pursuant to Paragraph 3(f) hereof, Broadcaster shall be obligated to pay to CBS, for the Broadcast Year in which such termination occurs, a fraction of its Annual NFL Contribution, the numerator of which is the number of NFL Games that have been provided to Broadcaster prior to the date of such termination and the denominator of which is the number of NFL Games reasonably expected to be provided by CBS to Broadcaster during such NFL Season.

11

Exhibit 10.7

15. The following Paragraph shall be added to the Affiliation Agreement as the last numbered paragraph thereof and shall read in its entirety as follows:

    . Definitions. Capitalized terms not otherwise defined in the Agreement shall have the meanings ascribed thereto as follows:

“Adjusted CBS Households” means the total of Affiliated Station Households for all television stations affiliated with the CBS Network, minus the total number of television households for the 1997-98 Broadcast Season in the DMAs in which a television station is owned by CBS or any Affiliate thereof.

“Advisory Board” means the Advisory Board of the CBS Television Network Affiliate Association.

“AFC Team” means a professional football team fielded by a NFL franchisee that is designated by the NFL as a member team of the American Football Conference.

“Affiliate” means, with respect to any person or entity, any other person or entity directly or indirectly Controlling, or Controlled by, or under common Control with such first person or entity.

“Affiliated Station’s Households” means the number of television households in Affiliated Station’s DMA for the 1997-98 season, plus the number of such households, if any, in any adjoining DMA in which there is no affiliated station of the CBS Network and in which the predominant viewing of Network Programs is to Affiliated Station.

“Award Show” means a Network Program depicting an event at which awards, prizes or other elements of like recognition are distributed to one or more individuals or other entities and that is broadcast within seven (7) calendar days of the actual occurrence of such event.

“Broadcast Season” means the period beginning in September and ending in May of each year during which the CBS Network broadcasts primarily first-run, non-repeat programs.

“Broadcast Year” means the 12-month period beginning in September of each year in which Network Programs are premiered by CBS.

“CBS Network” means the current system of which Affiliated Station is a part by which Network Programs are distributed for simultaneous television broadcast by television station(s) not owned or controlled by CBS or any Affiliate thereof.

“CBS News” means the division of CBS or any Affiliate thereof primarily responsible for production of programming concerning news or other events of current interest.

“CBS Owned Network Program” means any Network Program the rights to which are, at any time, wholly owned directly or indirectly by CBS or any of its wholly owned subsidiaries, including without limitation those Network Programs listed in Exhibit C hereto.

“Control” means having the power to direct the affairs of a person or entity by reason of either (i) owning or controlling the right to vote a sufficient number of shares of voting stock or other voting interest of such person or entity or (ii) having the right to direct the general management of the affairs of such person or entity by contract or otherwise.

“ Exclusivity Period” means, with respect to a Network Program, (i) the period preceding the first broadcast date on which CBS offers such Network Program to CBS

12

Exhibit 10.7

affiliates for simultaneous television broadcasting on the CBS Network, and (ii) the period beginning on the first broadcast date on which CBS offers such Network Program to CBS affiliates for simultaneous television broadcasting on the CBS Network and ending on the date that is twelve months after such first broadcast date.

“FCC” means the Federal Communications Commission.

“Inventory” means the amount of potential units of advertising contained in Network Programs that are available for sale or other disposition.

“Licensed Network Program” means any Network Program that is not a CBS Owned Network Program, including any Network Program the rights to which are licensed by CBS or any of its Affiliates from an unrelated third party.

“Made for Television Movie” means a feature length motion picture originally produced for exhibition on television.

“Mini-Series” means a special series of television programs consisting of a unified story line, other than a regular episodic program, intended for broadcast on two or more, but no more than 14, days.

“Network-Affiliated Station Licensees” means all FCC licensees of the television broadcast stations affiliated with the CBS Network that are not owned or Controlled, directly or indirectly, by CBS.

“News Footage” means the reproduction of the image (whether by means of video, film, photography or other sound and/or image reproduction technology) of a news event occurring within 24 hours prior to the broadcast or other distribution thereof that has been produced but not been edited into a News Segment.

“News Segment” means the report of or on a news event occurring within 24 hours prior to the broadcast or other distribution thereof by means of video, film, photography or other sound and image reproduction technology that has been produced and edited into a news story.

“NFC Team” means a professional football team fielded by an NFL franchisee that is designated by the NFL as a member team of the National Football Conference.

“NFL” means the National Football League and any successor thereto.

“NFL Agreement” means that certain Agreement, dated as of January 8, 1998 by and between CBS and the NFL, as the same may be amended, extended, renewed or otherwise supplemented or replaced but which, in any event, shall not extend beyond the 2005-2006 NFL Season.

“NFL Broadcast Period” means the period of time that coincides with the expiration or termination of the NFL Agreement.

“NFL Game” means a NFL professional football game between any two teams fielded by NFL franchisees, whether a pre-season game, a regular season game, a “wildcard” or divisional playoff game, conference championship game or Super Bowl game.

“Non-Dramatic Special” means a non-episodic, special program of a non-dramatic nature

“Prime Time” means (i) the time periods between the hours of 8:00 p.m. and 11:00 p.m., Monday through Saturday, and between 7:00 p.m. and 11:00 p.m. Sunday in the Eastern and Pacific time zones and (ii) the time periods between the hours of 7:00 p.m. and 10:00 p.m., Monday through Saturday, and between 6:00 p.m. and 10:00 p.m. Sunday in the Central and Mountain time zones.

13

Exhibit 10.7

“Sporting Event” means any sporting event, contest or, exhibition of an event requiring athletic skill (such as, by way of example and not of limitation, ice skating), whether professional or amateur, whether individual or team; provided, however, that a special program concerning or relating to sports or sporting events, including anthologies, shall be considered a Network Program that is not a Sporting Event provided that such program does not display a material portion of the sporting event which is the subject of such program

“Syndication Window” means the period commencing three years from the beginning of the first Broadcast Season during which the episodes of an episodic Network Program are first offered to CBS affiliates for simultaneous television broadcasting on the CBS Network.

“Talk Show” means a non-episodic, non-dramatic or comedic, entertainment or informative Network Program utilizing a talk-show format, which consists of one or more hosts interviewing one or more non-recurring guests.

“Theatrical Movie” means a feature length motion picture originally produced for exhibition, and exhibited, in theatres.

“Video Systems” means any and all systems or technology by which video program content may be distributed, whether existing or developed after the date of this Agreement, including, without limitation, cable television systems and channels distributed to such systems; wireless cable systems, including MDS, MMDS and LMDS, and channels distributed to such systems; direct broadcast satellite (“DBS”) systems and channels distributed to DBS systems; open video systems and channels distributed to such systems; systems operated by telephone companies or others providing television programming via digital subscriber line (“DSL”) or other emerging technologies; the Internet and other on-line computer distribution systems; video-computer hybrid systems; and all other methods for distributing video programming; provided, however, that this definition shall not be deemed to apply to analog and digital television broadcast stations received by viewers via over-the-air broadcasting or retransmission by a cable television system or other multichannel video program provider under color of compulsory copyright license and/or retransmission consent consistent with Paragraph 4 of the Affiliation Agreement.

B. Further Agreements.

1. CBS agrees to discuss with the Advisory Board in good faith the issues concerning an affiliation agreement that will govern the provision of Network Programs for the Affiliate’s digital channel.

2. CBS agrees that any request for additional payment to defray programming costs from Broadcaster or any other CBS Affiliated Station Licensee during the NFL Broadcast Period shall be submitted by CBS to the Advisory Board which, in its sole discretion, may subject such request to a full and comprehensive review in the event of significantly changed marketplace conditions.

