SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             -----------------------

                                    FORM 10-K

                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

(Mark One)
     [x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934
         For the fiscal year ended December 31, 1998


                                       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 1-2999

                          CHRIS-CRAFT INDUSTRIES, INC.
             (Exact name of registrant as specified in its charter)

         Delaware                                 94-1461226

(State or other jurisdiction of               (I.R.S. Employer
incorporation or organization)               Identification No.)


 767 Fifth Avenue 
New York, New York                                   10153
(Address of principal 
executive offices)                                 (Zip Code)

Registrant's telephone number, including area code: (212) 421-0200

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


                                                        Name of each Exchange
Title of each class                                     on which registered


Prior Preferred Stock                                    New York Stock Exchange
  $1.00 cumulative dividend                              Pacific Exchange


Convertible Preferred Stock                              New York Stock Exchange
  $1.40 cumulative dividend                              Pacific Exchange


Common Stock, $.50 par value                             New York Stock Exchange
                                                         Pacific Exchange

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

                      Class B Common Stock, $.50 par value
                                (Title of class)

         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 if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [x]

<PAGE> 2
         The aggregate  market value of the voting stock held by  non-affiliates
of the registrant, as of February 28, 1999, was approximately $1,175,000,000.

         As  of  February  28,  1999,  there  were  24,520,262   shares  of  the
registrant's  Common  Stock and  8,097,684  shares of the  registrant's  Class B
Common Stock outstanding.


                       DOCUMENTS INCORPORATED BY REFERENCE

         The  documents  incorporated  by reference  into this Form 10-K and the
Parts hereof into which such documents are incorporated are listed below:


   Document                               Part


Those portions of the  
registrant's  annual report
to stockholders for 
the fiscal year ended December
31, 1998 (the "Annual  Report")
that are specifically
identified herein as 
incorporated by reference 
into this Form 10-K.                       I, II 


Those portions of the registrant's
proxy statement for the 
registrant's 1999 Annual Meeting 
(the "Proxy Statement") that are 
specifically identified herein as 
incorporated by reference
into this Form 10-K.                       III


<PAGE> 3


ITEM 1.  BUSINESS.

                                     General

     Chris-Craft  Industries,  Inc.  ("Chris-Craft"),  the  registrant,  was  
organized in Delaware in 1928 and adopted its present name in 1962.  
Chris-Craft's principal business is television  broadcasting,  conducted through
its majority owned (79.96% at February 28, 1999) subsidiary,  BHC 
Communications,  Inc. ("BHC"), which owns 100% of Chris-Craft Television,  Inc.
("CCTV"),  100% of Pinelands,  Inc. ("Pinelands") and, as of February 28, 1999,
58.5% of United Television, Inc. ("UTV").

         At February  28,  1999,  Chris-Craft  (including  UTV) had 1,188  
full-time  employees  and 129  part-time employees.

         The information appearing in Note 10 of Notes to Consolidated Financial
Statements in the Annual Report,  Industry Segment Information,  is incorporated
herein by reference.

                               Television Division

         BHC operates six very high frequency  ("VHF")  television  stations and
three ultra high frequency ("UHF") television  stations,  together  constituting
Chris-Craft's  Television Division.  Commercial  television  broadcasting in the
United  States is  conducted  on 68 channels  numbered 2 through 69.  Channels 2
through 13 are in the VHF band,  and channels 14 through 69 are in the UHF band.
In general, UHF stations are at a disadvantage relative to VHF stations, because
UHF frequencies are more difficult for households to receive.  This disadvantage
is eliminated when a viewer receives the UHF station through a cable system.

         Commercial  broadcast television stations may be either affiliated with
one of the three major national networks (ABC, NBC and CBS); three more recently
established  national  networks  (Fox  Broadcasting   Company  ("Fox"),   United
Paramount   Network  ("UPN"),   and  The  WB  Network  ("WB")),   which  provide
substantially fewer hours of programming; or may be independent.

