10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2012

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: 0-22439

FISHER COMMUNICATIONS, INC.

(Exact Name of Registrant as Specified in Its Charter)

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

140 Fourth Ave. N., Suite 500

Seattle, Washington 98109

(Address of Principal Executive Offices) (Zip Code)

(206) 404-7000

(Registrant’s Telephone Number, Including Area Code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

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	¨  (Do not check if a smaller reporting company)	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

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

Common Stock, $1.25 par value, outstanding as of October 31, 2012: 8,876,258

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

The following Condensed Consolidated Financial Statements are presented for Fisher Communications, Inc., and its subsidiaries.

1.	Condensed Consolidated Statements of Operations (unaudited): Three and nine months ended September 30, 2012 and 2011	3
2.	Condensed Consolidated Statements of Comprehensive Income (unaudited): Three and nine months ended September 30, 2012 and 2011	4
3.	Condensed Consolidated Balance Sheets (unaudited): September 30, 2012 and December 31, 2011	5
4.	Condensed Consolidated Statements of Cash Flows (unaudited): Nine months ended September 30, 2012 and 2011	6
5.	Notes to Condensed Consolidated Financial Statements (unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
PART II
OTHER INFORMATION
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	27
SIGNATURES		28
EXHIBIT INDEX		29

2

Fisher Communications, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

	Three months ended September 30,						Nine months ended September 30,
(in thousands, except per-share amounts)	2012			2011			2012			2011
Revenue	$	39,895		$	39,700		$	116,097		$	117,602
Operating expenses
Direct operating costs		16,386			17,704			48,974			52,595
Selling, general and administrative expenses		15,939			12,642			45,574			40,809
Amortization of broadcast rights		2,479			2,449			7,372			8,324
Depreciation and amortization		1,736			2,697			5,241			8,027
Gain on sale of real estate, net		—			—			(164	)		(4,089	)
Plaza fire reimbursements, net		—			(40	)		—			(223	)
Total operating expenses		36,540			35,452			106,997			105,443
Income from continuing operations		3,355			4,248			9,100			12,159
Loss on extinguishment of senior notes, net		—			(298	)		(1,482	)		(1,356	)
Other income, net		49			34			143			214
Interest expense		(16	)		(1,572	)		(292	)		(5,697	)
Income from continuing operations before income taxes		3,388			2,412			7,469			5,320
Provision for income taxes		1,188			893			2,851			1,978
Income from continuing operations, net of income taxes		2,200			1,519			4,618			3,342
Loss from discontinued operations, net of income taxes		—			(75	)		—			(9	)
Net income	$	2,200		$	1,444		$	4,618		$	3,333
Net income (loss) per share:
From continuing operations	$	0.25		$	0.17		$	0.52		$	0.38
From discontinued operations		—			(0.01	)		—			—
Net income per share	$	0.25		$	0.16		$	0.52		$	0.38
Net income (loss) per share assuming dilution:
From continuing operations	$	0.25		$	0.17		$	0.52		$	0.38
From discontinued operations		—			(0.01	)		—			(0.01	)
Net income per share	$	0.25		$	0.16		$	0.52		$	0.37
Weighted average shares outstanding		8,878			8,836			8,866			8,827
Weighted average shares outstanding assuming dilution		8,958			8,900			8,949			8,898
Dividends declared per share	$	10.00		$	—		$	10.00		$	—

See accompanying notes to condensed consolidated financial statements.

3

Fisher Communications, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

	Three months ended September 30,						Nine months ended September 30,
(in thousands)	2012			2011			2012			2011
Net income	$	2,200		$	1,444		$	4,618		$	3,333
Other comprehensive income (loss):
Accumulated income		36			15			108			44
Effect of income taxes		(14	)		(5	)		(40	)		(15	)
Prior service cost		15			15			45			45
Effect of income taxes		(5	)		(6	)		(16	)		(16	)
Unrealized gains on security investments		21			—			21			—
Effect of income taxes		(8	)		—			(8	)		—
Other comprehensive income		45			19			110			58
Comprehensive income	$	2,245		$	1,463		$	4,728		$	3,391

See accompanying notes to condensed consolidated financial statements.

4

Fisher Communications, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per-share amounts)	September 30, 2012			December 31, 2011
ASSETS
Current Assets
Cash and cash equivalents	$	31,316		$	143,017
Short-term debt security investments		72,532			33,481
Receivables, net		28,240			32,402
Income taxes receivable		—			117
Deferred income taxes, net		1,825			1,825
Prepaid expenses and other		1,972			3,062
Broadcast rights		9,219			6,789
Total current assets		145,104			220,693
Restricted cash		3,623			3,594
Cash surrender value of life insurance and annuity contracts		17,884			17,278
Goodwill, net		13,293			13,293
Intangible assets, net		40,131			40,307
Other assets		5,219			5,006
Deferred income taxes, net		3,303			3,367
Assets held for sale		—			658
Property, plant and equipment, net		39,344			40,921
Total Assets	$	267,901		$	345,117
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Current maturities of long-term debt	$	—		$	61,834
Accounts payable		2,009			3,754
Accrued payroll and related benefits		4,558			4,660
Interest payable		—			1,556
Broadcast rights payable		8,936			6,541
Income taxes payable		2,464			21,468
Current portion of accrued retirement benefits		1,302			1,302
Dividends payable		88,795			—
Other current liabilities		9,415			8,708
Total current liabilities		117,479			109,823
Deferred income		8,633			10,036
Accrued retirement benefits		20,385			20,525
Other liabilities		2,943			2,688
Total liabilities		149,440			143,072
Commitments and Contingencies (Note 7)
Stockholders’ Equity
Common stock, shares authorized 12,000,000, $1.25 par value; 8,876,258 and 8,832,177 issued and outstanding at September 30, 2012 and December 31, 2011, respectively		11,095			11,040
Capital in excess of par		15,407			14,679
Accumulated other comprehensive loss, net of income taxes:
Accumulated loss		(3,219	)		(3,288	)
Prior service cost		(34	)		(62	)
Unrealized gain on available for sale securities		13			—
Retained earnings		95,199			179,676
Total Stockholders’ Equity		118,461			202,045
Total Liabilities and Stockholders’ Equity	$	267,901		$	345,117

See accompanying notes to condensed consolidated financial statements.

5

Fisher Communications, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine months ended September 30,
(in thousands)	2012			2011
Operating activities
Net income	$	4,618		$	3,333
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation and amortization		5,241			8,027
Deferred income taxes, net		64			31
Loss on extinguishment of senior notes, net		594			416
Loss in operations of equity investees		119			188
Loss on disposal of property, plant and equipment, net		101			75
Gain on sale of radio station, net		—			(48	)
Gain on sale of real estate, net		(164	)		(4,089	)
Amortization of deferred financing fees		19			235
Amortization of deferred gain on sale of Fisher Plaza		(569	)		—
Amortization of debt security investment premium		78			—
Amortization of non-cash contract termination fee		(1,096	)		(1,096	)
Amortization of broadcast rights		7,372			8,324
Payments for broadcast rights		(7,421	)		(8,688	)
Stock-based compensation		1,284			1,174
Change in operating assets and liabilities, net
Receivables		4,162			1,791
Prepaid expenses and other		1,091			791
Cash surrender value of life insurance and annuity contracts		(606	)		1,819
Other assets		125			203
Accounts payable, accrued payroll and related benefits and other current liabilities		2,872			(1,593	)
Interest payable		(1,556	)		(2,312	)
Income taxes receivable and payable		(18,887	)		2,514
Accrued retirement benefits		(43	)		31
Other liabilities		675			(783	)
Net cash provided by (used in) operating activities		(1,927	)		10,343
Investing activities
Investment in equity investee		(50	)		(88	)
Purchase of debt security investments		(82,733	)		—
Purchase of investment in a radio station		(750	)		—
Purchase of option to acquire a radio station		(615	)		—
Proceeds from sale of debt security invesments		7,628			—
Proceeds from maturity of debt security invesments		35,967			—
Purchase of radio stations		—			(113	)
Purchase of property, plant and equipment		(7,565	)		(5,070	)
Proceeds from sale of radio station		—			48
Proceeds from sale of real estate		825			4,164
Net cash used in investing activities		(47,293	)		(1,059	)
Financing activities
Repurchase of senior notes		(61,834	)		(34,606	)
Repurchase of common stock		(86	)		—
Shares settled upon vesting of stock rights		(441	)		(278	)
Payments on capital lease obligations		(145	)		(134	)
Proceeds from exercise of stock options		25			75
Net cash used in financing activities		(62,481	)		(34,943	)
Net decrease in cash and cash equivalents		(111,701	)		(25,659	)
Cash and cash equivalents, beginning of period		143,017			52,945
Cash and cash equivalents, end of period	$	31,316		$	27,286

See accompanying notes to condensed consolidated financial statements.

6

Fisher Communications, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Basis of Presentation and Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements of Fisher Communications, Inc. and its wholly-owned subsidiaries (the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement have been included in the periods presented. Operating results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012, or for any other period. The unaudited condensed consolidated balance sheet at December 31, 2011 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by GAAP for annual financial statements. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 (“2011 Form 10-K”).

Certain reclassifications have been made to the unaudited condensed consolidated financial statements in the prior year to conform to the current year presentation.

The significant accounting policies used in preparation of the unaudited condensed consolidated financial statements are disclosed in the Company’s 2011 Form 10-K. Except as described below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the three and nine months ended September 30, 2012, as compared to the recent accounting pronouncements described in the Company’s 2011 Form 10-K, that are of significance, or potential significance, to the Company.

In the third quarter of 2012, the Company’s Board of Directors declared a special cash dividend of $10.00 per common share, or approximately $88.8 million, payable on October 19, 2012 to holders of record on September 28, 2012. At September 30, 2012, the special cash dividend was reported as dividends payable in the Company’s unaudited condensed consolidated balance sheet.

In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-05, which amends the disclosure requirements for presentation of comprehensive income. Subsequently, in December 2011, the FASB indefinitely deferred the effective date of the portion of ASU No. 2011-05 requiring the separate presentation of reclassifications out of accumulated other comprehensive income. The implementation of the amended accounting guidance did not have a material impact on our consolidated financial position or results of operations.

In July 2012, the FASB issued an accounting standard update on testing indefinite-lived intangibles for impairment. The accounting update provides an entity the option to first perform a qualitative assessment to determine whether it is more likely than not that the indefinite-lived intangible asset is impaired. If an entity determines that this is the case, it is required to perform the currently prescribed two-step impairment test to identify potential impairment and measure the amount of impairment loss to be recognized for the indefinite-lived intangible asset (if any). This guidance is effective for the Company’s fiscal year beginning January 1, 2013, however, the Company can choose to early adopt the revised standard. The implementation of this accounting guidance is not expected to have a material impact on our consolidated financial position or results of operations.

2. Fair Value Measurements

The Company measures certain financial assets at fair value on a recurring basis. The fair value of these financial assets was determined based on three levels of inputs, of which, the first two levels are considered observable and the last unobservable. The three levels of inputs that may be used to measure fair value are as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

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; or the fair value is determined through the use of models or other valuation methodologies.

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. The inputs to determine fair value require significant management judgment or estimation.

Assets and liabilities measured at fair value on a recurring basis consist of marketable securities and debt security investments. As of September 30, 2012 and December 31, 2011, the reported fair value of marketable securities, using Level 1 inputs, was

7

$581,000 and $1.0 million, respectively. Marketable securities are included in other assets on the Company’s unaudited condensed consolidated balance sheets. As of September 30, 2012 and December 31, 2011, the reported fair value of debt security investments, using Level 1 inputs, was $76.0 million and $36.9 million, respectively. Debt security investments are included in short term debt security investments and restricted cash on the Company’s unaudited condensed consolidated balance sheets.

As of September 30, 2012, the Company did not have any outstanding fixed interest rate debt. As of December 31, 2011, all of the Company’s debt was at a fixed interest rate and totaled $61.8 million. The fair market value of 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 the Company’s debt, using Level 2 inputs, at December 31, 2011 was $62.9 million. The fair value of debt is based on estimates made by investment bankers based on the fair value of the Company’s fixed interest rate debt. For fixed interest rate debt, interest rate changes do not impact financial position, operations or cash flows.

Restricted cash included $3.5 million of debt security investments and $125,000 of cash equivalents at September 30, 2012 and December 31, 2011, for which the fair value is measured using Level 1 inputs. The debt security investments are reported at fair value and the carrying amount of cash equivalents approximates fair value.

Cash equivalents consist of $30.6 million and $145.4 million at September 30, 2012 and December 31, 2011, respectively, for which the fair value is measured using Level 1 inputs. The carrying amount of cash equivalents approximates fair value.

3. Debt Security Investments

Corresponding with the Company’s Board of Directors’ August 2012 declaration of a $10.00 per common share special cash dividend and the institution of a quarterly dividend policy, the Company announced its intention to fund the dividends from existing cash and its debt security investments. As a result of these declarations, on September 30, 2012, the Company reclassified its entire portfolio of debt security investments classified as held-to-maturity, which consisted of U.S. treasury securities, to available for sale. At September 30, 2012, these investments had a fair value and amortized cost of $76.0 million. The investments’ net unrealized appreciation, net of tax, increased the Company’s accumulated other comprehensive income and shareholders’ equity by $13,000 as of September 30, 2012.

The following table summarizes amortized cost, gross unrealized gains, gross unrealized losses and the fair value of debt security investments (in thousands):

	September 30, 2012									December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury securities	$	76,009	$	29	$	(8	)	$	76,030	$	36,950	$	—	$	(6	)	$	36,944

The following table displays the gross unrealized losses and fair value of all available for sale debt security investments that were in a continuous unrealized loss position for the periods indicated.

	Less than 12 months					12 months or more				Total
	Fair value		Unrealized losses			Fair value		Unrealized losses		Fair value		Unrealized losses
September 30, 2012
U.S. Treasury securities	$	47,235	$	(8	)	$	—	$	—	$	47,235	$	(8	)
December 31, 2011
U.S. Treasury securities	$	36,944	$	(6	)	$	—	$	—	$	36,944	$	(6	)

8

The following table presents the amortized cost and the fair value of debt security investments, by contractual maturity (in thousands):

	September 30, 2012
	Amortized Cost		Fair Value
Due in one year or less	$	56,585	$	56,583
Due after one year through five years		19,424		19,447
Total debt security investments	$	76,009	$	76,030

Debt security investments are reviewed periodically to determine if a permanent decline in fair value has occurred that would require impairment of the carrying value. No impairments on debt security investments have been recorded as of September 30, 2012 and December 31, 2011.