3. CBS and Broadcaster hereby acknowledge and agree that the rights and benefits granted to Broadcaster under Paragraphs 1(a), 1(b), 1(d), 1(e) and 2(h) of the Affiliation Agreement are intended to benefit Broadcaster during the term of the NFL Broadcast Period to the extent that the term of the Affiliation Agreement extends during such period or is otherwise

14

Exhibit 10.7

renewed or extended. During the NFL Broadcast Period, provisions of Paragraphs 1(a), 1(b), 1(d), 1(e) and 2(h) of the Affiliation Agreement and the next to last numbered paragraph of the Affiliation Agreement (added under Paragraph A(14) of this Agreement) shall be incorporated in their entirety in any amendment to, renewal of or successor agreement to the Affiliation Agreement and may not be amended or modified without the approval of the Advisory Board, which approval may be granted or withheld in its sole and absolute discretion.

4. This Agreement (including the Exhibits hereto which are incorporated herein by reference and made a part hereof) and the Affiliation Agreement (as supplemented or amended by any writing that expressly references the Affiliation Agreement and is signed by the parties hereto prior to the date hereof) represent the entire understanding of the parties with respect to the subject matter hereof. Except as expressly provided herein, the Affiliation Agreement is not amended, modified or affected by this Agreement, and the Affiliation Agreement and the obligations of the parties thereunder are hereby ratified and confirmed by the parties hereto.

5. This Agreement shall inure to the benefit of, and shall be binding upon, each of the parties hereto and their respective legal representatives, successors and assigns. Nothing in this Agreement shall be construed as giving any person or entity, other than the parties hereto, their successors and assigns, any right, remedy or claim under or in respect of this Agreement or any provision hereof, except that the Advisory Board shall be a third party beneficiary of Paragraph 3(f) of the Affiliation Agreement and Paragraph B(3) of this Agreement.

6. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to its principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of the laws of another jurisdiction.

7. The Paragraph and other headings contained in this Agreement are for reference purposes only and shall not be deemed to be a part of this Agreement or to affect the meaning or interpretation of this Agreement.

8. In this Agreement the singular shall include the plural and vice versa, and the masculine, feminine, and neuter genders shall each include the others, unless the context otherwise requires.

9. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same document. Each party hereto will receive by delivery or facsimile transmission a duplicate original of the Agreement executed by each party, and each party agrees that the delivery of the Agreement by facsimile transmission will be deemed to be an original of the Agreement so transmitted.

10. A legally binding instrument containing substantially the same terms and conditions as this Agreement shall be submitted to all Network-Affiliated Station Licensees for approval. If such instrument is rejected by the Network-Affiliated Station Licensees whose television stations, in the aggregate, exceed 5% or more of DMA coverage (as determined by Nielsen Media Research, Inc.) this Agreement, at the option of CBS, may be declared null and void ab initio. Any Network-Affiliated Station Licensee from which CBS has not received an executed copy of this Agreement within 30 days of the date hereof will be deemed to have rejected the Agreement for purposes of this Paragraph. Within a reasonable time following such date, CBS shall notify Affiliated Station and the Advisory Board of the satisfaction or the failure to satisfy the condition set forth in this Paragraph.

* * * * * * * * * * * * * * *

15

Exhibit 10.7

If the foregoing reflects your understanding of the agreement between you and CBS, please signify your agreement to the foregoing by executing the Agreement in the space indicated below and returning two originally executed copies of the Agreement to Robert Shellard, Director, Planning & Administration, CBS Affiliate Relations, 7^th Floor, 51 West 52 Street, New York, New York 10019.

Very truly yours,
CBS Affiliate Relations, An Operating Unit of CBS Corporation
By:	/s/ Peter K. Schruth
Name:	Peter K. Schruth
Title:	Senior Vice President & General Manager

Agreed and Accepted this 21 day of October, 1998.

WESTWIND COMMUNICATIONS L.L.C.
By:	/s/ Wayne W. Lansche
Name:	Wayne W. Lansche
Title:	President

16

Exhibit 10.7

CBS TELEVISION 51 WEST 52 STREET NEW YORK, NEW YORK 10019-6188   (212) 975-4191 FAX: (212) 975-4229 nrourman@cbs.com   RHONDA TROUTMAN VICE PRESIDENT. BUSINESS AFFAIRS AND ADMINISTRATION AFFILIATE RELATIONS

June 20, 2005

Mr. Peter Desnoes

Chairman

Westwind Communications LLC

47-475 Vintage Drive East

Indian Wells, CA 92210

Dear Peter:

Reference is made to the Affiliation Agreement (“the Agreement”) between Westwind Communications LLC (“Broadcaster”) and CBS, dated December 4, 1995, as amended, regarding the affiliation of television station KBAK (“Station”), in Bakersfield, California, with the CBS Television Network.

You and we mutually agree in this Letter Agreement to the following amendments and additional terms and conditions of the Agreement:

1. In order to clarify that Broadcaster’s “first call” rights to Network Programs extend to such programs in digital format, you and we agree that the initial words of Paragraph 1 of the Agreement prior to the start of Subparagraph l(a) shall be deleted and replaced by the following language:

“1. Offer, Acceptance and Delivery of Network Programs

Broadcaster shall have a “first call”, as set forth below, on the program offerings of the CBS Television Network (“Network Programs”). Such “first call” rights shall apply to Network Programs in both analog and digital format. It being understood that, with respect to digital broadcasting, “Network Programs” shall refer to the “Primary Network Feed”, which during the digital transition shall mean the digital version of those programs transmitted to CBS Affiliates for the purpose of analog broadcasting, and not to any additional program streams that may be transmitted by the Network (i.e., “multi-plexed” programming).”

2. In order to clarify that Broadcaster’s network non-duplication protection rights apply to digital as well as analog broadcasting of Network Programs, you and we agree that the words “in analog and digital formats” shall be inserted into the second line of Subparagraph 9(b) of the Agreement after the words “network programming”, so that the beginning of this subparagraph will read as follows:

“Broadcaster shall be entitled to exercise, within Affiliated Station’s Network Exclusivity Zone, the protection against duplication of network programming in analog and digital formats,”

Exhibit 10.7

Mr. Peter Desnoes

June 20, 2005

Page 2

Also, due to modification of the FCC’s regulations, you and we agree that the reference in the same Subparagraph 9(b) to “Section 76.92 through 76.97 of the FCC rules” shall be amended to read “Sections 76.92 through 76.95 of the FCC rules.”

3. In addition, you and we agree to the following additional terms and conditions which shall be made part of the Agreement:

Station will, to the same extent as the Agreement provides for carnage of Network programs on its analog channel, transmit on such DTV channel the digital feed of such Network Programs in the technical format, consistent with the ATSC standards, provided by CBS, which shall be deemed to include the transmission by Station of all program related material, as defined below, provided by CBS which can be accommodated within a six MHz channel carrying a data stream of up to 19.4 megabits per second. It is expressly understood that this Agreement applies only to the Primary Network Feed in digital format of the program provided by the Network to its affiliated stations, together with any associated program related material, and that Broadcaster will in no event be required to carry additional Network digital programming (i.e., “multiplexed” programming). Consistent with and subject to the foregoing, the Station shall have the right to use any available portion of its digital signal for the purpose of transmitting local programs or any other material; provided, however, that in the event that CBS proposes that the Station carry Network multiplexed programming or ancillary data which is not “program related”, Broadcaster agrees to negotiate in good faith with CBS regarding the terms pursuant to which such multiplexed programming or ancillary data may be carried. As used in this paragraph, “program-related material” shall mean (i) information and material of a commercial or non-commercial nature which is directly related to the subject matter or identification of, or persons appearing in, the Network Programs, or to specific Network commercial advertisements or promotional announcements contained in the Network Programs, if such information or material is transmitted concurrently or substantially concurrently with the associated Network Program, commercial advertisement or promotional announcement, (ii) closed-captioning

Exhibit 10.7

Mr. Peter Desnoes

June 20, 2005

Page 3

information, (iii) program identification codes, (iv) program ratings information, (v) alternative language feeds related to the programming, (vi) video description information, and (vii) such other material as may be essential to or necessary for the delivery or distribution of the Network Programs in digital format.