         The following table sets forth certain  information with respect to BHC
stations and their respective markets:


<PAGE> 4
<TABLE>

<CAPTION>
                                                                     
                                                       Total           DMA
                               DMA                     Commercial      Cable  
                Network        TV                      Stations        TV
Station and     Affiliation/   House-      DMA         Operating in    Penetra-
Location(a)     Channel        holds(b)    Rank (b)    Market (c)      tion(d)  
-----------     ------------   --------    --------    ------------    -------
<S>             <C>            <C>         <C>         <C>               <C>

WWOR (e)        UPN 9          6,812,540    1st         6VHF             73%
  Secaucus                                             14UHF


KCOP            UPN 13         5,135,140    2nd         7VHF             63%
  Los Angeles                                          10UHF


KPTV            UPN 12           993,540   23rd         4VHF             62%
  Portland                                              2UHF


KMSP            UPN 9          1,457,130   15th         4VHF             52%
  Minneapolis/                                          3UHF
  St. Paul

KTVX            ABC 4            707,070   36th         4VHF             54%
  Salt Lake                                             2UHF
  City

KMOL            NBC 4            667,750   37th         3VHF             65%
  San Antonio                                           3UHF


KBHK            UPN 44         2,368,970    5th         4VHF             71%
  San Francisco                                        10UHF


KUTP            UPN 45         1,343,090   17th         4VHF             58%
  Phoenix                                               4UHF


WUTB            UPN 24           991,610   24th         3VHF             67%
  Baltimore                                             3UHF

<FN>
------------
(a) KCOP and KPTV are owned by CCTV;  WWOR is owned by Pinelands;  the remaining
    stations are owned by UTV.

    In October  1997,  UTV agreed to purchase the assets of UHF  television
    station WRBW in Orlando,  Florida,  for $60,000,000 and possible future
    consideration.  The  acquisition  is subject to approval by the Federal
    Communications Commission ("FCC") and other conditions.

(b) Designated Market Area ("DMA") is an exclusive geographic
    area consisting of all counties in which the home-market commercial
    stations received a preponderance of total viewing hours. The ranking
    shown is the nationwide rank, in terms of television households in
    DMA, of the market served by the station. Source: Nielsen Media
    Research television households universe estimates.

(c) Additional channels have been allocated by the FCC for activation as
    commercial television stations in certain of these markets. Also,
    additional stations may be located within the respective DMAs of BHC
    stations but outside the greater metropolitan television markets in which
    BHC stations operate.

(d) Cable penetration refers to the percentage of DMA television viewing
    households receiving cable television service, as estimated by Nielsen
    Media Research.

(e) WWOR UPN 9 broadcasts across a tri-state area including the entire New York
    City metropolitan area.
</FN>
</TABLE>


<PAGE> 5

    Television stations derive their revenues primarily from selling advertising
time. The television advertising sales market consists primarily of national
network advertising, national spot advertising and local spot advertising. An
advertiser wishing to reach a nationwide audience usually purchases advertising
time directly from the national networks, "superstations" (i.e., broadcast
stations carried by cable operators in areas outside their broadcast coverage
area), barter program syndicators, national basic cable networks, or "unwired"
networks (groups of otherwise unrelated stations whose advertising time is
combined for national sale). A national advertiser wishing to reach a particular
regional or local audience usually buys advertising time from local stations
through national advertising sales representative firms having contractual
arrangements with local stations to solicit such advertising. Local businesses
generally purchase advertising from the stations' local sales staffs.

         Television   stations  compete  for  television   advertising   revenue
primarily with other television  stations and cable television  channels serving
the same DMA. There are 210 DMAs in the United States.  DMAs are ranked annually
by the estimated  number of households  owning a television  set within the DMA.
Advertising  rates that a  television  station can command vary in part with the
size, in terms of television households, of the DMA served by the station.