4. Goodwill and Intangible Assets

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

	September 30, 2012							December 31, 2011
	Gross carrying amount		Accumulated amortization			Net		Gross carrying amount		Accumulated amortization			Net
Goodwill (1)	$	13,293	$	—		$	13,293	$	13,293	$	—		$	13,293
Intangible assets:
Broadcast licenses (1)	$	37,430	$	—		$	37,430	$	37,430	$	—		$	37,430
Other intangible assets		285		—			285		285		—			285
Intangible assets subject to amortization (2)
Network affiliation agreement		3,560		(1,144	)		2,416		3,560		(968	)		2,592
Total intangible assets	$	41,275	$	(1,144	)	$	40,131	$	41,275	$	(968	)	$	40,307

(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 Federal Communications Commission (“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 three and nine months ended September 30, 2012 was $59,000 and $176,000, respectively. Total amortization expense for intangible assets subject to amortization for the three and nine months ended September 30, 2011 was $59,000 and $177,000, respectively.

The Company tests goodwill and intangible assets for impairment at least annually, as of October 1^st of each year, or whenever events indicate that impairment may exist. The Company has determined that the impairment test should be conducted at the 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 following table presents the estimated amortization expense for the Company’s intangible assets subject to amortization for the remainder of 2012 and each of the next five years and thereafter (in thousands):

2012	$	60
2013		236
2014		236
2015		236
2016		236
2017		236
Thereafter		1,176
	$	2,416

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5. Discontinued Operations

In October 2011, the Company sold its six Great Falls, Montana radio stations (the “Montana Stations”) to STARadio Corp. (“STARadio”), which is based in Quincy, Illinois for $1.8 million, which was subject to certain adjustments. In accordance with authoritative guidance, the Company has reported the results of operations of the Montana Stations as discontinued operations in the accompanying unaudited condensed consolidated financial statements. For all previously reported periods, the Company reclassified the results of the Montana Stations from continuing operations to discontinued operations. The Montana Stations were previously included in the Company’s radio segment.

6. Extinguishment of Senior Notes

In January 2012, the Company redeemed the remaining $61.8 million aggregate principal amount of its 8.625% Senior Notes due in 2014 (“Senior Notes”) for a total consideration of $62.7 million in cash plus accrued interest of $1.8 million. The Company recorded a loss on extinguishment of debt of $1.5 million, including a charge for related unamortized debt issuance costs of approximately $594,000. As a result of the redemption of the remaining outstanding Senior Notes, the Company is no longer subject to provisions contained in the Senior Notes indenture, including various debt covenants and other restrictions, and the Company no longer is required to report financial information for its subsidiary guarantors of the Senior Notes.

During the three months ended September 30, 2011, the Company redeemed or repurchased $8.7 million aggregate principal amount of Senior Notes for a total consideration of $8.9 million in cash plus accrued interest of $263,000. The Company recorded a loss on extinguishment of debt of $298,000, including a charge for related unamortized debt issuance costs of approximately $98,000.

During the nine months ended September 30, 2011, the Company redeemed or repurchased $34.6 million aggregate principal amount of Senior Notes for a total consideration of $35.5 million in cash plus accrued interest of $572,000. The Company recorded a loss on extinguishment of debt of $1.4 million, including a charge for related unamortized debt issuance costs of approximately $416,000.

7. Broadcast Rights and Other Commitments

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

As of September 30, 2012, the Company had commitments under various agreements of $20.0 million for future rights to broadcast television programs, rights to sell available advertising time on a third party radio station and commitments under certain network affiliate agreements.

The Company entered into a reimbursement agreement with Hines Global REIT (“Hines”) whereby the Company may be required to reimburse Hines up to $1.5 million if the power and/or chiller consumption by certain existing Fisher Plaza tenants, including the Company, exceeds specified levels and Hines is required to install additional power and/or chiller facilities. This reimbursement agreement expires on December 31, 2023.

As previously announced, the Company received a commitment letter from JPMorgan Chase Bank for a five-year $30 million senior secured revolving credit facility. The credit facility is subject to the negotiation and execution of loan and security documents that are expected to contain customary terms and conditions, including financial and other covenants. Borrowings under the facility will bear interest at a floating rate based on LIBOR and are expected to be used for general corporate purposes and working capital, as needed. The credit facility is also expected to include an option permitting the Company to increase the size of the facility by up to $50 million, subject to approval from participating lenders and other customary conditions.

8. Local Marketing Agreement

In June 2012, the Company amended its Local Marketing Agreement (“LMA”) with South Sound Broadcasting LLC (“South Sound”) to manage South Sound’s FM radio station licensed in Oakville, Washington for another five years. The station broadcasts the Company’s KOMO NewsRadio AM programming to FM listeners in the Seattle – Tacoma radio market. Contemporaneously with the LMA, the Company entered into an option agreement with South Sound, whereby the Company has the right to acquire the station until January 2017. This amended LMA and related option agreement supersedes and terminates a previous LMA and option agreement between the Company and South Sound. Under the terms of the previous option agreement, the Company was obligated to pay South Sound up to approximately $1.4 million, if the Company did not exercise the option prior to its expiration. Pursuant to the amended LMA, the $1.4 million fee was eliminated and instead the Company paid South Sound $750,000 for a 7.5% ownership interest in South Sound and $615,000 for a new option agreement, pursuant to which we have the right to acquire the station until January 2017. The consideration for the option agreement is non-refundable, but will be applied to the purchase price if the Company chooses to exercise the option. The consideration for the option agreement and the investment in South Sound are presented within other assets on the Company’s unaudited condensed consolidated balance sheet as of September 30, 2012. Due to the term of the LMA and the uncertainties associated with the exercise of the option agreement, South Sound does not meet the criteria for consolidation. Advertising revenues earned under this LMA are recorded as revenue and LMA fees and programming expenses are recorded as operating costs.

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9. Retirement Benefits

The Company has a noncontributory supplemental retirement program for former key members of management. No new participants have been admitted to this program since 2001 and no current executive officers participate in the program. The program provides for vesting of benefits under certain circumstances. Funding is not required, but the Company has made investments in annuity contracts and maintains life insurance policies on the lives of the individual participants to assist in payment of retirement benefits. The Company is the owner and beneficiary of the annuity contracts and life insurance policies; accordingly, the cash value of the annuity contracts and the cash surrender value of the life insurance policies are reported on the unaudited condensed consolidated balance sheet and the appreciation is included in the unaudited condensed consolidated statement of operations.

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

	Three months ended September 30,				Nine months ended September 30,
	2012		2011		2012		2011
Interest cost	$	234	$	250	$	702	$	750
Amortization of loss		45		22		135		66
Net periodic pension cost	$	279	$	272	$	837	$	816

The discount rate used to determine net periodic pension cost was 4.48% for both the three and nine months ended September 30, 2012. The discount rate used to determine net periodic pension cost was 5.22% for both the three and nine months ended September 30, 2011.

10. Net income per share

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

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

	Three months ended September 30,					Nine months ended September 30,
	2012		2011			2012		2011
Income from continuing operations, net of income taxes	$	2,200	$	1,519		$	4,618	$	3,342
Loss from discontinued operations, net of income taxes		—		(75	)		—		(9	)
Net income	$	2,200	$	1,444		$	4,618	$	3,333
Weighted average shares outstanding		8,878		8,836			8,866		8,827
Weighted effect of dilutive options and rights		80		64			83		71
Weighted average shares outstanding assuming dilution		8,958		8,900			8,949		8,898
Net income (loss) per share:
From continuing operations	$	0.25	$	0.17		$	0.52	$	0.38
From discontinued operations		—		(0.01	)		—		—
Net income per share	$	0.25	$	0.16		$	0.52	$	0.38
Net income (loss) per share assuming dilution:
From continuing operations	$	0.25	$	0.17		$	0.52	$	0.38
From discontinued operations		—		(0.01	)		—		(0.01	)
Net income per share	$	0.25	$	0.16		$	0.52	$	0.37

For the three months ended September 30, 2012, the effect of options to purchase 148,560 shares are excluded from the calculation of weighted average shares outstanding because such rights/units and options were anti-dilutive. For the nine months ended September 30, 2012, the effect of options to purchase 181,071 shares are excluded from the calculation of weighted average shares outstanding because such rights/units and options were anti-dilutive.

For the three months ended September 30, 2011, the effect of options to purchase 204,994 shares are excluded from the calculation of weighted average shares outstanding because such rights/units and options were anti-dilutive. For the nine months ended September 30, 2011, the effect of 53 restricted stock rights/units and options to purchase 209,706 shares are excluded from the calculation of weighted average shares outstanding because such rights/units and options were anti-dilutive.

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11. Stock-Based Compensation

Stock-based compensation expense for the three and nine months ended September 30, 2012 was $458,000 and $1.3 million, respectively. Stock-based compensation expense for the three and nine months ended September 30, 2011 was $442,000 and $1.2 million, respectively. Stock-based compensation expense is included in selling, general and administrative expenses in the Company’s unaudited condensed consolidated statements of operations.

12. Income Taxes

The Company records an income tax provision or benefit based upon its estimated annual effective tax rate, which is estimated at 38.2% and 36.3% for the nine months ended September 30, 2012 and 2011, respectively.

As of September 30, 2012 and December 31, 2011, the Company had $632,000 of unrecognized tax benefits and no penalties or interest was accrued. If the unrecognized tax benefits were recognized $410,000 would impact the effective tax rate.

A reconciliation of the change in the amount of gross unrecognized income tax benefits is as follows (in thousands):

	September 30, 2012		December 31, 2011
Balance at beginning of period	$	632	$	—
Increase of unrecognized tax benefits related to prior years		—		632
Balance at end of period	$	632	$	632

Although the timing and outcome of income tax audits is uncertain, it is possible that unrecognized tax benefits may be reduced as a result of the lapse of the applicable statutes of limitations in federal and state jurisdictions within the next 12 months. Currently, the Company cannot reasonably estimate the amount of reductions, if any, during the next 12 months. Any such reduction could be impacted by other changes in unrecognized tax benefits and could result in changes to in the Company’s tax obligations.

The State of California conducted an examination of the Company’s 2007 and 2008 state tax returns and in April 2012, the Company received a preliminary determination seeking approximately $450,000 in unpaid taxes in connection with the Company’s treatment of the proceeds from its 2008 sale of Safeco Corporation stock and dividends received. The Company opposed the State of California’s position. In October 2012, the Company received a letter from the State of California indicating that the auditor agreed with the Company's original treatment of the proceeds from its 2008 sale of Safeco Corporation stock and dividends received. Under applicable regulations, the auditor's determination is potentially subject to review. If the auditor's determination were overturned on review, the final disposition of the proposed audit adjustments could require the Company to make additional payments of taxes, interest and penalties, which could materially affect its effective tax rate.

The State of Oregon conducted an examination of the Company’s 2007 and 2008 state tax returns and in November 2011, the Company received a Proposed Auditor’s Report from the State of Oregon seeking approximately $800,000 in unpaid taxes, interest and penalties in connection with the Company’s treatment of the proceeds from its 2007 and 2008 sales of Safeco Corporation stock and dividends received. The Company has opposed the State of Oregon’s position. The final disposition of the proposed audit adjustments could require the Company to make additional payments of taxes, interest and penalties, which could materially affect its effective tax rate.

The determination of the Company’s provision for income taxes and valuation allowance requires significant judgment, the use of estimates and the interpretation and application of complex tax laws. In assessing whether and to what extent deferred tax assets can be realized, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized.

The Company assesses the likelihood of the realizability of its deferred tax assets on a quarterly basis. As of September 30, 2012 and December 31, 2011, the Company had a valuation allowance of approximately $480,000 on certain of its deferred tax assets. The amount of net deferred tax assets considered realizable, however, could be reduced in the future if the Company’s projections of future taxable income are reduced or if the Company does not perform at the levels that it is projecting. This could result in an increase in the Company’s valuation allowance for deferred tax assets.

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13. Segment Information

The Company reports financial data for two segments: television and radio. The television segment includes the operations of the Company’s 20 owned and/or operated television stations (including a 50%-owned television station) and the Company’s developing media business. The radio segment includes the operations of the Company’s three radio stations and one managed radio station. Prior to 2012, the Company also included Fisher Plaza as a reportable segment which included the operations of a communications center located near downtown Seattle that serves as home of the Company’s Seattle-based television, radio and developing media operations, the Company’s corporate offices and third-party tenants. In December 2011, the Company completed the sale of Fisher Plaza to Hines for $160.0 million in cash. The Company’s corporate headquarters and Seattle-based television, radio and developing media operations continue to be located at Fisher Plaza.

The Company discloses information about its reportable segments based on measures it uses in assessing the performance of its reportable segments. The Company uses “segment income from continuing operations” to measure the operating performance of its segments which represents income from continuing operations before depreciation and amortization, loss (gain) on sale of real estate, net and Plaza fire reimbursements, net. Additionally, the performance metric for segment income from continuing operations excludes the allocation of corporate costs and Fisher Plaza rent expense. Prior period financial information has been restated to conform to current period presentation.

Operating results and other financial data for each segment are as follows:

	Three months ended September 30,						Nine months ended September 30,
(dollars in thousands)	2012			2011			2012			2011
Revenue
Television	$	34,663		$	30,522		$	100,600		$	90,557
Radio		5,225			5,344			15,524			15,876
Fisher Plaza		—			3,853			—			11,361
Total segment revenue		39,888			39,719			116,124			117,794
Intercompany and other		7			(19	)		(27	)		(192	)
	$	39,895		$	39,700		$	116,097		$	117,602
Segment income from continuing operations
Television	$	10,178		$	6,783		$	27,630		$	18,213
Radio		1,387			1,476			4,020			3,358
Fisher Plaza		—			2,286			—			6,938
Total segment income from continuing operations		11,565			10,545			31,650			28,509
Corporate and other		(5,065	)		(3,640	)		(13,540	)		(12,635	)
Fisher Plaza rent		(1,409	)		—			(3,933	)		—
	$	5,091		$	6,905		$	14,177		$	15,874
Depreciation and amortization
Television	$	1,486		$	1,200		$	4,463		$	3,526
Radio		29			23			88			70
Fisher Plaza		—			1,200			—			3,608
Total segment depreciation and amortization		1,515			2,423			4,551			7,204
Corporate and other		221			274			690			823
	$	1,736		$	2,697		$	5,241		$	8,027
	September 30, 2012			December 31, 2011
Total assets
Television	$	118,376		$	122,357
Radio		15,198			13,435
Fisher Plaza		—			377
Total segment assets		133,574			136,169
Corporate and other		134,327			208,948
	$	267,901		$	345,117

Intercompany and other non-segment revenue relates to sales between our television and radio stations and miscellaneous amounts not attributable to the operations of television or radio segments.