4. Subject to the FCC’s Right to Reject under Section 73.658(e) of the FCC’s Rules, and superseding previous understandings regarding clearance of network programming, Station will provide and maintain full, in-pattern clearance of all programs (or, any program’s replacement) on the CBS Television Network program schedule in all day-parts (including, but not limited to, Weekend Sports programming), in accordance with the foregoing and the attached Schedule A. Station agrees not to downgrade, delay, cancel or change time periods of any Network Program without the written consent of CBS. Further, Station agrees (i) to continue to provide live clearance of the “full-network” format of THE EARLY SHOW (or its replacement), 7:00-9:00 am local time, Monday-Friday; and (ii) to provide clearance of at least two (2) hours per weekday of the overnight service UP TO THE MINUTE (or its replacement).

Broadcaster agrees to limit one-time-only primetime preemptions to no more than 10 hours per calendar year allocated proportionally in partial years (“the Primetime Preemption Cap”). For any Primetime preemption beyond 10 hours and up to 15 hours annually, the Station agrees to pay CBS $4,002 per hour with an annual increase of 3% (the “Primetime Preemption Fee”). Any Primetime preemption beyond 15 hours annually shall be considered a breach of the Affiliation Agreement unless such preemptions are made pursuant to Section 73.658(e) of the FCC’s rules. Preemption limits shall be allocated proportionately in partial years.

Similarly, Broadcaster agrees to limit one-time-only preemptions of Weekend Sports programming to no more than 10 hours per calendar year allocated proportionately in partial years (“the Weekend Sports Cap”). For any Weekend Sports preemption beyond 10 hours and up to 15 hours annually, the Station agrees to pay CBS $762 per hour with an annual increase of 3% (the “Weekend Preemption Fee”). Preemption limits shall be allocated proportionately in partial years. Any Weekend Sports preemption beyond 15 hours annually shall be considered a breach of the Affiliation Agreement unless such preemptions are made pursuant to Section 73.658(e) of the FCC’s rules.

Exhibit 10.7

Mr. Peter Desnoes

June 20, 2005

Page 4

Station will promptly notify CBS of any preemption and payment or any Preemption Penalty will made within sixty (60) days of the written notification from CBS of the amount due.

It is understood that Station’s obligations pursuant the above provisions shall be subject to Station’s rights under Section 73.658 (e) of the FCC’s rules and Paragraph 5 (a) of the Agreement, and that Station’s legitimate exercise of such rights shall in no event be deemed a breach of the obligations set forth in the above paragraph and shall not count against the Primetime Preemption Cap or the Weekend Sports Cap as set forth above; provided, however, that nothing in the foregoing will be construed to permit Station to preempt a program, regardless of the reason for the preemption, in its live or agreed time period, and then broadcast such program in a different time period, without the express written consent of CBS. Station agrees to makegood in a mutually agreed upon time period all primetime preemptions made for reasons other than the Right to Reject Rule as defined in Section 73.658(e) of the FCC rules.

5. This Letter Agreement and the terms herein shall become effective March 4, 2006 and Paragraph 3(a) of the Agreement shall be deleted and replaced by the following new Paragraph 3(a):

“3. Term and Termination.

(a) Term.

The term of this Agreement shall be the period commencing on March 4, 2006 and expiring on March 3,2016. Notwithstanding any provision of any offer or acceptance under Paragraph 1 hereof, upon the expiration or any termination of the term of this Agreement, Broadcaster shall have no right whatsoever to broadcast over Affiliated Station any Network Program.”

6. Station agrees to participate in CBS’ Coop and Promo Swap Programs as requested by CBS provided the elements of such Programs remain similar to the current Programs.

7. Station agrees to abide by the standard CBS Service Mark requirements specifying acceptable ways Station may utilize the CBS Eye Service Mark in on-air and print advertising.

Exhibit 10.7

Mr. Peter Desnoes

June 20, 2005

Page 5

8. The Affiliated Station’s Annual Net Compensation as specified in Paragraphs 2(a) through 2(c) of the Agreement will he revised to the amount shown below on the indicated Effective Date:

Effective Date	Annual Net Compensation
March 4, 2006 - March 3, 2007	$	275,000
March 4, 2007 - March 3, 2016	$	0

Except for paragraph 9 below, the foregoing represents CBS’ total financial contribution to Station during this Term and supercedes all previous agreements with respect thereto, including, but not limited to, all compensation, promotion and capital contributions. Payments of Annual Net Compensation shall be paid in twelve (12) equal installments and shall be due and payable monthly, in arrears, within 20 days from the end of each calendar month during the applicable period for which Annual Net Compensation is due. All references in the Agreement to Network Rate shall be deleted.

9. CBS agrees to pay Station a one-time-only promotion grant of $25,000, provided, Station submits to CBS and CBS approves a marketing plan which utilizes such amount over the first two (2) years of the Term. In such event, the sum of $25,000, shall be payable on or before March 4, 2007.

10. In order to reflect that television markets now generally are defined with reference to Nielsen DMAs rather than with reference to Arbitron ADIs, you and we agree that in Subparagraph 9(a) of the Agreement the language “the Area of Dominant Influence (ADI), as determined by Arbitron and published in the then-current edition of its Television ADI Market Guide,” shall be stricken and replaced with the following: “the Designated Market Area (DMA), as most recently determined by the A.C. Nielsen Company,”.

11. In order to permit notices pursuant to the Agreement to be made by facsimile delivery, you and we agree that the word “facsimile” shall be inserted between “personal delivery,” and “mail” in the first sentence of Subparagraph 11(d) of the Agreement, so that the beginning of the subparagraph will read as follows:

“11(d) Unless specified otherwise, all notices given hereunder shall be given in writing by personal delivery, facsimile, mail,”

12. Terms of this Letter and Affiliation Agreement, and discussions related thereto, will not be disclosed to anyone who is not either employed by the

Exhibit 10.7

Mr. Peter Desnoes

June 20, 2005

Page 6

Station or the corporate ownership of the Station; it being understood, however, that adherence to FCC filing and disclosure requirements will not constitute a violation of this point. Any press release regarding the terms of this negotiation or Agreement, shall be made jointly by the parties.

Further, it is hereby ratified and reaffirmed that throughout this Term the: (i) terms of the September 23, 1998 and October 22, 2001 Letter Agreements between you and us which established, among other things, Station’s NFL Contribution and placed various program exclusivity requirements on the Network plus any increase or renewals agreed to by the CBS Affiliate Board shall remain in full force and effect per the terms of that Letter Agreement; (ii) Station’s participation in the NCAA Exchange Value Program will continue as set forth in the December 2, 2003 Letter Agreement; and (iii) Station’s participation in CBS Newspath and NNS shall continue throughout the Term at the current annual rate of $78,525, through March 2, 2009, and, thereafter, by such annual increases agreed to by the CBS Affiliate Board, and, Station agrees to the terms and conditions implemented by CBS Newspath and NNS with respect to such services.

As herein amended, all terms and conditions of the Agreement are ratified and confirmed. All individual reference herein to Station or Broadcaster shall apply to both collectively.

Four originals of this Letter Agreement are enclosed. Please indicate your approval by signing each original in the space provided below and return all originals to me for counter-execution. We will return two fully executed originals to you.

Accepted and agreed:

Westwind Communications LLC		CBS AFFILIATE RELATIONS
		A Unit of CBS Broadcasting, Inc.
By:	/s/ Peter Desnoes	By:	/s/ Peter K. Schruth
	Peter Desnoes, Chairman		Peter K. Schruth, President

Best regards,

cc: P. Schruth, D. Comisar, P. Farr, E. Tokarz

Exhibit 10.7

51 WEST 52 STREET NEW YORK. NEW YORK 10019-6188   (212) 975-4321

July 14, 2006

WESTWIND COMMUNICATIONS L.L.C.