         Within a DMA,  the  advertising  rates  charged by  competing  stations
depend primarily on four factors: the stations' program ratings, the time of day
the  advertising  will run, the  demographic  qualities  of a program's  viewers
(primarily  age and sex), and the amount of each  station's  inventory.  Ratings
data for television  markets are measured by A.C.  Nielsen Company  ("Nielsen").
This rating  service  uses two terms to quantify a  station's  audience:  rating
points and share points. A rating point represents one percent of all television
households  in the entire DMA tuned to a particular  station,  and a share point
represents  one percent of all  television  households  within the DMA  actually
using at least one television  set at the time of  measurement  and tuned to the
station in question.

         Because the major  networks  regularly  provide  first-run  programming
during  prime  time  viewing  hours  (in  general,   8:00  P.M.  to  11:00  P.M.
Eastern/Pacific  time),  their affiliates  generally (but do not always) achieve
higher  audience   shares,   but  have   substantially   less  advertising  time
("inventory") to sell,  during those hours than affiliates of the newer networks
or  independent  stations,  since the major  networks  use  almost  all of their
affiliates'  prime time  inventory for network  programming.  Although the newer
networks  generally use the same amount of their  affiliates'  inventory  during
network  broadcasts,  the newer networks provide less programming;  accordingly,
their   affiliates,   as  well  as  non-affiliated   stations,   generally  have
substantially  more inventory for sale than the  major-network  affiliates.  The
newer  network  affiliates'  and  independent  stations'  smaller  audiences and
greater  inventory during prime time hours generally result in lower advertising
rates  charged and more  advertising  time sold during those hours,  as compared
with major affiliates' larger audiences and limited  inventory,  which generally
allow the major-network  affiliates to charge higher advertising rates for prime
time  programming.   By  selling  more  advertising  time,  the  new-network  or
independent  station typically  achieves a share of advertising  revenues in its
market greater than its audience  ratings.  On the other hand, total programming
costs for such a station, because it broadcasts more syndicated programming than
a major-network  affiliate,  are generally  higher than those of a major-network
affiliate in the same market.  These differences have been reduced by the growth
of the Fox network,  which  currently  provides 15 weekly  hours of  programming
during prime time and additional  programming  in other  periods,  and are being
reduced  further as the other  newer  networks  provide  expanded  schedules  of
programming.


         Programming

         BHC's UPN stations  depend  heavily on  independent  third  parties for
programming,  as do KTVX and KMOL for their non-network broadcasts.  Recognizing
the need to have a more direct influence on the quality of programming available
to its  stations,  and  desiring to  participate  in potential  profits  through
national  syndication  of  programming,  BHC has joined in the formation of UPN,
and, additionally,  invests directly in the development of original programming.
The aggregate amount invested in original  programming through December 31, 1998
was not significant to Chris-Craft's financial position. BHC television stations
also produce  programming  directed to meet the needs and  interests of the area
served, such as local news and events,  public affairs  programming,  children's
programming and sports.

         Programs  obtained from  independent  sources  consist  principally  of
syndicated television shows, many of which have been shown previously on a major
network,  and  syndicated  feature  films,  which were  either  made for

<PAGE> 6
network television or have been exhibited previously in motion picture
theaters (most of which films have been shown previously on network or cable
television). Syndicated programs are sold to individual stations to be broadcast
one or more times. Television stations not affiliated with a major network
generally have large numbers of syndication contracts; each contract is a
license for a particular series or program that usually prohibits licensing the
same programming to other television stations in the same market. A single
syndication source may provide a number of different series or programs.

         Licenses for syndicated programs are often offered for cash sale (i.e.,
without any barter element) to stations;  however,  some are offered on a barter
or cash plus barter basis. In the case of a cash sale, the station purchases the
right to broadcast the program,  or a series of programs,  and sells advertising
time during the broadcast.  The cash price of such programming varies, depending
on  the  perceived  desirability  of the  program  and  whether  it  comes  with
commercials that must be broadcast  (i.e., on a cash plus barter basis).  Barter
programming is offered to stations for no cash  consideration,  but comes with a
greater number of commercials that must be broadcast and,  therefore,  with less
inventory.