No geographic areas outside the United States were of significance relative to consolidated revenue, segment income from continuing operations or total assets.

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A reconciliation of segment income from continuing operations to income from continuing operations is as follows (dollars in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Segment income from continuing operations	$	5,091		$	6,905		$	14,177		$	15,874
Adjustments:
Gain on sale of real estate, net		—			—			164			4,089
Plaza fire reimbursements, net		—			40			—			223
Depreciation and amortization		(1,736	)		(2,697	)		(5,241	)		(8,027	)
Income from continuing operations	$	3,355		$	4,248		$	9,100		$	12,159

14. Stock Repurchase Program

In December 2011, the Company’s Board of Directors approved a stock repurchase program authorizing the repurchase of up to an aggregate of $25.0 million of its outstanding shares of common stock. Under the program, share repurchases will be made from time-to-time, at the Company's discretion, on the open market at prevailing market prices or in negotiated transactions off the market. The repurchase program expires at the end of 2012, subject to periodic evaluation by the Board of Directors based on circumstances during the course of the year. No shares were repurchased during the three months ended September 30, 2012. The Company repurchased and retired 2,990 shares for an aggregate cost of $86,000 during the nine months ended September 30, 2012, which reduced capital in excess of par by the excess cost over par value in the Company’s unaudited condensed consolidated balance sheet at September 30, 2012. There were no unsettled share repurchases at September 30, 2012.

15. Special Cash Dividend

During the third quarter of 2012, the Company’s Board of Directors declared a special cash dividend of $10.00 per common share, or approximately $88.8 million, payable on October 19, 2012 to holders of record on September 28, 2012.

16. Subsequent Events

In October 2012, the Company’s Board of Directors declared a quarterly cash dividend of $0.15 per common share, payable on December 17, 2012 to holders of record on November 30, 2012.

In October 2012, in connection with the announcement of a $10.00 per share special cash dividend (“SCD”) and the initiation of a quarterly dividend policy, the Board of Directors and the Compensation Committee (the “Committee”) approved changes to both the Amended and Restated Fisher Communications Incentive Plan of 2001 (the “2001 Plan”) and the Amended and Restated 2008 Equity Incentive Plan (the “2008 Plan”). The changes permit: (1) the adjustment of outstanding awards in the event of a distribution of cash or other assets to

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shareholders other than a normal cash dividend and (2) the amendment of outstanding awards so that such awards are credited with normal cash dividends or dividend equivalents. Effective on October 22, 2012, all of the Company’s outstanding stock options, restricted stock units issued from the 2008 plan (“RSUs”) and performance awards were adjusted by reducing the exercise price and/or increasing the number of shares to preserve the intrinsic value of such awards as a result of the SCD.

The Company currently expects these award adjustments to result in approximately $500,000 to $700,000 of incremental stock compensation expense for the three months ended December 31, 2012 and will result in an incremental increase to stock compensation over the remaining service period for the impacted RSUs, performance awards and options.

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

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this quarterly report on Form 10-Q. Some of the statements in this quarterly report are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all passages containing verbs such as “aims”, “anticipates”, “believes”, “estimates”, “expects”, “hopes”, “intends”, “plans”, “predicts”, “projects” or “targets” or nouns corresponding to such verbs. Forward-looking statements also include any other passages that are primarily relevant to expected future events or that can only be fully evaluated by events that will occur in the future. There are many risks and uncertainties that could cause actual results to differ materially from those predicted in our forward-looking statements, including, without limitation, those factors discussed under the caption “Risk Factors” in Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, which was filed with the Securities and Exchange Commission on March 9, 2012. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Except as required by law, we undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. Readers are urged to carefully review and consider the various disclosures made in this report and in our other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect our business, prospects and results of operations. As used herein, unless the context requires otherwise, when we say “we”, “us”, “our”, or the “Company”, we are referring to Fisher Communications, Inc. and its consolidated subsidiaries.

This discussion is intended to provide an analysis of significant trends and material changes in our financial condition and operating results during the three and nine months ended September 30, 2012 compared with the corresponding periods in 2011.

Overview

We are an integrated media company. We own or operate 13 full power (including a 50%-owned television station) and seven low power television stations and three owned radio stations (in addition to one managed radio station). Our television stations are located in Washington, Oregon, Idaho and California, and our radio stations are located in Washington.

Our operations receive revenue from the sale of local, regional and national advertising and, to a much lesser extent, from retransmission consent fees, 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. 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 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, accounted for approximately 60% percent of our television revenue for the nine months ended September 30, 2012 and are affiliated with the ABC Television Network. We have thirteen television stations which are affiliated with one of the four major networks. Six of our television stations are affiliated with Univision. Our remaining television stations are independent or subscribe to various programming services. Our two affiliation agreements with the ABC Television Network with current terms expiring in August 2014. Our affiliation agreements with the CBS Television Network generally expire in February 2016. Our affiliation agreements with FOX Television Network expire in September 2014 and September 2015. Our affiliation agreement with Univision expires in December 2014. 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.

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

Significant Developments

The following significant developments impacted our financial statements for the three and nine months ended September 30, 2012 and 2011.

Special and Quarterly Cash Dividend. In the third quarter of 2012, our Board of Directors declared a special cash dividend of $10.00 per common share, or approximately $88.8 million, which was paid on October 19, 2012 to holders of record on September 28, 2012. Additionally, in October 2012, our Board of Directors declared a quarterly cash dividend of $0.15 per common share payable on December 17, 2012 to holders of record on November 30, 2012.

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Local Marketing Agreement. In June 2012, we amended our Local Marketing Agreement (“LMA”) with South Sound Broadcasting LLC (“South Sound”) to manage South Sound’s FM radio station licensed in Oakville, Washington for another five years. The station broadcasts our KOMO News Radio AM programming to FM listeners in the Seattle – Tacoma radio market. This LMA and related option agreement supersedes and terminates a previous LMA and option agreement between us and South Sound. Under the terms of the previous option agreement, we were obligated to pay South Sound up to approximately $1.4 million if we did not exercise the option prior to its expiration. Pursuant to the amended LMA, the $1.4 million fee was eliminated and instead we paid South Sound $750,000 for a 7.5% ownership interest in South Sound and $615,000 for a new option agreement, pursuant to which we have the right to acquire the station until January 2017. The option agreement is non-refundable, but will be applied to the purchase price if we choose to exercise the option. The consideration for the option agreement is presented as other assets on our unaudited condensed consolidated balance sheet as of September 30, 2012. Advertising revenue earned under this LMA is recorded as operating revenue and LMA fees and programming expenses are recorded as operating costs.

Redemption of Senior Notes. In January 2012, we redeemed the remaining $61.8 million aggregate principal amount of our 8.625% Senior Notes due in 2014 (“Senior Notes”) for a total consideration of $62.7 million in cash plus accrued interest of $1.8 million. We recorded a loss on extinguishment of debt of $1.5 million, including a charge for related unamortized debt issuance costs, of approximately $594,000. As a result of the redemption of the remaining outstanding Senior Notes, we are no longer subject to provisions contained in the indenture, including various debt covenants and other restrictions.

Sale and Leaseback of Fisher Plaza. In December 2011, we completed the sale of Fisher Plaza to Hines Global REIT (“Hines”) for $160.0 million in cash. In connection with the sale of Fisher Plaza we entered into a lease (the “Lease”) with Hines pursuant to which we leased 121,000 rentable square feet of Fisher Plaza. The Lease has an initial term that expires on December 31, 2023 and we have the right to extend the term for three successive five-year periods. Our corporate headquarters and Seattle television, radio and developing media operations continue to be located at Fisher Plaza. Given our sale of Fisher Plaza in December 2011, our consolidated results in 2012 and in future years will not include any revenue, operating expense or depreciation from Fisher Plaza, and will include rent expense, related to the Lease with Hines.

Expiration of KING FM Agreement. In May 2011, our Joint Sales Agreement with the classical music station KING FM expired and was not renewed. As a result we no longer record advertising revenue and operating expenses related to KING FM subsequent to the expiration of the agreement.

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, revenue 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 in our Annual Report on Form 10-K for the year ended December 31, 2011 and elsewhere in this Quarterly Report on Form 10-Q. 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.

For a detailed discussion of our critical accounting policies and estimates, please refer to our Annual Report on Form 10-K for the year ended December 31, 2011.

There have been no material changes in the application of our critical accounting policies and estimates subsequent to that report except for those discussed below.

In the third quarter of 2012, our Board of Directors declared a special cash dividend of $10.00 per common share, or approximately $88.8 million, which was paid on October 19, 2012 to holders of record on September 28, 2012. At September 30, 2012, the special cash dividend was reported as dividends payable in our unaudited condensed consolidated balance sheet.

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Consolidated Results of Operations

We report financial data for two reportable segments: television and radio. The television segment includes the operations of our 20 owned and/or operated television stations (including a 50%-owned television station) and our developing media business. The radio segment includes the operations of our three owned radio stations and one managed radio station. Prior to 2012, we also included Fisher Plaza as a reportable segment which consisted of the operations of a communications center located near downtown Seattle that serves as the home of our Seattle-based television, radio and developing media operations, our corporate offices and third-party tenants. Our corporate headquarters and Seattle-based television, radio and developing media operations continue to be located at Fisher Plaza.

We disclose information about our reportable segments based on the measures we use in assessing the performance of those reportable segments. We use “segment income from continuing operations” to measure the operating performance of our segments which represents income from continuing operations before depreciation and amortization, gain on sale of real estate, net, and Plaza fire reimbursements, net. Additionally, the performance metric for segment income from continuing operations excludes the allocation of corporate costs and Fisher Plaza rent expense. Prior period financial information has been restated to conform to current period presentation.

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The following table sets forth our results of operations for the three and nine months ended September 30, 2012 and 2011, including the dollar and percentage variances between these periods. Percentage variances have been omitted where they are not considered meaningful.

	Three months ended September 30,						Variance						Nine months ended September 30,						Variance
(in thousands)	2012			2011			$			%			2012			2011			$			%
Revenue
Television	$	34,663		$	30,522		$	4,141			14	%	$	100,600		$	90,557		$	10,043			11	%
Radio		5,225			5,344			(119	)		(2	%)		15,524			15,876			(352	)		(2	%)
Fisher Plaza		—			3,853			(3,853	)		(100	%)		—			11,361			(11,361	)		(100	%)
Total segment revenue		39,888			39,719			169			0	%		116,124			117,794			(1,670	)		(1	%)
Intercompany and other		7			(19	)		26			137	%		(27	)		(192	)		165			86	%
Consolidated revenue		39,895			39,700			195			0	%		116,097			117,602			(1,505	)		(1	%)
Direct operating costs
Television		13,878			13,720			(158	)		(1	%)		41,509			40,900			(609	)		(1	%)
Radio		2,359			2,352			(7	)		(0	%)		6,880			7,166			286			4	%
Fisher Plaza		—			1,488			1,488			100	%		—			4,112			4,112			100	%
Total segment direct operating costs		16,237			17,560			1,323			8	%		48,389			52,178			3,789			7	%
Corporate and other		149			144			(5	)		(3	%)		585			417			(168	)		(40	%)
Consolidated direct operating costs		16,386			17,704			1,318			7	%		48,974			52,595			3,621			7	%
Selling, general and administrative expenses
Television		8,128			7,570			(558	)		(7	%)		24,089			23,120			(969	)		(4	%)
Radio		1,479			1,516			37			2	%		4,624			5,352			728			14	%
Fisher Plaza		—			79			79			100	%		—			311			311			100	%
Total segment selling, general and administrative expenses		9,607			9,165			(442	)		(5	%)		28,713			28,783			70			0	%
Corporate and other		4,923			3,477			(1,446	)		(42	%)		12,928			12,026			(902	)		(8	%)
Fisher Plaza rent		1,409			—			(1,409	)		na			3,933			—			(3,933	)		na
Consolidated selling, general and administrative expenses		15,939			12,642			(3,297	)		(26	%)		45,574			40,809			(4,765	)		(12	%)
Amortization of broadcast rights
Television		2,479			2,449			(30	)		(1	%)		7,372			8,324			952			11	%
Segment income from continuing operations
Television		10,178			6,783			3,395			50	%		27,630			18,213			9,417			52	%
Radio		1,387			1,476			(89	)		(6	%)		4,020			3,358			662			20	%
Fisher Plaza		—			2,286			(2,286	)		(100	%)		—			6,938			(6,938	)		(100	%)
Total segment income from continuing operations		11,565			10,545			1,020			10	%		31,650			28,509			3,141			11	%
Corporate and other		(5,065	)		(3,640	)		(1,425	)		(39	%)		(13,540	)		(12,635	)		(905	)		(7	%)
Fisher Plaza rent		(1,409	)		—			(1,409	)		na			(3,933	)		—			(3,933	)		na
Subtotal		5,091			6,905			(1,814	)		(26	%)		14,177			15,874			(1,697	)		(11	%)
Depreciation and amortization
Television		1,486			1,200			(286	)		(24	%)		4,463			3,526			(937	)		(27	%)
Radio		29			23			(6	)		(26	%)		88			70			(18	)		(26	%)
Fisher Plaza		—			1,200			1,200			100	%		—			3,608			3,608			100	%
Total segment depreciation and amortization		1,515			2,423			908			37	%		4,551			7,204			2,653			37	%
Corporate and other		221			274			53			19	%		690			823			133			16	%
Consolidated depreciation and amortization		1,736			2,697			961			36	%		5,241			8,027			2,786			35	%
Gain on sale of real estate, net		—			—			—			na			(164	)		(4,089	)		(3,925	)		(96	%)
Plaza fire reimbursements, net		—			(40	)		(40	)		(100	%)		—			(223	)		(223	)		(100	%)
Income from continuing operations		3,355			4,248			(893	)		(21	%)		9,100			12,159			(3,059	)		(25	%)
Loss on extinguishment of senior notes, net		—			(298	)		298			100	%		(1,482	)		(1,356	)		(126	)		(9	%)
Other income, net		49			34			15			44	%		143			214			(71	)		(33	%)
Interest expense		(16	)		(1,572	)		1,556			99	%		(292	)		(5,697	)		5,405			95	%
Income from continuing operations before income taxes		3,388			2,412			976			40	%		7,469			5,320			2,149			40	%
Provision for income taxes		1,188			893			(295	)		(33	%)		2,851			1,978			(873	)		(44	%)
Income from continuing operations, net of income taxes		2,200			1,519			681			45	%		4,618			3,342			1,276			38	%
Income from discontinued operations, net of income taxes		—			(75	)		75			100	%		—			(9	)		9			100	%
Net income	$	2,200		$	1,444		$	756			52	%	$	4,618		$	3,333		$	1,285			39	%

Comparison of three and nine months ended September 30, 2012 and 2011

No comparisons for the three and nine months ended September 30, 2012 compared to the same periods in 2011 are included for the Fisher Plaza segment in the discussion below because, effective on the sale of Fisher Plaza, it is no longer a reportable segment and is not included in results of operations for 2012.