Bakersfield, California

Ladies and Gentlemen:

Reference is made to the CBS Television Network Affiliation Agreement between us, as amended, without limitation, by those certain letter agreements dated September 23, 1998 (the “1998 Amendment”) and October 22, 2001 (the “2001 Amendment”) and December 2, 2003 (the “2003 Agreement”) (collectively, the “NFL/NCAA Amendments”), relating to broadcast station KBAK-TV at Bakersfield, California, and other agreements between us with respect thereto (collectively, the “Affiliation Agreement”). You and we have agreed to further amend the Affiliation Agreement (the “2006 Agreement”) as follows. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Affiliation Agreement.

1. The following inventory adjustments shall be made commencing September 1, 2006:

i. Affiliates will receive one (1) additional thirty-second unit per week in the CBS Evening News.

ii. CBS will recapture one (1) thirty-second Supplemental Unit currently made available to Broadcaster in Sunday Prime Time Network Programs, so that a total of six (6) Supplemental Units (one per day, Monday through Saturday) shall be available to Broadcaster per week, which, together with the Minimum Available Advertising Inventory set forth in subparagraph 2 (h) (i) of the Affiliation Agreement, will result in a new weekly guaranteed inventory of one hundred fifteen (115) thirty- second units in Prime Time Network Programs for local sale by Broadcaster.

iii. CBS will recapture one thirty-second unit (from those broadcast during half-time) in each regular-season NFL game from those currently allocated to Broadcaster during each NFL season.

Exhibit 10.7

To reflect these inventory adjustments, the following amendments shall be made to Paragraph 2(h) effective September 1, 2006 through August 31. 2009:

(a) The following sentence shall be added immediately after the penultimate sentence of Subparagraph 2(h)(i) of the Affiliation Agreement:

In addition, from September 1, 2006 through August 31, 2009, CBS shall make available to Broadcaster for local sale one (1) additional 30-second unit per week in “The CBS Evening News” (or its successor program) (in addition to the amount of Inventory that is available for sale by Broadcaster in such Network Program pursuant to the 2003 Agreement).

(b) Subparagraph 2(h) (ii) of the Affiliation Agreement is amended by substituting the words “Monday through Saturday” for “each day” in the third full line of the first sentence. In addition, Exhibit B is amended by deleting the last line “Sunday 1” in Exhibit B of the Affiliation Agreement.

(c) Subparagraphs 2(h) (iii) (A), (B) and (C) of the Affiliation Agreement are amended by substituting the numbers “eighteen (18)”, “thirteen (13)” and “twenty-pine (29)” in the fourth full sentence of each paragraph (A), (B) and (C) respectively, with the numbers “seventeen (17)”, “twelve (12)” and twenty-eight (28)”, respectively.

In all other respects, Paragraph 2(h) will remain unchanged

2. To reflect limitations in Affiliated Station’s exclusivity and revised and new exceptions to such exclusivity the following amendments shall be made effective August 1, 2006 through August 31, 2009:

(A) Paragraph 1(b) shall be amended by ending the second sentence thereof with the words “and of such offer” (on the third line of the relevant paragraph of the 1998 Amendment), and inserting the following thereafter:

As to any Network Prime Time Entertainment Program that Broadcaster accepts in accordance with the preceding sentence, CBS will not (i) authorize or permit the broadcast of any such entire Network Prime Time Entertainment Program over any over-the-air television station licensed to Affiliated Station’s community of license, or authorize or permit the telecast of such entire Network Prime Time Entertainment Program on any other Broadcast Network (i.e., CW, NBC, ABC, My Network TV, Fox and any other broadcast television network that offers an interconnected program service on a national and regular basis to multiple affiliated broadcast television stations) or Cable Network (e.g. USA, TNT, Bravo, A&E) in Affiliated Station’s designated market area as defined by Nielsen Media Research, Inc. (“DMA”), at any time during the Exclusivity Period,

Page 2

Exhibit 10.7

or, (ii) authorize or permit the exhibition of an entire Network Prime Time Entertainment Program or platforms other than Broadcast & Cable Networks (e.g., the internet/broadband) prior to the first broadcast date on which CBS offers such Prime Time Network Program to CBS affiliates for simultaneous television broadcasting on the CBS Network in Affiliated Station’s DMA (“CBS First Run”). The exclusivity protections set forth in the preceding sentence shall, subject to the exceptions set forth in Paragraph 1(d), constitute the “Exclusivity Arrangements.”

(B) Paragraph 1 (d) of the Affiliation Agreement is amended to read in its entirely as follows:

(d) Exceptions to Exclusivity. Notwithstanding anything in Subparagraph l(b) of the Affiliation Agreement to the contrary, the exclusivity provided for in said Subparagraph shall not apply to:

(i) news and public affairs programs (including without limitation the CBS Evening News, 60 Minutes, and the distribution of News Footage and New Segments);

(ii) Talk Shows;

(iii) Award Shows;

(iv) non-Prime Time episodic dramas;

(v) Sporting Events;

(vi) subject to Paragraph 1(j), Video on Demand ( i.e., distribution for viewing on a paid subscription or fee for viewing basis, at the time of each individual subscriber’s own choosing, as part of a general video-on-demand service);

(vii) events of national importance, (i.e., (A) an address by the President of the United States of America on a subject of national importance or (B) coverage of a matter of immediate national concern;

(viii) promotional uses (i.e., distribution primarily for the purpose of promoting a Network Primetime Entertainment Program on the CBS Network);

(ix) a Sporting Event offered as part of a package of such events for viewing nationally on a subscription or fee for viewing basis (a “Pay-Per-View Exhibition”);

Page 3

Exhibit 10.7

(x) distribution or commercial sale of a Network Prime Time Entertainment Program to the general public for exhibition in the home by means of video cassettes, video discs or similar devices;.

(xi) distribution or commercial sale to the general public of Network Programs for exhibition by means of any device which is mobile or handheld;

(xii) distribution of clips, segments, footage and or parts of Network Primetime Entertainment Programs;

(xiii) any episodic Network Program that CBS has ceased to broadcast on a network basis, i.e., “cancelled programs”;

(xiv) Theatrical Movies, Made-for-Television Movies, Non- Dramatic Specials or Mini-Series.

(xv) Six (6) hours per week of regularly-scheduled Prime Time Network Entertainment Programs, not otherwise exempt from the exclusivity provisions of Paragraph 1(b), provided that any exhibition on other Broadcast Networks or Cable Networks will not be made prior to the telecast on the CBS Network and will not be in the same day and time period as that in which a Network Program in the same program series is offered to CBS affiliates for simultaneous television broadcasting on the CBS Network;

3. Paragraph 1(f) of the Affiliation Agreement entitled “Program Title” is hereby deleted.

4. Paragraph 1(g) of the Affiliation Agreement entitled “Promotion” is hereby deleted.

5. Paragraph 1 of the Affiliation Agreement is amended by adding a new subparagraph 1(j), which shall read in its entirety as follows:

(j) Affiliate Participation

(i) Broadcaster will share in revenue paid to CBS from the exhibition or distribution on the following platforms of an entire Network Prime Time Entertainment Program during the Broadcast Season in which the episode in question has its CBS First Run, it being understood that, except for subparagraphs 1(d)(vi) and 1(d)(xv), this will not apply to programs or distribution exempted under Paragraph 1(d) above.

(A) Video-on-Demand. With respect to Network Prime

Page 4

Exhibit 10.7

Time Entertainment Programs exhibited on a Video-on-Demand basis to subscribers in Affiliate Station’s DMA, CBS shall pay Broadcaster a proportionate share, based on the number of television households in Affiliated Station’s DMA divided by the total number of television households in all DMAs of CBS Network Stations in which the Network Prime Time Entertainment Program in question is exhibited on a Video-on-Demand basis, of the following percentage of Net Profits from the fees received on a fee for viewing and subscription basis (“VOD Gross Revenues”) as follows:

(1) for programs that are exhibited on a Video-on-Demand basis prior to or simultaneous with the first broadcast date on which CBS offers such Prime Time Network Program to CBS affiliates for simultaneous television broadcasting oil the CBS Network (“Pre-Air Exhibitions” & “Simultaneous Exhibitions”), twenty percent (20%) of Net Profits (as defined below).

