NEW YORK — General Electric Co.'s NBC unit agreed on Monday to buy San Francisco-area television station KNTV from Granite Broadcasting Corp. for $230 million to expand into the fifth-largest U.S. media market.
KNTV will become the San Francisco NBC affiliate Jan. 1. The purchase will close in the first half, the companies said.
NBC, which owns 13 other TV stations, will spend more than $2 million advertising the affiliate change through magazines, radio and billboards, spokesman Cory Shields said.
NBC has sought to purchase local TV stations, which are more profitable than the network itself because they don't have high programming costs.
NBC, which tried two years ago to buy San Francisco-area station KRON before it was sold to Young Broadcasting Corp., will end an affiliation agreement with KNTV that required Granite to pay $37 million annually.
Shares of New York-based Granite jumped 48 cents to $2.55 on Nasdaq. The stock had declined 66% in the last year. General Electric, based in Fairfield, Conn., rose 65 cents to 38.30 on the New York Stock Exchange.
KNTV, which broadcasts on Channel 11 from nearby San Jose, will promote NBC's coverage of the Winter Olympics starting in February.
The station has a weaker signal and lower ratings than KRON, which had been an NBC affiliate for 40 years and which Young has said will become an independent station.
The purchase follows NBC's agreement to buy Telemundo Communications Group Inc., the second-largest U.S. Spanish-language broadcaster, in October for $2.7 billion.
Separately, Young Broadcasting said it hired Credit Suisse First Boston as its financial advisor.
Young shares fell 82 cents to $16.55 on Nasdaq.