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Revenue

The following table sets forth our main types of revenue by segment for the three and nine months ended September 30, 2012 and 2011:

	Three months ended September 30,														Nine months ended September 30,
(in thousands)	2012		% change			% total revenue			2011			% total revenue			2012			% change			% total revenue			2011			% total revenue
Core advertising (local and national)	$	21,760		-4	%		55	%	$	22,775			57	%	$	69,917			0	%		60	%	$	69,578			59	%
Political		3,648		285	%		9	%		947			2	%		5,110			293	%		4	%		1,301			1	%
Internet		1,220		-13	%		3	%		1,408			4	%		3,800			-4	%		3	%		3,958			3	%
Retransmission		6,271		83	%		16	%		3,420			9	%		16,117			61	%		14	%		10,037			9	%
Trade, barter and other		1,764		-11	%		4	%		1,972			5	%		5,656			0	%		5	%		5,683			5	%
Television		34,663		14	%		87	%		30,522			77	%		100,600			11	%		87	%		90,557			77	%
Core advertising (local and national)		4,849		-4	%		12	%		5,059			13	%		14,591			-2	%		13	%		14,951			13	%
Political		122		455	%		0	%		22			0	%		180			21	%		0	%		149			0	%
Trade, barter and other		254		-3	%		1	%		263			1	%		753			-3	%		1	%		776			1	%
Radio		5,225		-2	%		13	%		5,344			13	%		15,524			-2	%		13	%		15,876			13	%
Fisher Plaza		—		-100	%		0	%		3,853			10	%		—			-100	%		0	%		11,361			10	%
Intercompany and other		7		-137	%		0	%		(19	)		0	%		(27	)		-86	%		0	%		(192	)		0	%
Total Revenue	$	39,895		0	%		100	%	$	39,700			100	%	$	116,097			-1	%		100	%	$	117,602			100	%

Television. Television revenue increased $4.1 million and $10.0 million in the three and nine months ended September 30, 2012, respectively, compared to the same periods in 2011. This increase was primarily due to increases in retransmission revenue and political advertising, offset partially by decreases in core advertising.

The increase of $2.9 million and $6.1 million in retransmission revenue for the three and nine months ended September 30, 2012 compared to the same periods in 2011 was primarily a result of finalizing the renewal of substantially all of our retransmission consent contracts for the 2012-2014 cycle in the second quarter of 2012.

Automotive-related advertising, one of our largest advertising categories, increased 9% and 11%, respectively, for the three and nine months ended September 30, 2012, compared to the same periods in 2011. Results of other advertising categories for the three and nine months ended September 30, 2012, compared to the same periods in 2011 include retail (increased 5% and 8%, respectively) and professional services (decreased 12% and increased 1%, respectively).

Political revenue increased 285% and 293%, respectively, for the three and nine months ended September 30, 2012, compared to the same periods in 2011.

Revenue from our ABC-affiliated stations increased 17% and 12% in the three and nine months ended September 30, 2012, respectively, compared to the same periods in 2011, primarily due to increases in retransmission revenue and political revenue, partially offset by a decrease in national advertising revenue. Revenue from our CBS-affiliated stations increased 11% and 14% in the three and nine months ended September 30, 2012, respectively, compared to the same periods in 2011, as a result of increases in retransmission revenue and local and political advertising.

Radio. Radio revenue decreased by 2% in both the three and nine months ended September 30, 2012, compared to the same periods in 2011. The decrease for the nine months ended September 30, 2012 compared to the same period in 2011 is primarily a result of the non-renewal of our ten year Joint Sales Agreement with KING FM, which expired in the second quarter of 2011.

Direct operating costs

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

Television. Direct operating costs for the television segment increased $158,000 and $609,000 in the three and nine months ended September 30, 2012, respectively, compared to the same periods in 2011. The increase in the three and nine months ended September 30, 2012 compared to the same periods in 2011 primarily reflects an increase in costs related to network fees.

Radio. Direct operating costs for the radio segment increased $7,000 in the three months ended September 30, 2012 and decreased $286,000 in the nine months ended September 30, 2012, compared to the same periods in 2011. The decrease in the nine months ended September 30, 2012, compared to the same period in 2011 was primarily due to a reduction in advertising costs for our radio stations and a decrease in music rights as the result of an industry-wide legal settlement.

Other. Other non-segment direct operating costs consist primarily of the centralized network operating center and corporate engineering department. In the three and nine months ended September 30, 2012, non-segment direct operating costs increased $5,000 and $168,000 compared to the same periods in 2011, respectively.

Selling, general and administrative expenses

Television. Selling, general and administrative expenses in our television segment increased $558,000 and $969,000 in the three and nine months ended September 30, 2012, respectively, compared to the same periods in 2011. Prior year’s expenses were reduced by vacation accrual savings related to our revised vacation policy. Additionally, in 2012, audience survey and commission costs increased compared to the same periods in 2011, partially offset by a reduction in bad debt expense.

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Radio. Selling, general and administrative expenses in our radio segment decreased $37,000 and $728,000 during the three and nine months ended September 30, 2012 compared to the same period in 2012. The decrease for the nine months ended September 30, 2012 reflects cost savings as a result of the non-renewal of our ten year Joint Sales Agreement with KING FM, which expired in the second of quarter 2011.

Corporate and other. Other selling, general and administrative expenses consist primarily of corporate costs and various centralized functions. For the three and nine months ended September 30, 2012, other selling, general and administrative expenses increased $1.4 million and $902,000 compared to the same periods in 2011. The three and nine months ended September 30, 2012 included $812,000 and $959,000, respectively, of costs related to various strategic initiatives. The 2011 amounts included costs related to the proxy contest in 2011 and savings related to our revised vacation policy.

Fisher Plaza rent. In connection with the December 2011 sale of Fisher Plaza we entered into a lease with Hines pursuant to which we leased 121,000 rentable square feet of Fisher Plaza. Fisher Plaza rent expense for the three and nine months ended September 30, 2012 was $1.4 million and $3.9 million, respectively. This expense reflects the costs associated with leasing Fisher Plaza which serves as our corporate headquarters and the location of our Seattle-based television, radio and developing media operations.

Amortization of broadcast rights

Television. Amortization of program rights for our television segment increased $30,000 for the three months ended September 30, 2012 and decreased $952,000 in the nine months ended September 30, 2012, compared to the same periods in 2011. The decrease in the nine months ended September 30, 2012 is primarily due to reduced obligations as a result of renegotiated contracts.

Depreciation and amortization

Television. Depreciation and amortization for our television segment increased $286,000 and $937,000 in the three and nine months ended September 30, 2012 compared to the same periods in 2011, respectively, primarily due to investments in our broadcasting equipment at KOMO and KATU.

Radio. Depreciation and amortization for our radio segment increased $6,000 and $18,000 in the three and nine months ended September 30, 2012, respectively, compared to the same periods in 2011.

Other. Other depreciation and amortization decreased $53,000 and $133,000 in the three and nine months ended September 30, 2012, respectively, compared to the same periods in 2011 as certain assets have become fully depreciated.

Gain on sale of real estate, net

In January 2012, we completed the sale of two real estate parcels not essential to current operations and received $570,000 in net proceeds. In June 2012, we completed the sale of a real estate parcel not essential to current operations and received $253,000 in net proceeds. We recognized a gain on sale of real estate, net of $164,000 for the nine months ended September 30, 2012.

In June 2011, we completed the sale of two real estate parcels not essential to current operations and received $4.2 million in net proceeds. We recognized a gain on the sale of real estate, net of $4.1 million for the nine months ended September 30, 2011.

Plaza fire reimbursements, net

No Plaza fire reimbursements were received in the three and nine months ended September 30, 2012. Plaza fire reimbursements, net of $40,000 and $223,000 represent net insurance reimbursements related to the July 2009 Fisher Plaza fire received in the three and nine months ended September 30, 2011, respectively.

Loss on extinguishment of senior notes, net

In January 2012, we redeemed the remaining $61.8 million aggregate principal amount of Senior Notes for a total consideration of $62.7 million in cash plus accrued interest of $1.8 million. We recorded a loss on extinguishment of debt of $1.5 million, including a charge for related unamortized debt issuance costs, of approximately $594,000.

During the three months ended September 30, 2011, we redeemed or repurchased $8.7 million aggregate principal amount of Senior Notes for a total consideration of $8.9 million in cash plus accrued interest of $263,000. We recorded a loss on extinguishment of debt of $298,000, including a charge for related unamortized debt issuance costs, of approximately $98,000.

During the nine months ended September 30, 2011, we redeemed or repurchased $34.6 million aggregate principal amount of Senior Notes for a total consideration of $35.5 million in cash plus accrued interest of $572,000. We recorded a loss on extinguishment of debt of $1.4 million, including a charge for related unamortized debt issuance costs, of approximately $416,000.

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Other income, net

Other income, net, typically consists of interest and other miscellaneous income received. During the three and nine months ended September 30, 2012, other income, net, increased $15,000 and decreased $71,000, respectively, compared to the same periods in 2011. The decrease in the nine months ended September 30, 2012 compared to the same period in 2011 was primarily due to a miscellaneous insurance reimbursement received in 2011.

Interest expense

Interest expense in the three and nine months ended September 30, 2012 decreased $1.6 million and $5.4 million, respectively, from the same periods in 2011, due to the redemption of outstanding Senior Notes in January 2012.

Provision for income taxes

Our effective tax rate was 38.2% and 36.3% for the nine months ended September 30, 2012 and 2011, respectively. Our effective tax rate is calculated on the statutory rate of 35%, adjusted for state income taxes, changes in certain tax account balances and estimated permanent differences, including non-deductible expenses, and changes in discrete or other non-recurring items. We record our income tax provision or benefit based upon our estimated annual effective tax rate.

Income from discontinued operations, net of income taxes

In October 2011, we completed the sale of our Montana Stations to STARadio for $1.8 million, subject to certain adjustments. In accordance with authoritative guidance we have reported the results of operations of the Montana Stations as discontinued operations in the unaudited condensed consolidated financial statements. See Note 5 to the unaudited condensed consolidated financial statements for more information on our discontinued operations.

Liquidity and Capital Resources

Liquidity

Our liquidity is primarily dependent upon cash and cash equivalents, investments in debt securities and net cash generated from operating activities. Our net cash generated 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 and the timing of cash receipts and payments.

We expect cash flows from operations and our cash, cash equivalents and investments in debt securities to provide sufficient liquidity to meet our cash requirements for operations, projected working capital requirements and planned capital expenditures and commitments for at least the next 12 months.

In August 2012, we received a commitment letter from JPMorgan Chase Bank for a five-year $30 million senior secured revolving credit facility. The credit facility is subject to the negotiation and execution of loan and security documents that are expected to contain customary terms and conditions, including financial and other covenants. Borrowings under the facility will bear interest at a floating rate based on LIBOR and are expected to be used for general corporate purposes and working capital, as needed. The credit facility is also expected to include an option permitting us to increase the size of the facility by up to $50 million, subject to approval from participating lenders and other customary conditions.

In January 2012, we redeemed the remaining $61.8 million aggregate principal amount of our Senior Notes for a total consideration of $62.7 million in cash plus accrued interest of $1.8 million. We recorded a loss on extinguishment of debt of $1.5 million, including a charge for related unamortized debt issuance costs, of approximately $594,000. As a result of our redemption of the remaining outstanding Senior Notes, we are no longer subject to provisions contained in the Senior Notes indenture, including various debt covenants and other restrictions.

In the third quarter of 2012, our Board of Directors declared a special cash dividend of $10.00 per common share, or approximately $88.8 million, which was paid on October 19, 2012 to holders of record on September 28, 2012. Additionally, in October 2012, our Board of Directors declared a quarterly cash dividend of $0.15 per common share payable on December 17, 2012 to holders of record on November 30, 2012.

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Capital Resources

Cash, cash equivalents and short-term debt security investments were approximately $103.8 million as of September 30, 2012 compared to $176.5 million as of December 31, 2011. The decrease of $72.7 million was primarily due to our redemption of the remaining $61.8 million of outstanding principal of our senior notes in January 2012. Cash used in operating activities for the nine months ended September 30, 2012 of $1.9 million consists of $23.1 million of cash generated from operations offset by $21.7 million in income tax payments, net of refunds received, $1.5 million of debt extinguishment costs and $1.8 million of interest payments on our retired senior notes. Our debt security investments are held in U.S. Treasury securities and are carried at fair market value.

Due to the Board of Directors’ August 2012 declaration of a $10.00 per common share special cash dividend and the institution of a quarterly dividend policy we announced our intention to fund the dividends from existing cash and debt security investments. As a result, on September 30, 2012, we reclassified our entire portfolio of debt security investments classified as held-to-maturity, which consisted of U.S. Treasury securities, to available for sale. At September 30, 2012, these investments had a fair value and amortized cost of $76.0 million. The investments’ net unrealized appreciation, net of tax, increased our accumulated other comprehensive income and shareholders’ equity by $13,000 as of September 30, 2012.

The following table summarizes our debt security investments (on the basis of carrying value) as of September 30, 2012 and December 31, 2011 (in thousands):

	September 30, 2012					December 31, 2011
	Amount		Percent			Amount		Percent
Debt securities:
Held to maturity (at amortized cost):
U.S. Treasury securities	$	—		0.0	%	$	36,950		100.0	%
Available for sale (at fair value):
U.S. Treasury securities		76,030		100.0	%		—		0.0	%
Total debt security investments	$	76,030		100.0	%	$	36,950		100.0	%

In October 2012, debt security investments with a carrying value of $6.2 million reached maturity and we sold debt security investments with a carrying value of $66.3 million for a loss of $20,000. The proceeds from the sale and maturity of these investments were used to fund the special cash dividend paid on October 19, 2012.

Net cash provided by (used in) operating activities

Net cash used in operating activities for the nine months ended September 30, 2012 of $1.9 million consists of our net income of $4.6 million, adjusted for non-cash charges of $13.0 million, which consisted primarily of depreciation and amortization, amortization of broadcast rights and stock-based compensation, offset by a $12.1 million decrease in working capital, which includes income tax payments, net, of $21.7 million, and $7.4 million of payments for broadcast rights.