(2) for programs that are exhibited on a Video-on-Demand basis after the first broadcast date on which CBS offers such Prime Time Network Program to CBS affiliates for simultaneous television broadcasting on the CBS Network (“Post-Air Exhibitions”), ten percent (10%) of Net Profits (as defined below).

For purposes of this Subparagraph: CBS Network Stations shall include all stations that regularly broadcast the programming of the CBS Television Network, including both Network-Affiliated Station Licensees and stations owned by CBS or any Affiliate thereof.

(B). Internet Streaming Exhibition With respect to the exhibition of Network Prime Time Entertainment Programs on or through the Internet from which CBS derives advertising revenues on a per click-through basis, CBS will pay Broadcaster a flat fee of Five Dollars ($5.00) for every thousand click-throughs originating from Affiliated Station’s Web Site. The amount paid to Broadcaster shall be adjusted every six (6) months to increase or decrease proportionately with the average amount received by CBS for each one thousand click-throughs (equal to 25% of CBS’s CPMs).

(ii) CBS will pay Broadcaster its share of set Profits under this subparagraph every six (6). months commencing on or about July 1, 2007, for the preceding six-month period (e.g., CBS will make the first such payment to Broadcaster on July 1, 2007 for the August 1, 2006 through December 31, 2006 period, the second

Page 5

Exhibit 10.7

such payment to Broadcaster on December 31, 2007 for the January 1 , 2007 through June 30, 2007 period, the third such payment to Broadcaster on July 1, 2008 for the July 1, 2007 through December 31, 2007 period, and so on, with the last payment on December 31, 2009 (or the January 1, 2009 through August 31, 2009 period). CBS’s payment shall be accompanied by a statement, in reasonable detail, accounting for (X) the VOD Gross revenues paid to CBS pursuant to (A) above, the costs subtracted there-from in order to calculate Net Profits, and the manner in which Broadcaster’s proportionate share of Net Profits was calculated; and (Y) the Internet advertising revenue derived by CBS on a per click-through basis from click-throughs originating from Affiliated Station’s Web Site, and the manner in which Broadcaster’s fee in accordance with (B) above was calculated.

(iii) It is understood that the Affiliates Board or its designee, on behalf of Broadcaster and all other Network-Affiliated Station licensees, shall have the right, during the term of the Affiliation Agreement and for one year thereafter (but no more than once in any 12 month period during the term and once in the year thereafter) and subject to any contractual obligations of CBS, to a reasonable inspection and audit of the books and records of CBS that are relevant to CBS’s compliance with this Subparagraph and that relate to the applicable period, upon reasonable notice to CBS.

6. Paragraph 3(f) of the Affiliation Agreement entitled “Renegotiation; Partial Expiration and Termination” is hereby deleted.

7. To reflect an adjustment in Affiliated Station’s Annual NFL Contribution based on the calculations set forth above as of August 1, 2006, the following subparagraph shall be added to Paragraph 14:

(c) Effective from September 1, 2006, to August 31, 2009, Affiliated Station’s Annual NFL Contribution shall be $74,686.

8. In order to effectuate the intent of the agreements reached between the parties, the last numbered Paragraph of the Affiliation Agreement entitled “Definitions.” shall be amended by:

(a) revising the definition of “NFL Agreement” to read: “NFL Agreement” means that certain Agreement between CBS and the NFL, as the same may be amended, extended, renewed or otherwise replaced but which, in part, grants the CBS Network rights to telecast the NFL games commencing with the 2006-2007 NFL Season through the 2008-09 NFL Season.

Page 6

Exhibit 10.7

(b) revising the definition of “NFL Broadcast Period” to read “NFL Broadcast Period” means through August 31, 2009

(c) revising the definition of “Exclusivity Period” to read: “Exclusivity Period” means, with respect to a Prime Time Network Entertainment Program, (i) the period preceding the first broadcast date on which CBS offers such Prime Time Network Entertainment Program to Station for simultaneous television broadcasting on the CBS Network, and (ii) the period prior to the end of the Broadcast Season in which CBS first offer such Prime Time Network Entertainment Program to Station for simultaneous television broadcasting on the CBS Network.

(d) adding the following definition of “Net Profits”: Net Profits means the gross revenues received by CBS from the exhibition or distribution of any Network Prime Time Program as specified in Paragraph 1(j)(i)(A), less the costs incurred by CBS that are specifically attributable to redistributing & exhibiting the program on the particular platform (but not to the original production or acquisition of the program by CBS), including without limitation (i) sales commissions, (ii) payments to profit participants (e.g., participants involved in the creation of the program or with ownership interests in the program), (iii) music licenses: (iv) guild payments, and (v) residuals.

(e) amending the definition of “Broadcast Season” to add the following new sentence at the end thereof: For Network Programs that have their CBS First Run outside of the above-referenced period. the “Broadcast Season” shall be deemed to be that period of time ending when the next Broadcast Season begins.

(f) adding the following definition of “1998 Amendment”: “1998 Amendment” means that certain agreement entered into between CBS and its affiliates pertaining to NFL contributions, inventory, exclusivity and other matters dated September 23, 1998.

(g) adding the following definition of “2001 Amendment”: “2001 Amendment” means that certain agreement entered into between CBS and its affiliates that amended the 1998 Amendment, dated October 22, 2001.

(h) adding the following definition of “2003 Agreement”: “2003 Agreement” means that certain agreement entered into between CBS and its affiliates pertaining to NCAA contributions, inventory, and other matters dated December 2, 2003.

Page 7

Exhibit 10.7

9. CBS agrees to discuss in good faith with the Affiliates Board a plan for the mutual benefits of CBS and Network-Affiliated Station Licensees, providing for affiliate distribution of CBS programs (with local inventory) over the Internet and other alternate distribution platforms.

10. Without limitation of any other provision of the Affiliation Agreement, Broadcaster and CBS each agrees that, except as required by law, it will not disclose any provision of this 2006 Agreement, or any discussions or negotiations relating thereto, to any person not employed or retained by CBS, Affiliated Station, Broadcaster, their respective Affiliates, or a CBS Affiliate. No press release or other statement concerning this 2006 Agreement will be made without the approval of both parties.

11. Paragraph 4 of the 2003 Agreement, which specifies a December 31, 2006, expiration date for certain provisions of the Affiliation Agreement, is hereby deleted.

12. Except as otherwise provided herein, the commencement date of this 2006 Agreement shall be September 1, 2006, and, unless otherwise provided for in the 2003 Agreement, all terms herein and all terms of the 1998 Amendment and 2001 Amendment (subject to the amendments herein), will expire August 31, 2009. During the foregoing period, the provisions contained in this 2006 Agreement shall be incorporated, as applicable, in their entirety in any amendment to or renewal of the Affiliation Agreement, and may not be amended or modified by CBS without the approval of The Board of Directors of CBS Television Network Affiliates Association, which approval may be granted or withheld in its sole and absolute discretion.

13. This 2006 Agreement is being submitted to all Network-Affiliated Station Licensees for approval. If this 2006 Agreement is rejected by the Network-Affiliated Station Licensees whose television stations, in the aggregate, exceed 5% or more of the total DMA coverage (as determined by Nielsen Media Research, Inc.) of such Network-Affiliated Station Licensees, then, at the option of CBS, this 2006 Agreement may be declared null and void ab initio with respect to all affiliates. Within a reasonable time following distribution of this 2006 Agreement, CBS shall notify Affiliated Station and The Board of Directors of CBS Television Network Affiliates Association of the satisfaction or the failure to satisfy the condition set forth in this Paragraph.