         Barter and cash plus barter  programming reduce both the amount of cash
required  for  program  purchases  and the  amount of time  available  for sale.
Although  the direct  impact on  broadcasters'  operating  income  generally  is
believed  to be  neutral,  program  distributors  that  acquire  barter air time
compete  with  television  stations and  broadcasting  networks for sales of air
time.  Chris-Craft believes that the effect of barter on BHC television stations
is not significantly different from its impact on the industry as a whole.

         BHC  television  stations are frequently  required to make  substantial
financial commitments to obtain syndicated programming while such programming is
still  being  broadcast  by  another  network  and  before it is  available  for
broadcast  by BHC  stations,  or even  before it has been  produced.  Generally,
syndication  contracts  require the station to acquire an entire program series,
before the number of  episodes of original  showings  that will be produced  has
been determined.  While analyses of network audiences are used in estimating the
value and potential  profitability  of such  programming,  there is no assurance
that a successful  network  program will continue to be successful or profitable
when broadcast after initial network airing.

         Pursuant to generally accepted accounting  principles,  commitments for
programming  not available for broadcast are not recorded as  liabilities  until
the  programming  becomes  available  for  broadcast,  at which time the related
contract  right is also  recorded  as an  asset.  BHC  television  stations  had
unamortized film contract rights for programming available for telecasting,  and
deposits  on film  contracts  for  programming  not  available  for  telecasting
aggregating  $123,502,000  as of December 31, 1998.  The stations were committed
for film and sports rights  contracts  aggregating  $337,800,000 for programming
not available for  broadcasting as of that date.  License periods for particular
programs or films generally run from one to five years.  Long-term contracts for
the broadcast of syndicated  television  series generally provide for an initial
telecast and  subsequent  reruns for a period of years,  with full payment to be
made by the station  over a period of time shorter  than the rerun  period.  See
Notes 1(C) and 9 of Notes to Consolidated Financial Statements.

         KTVX and KMOL are  primary  affiliates  of their  respective  networks.
Network  programs  are  produced  either  by  the  networks   themselves  or  by
independent  production  companies and are  transmitted by the networks to their
affiliated stations for broadcast.

         Most networks have begun to enter into affiliation agreements for terms
as long as ten years.  UTV has entered into 10-year  affiliation  agreements for
KTVX and  KMOL.  Current  FCC rules do not limit  the  duration  of  affiliation
agreements.

         An affiliation agreement gives the affiliate the right to broadcast all
programs  transmitted  by the network.  The affiliate  must run in its entirety,
together with all network  commercials,  any network  programming  the affiliate
elects or is required to broadcast, and is allowed to broadcast a limited number
of  commercials  it has sold.  For each  hour of  programming  broadcast  by the
affiliate,  the major  networks  generally  have paid  their  affiliates  a fee,
specified in the agreement  (although  subject to change by the network),  which
varies in amount  depending  on the time of day  during  which  the  program  is
broadcast and other factors.  Prime time programming generally earns the highest
fee. A network  may,  and  sometimes  does,  designate  certain  programs  to be
broadcast with no compensation to the station.

<PAGE> 7
         Subject to certain limitations contained in the affiliation  agreement,
an affiliate  may accept or reject a program  offered by the network and instead
broadcast  programming from another source.  Rejection of a program may give the
network the right to offer that program to another station in the area.


         United Paramount Network

         UPN,  owned 50% by BHC and 50% by Viacom  Inc.'s  Paramount  Television
Group ("Paramount"),  broadcasts ten hours of original prime time programming on
five  nights per week.  The  network  also  broadcasts  two hours of  previously
exhibited  movies,  on  Saturday   afternoons,   and  two  hours  of  children's
programming,  plus a  one-hour  rerun of Star Trek:  Voyager,  on  Sundays.  UPN
intends to expand its non-prime time programming over the next several years.