Net cash provided by operating activities for the nine months ended September 30, 2011 of $10.3 million consists of our net income of $3.3 million adjusted for our non-cash charges of $13.2 million, which consisted primarily of depreciation and amortization, amortization of broadcast rights, gain on sale of real estate, net, and stock-based compensation, and a $2.5 million increase in working capital, which includes $2.4 million received on an annuity contract of a retiree, offset by $8.7 million of payments for broadcast rights.

Net cash used in investing activities

During the nine months ended September 30, 2012, net cash used in investing activities of $47.3 million consisted primarily of purchases of debt security investments of $82.7 million in the form of U.S. Treasury securities and purchases of property, plant and equipment of $7.6 million, partially offset by $43.6 million in proceeds received from the sale or maturity of debt security investments in the form of U.S. Treasury securities.

23

During the nine months ended September 30, 2011, cash flows used in investing activities of $1.1 million consisted primarily of $5.1 million in purchases of property, plant and equipment, partially offset by proceeds received from the sale of real estate of $4.2 million.

Net cash used in financing activities

Net cash used in financing activities for the nine months ended September 30, 2012 was $62.5 million primarily due to the redemption of $61.8 million aggregate principal amount of Senior Notes and net share settlement for employee stock compensation tax withholding obligations of $441,000.

Net cash used in financing activities for the nine months ended September 30, 2011 was $34.9 million primarily due to the redemption or repurchase of $34.6 million aggregate principal amount of Senior Notes and net share settlement for employee stock compensation tax withholding obligations of $278,000.

Recent Accounting Pronouncements

Refer to Note 1 of our unaudited condensed consolidated financial statements included in Part I, Item 1 of this report.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The market risk in our financial instruments represents the potential loss arising from adverse changes in financial rates. We are exposed to market risk primarily in the area of interest rates. This exposure is directly related to our normal funding activities.

At September 30, 2012 we had no outstanding fixed interest rate debt. At December 31, 2011, all of our debt was at a fixed interest rate and totaled $61.8 million. The fair market value of long-term fixed interest rate debt is subject to interest rate risk. Generally, the fair market value of fixed interest rate debt will increase as interest rates fall and decrease as interest rates rise. The estimated fair value of our fixed interest rate debt at December 31, 2011 was approximately $62.9 million, which was approximately $1.1 million more than its carrying value. Market risk is estimated as the potential change in fair market value resulting from a hypothetical 10% change in interest rates and, as of December 31, 2011, amounted to $1.3 million. Fair market values are determined based on estimates made by investment bankers based on the fair value of the Company’s fixed interest rate debt. For fixed interest rate debt, interest rate changes do not impact financial position, operations or cash flows.

At September 30, 2012 and December 30, 2011, the reported fair value of our debt security investments was $76.0 million and $36.9 million, respectively. The primary objective of these investments was to preserve principal and liquidity. A hypothetical 10% change in interest rates as of September 30, 2012 and December 31, 2011 would not have had a significant impact on the fair value of our investment portfolio as of that date.

ITEM 4. 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 quarter ended September 30, 2012. Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of our fiscal quarter ended September 30, 2012, our disclosure controls and procedures were effective in ensuring that the information required to be disclosed by us in the reports that we file or submit 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.

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.

We made no change in our internal control over financial reporting during the fiscal quarter ended September 30, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. We intend to continue to refine our internal control over financial reporting on an ongoing basis, as we deem appropriate with a view towards continuous improvement.

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PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

ITEM 1A. RISK FACTORS

There have not been any material changes to the risk factors set forth in Part 1, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange Commission on March 9, 2012.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

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.
101	The following financial information from Fisher Communication, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2012 and 2011, (ii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2012 and 2011, (iii) Condensed Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011, (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and 2011, and (v) the Notes to Condensed Consolidated Financial Statements.

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SIGNATURES

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

	FISHER COMMUNICATIONS, INC.
Date: November 7, 2012	/s/ Hassan N. Natha
	Hassan N. Natha
	Senior Vice President and Chief Financial Officer (Signing on behalf of the registrant and as Principal Financial Officer)

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EXHIBIT INDEX

Exhibit No.	Description
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.
101	The following financial information from Fisher Communication, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2012 and 2011, (ii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2012 and 2011, (iii) Condensed Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011, (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and 2011, and (v) the Notes to Condensed Consolidated Financial Statements.

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Colleen B. Brown, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: November 7, 2012

/s/ Colleen B. Brown

Colleen B. Brown

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Hassan Natha, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: November 7, 2012

/s/ Hassan N. Natha

Hassan N. Natha

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 Quarterly Report of Fisher Communications, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), I, Colleen B. Brown, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 7, 2012

/s/ Colleen B. Brown

Colleen B. Brown

President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Fisher Communications, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), I, Hassan Natha, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 7, 2012

/s/ Hassan N. Natha

Hassan N. Natha

Senior Vice President and

Chief Financial Officer

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Discontinued Operations (Details) (USD $) In Millions, unless otherwise specified	Oct. 31, 2011 Segment
Discontinued Operations (Textual) [Abstract]
Number of segments sold	6
Segments sold by company, Amount	$ 1.8

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Special Cash Dividend (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	1 Months Ended	3 Months Ended	9 Months Ended
	Oct. 31, 2012	Sep. 30, 2012	Sep. 30, 2012
Special Cash Dividend (Textual) [Abstract]
Special cash dividend declared per share	$ 0.15	$ 10.00	$ 10.00
Special cash dividend		$ 88.8
Special cash dividend payable date	Dec. 17, 2012	Oct. 19, 2012
Date of record for special cash dividend payable	Nov. 30, 2012	Sep. 28, 2012

XML

Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Sep. 30, 2012
Reconciliation of the change in the amount of gross unrecognized income tax benefits
Balance at beginning of period		$ 632
Increase of unrecognized tax benefits related to prior years	632
Balance at end of period	$ 632	$ 632

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Subsequent Events (Details) (USD $)	1 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended
	Oct. 31, 2012	Sep. 30, 2012	Sep. 30, 2012	Dec. 31, 2012 Maximum [Member] Scenario, Forecast [Member]	Dec. 31, 2012 Minimum [Member] Scenario, Forecast [Member]
Subsequent Events (Textual) [Abstract]
Dividends declared per share	$ 0.15	$ 10.00	$ 10.00
Special cash dividend payable date	Dec. 17, 2012	Oct. 19, 2012
Date of record for special cash dividend payable	Nov. 30, 2012	Sep. 28, 2012
Special Cash Dividend		$ 10.00
Expected incremental stock compensation expense				$ 700,000	$ 500,000

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Net Income Per Share (Details Textual)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Restricted Stock Units (RSUs) [Member]
Net Income Per Share (Textual) [Abstract]
Stock-based compensation expense				53
Stock Options [Member]
Net Income Per Share (Textual) [Abstract]
Stock-based compensation expense	148,560	204,994	181,071	209,706

XML

Debt Security Investments (Details 1) (U.S. Treasury Securities [Member], USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
U.S. Treasury Securities [Member]
Gross unrealized losses and fair value of all available for sale debt security investments
Fair value, Less than 12 months	$ 47,235	$ 36,944
Fair value, 12 months or more
Fair value	47,235	36,944
Unrealized losses, Less than 12 months	(8)	(6)
Unrealized losses, 12 months or more
Unrealized losses	$ (8)	$ (6)

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets [Abstract]

Summary of the carrying amount of goodwill and intangible assets

	September 30, 2012							December 31, 2011
	Gross carrying amount		Accumulated amortization			Net		Gross carrying amount		Accumulated amortization			Net
Goodwill (1)	$	13,293	$	—		$	13,293	$	13,293	$	—		$	13,293
Intangible assets:
Broadcast licenses (1)	$	37,430	$	—		$	37,430	$	37,430	$	—		$	37,430
Other intangible assets		285		—			285		285		—			285
Intangible assets subject to amortization (2)
Network affiliation agreement		3,560		(1,144	)		2,416		3,560		(968	)		2,592
Total intangible assets	$	41,275	$	(1,144	)	$	40,131	$	41,275	$	(968	)	$	40,307

(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 Federal Communications Commission (“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 three and nine months ended September 30, 2012 was $59,000 and $176,000, respectively. Total amortization expense for intangible assets subject to amortization for the three and nine months ended September 30, 2011 was $59,000 and $177,000, respectively.

Amortization expense for the Company's intangible assets

2012	$	60
2013		236
2014		236
2015		236
2016		236
2017		236
Thereafter		1,176
	$	2,416

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Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Operating results and other financial data for each segment
Revenue	$ 39,895	$ 39,700	$ 116,097	$ 117,602
Segment income from continuing operations	5,091	6,905	14,177	15,874
Fisher Plaza rent	(1,409)		(3,933)
Depreciation and amortization	1,736	2,697	5,241	8,027
Total assets	267,901		267,901		345,117
Television [Member]
Operating results and other financial data for each segment
Revenue	34,663	30,522	100,600	90,557
Segment income from continuing operations	10,178	6,783	27,630	18,213
Depreciation and amortization	1,486	1,200	4,463	3,526
Total assets	118,376		118,376		122,357
Radio [Member]
Operating results and other financial data for each segment
Revenue	5,225	5,344	15,524	15,876
Segment income from continuing operations	1,387	1,476	4,020	3,358
Depreciation and amortization	29	23	88	70
Total assets	15,198		15,198		13,435
Fisher Plaza [Member]
Operating results and other financial data for each segment
Revenue		3,853		11,361
Segment income from continuing operations		2,286		6,938
Depreciation and amortization		1,200		3,608
Total assets					377
Operating segments [Member]
Operating results and other financial data for each segment
Revenue	39,888	39,719	116,124	117,794
Segment income from continuing operations	11,565	10,545	31,650	28,509
Depreciation and amortization	1,515	2,423	4,551	7,204
Total assets	133,574		133,574		136,169
Corporate and other [Member]
Operating results and other financial data for each segment
Revenue	7	(19)	(27)	(192)
Segment income from continuing operations	(5,065)	(3,640)	(13,540)	(12,635)
Depreciation and amortization	221	274	690	823
Total assets	$ 134,327		$ 134,327		$ 208,948

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Local Marketing Agreement (Details) (Local Marketing Agreement [Member], USD $)	9 Months Ended
	Sep. 30, 2012
Local Marketing Agreement (Textual) [Abstract]
Term of agreement	5 years
Last date of radio station acquisition	2017-01
Predecessor [Member]
Local Marketing Agreement (Textual) [Abstract]
Obligation under option agreement	1,400,000
Successor [Member]
Local Marketing Agreement (Textual) [Abstract]
Obligation under option agreement	615,000
Ownership by amendment of agreement, percentage	7.50%
Ownership by amendment of agreement	750,000

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Goodwill and Intangible Assets (Details 1) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Amortization expense for the Company's intangible assets
2012	$ 60
2013	236
2014	236
2015	236
2016	236
2017	236
Thereafter	1,176
Total	$ 2,416

XML

Segment Information (Details Textual) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2012 Segment	Dec. 31, 2011
Segment Information (Textual) [Abstract]
Number of segments	2
Sale of Fisher Plaza		$ 160.0
Television [Member]
Segment Reporting Information [Line Items]
Number of operating segments	20
Operating segments, percentage	50.00%
Radio [Member]
Segment Reporting Information [Line Items]
Number of owned radio stations	3
Number of managed radio stations	1

XML

Stock-Based Compensation (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Stock Based Compensation (Textual) [Abstract]
Stock-based compensation	$ 458	$ 442	$ 1,284	$ 1,174

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Debt Security Investments

9 Months Ended

Sep. 30, 2012

Debt Security Investments [Abstract]

Debt Security Investments

3. Debt Security Investments

Corresponding with the Company’s Board of Directors’ August 2012 declaration of a $10.00 per common share special cash dividend and the institution of a quarterly dividend policy, the Company announced its intention to fund the dividends from existing cash and its debt security investments. As a result of these declarations, on September 30, 2012, the Company reclassified its entire portfolio of debt security investments classified as held-to-maturity, which consisted of U.S. treasury securities, to available for sale. At September 30, 2012, these investments had a fair value and amortized cost of $76.0 million. The investments’ net unrealized appreciation, net of tax, increased the Company’s accumulated other comprehensive income and shareholders’ equity by $13,000 as of September 30, 2012.

The following table summarizes amortized cost, gross unrealized gains, gross unrealized losses and the fair value of debt security investments (in thousands):

	September 30, 2012									December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury securities	$	76,009	$	29	$	(8	)	$	76,030	$	36,950	$	—	$	(6	)	$	36,944

The following table displays the gross unrealized losses and fair value of all available for sale debt security investments that were in a continuous unrealized loss position for the periods indicated.

	Less than 12 months					12 months or more				Total
	Fair value		Unrealized losses			Fair value		Unrealized losses		Fair value		Unrealized losses
September 30, 2012
U.S. Treasury securities	$	47,235	$	(8	)	$	—	$	—	$	47,235	$	(8	)
December 31, 2011
U.S. Treasury securities	$	36,944	$	(6	)	$	—	$	—	$	36,944	$	(6	)

The following table presents the amortized cost and the fair value of debt security investments, by contractual maturity (in thousands):

	September 30, 2012
	Amortized Cost		Fair Value
Due in one year or less	$	56,585	$	56,583
Due after one year through five years		19,424		19,447
Total debt security investments	$	76,009	$	76,030

Debt security investments are reviewed periodically to determine if a permanent decline in fair value has occurred that would require impairment of the carrying value. No impairments on debt security investments have been recorded as of September 30, 2012 and December 31, 2011.