In all other respects, the terms of the Affiliation Agreement, as amended, are hereby confirmed and ratified.

Page 8

Exhibit 10.7

Please signify your agreement to the foregoing by executing the Agreement in the space indicated below, faxing such executed Agreement to the attention of Rhonda Troutman at Facsimile No. 212-975-4229, retain one for your records, and return one original executed copy of the same to Rhonda Troutman, Senior Vice President, CBS Affiliate Relations, 7^th Floor, 51 West 52 Street, New York, New York 10019, by August 14, 2006.

Very truly yours,
CBS Affiliate Relations, A Unit of CBS Broadcasting Inc.
By:	/s/ Peter K. Schruth
Name:	Peter K. Schruth
Title:	President

Agreed and Accepted this 24 day of July, 2006.
	/s/ Mr. Peter Desnoes
	Mr. Peter Desnoes Chairman
	Westwind Communications L.L.C. 47-475 Vintage Drive East Indian Wells, CA 92210

Page 9

EX-10.22

Exhibit 10.22

AMENDED AND RESTATED

CHANGE IN CONTROL SEVERANCE AGREEMENT

This Amended and Restated Change In Control Severance Agreement (this “Agreement”) is entered into by and between Fisher Communications, Inc., a Washington corporation (the “Company”), and Colleen Brown (“Executive”), effective as of the close of business on December 31, 2008.

The Company and Executive agree as follows:

1. Commitment of Executive

In the event that any person extends any proposal or offer that is intended to or may result in a Change in Control (defined below), Executive shall, at the Company’s request, assist the Company in evaluating such proposal or offer. Further, subject to the additional terms and conditions of this Agreement, in order to receive the Change in Control Payment (defined below), Executive cannot resign from the Company during any period from the receipt of a specific Change in Control proposal up to the consummation or abandonment of the transaction contemplated by such proposal.

2. Change In Control

“Change in Control” means a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, within the meaning of Section 409A(a)(2)(A)(v) of the Internal Revenue Code; provided however, that an internal reorganization of the Company shall not constitute a Change in Control.

3. Payment Obligations

3.1 Closing of Change In Control

If (i) Executive remains employed with the Company through the closing of a Change in Control, (ii) Executive complies with his or her obligations under Section 1 of this Agreement, and (iii) Executive is not offered a Comparable Position with the Company upon such Change in Control, then Executive shall receive a single cash payment in an amount equal to two (2) times Executive’s annual base salary for the calendar year immediately preceding such Change in Control. Upon payment of such amount to Executive, this Agreement shall terminate. For purposes of this Agreement, “Comparable Position” means a position with respect to which the authority, responsibilities, compensation and benefits are substantially comparable in the aggregate with the authority, responsibilities, compensation and benefits associated with Executive’s position immediately preceding the closing of a Change in Control.

3.2 Termination Prior to Change In Control

If (i) the Company terminates Executive’s employment without Cause or Executive resigns for Good Reason before a Change in Control, and (ii) within six (6) months thereafter, the Company enters into an agreement for a Change in Control or the Company announces or is

Exhibit 10.22

required by law to announce a prospective Change in Control of the Company, then upon the closing of such Change in Control, Executive shall receive a single cash payment in an amount equal to two (2) times Executive’s annual base salary for the calendar year immediately preceding such termination or resignation, as the case may be. Upon payment of such amount to Executive, this Agreement shall terminate.

3.3 Change in Control Payment Defined

Any payment under Section 3.1 or Section 3.2 of this Agreement is referred to in this Agreement as a “Change in Control Payment”.

3.4 Parachute Payment Limitation

Notwithstanding anything in this Agreement to the contrary, if the total of the Change in Control Payment, together with any other payments or benefits received from the Company, will be an amount that would cause them to be a “parachute payment” within the meaning of Section 280G(b)(2)(A) of the Internal Revenue Code of 1986, as amended (the “Parachute Payment Amount”), then the Change in Control Payment shall be reduced so that the total amount thereof is $1 less than the Parachute Payment Amount.

3.5 Release Required

Notwithstanding any other provision of this Agreement, payment of the Change in Control Payment or any other amounts due under this Agreement is conditioned upon execution by Executive, within sixty (60) days (or such shorter period as is specified in the release) after the occurrence of the Change in Control, of an effective release of any and all claims, known or unknown, arising out of or relating to Executive’s employment with the Company, with the exception of claims arising under this Agreement and claims that are not legally subject to waiver. Executive’s release shall be binding upon any person or entity that Executive can legally bind, and the released parties will include not only the Company but also any other person or entity against whom the released claims could be asserted. If Executive executes the release required by this Section 3.5 within the time period specified above, payment of the Change in Control Payment will be made within thirty (30) days following the effective date of such release; provided, however, that in any event, such payment shall be made no later than two and one-half (2 ¹/2) months after the end of the calendar year in which the Change in Control occurs. If Executive fails to execute the release required by this Section 3.5 within the time period specified above, then Executive shall forfeit any Change in Control Payment to which she would otherwise be entitled under this Agreement.

4. Termination of Agreement

This Agreement terminates immediately if, at any time before a Change in Control transaction closes, (i) the Company terminates Executive’s employment for Cause, (ii) Executive resigns from the Company without Good Reason, (iii) Executive dies, or (iv) Executive is unable to perform his or her duties and obligations to the Company for a period of 90 consecutive days as a result of a physical or mental disability, unless with reasonable accommodation Executive could continue to perform such duties and making these accommodations would not pose an undue hardship on the Company. If no Change in Control has occurred, this Agreement will

-2-

Exhibit 10.22

terminate six (6) months after Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason, unless during such six-month period, the Company enters into an agreement for a Change in Control or the Company announces or is required to announce a Change in Control, in which case this Agreement will terminate upon the earlier of payment of a Change in Control Payment pursuant to Section 3.2 or the abandonment of the transaction contemplated by such agreement or announcement (or required announcement), as the case may be.

5. Definitions

5.1 Cause

“Cause” means any one or more of the following:

a. Removal or discharge of Executive pursuant to order of any regulatory authority;

b. Executive perpetrates fraud, dishonesty, or other act of misconduct in the rendering of services to the Company or to customers of the Company, or if Executive engages in conduct which, in the opinion of the Board of Directors, materially interferes with the performance of Executive’s duties or harms the reputation of the Company by reason of the adverse reaction of the community to such conduct;

c. Executive conceals from, or knowingly fails to disclose to, any federal regulatory authority, or the Board of Directors any material matters affecting the viability of the Company; or

d. Executive fails (or refuses) to faithfully or diligently perform any of the usual and customary duties of his or her employment and either fails to remedy the lapse or formulate a plan for its correction with the Company (if such failure is not susceptible to immediate correction) within thirty (30) days after notice to Executive.

5.2 Good Reason

“Good Reason” means any one or more of the following events, which is not remedied by the Company within thirty (30) days after the Company receives notice thereof from Executive (which notification must be given by Executive within ninety (90) days of the initial occurrence of the relevant event):

a. Elimination of any significant compensation or benefit plan benefiting Executive, unless the reduction or elimination is generally applicable to substantially all similarly situated employees (or similarly situated employees of a successor or controlling entity of the Company) formerly benefited;

b. The assignment to Executive without his or her consent of any authority or duties materially inconsistent with Executive’s position as of the date of this Agreement; or

-3-

Exhibit 10.22

c. A relocation or transfer of Executive’s principal place of employment that would require Executive to commute on a regular basis more than 50 miles each way from his or her present place of employment.