         UPN licenses its  programming on the same bases as are customary in the
industry.  UPN seeks  license  or  ownership  rights  for  programming  from all
available sources on arms-length terms.

         As of March 19, 1999, UPN's  programming was carried by 186 affiliates,
in markets  covering a total of 95.0% of all U.S.  households.  Of these station
affiliates,  113 are primary affiliates,  including all of BHC's and Paramount's
previously  independent  stations, in markets covering 80.8% of U.S. households,
and 73 are secondary  affiliates in markets covering an additional 14.2% of such
households.  UPN continues to seek additional affiliates to expand its household
reach. The terms of UPN's primary affiliate  station  agreements range up to ten
and a half  years  and  provide  commercial  time  for sale by the  stations  as
consideration for broadcasting the network's programming.

         UPN funding  requirements,  shared  equally by BHC and  Paramount,  are
expected  to  continue  to be  significant  for  the  next  several  years.  See
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations and Note 2 of Notes to Consolidated Financial Statements.


         Sources of Revenue

         The  principal  source  of  revenues  for BHC  stations  is the sale of
advertising  time to  national  and  local  advertisers.  Such  time  sales  are
represented by spot announcements  purchased to run between programs and program
segments and by program sponsorship.  The relative contributions of national and
local  advertising  to BHC's gross cash  advertising  revenues vary from time to
time. Most advertising  contracts are short-term.  BHC's television  business is
seasonal,  like that of the television broadcasting business generally. In terms
of revenues, generally the fourth quarter is strongest,  followed by the second,
third and first.

         Advertising is generally placed with BHC stations  through  advertising
agencies,  which are allowed a commission generally equal to 15% of the price of
advertising placed. National advertising time is usually sold through a national
sales representative,  which also receives a commission, while local advertising
time is sold by each station's sales staff. UTV has established a national sales
representative   organization,   United  Television  Sales,  Inc.  ("UTS"),   to
represent,  initially,  all BHC stations.  Practices with respect to the sale of
advertising  time do not differ  markedly  between  BHC's major  network and UPN
stations,  although the major-network affiliated stations have less inventory to
sell.


         Government Regulation

         Television  broadcasting  operations are subject to the jurisdiction of
the FCC under the  Communications  Act of 1934, as amended (the  "Communications
Act"). The  Communications  Act empowers the FCC, among other things,  to issue,
revoke or modify broadcast  licenses,  to assign  frequencies,  to determine the
locations of stations, to regulate the broadcasting  equipment used by stations,
to establish areas to be served,  to adopt such  regulations as may be necessary
to carry out the  provisions  of the  Communications  Act and to impose  certain
penalties for violation of its regulations.  BHC television stations are subject
to a wide range of technical,  reporting and operational requirements imposed by
the Communications Act or by FCC rules and policies.  The Communications Act was
recently and substantially  amended by the  Telecommunications  Act of 1996 (the
"Telecom Act") and by 

<PAGE> 8

the Budget Reconciliation Act of 1997, some provisions of which have been
incorporated into the FCC's rules and regulations during the past year.

         The  Communications  Act provides  that a license may be granted to any
applicant  if the public  interest,  convenience  and  necessity  will be served
thereby, subject to certain limitations,  including the requirement that the FCC
allocate  licenses,  frequencies,  hours of operation and power in a manner that
will provide a fair, efficient and equitable  distribution of service throughout
the United States. Prior to 1998,  television licenses generally were issued for
five-year  terms,  but such licenses and their renewals are now normally  issued
for eight years. Upon application, and in the absence of adverse questions as to
the licensee's  qualifications or operations,  television  licenses have usually
been  renewed  for  additional  terms  without a hearing by the FCC. An existing
license automatically  continues in effect once a timely renewal application has
been filed until a final FCC decision is issued.