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Retirement Benefits (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Net periodic pension cost
Interest cost	$ 234	$ 250	$ 702	$ 750
Amortization of loss	45	22	135	66
Net periodic pension cost	$ 279	$ 272	$ 837	$ 816

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2012

Segment Information [Abstract]

Operating results and other financial data for each segment

	Three months ended September 30,						Nine months ended September 30,
(dollars in thousands)	2012			2011			2012			2011
Revenue
Television	$	34,663		$	30,522		$	100,600		$	90,557
Radio		5,225			5,344			15,524			15,876
Fisher Plaza		—			3,853			—			11,361
Total segment revenue		39,888			39,719			116,124			117,794
Intercompany and other		7			(19	)		(27	)		(192	)
	$	39,895		$	39,700		$	116,097		$	117,602
Segment income from continuing operations
Television	$	10,178		$	6,783		$	27,630		$	18,213
Radio		1,387			1,476			4,020			3,358
Fisher Plaza		—			2,286			—			6,938
Total segment income from continuing operations		11,565			10,545			31,650			28,509
Corporate and other		(5,065	)		(3,640	)		(13,540	)		(12,635	)
Fisher Plaza rent		(1,409	)		—			(3,933	)		—
	$	5,091		$	6,905		$	14,177		$	15,874
Depreciation and amortization
Television	$	1,486		$	1,200		$	4,463		$	3,526
Radio		29			23			88			70
Fisher Plaza		—			1,200			—			3,608
Total segment depreciation and amortization		1,515			2,423			4,551			7,204
Corporate and other		221			274			690			823
	$	1,736		$	2,697		$	5,241		$	8,027
	September 30, 2012			December 31, 2011
Total assets
Television	$	118,376		$	122,357
Radio		15,198			13,435
Fisher Plaza		—			377
Total segment assets		133,574			136,169
Corporate and other		134,327			208,948
	$	267,901		$	345,117

Reconciliation of segment income from continuing operations to income from continuing operations

	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Segment income from continuing operations	$	5,091		$	6,905		$	14,177		$	15,874
Adjustments:
Gain on sale of real estate, net		—			—			164			4,089
Plaza fire reimbursements, net		—			40			—			223
Depreciation and amortization		(1,736	)		(2,697	)		(5,241	)		(8,027	)
Income from continuing operations	$	3,355		$	4,248		$	9,100		$	12,159

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2012

Income Taxes [Abstract]

Reconciliation of the change in the amount of gross unrecognized income tax benefits

	September 30, 2012		December 31, 2011
Balance at beginning of period	$	632	$	—
Increase of unrecognized tax benefits related to prior years		—		632
Balance at end of period	$	632	$	632

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Retirement Benefits (Details Textual)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Retirement Benefits (Textual) [Abstract]
Discount rate used to determine net periodic pension cost	4.48%	5.22%	4.48%	5.22%

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Basis of Presentation and Significant Accounting Policies (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	1 Months Ended	3 Months Ended
	Oct. 31, 2012	Sep. 30, 2012
Basis of Presentation and Significant Accounting Policies (Textual) [Abstract]
Special cash dividend per share		$ 10.00
Special cash dividend payable		$ 88.8
Date of special cash dividend payable		Oct. 19, 2012
Date of record for special cash dividend payable	Nov. 30, 2012	Sep. 28, 2012

XML

Fair Value Measurements (Details) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Fair Value Measurements (Textual) [Abstract]
Fixed interest rate and totaled	$ 0	$ 61,800,000
Level 1 [Member]
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract]
Fair value of debt security investments	76,000,000	36,900,000
Cash equivalents	30,600,000	145,400,000
Level 2 [Member]
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract]
Estimated fair value of the Company's debt		62,900,000
Debt Security Investment [Member]
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract]
Restricted Cash	3,500,000
Cash Equivalents [Member]
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract]
Restricted Cash		125,000
Fair Value on Recurring Basis [Member] | Level 1 [Member]
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract]
Fair value of marketable securities	$ 581,000	$ 1,000,000

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Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

2. Fair Value Measurements

The Company measures certain financial assets at fair value on a recurring basis. The fair value of these financial assets was determined based on three levels of inputs, of which, the first two levels are considered observable and the last unobservable. The three levels of inputs that may be used to measure fair value are as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

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; or the fair value is determined through the use of models or other valuation methodologies.

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. The inputs to determine fair value require significant management judgment or estimation.

Assets and liabilities measured at fair value on a recurring basis consist of marketable securities and debt security investments. As of September 30, 2012 and December 31, 2011, the reported fair value of marketable securities, using Level 1 inputs, was $581,000 and $1.0 million, respectively. Marketable securities are included in other assets on the Company’s unaudited condensed consolidated balance sheets. As of September 30, 2012 and December 31, 2011, the reported fair value of debt security investments, using Level 1 inputs, was $76.0 million and $36.9 million, respectively. Debt security investments are included in short term debt security investments and restricted cash on the Company’s unaudited condensed consolidated balance sheets.

As of September 30, 2012, the Company did not have any outstanding fixed interest rate debt. As of December 31, 2011, all of the Company’s debt was at a fixed interest rate and totaled $61.8 million. The fair market value of 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 the Company’s debt, using Level 2 inputs, at December 31, 2011 was $62.9 million. The fair value of debt is based on estimates made by investment bankers based on the fair value of the Company’s fixed interest rate debt. For fixed interest rate debt, interest rate changes do not impact financial position, operations or cash flows.

Restricted cash included $3.5 million of debt security investments and $125,000 of cash equivalents at September 30, 2012 and December 31, 2011, for which the fair value is measured using Level 1 inputs. The debt security investments are reported at fair value and the carrying amount of cash equivalents approximates fair value.

Cash equivalents consist of $30.6 million and $145.4 million at September 30, 2012 and December 31, 2011, respectively, for which the fair value is measured using Level 1 inputs. The carrying amount of cash equivalents approximates fair value.

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Debt Security Investments (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Amortized cost, gross unrealized gains, gross unrealized losses and fair values of debt security investments
Amortized Cost	$ 76,009
Total debt security investments, Fair Value	76,030
U.S. Treasury Securities [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and fair values of debt security investments
Amortized Cost	76,009	36,950
Gross Unrealized Gains	29
Gross Unrealized Losses	(8)	(6)
Total debt security investments, Fair Value	$ 76,030	$ 36,944

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Extinguishment of Senior Notes (Details) (USD $)	1 Months Ended	3 Months Ended	9 Months Ended
	Jan. 31, 2012	Sep. 30, 2011	Sep. 30, 2011
Extinguishment of Senior Notes (Textual) [Abstract]
Redeemed principle amount of senior notes	$ 61,800,000	$ 8,700,000	$ 34,600,000
Percentage of Senior Note Redeemed	8.625%
Senior notes due date	2014
Total consideration on redemption of senior notes	62,700,000	8,900,000	35,500,000
Accrued interest on redemption	1,800,000	263,000	572,000
Loss on extinguishment of debt	1,500,000	298,000	1,400,000
Unamortized debt issuance costs	$ 594,000	$ 98,000	$ 416,000

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Stock Repurchase Program (Details) (USD $)	1 Months Ended	3 Months Ended	9 Months Ended
	Dec. 31, 2011	Sep. 30, 2012	Sep. 30, 2012
Stock Repurchase Program (Textual) [Abstract]
Stock repurchase of its outstanding shares	$ 25,000,000
Share repurchase		0
Stock repurchased and retired			2,990
Cost of stock repurchased and retired			$ 86,000
Number of unsettled shares out of shares repurchased		0	0

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Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Condensed Consolidated Statements of Operations [Abstract]
Revenue	$ 39,895	$ 39,700	$ 116,097	$ 117,602
Operating expenses
Direct operating costs	16,386	17,704	48,974	52,595
Selling, general and administrative expenses	15,939	12,642	45,574	40,809
Amortization of broadcast rights	2,479	2,449	7,372	8,324
Depreciation and amortization	1,736	2,697	5,241	8,027
Gain on sale of real estate, net			(164)	(4,089)
Plaza fire reimbursements, net		(40)		(223)
Total operating expenses	36,540	35,452	106,997	105,443
Income from continuing operations	3,355	4,248	9,100	12,159
Loss on extinguishment of senior notes, net		(298)	(1,482)	(1,356)
Other income, net	49	34	143	214
Interest expense	(16)	(1,572)	(292)	(5,697)
Income from continuing operations before income taxes	3,388	2,412	7,469	5,320
Provision for income taxes	1,188	893	2,851	1,978
Income from continuing operations, net of income taxes	2,200	1,519	4,618	3,342
Loss from discontinued operations, net of income taxes		(75)		(9)
Net Income	$ 2,200	$ 1,444	$ 4,618	$ 3,333
Net income (loss) per share:
From continuing operations	$ 0.25	$ 0.17	$ 0.52	$ 0.38
From discontinued operations		$ (0.01)
Net income per share	$ 0.25	$ 0.16	$ 0.52	$ 0.38
Net income (loss) per share assuming dilution:
From continuing operations	$ 0.25	$ 0.17	$ 0.52	$ 0.38
From discontinued operations		$ (0.01)		$ (0.01)
Net income per share	$ 0.25	$ 0.16	$ 0.52	$ 0.37
Weighted average shares outstanding	8,878	8,836	8,866	8,827
Weighted average shares outstanding assuming dilution	8,958	8,900	8,949	8,898
Dividends declared per share	$ 10.00		$ 10.00

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Net Income Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Basic and diluted net income per share
Income from continuing operations, net of income taxes	$ 2,200	$ 1,519	$ 4,618	$ 3,342
Loss from discontinued operations, net of income taxes		(75)		(9)
Net Income	$ 2,200	$ 1,444	$ 4,618	$ 3,333
Weighted average shares outstanding	8,878	8,836	8,866	8,827
Weighted effect of dilutive options and rights	80	64	83	71
Weighted average shares outstanding assuming dilution	8,958	8,900	8,949	8,898
Net income (loss) per share:
From continuing operations	$ 0.25	$ 0.17	$ 0.52	$ 0.38
From discontinued operations		$ (0.01)
Net income per share	$ 0.25	$ 0.16	$ 0.52	$ 0.38
Net income (loss) per share assuming dilution [Member]
Net income (loss) per share:
From continuing operations	$ 0.25	$ 0.17	$ 0.52	$ 0.38
From discontinued operations		$ (0.01)		$ (0.01)
Net income per share	$ 0.25	$ 0.16	$ 0.52	$ 0.37

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Operating activities
Net income	$ 4,618	$ 3,333
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation and amortization	5,241	8,027
Deferred income taxes, net	64	31
Loss on extinguishment of senior notes, net	594	416
Loss in operations of equity investees	119	188
Loss on disposal of property, plant and equipment, net	101	75
Gain on sale of radio station, net		(48)
Gain on sale of real estate, net	(164)	(4,089)
Amortization of deferred financing fees	19	235
Amortization of deferred gain on sale of Fisher Plaza	(569)
Amortization of debt security investment premium	78
Amortization of non-cash contract termination fee	(1,096)	(1,096)
Amortization of broadcast rights	7,372	8,324
Payments for broadcast rights	(7,421)	(8,688)
Stock-based compensation	1,284	1,174
Change in operating assets and liabilities, net
Receivables	4,162	1,791
Prepaid expenses and other	1,091	791
Cash surrender value of life insurance and annuity contracts	(606)	1,819
Other assets	125	203
Accounts payable, accrued payroll and related benefits and other current liabilities	2,872	(1,593)
Interest payable	(1,556)	(2,312)
Income taxes receivable and payable	(18,887)	2,514
Accrued retirement benefits	(43)	31
Other liabilities	675	(783)
Net cash provided by (used in) operating activities	(1,927)	10,343
Investing activities
Investment in equity investee	(50)	(88)
Purchase of debt security investments	(82,733)
Purchase of investment in a radio station	(750)
Purchase of option to acquire a radio station	(615)
Proceeds from sale of debt security investments	7,628
Proceeds from maturity of debt security investments	35,967
Purchase of radio stations		(113)
Purchase of property, plant and equipment	(7,565)	(5,070)
Proceeds from sale of radio station		48
Proceeds from sale of real estate	825	4,164
Net cash used in investing activities	(47,293)	(1,059)
Financing activities
Repurchase of senior notes	(61,834)	(34,606)
Repurchase of common stock	(86)
Shares settled upon vesting of stock rights	(441)	(278)
Payments on capital lease obligations	(145)	(134)
Proceeds from exercise of stock options	25	75
Net cash used in financing activities	(62,481)	(34,943)
Net decrease in cash and cash equivalents	(111,701)	(25,659)
Cash and cash equivalents, beginning of period	143,017	52,945
Cash and cash equivalents, end of period	$ 31,316	$ 27,286

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Debt Security Investments (Details Textual) (USD $) In Thousands, except Per Share data, unless otherwise specified	1 Months Ended	3 Months Ended	9 Months Ended	12 Months Ended
	Oct. 31, 2012	Sep. 30, 2012	Sep. 30, 2012	Dec. 31, 2011
Debt Security Investments (Textual) [Abstract]
Special cash dividend declared per share	$ 0.15	$ 10.00	$ 10.00
Fair value of investment		$ 76,030	$ 76,030
Amortized cost		76,009	76,009
Unrealized gain on available for sale securities		13	13
Impairments on the debt security investments			$ 0	$ 0

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Subsequent Events

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

Subsequent Events

16. Subsequent Events

In October 2012, the Company’s Board of Directors declared a quarterly cash dividend of $0.15 per common share, payable on December 17, 2012 to holders of record on November 30, 2012.

In October 2012, in connection with the announcement of a $10.00 per share special cash dividend (“SCD”) and the initiation of a quarterly dividend policy, the Board of Directors and the Compensation Committee (the “Committee”) approved changes to both the Amended and Restated Fisher Communications Incentive Plan of 2001 (the “2001 Plan”) and the Amended and Restated 2008 Equity Incentive Plan (the “2008 Plan”). The changes permit: (1) the adjustment of outstanding awards in the event of a distribution of cash or other assets to shareholders other than a normal cash dividend and (2) the amendment of outstanding awards so that such awards are credited with normal cash dividends or dividend equivalents. Effective on October 22, 2012, all of the Company’s outstanding stock options, restricted stock units issued from the 2008 plan (“RSUs”) and performance awards were adjusted by reducing the exercise price and/or increasing the number of shares to preserve the intrinsic value of such awards as a result of the SCD.

The Company currently expects these award adjustments to result in approximately $500,000 to $700,000 of incremental stock compensation expense for the three months ended December 31, 2012 and will result in an incremental increase to stock compensation over the remaining service period for the impacted RSUs, performance awards and options.