6. Arbitration

At either the Company’s or Executive’s request, the parties must submit any dispute, controversy or claim arising out of or in connection with, or relating to, this Agreement or any breach or alleged breach of this Agreement, to arbitration under the American Arbitration Association’s rules then in effect (or under any other form of arbitration mutually acceptable to the parties). A single arbitrator agreed on by the parties will conduct the arbitration. If the parties cannot agree on a single arbitrator, each party must select one arbitrator and those two arbitrators will select a third arbitrator. This third arbitrator will hear the dispute. The arbitrator’s decision is final (except as otherwise specifically provided by law) and binds the parties, and any party may request any court having jurisdiction to enter a judgment and to enforce the arbitrator’s decision. The arbitrator will provide the parties with a written decision naming the substantially prevailing party in the action. This prevailing party is entitled to reimbursement from the other parties for its costs and expenses, including reasonable attorneys’ fees. All proceedings will be held at a place designated by the arbitrator in King County, Washington. The arbitrator, in rendering a decision as to any state law claims, will apply Washington law.

7. Withholding

All payments required to be made by the Company hereunder to Executive shall be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Company may reasonably determine should be withheld pursuant to any applicable law or regulation.

8. Other Compensation and Terms of Employment

This Agreement is not an employment agreement. Accordingly, except with respect to the Change In Control Payment, this Agreement shall have no effect on the determination of any compensation payable by the Company to Executive, or upon any of the other terms of Executive’s employment with the Company. The specific arrangements referred to herein are not intended to exclude any other benefits which may be available to Executive upon a termination of employment with the Company pursuant to employee benefit plans of the Company or otherwise; provided, however, that payment of the Change in Control Payment shall be deemed to be in lieu of any and all other severance payments to which Executive may be entitled upon or by reason of the termination of Executive’s employment with the Company.

9. Consideration

Executive understands and agrees that the Change in Control Payment is a payment to which Executive would not otherwise be entitled and is provided as consideration, and in exchange for, Executive’s release and the other terms of this Agreement.

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Exhibit 10.22

10. Miscellaneous Provisions

10.1 Entire Agreement

This Agreement constitutes the entire understanding and agreement between the parties concerning its subject matter and supersedes all prior agreements, correspondence, representations, or understandings between the parties relating to its subject matter, including, without limitation, that Change in Control Severance Agreement between the Company and Executive dated October 10, 2005.

10.2 Binding Effect

This Agreement will bind and inure to the benefit of the Company’s and Executive’s heirs, legal representatives, successors and assigns.

10.3 Waiver

Any waiver by a party of its rights under this Agreement must be written and signed by the party waiving its rights. A party’s waiver of the other party’s breach of any provision of this Agreement will not operate as a waiver of any other breach by the breaching party.

10.4 Amendment

This Agreement may be modified only through a written instrument signed by all parties.

10.5 Severability

The provisions of this Agreement are severable. The invalidity of any provision will not affect the validity of other provisions of this Agreement.

10.6 Counsel Review

Executive acknowledges that s/he has had the opportunity to consult with independent counsel with respect to the negotiation, preparation, and execution of this Agreement.

10.7 Section 409A

The parties intend that this Agreement and the payment provided hereunder be exempt from the requirements of Code Section 409A pursuant to the short-term deferral exception described in Treasury Regulation Section 1.409A-l(b)(4), the involuntary separation pay plan exception described in Treasury Regulation Section 1.409A-l(b)(9)(iii), or other applicable law. Notwithstanding any other provision of this Agreement to the contrary, this Agreement shall be interpreted, operated and administered in a manner consistent with such intention.

10.8 Governing Law and Venue

This Agreement will be governed by and construed in accordance with Washington law, except to the extent that federal law may govern certain matters. The parties must bring any legal proceeding arising out of this Agreement in King County, Washington.

-5-

Exhibit 10.22

10.9 Counterparts

This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which taken together will constitute one and the same document.

FISHER COMMUNICATIONS, INC.
By:	/s/ Phelps K. Fisher
	Phelps K. Fisher
Its:	Chairman of the Board of Directors
EXECUTIVE:
	/s/ Colleen Brown
	Colleen Brown

-6-

EX-10.25

Exhibit 10.25

FISHER Communications, Inc. Management Short Term Incentive Plan-2008, as of December 9, 2008

Purpose

The purpose of the Management Short Term Incentive Plan (the Plan) is to reward performance by focusing Fisher Communications key management employees on setting high standards and achieving performance goals.

Administration of the Plan

The Compensation Committee of the Board of Directors of Fisher Communications (the Committee) will approve final disposition of all matters pertaining to the administration of the Plan. The Committee’s decisions affecting the construction of the Plan will be final and binding on all parties.

The President and Chief Executive Officer (CEO) of Fisher Communications, on behalf of the Committee, has the responsibility to administer the Plan. The CEO will review goals for all plan participants. The Committee will review and approve Company financial goals, individual goals and final performance results and payouts.

Responsibilities for actions taken under the Plan and associated time frames are:

Responsibilities	CEO	Participant	Finance and Administration	Committee
Goal setting for upcoming year (Company financial and individual)	December 2007- January 2008	December 2007- January 2008	October 2007- December 2007
Goal approval for upcoming year				March 2008
Evaluation of performance results at the end of the Plan period	January 2009- February 2009		January 2009- February 2009
Calculation of payouts	March 2009		March 2009
Approval of payouts for previous year				March 2009 meeting
Communication of payouts	March 2009
Payouts to participants		By March 15, 2009

Exhibit 10.25

Plan Period

The plan period is defined as January 1, 2008 through December 31, 2008.

Plan Participants

Participants in the Plan will be corporate officers and other key management employees approved by the Committee that are responsible for directing and performing functions that have significant impact on Fisher Communications’ performance. At the current time they are:

• President/CEO

• Sr. VP/CFO/Corporate Secretary

• Sr. VP (2)

• VP/Finance

• VP/Engineering

• VP/Human Resources

• VP/Special Projects

• VP/Market Development

Newly hired employees who are added as participants to the Plan during the year may receive prorated incentive awards as recommended by the CEO and approved by the Committee.

Plan Performance Measures and Weights

Performance measures are established before the end of the first quarter of the Plan period.

Performance measures for all of the above employees will consist entirely of Company Financial Performance based on Net Income (which may be adjusted for certain circumstances by the Compensation Committee). Please refer to Matrix A.

Award Schedule

At the beginning of the Plan year, a performance/payout schedule will be developed that specifies threshold, target, and maximum Company financial performance levels and the corresponding percentage of the target award that would be earned for each performance level.

Exhibit 10.25

Target Incentive Awards

Target incentive awards are expressed as a percentage of base salary and vary by position level and accountabilities.

Payment of Awards

A participant’s payout is calculated as follows:

• Confirm target opportunity as % of base salary

• Assess level of Company financial performance versus target performance

• Determine payout as a percent of target for Company financial results

Termination

Retirement or Disability — In the event of termination of employment through retirement or as a result of total disability as defined in Fisher Broadcasting benefit plans, the award will be prorated for the number of months of the year completed prior to termination. The award is contingent upon actual performance against goals during the months served. The award will be paid out at the normal payout date or earlier, at the discretion of the Committee.

Death — If the participant dies, any unpaid awards will be paid to his or her estate in one lump sum. The amount of the award will be prorated for the number of months of the year completed prior to the participant’s death. The award is contingent upon actual performance against goals during the months served. The award will be paid out at the normal payout date or earlier, at the discretion of the Committee.

Termination for Reasons Other Than Retirement, Disability or Death — In the event of termination of employment for any other reason, the participant will not be entitled to any incentive compensation for the Plan period subsequent to termination, unless otherwise approved by the Committee.

Amendment or Termination of the Plan — The Committee may terminate, amend or modify this Plan at any time.

Other Considerations

Right of Assignment — No right or interest in the Plan is assignable or transferable, or subject to any lien, directly, by operation of law, or otherwise, including levy, garnishment, attachment, pledge, or bankruptcy.

Right of Employment — Participation under this Plan does not guarantee any right to continued employment; management reserves the right to dismiss participants. Participation in any one Plan period does not guarantee the participant the right to participation in any subsequent Plan period.

Withholding for Taxes — Fisher Broadcasting has the right to deduct from all awards under this Plan any taxes required by law to be withheld with respect to such payments.