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Goodwill and Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Summary of the carrying amount of goodwill and intangible assets
Gross carrying amount	$ 41,275	$ 41,275
Accumulated amortization	(1,144)	(968)
Net	40,131	40,307
Goodwill [Member]
Summary of the carrying amount of goodwill and intangible assets
Gross carrying amount	13,293	13,293
Accumulated amortization
Net	13,293	13,293
Broadcast licenses [Member]
Summary of the carrying amount of goodwill and intangible assets
Gross carrying amount	37,430	37,430
Accumulated amortization
Net	37,430	37,430
Other intangible assets [Member]
Summary of the carrying amount of goodwill and intangible assets
Gross carrying amount	285	285
Accumulated amortization
Net	285	285
Network affiliation agreement [Member]
Summary of the carrying amount of goodwill and intangible assets
Gross carrying amount	3,560	3,560
Accumulated amortization	(1,144)	(968)
Net	$ 2,416	$ 2,592

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Debt Security Investments (Tables)

9 Months Ended

Sep. 30, 2012

Debt Security Investments [Abstract]

Amortized cost, gross unrealized gains, gross unrealized losses and the fair value of debt security investments

	September 30, 2012									December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury securities	$	76,009	$	29	$	(8	)	$	76,030	$	36,950	$	—	$	(6	)	$	36,944

Gross unrealized losses and fair value of all available for sale debt security investments

	Less than 12 months					12 months or more				Total
	Fair value		Unrealized losses			Fair value		Unrealized losses		Fair value		Unrealized losses
September 30, 2012
U.S. Treasury securities	$	47,235	$	(8	)	$	—	$	—	$	47,235	$	(8	)
December 31, 2011
U.S. Treasury securities	$	36,944	$	(6	)	$	—	$	—	$	36,944	$	(6	)

Amortized cost and the fair value of debt security investments, by contractual maturity

	September 30, 2012
	Amortized Cost		Fair Value
Due in one year or less	$	56,585	$	56,583
Due after one year through five years		19,424		19,447
Total debt security investments	$	76,009	$	76,030

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Basis of Presentation and Significant Accounting Policies

9 Months Ended

Sep. 30, 2012

Basis of Presentation and Significant Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

1. Basis of Presentation and Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements of Fisher Communications, Inc. and its wholly-owned subsidiaries (the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement have been included in the periods presented. Operating results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012, or for any other period. The unaudited condensed consolidated balance sheet at December 31, 2011 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by GAAP for annual financial statements. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 (“2011 Form 10-K”).

Certain reclassifications have been made to the unaudited condensed consolidated financial statements in the prior year to conform to the current year presentation.

The significant accounting policies used in preparation of the unaudited condensed consolidated financial statements are disclosed in the Company’s 2011 Form 10-K. Except as described below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the three and nine months ended September 30, 2012, as compared to the recent accounting pronouncements described in the Company’s 2011 Form 10-K, that are of significance, or potential significance, to the Company.

In the third quarter of 2012, the Company’s Board of Directors declared a special cash dividend of $10.00 per common share, or approximately $88.8 million, payable on October 19, 2012 to holders of record on September 28, 2012. At September 30, 2012, the special cash dividend was reported as dividends payable in the Company’s unaudited condensed consolidated balance sheet.

In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-05, which amends the disclosure requirements for presentation of comprehensive income. Subsequently, in December 2011, the FASB indefinitely deferred the effective date of the portion of ASU No. 2011-05 requiring the separate presentation of reclassifications out of accumulated other comprehensive income. The implementation of the amended accounting guidance did not have a material impact on our consolidated financial position or results of operations.

In July 2012, the FASB issued an accounting standard update on testing indefinite-lived intangibles for impairment. The accounting update provides an entity the option to first perform a qualitative assessment to determine whether it is more likely than not that the indefinite-lived intangible asset is impaired. If an entity determines that this is the case, it is required to perform the currently prescribed two-step impairment test to identify potential impairment and measure the amount of impairment loss to be recognized for the indefinite-lived intangible asset (if any). This guidance is effective for the Company’s fiscal year beginning January 1, 2013, however, the Company can choose to early adopt the revised standard. The implementation of this accounting guidance is not expected to have a material impact on our consolidated financial position or results of operations.

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Condensed Consolidated Statements of Comprehensive Income [Abstract]
Net income	$ 2,200	$ 1,444	$ 4,618	$ 3,333
Other comprehensive income (loss):
Accumulated income	36	15	108	44
Effect of income taxes	(14)	(5)	(40)	(15)
Prior service cost	15	15	45	45
Effect of income taxes	(5)	(6)	(16)	(16)
Unrealized gains on security investments	21		21
Effect of income taxes	(8)		(8)
Other comprehensive income	45	19	110	58
Comprehensive income	$ 2,245	$ 1,463	$ 4,728	$ 3,391

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

11. Stock-Based Compensation

Stock-based compensation expense for the three and nine months ended September 30, 2012 was $458,000 and $1.3 million, respectively. Stock-based compensation expense for the three and nine months ended September 30, 2011 was $442,000 and $1.2 million, respectively. Stock-based compensation expense is included in selling, general and administrative expenses in the Company’s unaudited condensed consolidated statements of operations.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2012	Oct. 31, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	FISHER COMMUNICATIONS INC
Entity Central Index Key	0001034669
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		8,876,258

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Income Taxes

9 Months Ended

Sep. 30, 2012

Income Taxes [Abstract]

Income Taxes

12. Income Taxes

The Company records an income tax provision or benefit based upon its estimated annual effective tax rate, which is estimated at 38.2% and 36.3% for the nine months ended September 30, 2012 and 2011, respectively.

As of September 30, 2012 and December 31, 2011, the Company had $632,000 of unrecognized tax benefits and no penalties or interest was accrued. If the unrecognized tax benefits were recognized $410,000 would impact the effective tax rate.

A reconciliation of the change in the amount of gross unrecognized income tax benefits is as follows (in thousands):

	September 30, 2012		December 31, 2011
Balance at beginning of period	$	632	$	—
Increase of unrecognized tax benefits related to prior years		—		632
Balance at end of period	$	632	$	632

Although the timing and outcome of income tax audits is uncertain, it is possible that unrecognized tax benefits may be reduced as a result of the lapse of the applicable statutes of limitations in federal and state jurisdictions within the next 12 months. Currently, the Company cannot reasonably estimate the amount of reductions, if any, during the next 12 months. Any such reduction could be impacted by other changes in unrecognized tax benefits and could result in changes to in the Company’s tax obligations.

The State of California conducted an examination of the Company’s 2007 and 2008 state tax returns and in April 2012, the Company received a preliminary determination seeking approximately $450,000 in unpaid taxes in connection with the Company’s treatment of the proceeds from its 2008 sale of Safeco Corporation stock and dividends received. The Company opposed the State of California’s position. In October 2012, the Company received a letter from the State of California indicating that the auditor agreed with the Company's original treatment of the proceeds from its 2008 sale of Safeco Corporation stock and dividends received. Under applicable regulations, the auditor's determination is potentially subject to review. If the auditor's determination were overturned on review, the final disposition of the proposed audit adjustments could require the Company to make additional payments of taxes, interest and penalties, which could materially affect its effective tax rate.

The State of Oregon conducted an examination of the Company’s 2007 and 2008 state tax returns and in November 2011, the Company received a Proposed Auditor’s Report from the State of Oregon seeking approximately $800,000 in unpaid taxes, interest and penalties in connection with the Company’s treatment of the proceeds from its 2007 and 2008 sales of Safeco Corporation stock and dividends received. The Company has opposed the State of Oregon’s position. The final disposition of the proposed audit adjustments could require the Company to make additional payments of taxes, interest and penalties, which could materially affect its effective tax rate.

The determination of the Company’s provision for income taxes and valuation allowance requires significant judgment, the use of estimates and the interpretation and application of complex tax laws. In assessing whether and to what extent deferred tax assets can be realized, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized.

The Company assesses the likelihood of the realizability of its deferred tax assets on a quarterly basis. As of September 30, 2012 and December 31, 2011, the Company had a valuation allowance of approximately $480,000 on certain of its deferred tax assets. The amount of net deferred tax assets considered realizable, however, could be reduced in the future if the Company’s projections of future taxable income are reduced or if the Company does not perform at the levels that it is projecting. This could result in an increase in the Company’s valuation allowance for deferred tax assets.

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Current Assets
Cash and cash equivalents	$ 31,316	$ 143,017
Short-term debt security investments	72,532	33,481
Receivables, net	28,240	32,402
Income taxes receivable		117
Deferred income taxes, net	1,825	1,825
Prepaid expenses and other	1,972	3,062
Broadcast rights	9,219	6,789
Total current assets	145,104	220,693
Restricted cash	3,623	3,594
Cash surrender value of life insurance and annuity contracts	17,884	17,278
Goodwill, net	13,293	13,293
Intangible assets, net	40,131	40,307
Other assets	5,219	5,006
Deferred income taxes, net	3,303	3,367
Assets held for sale		658
Property, plant and equipment, net	39,344	40,921
Total Assets	267,901	345,117
Current Liabilities
Current maturities of long-term debt		61,834
Accounts payable	2,009	3,754
Accrued payroll and related benefits	4,558	4,660
Interest payable		1,556
Broadcast rights payable	8,936	6,541
Income taxes payable	2,464	21,468
Current portion of accrued retirement benefits	1,302	1,302
Dividends payable	88,795
Other current liabilities	9,415	8,708
Total current liabilities	117,479	109,823
Deferred income	8,633	10,036
Accrued retirement benefits	20,385	20,525
Other liabilities	2,943	2,688
Total liabilities	149,440	143,072
Commitments and Contingencies (Note 7)
Stockholders' Equity
Common stock, shares authorized 12,000,000, $1.25 par value; 8,876,258 and 8,832,177 issued and outstanding at September 30, 2012 and December 31, 2011, respectively	11,095	11,040
Capital in excess of par	15,407	14,679
Accumulated other comprehensive loss, net of income taxes:
Accumulated loss	(3,219)	(3,288)
Prior service cost	(34)	(62)
Unrealized gain on available for sale securities	13
Retained earnings	95,199	179,676
Total Stockholders' Equity	118,461	202,045
Total Liabilities and Stockholders' Equity	$ 267,901	$ 345,117

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Extinguishment of Senior Notes

9 Months Ended

Sep. 30, 2012

Extinguishment of Senior Notes [Abstract]

Extinguishment of Senior Notes

6. Extinguishment of Senior Notes

In January 2012, the Company redeemed the remaining $61.8 million aggregate principal amount of its 8.625% Senior Notes due in 2014 (“Senior Notes”) for a total consideration of $62.7 million in cash plus accrued interest of $1.8 million. The Company recorded a loss on extinguishment of debt of $1.5 million, including a charge for related unamortized debt issuance costs of approximately $594,000. As a result of the redemption of the remaining outstanding Senior Notes, the Company is no longer subject to provisions contained in the Senior Notes indenture, including various debt covenants and other restrictions, and the Company no longer is required to report financial information for its subsidiary guarantors of the Senior Notes.

During the three months ended September 30, 2011, the Company redeemed or repurchased $8.7 million aggregate principal amount of Senior Notes for a total consideration of $8.9 million in cash plus accrued interest of $263,000. The Company recorded a loss on extinguishment of debt of $298,000, including a charge for related unamortized debt issuance costs of approximately $98,000.

During the nine months ended September 30, 2011, the Company redeemed or repurchased $34.6 million aggregate principal amount of Senior Notes for a total consideration of $35.5 million in cash plus accrued interest of $572,000. The Company recorded a loss on extinguishment of debt of $1.4 million, including a charge for related unamortized debt issuance costs of approximately $416,000.

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Discontinued Operations

9 Months Ended

Sep. 30, 2012

Discontinued Operations [Abstract]

Discontinued Operations

5. Discontinued Operations

In October 2011, the Company sold its six Great Falls, Montana radio stations (the “Montana Stations”) to STARadio Corp. (“STARadio”), which is based in Quincy, Illinois for $1.8 million, which was subject to certain adjustments. In accordance with authoritative guidance, the Company has reported the results of operations of the Montana Stations as discontinued operations in the accompanying unaudited condensed consolidated financial statements. For all previously reported periods, the Company reclassified the results of the Montana Stations from continuing operations to discontinued operations. The Montana Stations were previously included in the Company’s radio segment.

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Basis of Presentation and Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2012

Basis of Presentation and Significant Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements of Fisher Communications, Inc. and its wholly-owned subsidiaries (the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement have been included in the periods presented. Operating results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012, or for any other period. The unaudited condensed consolidated balance sheet at December 31, 2011 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by GAAP for annual financial statements. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 (“2011 Form 10-K”).

Certain reclassifications have been made to the unaudited condensed consolidated financial statements in the prior year to conform to the current year presentation.

The significant accounting policies used in preparation of the unaudited condensed consolidated financial statements are disclosed in the Company’s 2011 Form 10-K. Except as described below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the three and nine months ended September 30, 2012, as compared to the recent accounting pronouncements described in the Company’s 2011 Form 10-K, that are of significance, or potential significance, to the Company.

Comprehensive income

In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-05, which amends the disclosure requirements for presentation of comprehensive income. Subsequently, in December 2011, the FASB indefinitely deferred the effective date of the portion of ASU No. 2011-05 requiring the separate presentation of reclassifications out of accumulated other comprehensive income. The implementation of the amended accounting guidance did not have a material impact on our consolidated financial position or results of operations.

Impairment of indefinite-lived intangibles

In July 2012, the FASB issued an accounting standard update on testing indefinite-lived intangibles for impairment. The accounting update provides an entity the option to first perform a qualitative assessment to determine whether it is more likely than not that the indefinite-lived intangible asset is impaired. If an entity determines that this is the case, it is required to perform the currently prescribed two-step impairment test to identify potential impairment and measure the amount of impairment loss to be recognized for the indefinite-lived intangible asset (if any). This guidance is effective for the Company’s fiscal year beginning January 1, 2013, however, the Company can choose to early adopt the revised standard. The implementation of this accounting guidance is not expected to have a material impact on our consolidated financial position or results of operations.

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Segment Information

9 Months Ended

Sep. 30, 2012

Segment Information [Abstract]

Segment Information

13. Segment Information

The Company reports financial data for two segments: television and radio. The television segment includes the operations of the Company’s 20 owned and/or operated television stations (including a 50%-owned television station) and the Company’s developing media business. The radio segment includes the operations of the Company’s three radio stations and one managed radio station. Prior to 2012, the Company also included Fisher Plaza as a reportable segment which included the operations of a communications center located near downtown Seattle that serves as home of the Company’s Seattle-based television, radio and developing media operations, the Company’s corporate offices and third-party tenants. In December 2011, the Company completed the sale of Fisher Plaza to Hines for $160.0 million in cash. The Company’s corporate headquarters and Seattle-based television, radio and developing media operations continue to be located at Fisher Plaza.

The Company discloses information about its reportable segments based on measures it uses in assessing the performance of its reportable segments. The Company uses “segment income from continuing operations” to measure the operating performance of its segments which represents income from continuing operations before depreciation and amortization, loss (gain) on sale of real estate, net and Plaza fire reimbursements, net. Additionally, the performance metric for segment income from continuing operations excludes the allocation of corporate costs and Fisher Plaza rent expense. Prior period financial information has been restated to conform to current period presentation.