Exhibit 10.25

Matrix A

Corporate Performance (Net Income) as % of target	Payout as % target
110%	200%
109%	180%
108%	160%
107%	150%
106%	140%
105%	130%
104%	120%
103%	115%
102%	110%
101%	105%
100%	100%
99%	93%
98%	75%
97%	67%
96%	57%
<96%	0%

EX-10.28

Exhibit 10.28

Fisher Communications, Inc. Management Short Term Incentive Plan -2009

Purpose

The purpose of the Management Short Term Incentive Plan (the Plan) is to reward performance by focusing Fisher Communications key management employees on setting high standards and achieving performance goals.

Administration of the Plan

The Compensation Committee of the Board of Directors of Fisher Communications (the Committee) will approve final disposition of all matters pertaining to the administration of the Plan. The Committee’s decisions affecting the construction of the Plan will be final and binding on all parties.

The President and Chief Executive Officer (CEO) of Fisher Communications, on behalf of the Committee, has the responsibility to administer the Plan. The CEO will review goals for all plan participants. The Committee will review and approve Company financial goals, individual goals and final performance results and payouts.

Responsibilities for actions taken under the Plan and associated time frames are:

Responsibilities	CEO	Participant	Finance and Administration	Committee
Goal setting for upcoming year (Company financial and individual)	December 2008- January 2009	December 2008- January 2009	October 2008- December 2008
Goal approval for upcoming year				March 2009
Evaluation of performance results at the end of the Plan period	January 2010- February 2010		January 2010- February 2010
Calculation of payouts	March 2010		March 2010
Approval of payouts and performance results for previous year				March 2010 meeting
Communication of payouts	March 2010
Payouts to participants		By March 15, 2010

Exhibit 10.28

Fisher Communications, Inc. Management Short Term Incentive Plan -2009

Plan Period

The plan period is defined as January 1, 2009 through December 31, 2009.

Plan Participants

Participants in the Plan will be corporate officers and other key management employees approved by the Committee that are responsible for directing and performing functions that have significant impact on Fisher Communications’ performance. At the current time they are:

• President and Chief Executive Officer

• Senior Vice President, Chief Financial Officer

• Senior Vice President, Operations

• Vice President, Principal Accounting Officer

• Vice President, Senior Attorney and Corporate Secretary

• Vice President, Human Resources and Administration

• Vice President, Market Development

Newly hired employees who are added as participants to the Plan during the year may receive prorated incentive awards as recommended by the CEO and approved by the Committee.

Plan Performance Measures and Weights

Performance measures are established before the end of the first quarter of the Plan period.

Performance measures for all of the above employees will consist of 80% of the incentive based on Company Financial Performance or Fisher’s Adjusted EBITDA (which may be adjusted for certain circumstances by the Compensation Committee) and 20% of the incentive based on the achievement of individual objectives. Please refer to Matrix A for illustration of award potential for the Adjusted EBITDA component of the incentive.

Award Schedule

At the beginning of the Plan year, a performance/payout schedule will be developed that specifies threshold, target, and maximum Company financial performance levels and the corresponding percentage of the target award that would be earned for each performance level. Additionally, individual objectives are developed and approved by the CEO.

Exhibit 10.28

Fisher Communications, Inc. Management Short Term Incentive Plan -2009

Target Incentive Awards

Target incentive awards are expressed as a percentage of base salary and vary by position level and accountabilities.

Payment of Awards

A participant’s payout is calculated as follows:

• Confirm target opportunity as % of base salary

• Assess level of Company financial performance versus target performance

• Assess level of individual objective performance versus target performance

• Determine payout as a percent of target for Company financial and individual performance results

Termination

Retirement or Disability — In the event of termination of employment through retirement or as a result of total disability as defined in Fisher Broadcasting benefit plans, the award will be prorated for the number of months of the year completed prior to termination. Retirement is defined as termination of employment on or after age 65. The award is contingent upon actual performance against goals during the months served. The award will be paid out at the normal payout date or earlier, at the discretion of the Committee.

Death — If the participant dies, any unpaid awards will be paid to his or her estate in one lump sum. The amount of the award will be prorated for the number of months of the year completed prior to the participant’s death. The award is contingent upon actual performance against goals during the months served. The award will be paid out at the normal payout date or earlier, at the discretion of the Committee.

Termination for Reasons Other Than Retirement, Disability or Death — In the event of termination of employment for any other reason, the participant will not be entitled to any incentive compensation for the Plan period subsequent to termination, unless otherwise approved by the Committee.

Amendment or Termination of the Plan — The Committee may terminate, amend or modify this Plan at any time.

Other Considerations

Right of Assignment — No right or interest in the Plan is assignable or transferable, or subject to any lien, directly, by operation of law, or otherwise, including levy, garnishment, attachment, pledge, or bankruptcy.

Exhibit 10.28

Fisher Communications, Inc. Management Short Term Incentive Plan -2009

Right of Employment — Participation under this Plan does not guarantee any right to continued employment; management reserves the right to dismiss participants. Participation in any one Plan period does not guarantee the participant the right to participation in any subsequent Plan period.

Withholding for Taxes — Fisher Broadcasting has the right to deduct from all awards under this Plan any taxes required by law to be withheld with respect to such payments.

Exhibit 10.28

Fisher Communications, Inc. Management Short Term Incentive Plan -2009

Matrix A

Corporate Performance (EBITDA) As % of Target	Payout as % Target
110%	200%
109%	180%
108%	160%
107%	150%
106%	140%
105%	130%
104%	120%
103%	115%
102%	110%
101%	105%
100%	100%
99%	93%
98%	75%
97%	67%
96%	57%
<96%	0%

EX-21.1

Exhibit 21.1

Fisher Communications, Inc.

Subsidiaries

Subsidiary	Jurisdiction in which Organized
Fisher Broadcasting Company	Washington
Fisher Mills Inc.	Washington
Fisher Properties Inc.	Washington
Fisher Media Services Company	Washington
Fisher Radio Regional Group Inc. /(1)/	Washington
Fisher Broadcasting — Seattle TV, L.L.C. /(1)/	Delaware
Fisher Broadcasting — Seattle Radio, L.L.C. /(1)/	Delaware
Fisher Broadcasting — Portland TV, L.L.C. /(1)/	Delaware
Fisher Broadcasting — Oregon TV, L.L.C. /(1)/	Delaware
Fisher Broadcasting — Washington TV, L.L.C. /(1)/	Delaware
Fisher Broadcasting — Idaho TV, L.L.C. /(1)/	Delaware
Fisher Broadcasting — S.E. Idaho TV, L.L.C. /(1)/	Delaware
Fisher Broadcasting — Bellevue TV, L.L.C. /(1)/	Delaware
Fisher Broadcasting — California TV, L.L.C. /(1)/	Delaware

(1) Wholly owned by Fisher Broadcasting Company

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-32103, 333-62200 and 333-151297) of Fisher Communications, Inc. of our report dated March 16, 2009 relating to the consolidated financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Seattle, Washington

March 16, 2009

EX-31.1

Exhibit 31.1

Certification

I, Colleen B. Brown, certify that:

1. I have reviewed this annual report on Form 10-K 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(s) 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(s) 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.

Dated: March 16, 2009

/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 annual report on Form 10-K 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(s) 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(s) 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.

Dated: March 16, 2009

/s/ Joseph L. Lovejoy

Joseph L. Lovejoy

Senior Vice President and

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 Annual Report of Fisher Communications, Inc. (the “Company”) on Form 10-K for the fiscal year ended December 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-K”), 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-K 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-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 16, 2009

/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 Annual Report of Fisher Communications, Inc. (the “Company”) on Form 10-K for the fiscal year ended December 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-K”), 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-K 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-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 16, 2009

/s/ Joseph L. Lovejoy

Joseph L. Lovejoy

Senior Vice President and

Chief Financial Officer