Operating results and other financial data for each segment are as follows:

	Three months ended September 30,						Nine months ended September 30,
(dollars in thousands)	2012			2011			2012			2011
Revenue
Television	$	34,663		$	30,522		$	100,600		$	90,557
Radio		5,225			5,344			15,524			15,876
Fisher Plaza		—			3,853			—			11,361
Total segment revenue		39,888			39,719			116,124			117,794
Intercompany and other		7			(19	)		(27	)		(192	)
	$	39,895		$	39,700		$	116,097		$	117,602
Segment income from continuing operations
Television	$	10,178		$	6,783		$	27,630		$	18,213
Radio		1,387			1,476			4,020			3,358
Fisher Plaza		—			2,286			—			6,938
Total segment income from continuing operations		11,565			10,545			31,650			28,509
Corporate and other		(5,065	)		(3,640	)		(13,540	)		(12,635	)
Fisher Plaza rent		(1,409	)		—			(3,933	)		—
	$	5,091		$	6,905		$	14,177		$	15,874
Depreciation and amortization
Television	$	1,486		$	1,200		$	4,463		$	3,526
Radio		29			23			88			70
Fisher Plaza		—			1,200			—			3,608
Total segment depreciation and amortization		1,515			2,423			4,551			7,204
Corporate and other		221			274			690			823
	$	1,736		$	2,697		$	5,241		$	8,027
	September 30, 2012			December 31, 2011
Total assets
Television	$	118,376		$	122,357
Radio		15,198			13,435
Fisher Plaza		—			377
Total segment assets		133,574			136,169
Corporate and other		134,327			208,948
	$	267,901		$	345,117

Intercompany and other non-segment revenue relates to sales between our television and radio stations and miscellaneous amounts not attributable to the operations of television or radio segments.

No geographic areas outside the United States were of significance relative to consolidated revenue, segment income from continuing operations or total assets.

A reconciliation of segment income from continuing operations to income from continuing operations is as follows (dollars in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Segment income from continuing operations	$	5,091		$	6,905		$	14,177		$	15,874
Adjustments:
Gain on sale of real estate, net		—			—			164			4,089
Plaza fire reimbursements, net		—			40			—			223
Depreciation and amortization		(1,736	)		(2,697	)		(5,241	)		(8,027	)
Income from continuing operations	$	3,355		$	4,248		$	9,100		$	12,159

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Retirement Benefits

9 Months Ended

Sep. 30, 2012

Retirement Benefits [Abstract]

Retirement Benefits

9. Retirement Benefits

The Company has a noncontributory supplemental retirement program for former key members of management. No new participants have been admitted to this program since 2001 and no current executive officers participate in the program. The program provides for vesting of benefits under certain circumstances. Funding is not required, but the Company has made investments in annuity contracts and maintains life insurance policies on the lives of the individual participants to assist in payment of retirement benefits. The Company is the owner and beneficiary of the annuity contracts and life insurance policies; accordingly, the cash value of the annuity contracts and the cash surrender value of the life insurance policies are reported on the unaudited condensed consolidated balance sheet and the appreciation is included in the unaudited condensed consolidated statement of operations.

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

	Three months ended September 30,				Nine months ended September 30,
	2012		2011		2012		2011
Interest cost	$	234	$	250	$	702	$	750
Amortization of loss		45		22		135		66
Net periodic pension cost	$	279	$	272	$	837	$	816

The discount rate used to determine net periodic pension cost was 4.48% for both the three and nine months ended September 30, 2012. The discount rate used to determine net periodic pension cost was 5.22% for both the three and nine months ended September 30, 2011.

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Broadcast Rights and Other Commitments

9 Months Ended

Sep. 30, 2012

Broadcast Rights and Other Commitments [Abstract]

Broadcast Rights and Other Commitments

7. Broadcast Rights and Other Commitments

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

As of September 30, 2012, the Company had commitments under various agreements of $20.0 million for future rights to broadcast television programs, rights to sell available advertising time on a third party radio station and commitments under certain network affiliate agreements.

The Company entered into a reimbursement agreement with Hines Global REIT (“Hines”) whereby the Company may be required to reimburse Hines up to $1.5 million if the power and/or chiller consumption by certain existing Fisher Plaza tenants, including the Company, exceeds specified levels and Hines is required to install additional power and/or chiller facilities. This reimbursement agreement expires on December 31, 2023.

As previously announced, the Company received a commitment letter from JPMorgan Chase Bank for a five-year $30 million senior secured revolving credit facility. The credit facility is subject to the negotiation and execution of loan and security documents that are expected to contain customary terms and conditions, including financial and other covenants. Borrowings under the facility will bear interest at a floating rate based on LIBOR and are expected to be used for general corporate purposes and working capital, as needed. The credit facility is also expected to include an option permitting the Company to increase the size of the facility by up to $50 million, subject to approval from participating lenders and other customary conditions.

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Local Marketing Agreement

9 Months Ended

Sep. 30, 2012

Local Marketing Agreement [Abstract]

Local Marketing Agreement

8. Local Marketing Agreement

In June 2012, the Company amended its Local Marketing Agreement (“LMA”) with South Sound Broadcasting LLC (“South Sound”) to manage South Sound’s FM radio station licensed in Oakville, Washington for another five years. The station broadcasts the Company’s KOMO NewsRadio AM programming to FM listeners in the Seattle – Tacoma radio market. Contemporaneously with the LMA, the Company entered into an option agreement with South Sound, whereby the Company has the right to acquire the station until January 2017. This amended LMA and related option agreement supersedes and terminates a previous LMA and option agreement between the Company and South Sound. Under the terms of the previous option agreement, the Company was obligated to pay South Sound up to approximately $1.4 million, if the Company did not exercise the option prior to its expiration. Pursuant to the amended LMA, the $1.4 million fee was eliminated and instead the Company paid South Sound $750,000 for a 7.5% ownership interest in South Sound and $615,000 for a new option agreement, pursuant to which we have the right to acquire the station until January 2017. The consideration for the option agreement is non-refundable, but will be applied to the purchase price if the Company chooses to exercise the option. The consideration for the option agreement and the investment in South Sound are presented within other assets on the Company’s unaudited condensed consolidated balance sheet as of September 30, 2012. Due to the term of the LMA and the uncertainties associated with the exercise of the option agreement, South Sound does not meet the criteria for consolidation. Advertising revenues earned under this LMA are recorded as revenue and LMA fees and programming expenses are recorded as operating costs.

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Net Income Per Share

9 Months Ended

Sep. 30, 2012

Net Income Per Share [Abstract]

Net income per share

10. Net income per share

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

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

	Three months ended September 30,					Nine months ended September 30,
	2012		2011			2012		2011
Income from continuing operations, net of income taxes	$	2,200	$	1,519		$	4,618	$	3,342
Loss from discontinued operations, net of income taxes		—		(75	)		—		(9	)
Net income	$	2,200	$	1,444		$	4,618	$	3,333
Weighted average shares outstanding		8,878		8,836			8,866		8,827
Weighted effect of dilutive options and rights		80		64			83		71
Weighted average shares outstanding assuming dilution		8,958		8,900			8,949		8,898
Net income (loss) per share:
From continuing operations	$	0.25	$	0.17		$	0.52	$	0.38
From discontinued operations		—		(0.01	)		—		—
Net income per share	$	0.25	$	0.16		$	0.52	$	0.38
Net income (loss) per share assuming dilution:
From continuing operations	$	0.25	$	0.17		$	0.52	$	0.38
From discontinued operations		—		(0.01	)		—		(0.01	)
Net income per share	$	0.25	$	0.16		$	0.52	$	0.37

For the three months ended September 30, 2012, the effect of options to purchase 148,560 shares are excluded from the calculation of weighted average shares outstanding because such rights/units and options were anti-dilutive. For the nine months ended September 30, 2012, the effect of options to purchase 181,071 shares are excluded from the calculation of weighted average shares outstanding because such rights/units and options were anti-dilutive.

For the three months ended September 30, 2011, the effect of options to purchase 204,994 shares are excluded from the calculation of weighted average shares outstanding because such rights/units and options were anti-dilutive. For the nine months ended September 30, 2011, the effect of 53 restricted stock rights/units and options to purchase 209,706 shares are excluded from the calculation of weighted average shares outstanding because such rights/units and options were anti-dilutive.

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Debt Security Investments (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Amortized cost and fair value of debt security investments, by contractual maturity
Due in one year or less, Amortized Cost	$ 56,585
Due in one year or less, Fair Value	56,583
Due after one year through five years, Amortized Cost	19,424
Due after one year through five years, Fair Value	19,447
Total debt security investments, Amortized Cost	76,009
Total debt security investments, Fair Value	$ 76,030

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Segment Information (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Reconciliation of segment income from continuing operations to income from continuing operations
Segment income from continuing operations	$ 5,091	$ 6,905	$ 14,177	$ 15,874
Adjustments:
Gain on sale of real estate, net			164	4,089
Plaza fire reimbursements, net		40		223
Depreciation and amortization	(1,736)	(2,697)	(5,241)	(8,027)
Income from continuing operations	$ 3,355	$ 4,248	$ 9,100	$ 12,159

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Special Cash Dividend

9 Months Ended

Sep. 30, 2012

Special Cash Dividend [Abstract]

Special Cash Dividend

15. Special Cash Dividend

During the third quarter of 2012, the Company’s Board of Directors declared a special cash dividend of $10.00 per common share, or approximately $88.8 million, payable on October 19, 2012 to holders of record on September 28, 2012.

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Retirement Benefits (Tables)

9 Months Ended

Sep. 30, 2012

Retirement Benefits [Abstract]

Net periodic pension cost

	Three months ended September 30,				Nine months ended September 30,
	2012		2011		2012		2011
Interest cost	$	234	$	250	$	702	$	750
Amortization of loss		45		22		135		66
Net periodic pension cost	$	279	$	272	$	837	$	816

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Income Taxes (Details Textual) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Income Taxes (Textual) [Abstract]
Income tax provision or benefit based upon its estimated annual effective tax rate	38.20%	36.30%
Unrecognized tax benefits	$ 632,000		$ 632,000
Unrecognized tax benefits that would impact the effective tax rate	410,000		410,000
Unpaid taxes, interest and penalties	800,000
Valuation allowance of its deferred tax assets	480,000		480,000
Unpaid taxes in connection with the Company's treatment of the proceeds from sale of Safeco Corporation stock and dividends received	$ 450,000

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Broadcast Rights and Other Commitments (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Broadcast Rights and Other Commitments (Textual) [Abstract]
Commitments under various agreements for future right to broadcast television programs	$ 20.0
Reimbursement expenses	1.5
Reimbursement agreement expiry date	Dec. 31, 2023
Agreed amount of credit facility in commitment letter from JPMorgan Chase Bank	30
Maturity period of credit facility in commitment letter from JPMorgan Chase Bank	5 years
Increase in credit facility size	$ 50

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Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Condensed Consolidated Balance Sheets [Abstract]
Common stock, par value	$ 1.25	$ 1.25
Common stock, shares authorized	12,000,000	12,000,000
Common stock, shares issued	8,876,258	8,832,177
Common stock, shares outstanding	8,876,258	8,832,177

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Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets [Abstract]

Goodwill and Intangible Assets

4. Goodwill and Intangible Assets

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

	September 30, 2012							December 31, 2011
	Gross carrying amount		Accumulated amortization			Net		Gross carrying amount		Accumulated amortization			Net
Goodwill (1)	$	13,293	$	—		$	13,293	$	13,293	$	—		$	13,293
Intangible assets:
Broadcast licenses (1)	$	37,430	$	—		$	37,430	$	37,430	$	—		$	37,430
Other intangible assets		285		—			285		285		—			285
Intangible assets subject to amortization (2)
Network affiliation agreement		3,560		(1,144	)		2,416		3,560		(968	)		2,592
Total intangible assets	$	41,275	$	(1,144	)	$	40,131	$	41,275	$	(968	)	$	40,307

(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 Federal Communications Commission (“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 three and nine months ended September 30, 2012 was $59,000 and $176,000, respectively. Total amortization expense for intangible assets subject to amortization for the three and nine months ended September 30, 2011 was $59,000 and $177,000, respectively.

The Company tests goodwill and intangible assets for impairment at least annually, as of October 1^st of each year, or whenever events indicate that impairment may exist. The Company has determined that the impairment test should be conducted at the 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 following table presents the estimated amortization expense for the Company’s intangible assets subject to amortization for the remainder of 2012 and each of the next five years and thereafter (in thousands):

2012	$	60
2013		236
2014		236
2015		236
2016		236
2017		236
Thereafter		1,176
	$	2,416

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Net Income Per Share (Tables)

9 Months Ended

Sep. 30, 2012

Net Income Per Share [Abstract]

Basic and diluted net income per share

	Three months ended September 30,					Nine months ended September 30,
	2012		2011			2012		2011
Income from continuing operations, net of income taxes	$	2,200	$	1,519		$	4,618	$	3,342
Loss from discontinued operations, net of income taxes		—		(75	)		—		(9	)
Net income	$	2,200	$	1,444		$	4,618	$	3,333
Weighted average shares outstanding		8,878		8,836			8,866		8,827
Weighted effect of dilutive options and rights		80		64			83		71
Weighted average shares outstanding assuming dilution		8,958		8,900			8,949		8,898
Net income (loss) per share:
From continuing operations	$	0.25	$	0.17		$	0.52	$	0.38
From discontinued operations		—		(0.01	)		—		—
Net income per share	$	0.25	$	0.16		$	0.52	$	0.38
Net income (loss) per share assuming dilution:
From continuing operations	$	0.25	$	0.17		$	0.52	$	0.38
From discontinued operations		—		(0.01	)		—		(0.01	)
Net income per share	$	0.25	$	0.16		$	0.52	$	0.37

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Goodwill and Intangible Assets (Details Textual) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Goodwill and Intangible Assets (Textual) [Abstract]
Total amortization expense for intangible assets	$ 59,000	$ 59,000	$ 176,000	$ 177,000

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Stock Repurchase Program

9 Months Ended

Sep. 30, 2012

Stock Repurchase Program [Abstract]

Stock Repurchase Program

14. Stock Repurchase Program

In December 2011, the Company’s Board of Directors approved a stock repurchase program authorizing the repurchase of up to an aggregate of $25.0 million of its outstanding shares of common stock. Under the program, share repurchases will be made from time-to-time, at the Company's discretion, on the open market at prevailing market prices or in negotiated transactions off the market. The repurchase program expires at the end of 2012, subject to periodic evaluation by the Board of Directors based on circumstances during the course of the year. No shares were repurchased during the three months ended September 30, 2012. The Company repurchased and retired 2,990 shares for an aggregate cost of $86,000 during the nine months ended September 30, 2012, which reduced capital in excess of par by the excess cost over par value in the Company’s unaudited condensed consolidated balance sheet at September 30, 2012. There were no unsettled share repurchases at September 30, 2012.