         KMSP UPN 9's license renewal was granted on April 15, 1993, and was due
to expire on April 1, 1998. A renewal  application  for KMSP was timely filed on
December  1,  1997  and  remains  pending.  On  March 2,  1998,  Lakeland  Group
Television,  Inc., licensee of television station KGLT, Minneapolis,  Minnesota,
filed a petition to deny the KMSP  renewal  unless and until UTV permits  KGLT's
antenna to remain on UTV's  television  tower on reasonable and equitable terms.
UTV has opposed  the  petition,  which it does not believe  will have a material
adverse effect on UTV's license for KMSP; the license  remains in effect pending
FCC action on the renewal  application.  KTVX's  license  renewal was granted on
October 9, 1998, and is due to expire on October 1, 2006.  KUTP UPN 45's license
renewal was granted on March 28, 1994, and was due to expire on October 1, 1998.
A renewal  application  for KUTP was  timely  filed on June 1, 1998 and is still
pending.  KCOP UPN 13's license  renewal was granted on January 8, 1999,  and is
due to expire on December 1, 2006.  KBHK UPN 44's license renewal was granted on
January 8, 1999, and is due to expire on December 1, 2006. KPTV UPN 12's license
renewal  was granted on January  28,  1999,  and is due to expire on February 1,
2006.  KMOL's  license  renewal was granted on November 12, 1998,  and is due to
expire on August 1, 2006. WWOR UPN 9's license renewal was granted July 16, 1996
and is due to expire on June 1, 1999. A renewal  application for WWOR was timely
filed on  February  1,  1999.  WUTB  UPN 24's  license  was  assigned  to UTV of
Baltimore,  Inc., a subsidiary  of UTV, on January 20, 1998 and is due to expire
on October 1, 2001.

         Under  existing  FCC  regulations   governing   multiple  ownership  of
broadcast stations, a license to operate a television station generally will not
be  granted  to any party (or  parties  under  common  control),  if such  party
directly or indirectly owns, operates,  controls or has an attributable interest
in another television or radio station serving the same market or area. The FCC,
however,  is  favorably  disposed  to  grant  waivers  of this  rule  for  radio
station-television  station  ownership  combinations  in the  top 25  television
markets,  in which  there will be at least 30  separately  owned,  operated  and
controlled broadcast stations,  and in certain other circumstances.  The Telecom
Act  directs  the FCC to  extend  this  waiver  policy  to the  top 50  markets,
consistent with the public interest,  and to conduct a rule-making proceeding to
determine  whether to retain or modify the current  restriction  on  same-market
multiple television station ownership.

         FCC regulations  further  provide that a broadcast  license will not be
granted if that grant would  result in a  concentration  of control of radio and
television  broadcasting  in a manner  inconsistent  with the  public  interest,
convenience or necessity.  FCC rules deem such concentration of control to exist
if any party,  or any of its officers,  directors or  stockholders,  directly or
indirectly,  owned,  operated,  controlled  or had an  attributable  interest in
television stations capable of reaching,  in the aggregate,  a maximum of 35% of
the national audience.  This percentage is determined by the DMA market rankings
of the percentage of the nation's television  households  considered within each
market. Because of certain limitations of the UHF signal,  however, the FCC will
attribute  only 50% of a market's  DMA reach to owners of UHF  stations  for the
purpose  of  calculating  the  audience  reach  limits.  Applying  the 50% reach
attribution  rule to BHC's three UHF stations,  the nine BHC stations are deemed
to reach  approximately 18% of the nation's  television  households.  The FCC is
considering  whether to eliminate the 50% attribution  reduction under this rule
for UHF stations.

         The FCC's  multiple  ownership  rules  require the  attribution  of the
licenses held by a broadcasting  company to its officers,  directors and certain
of its stockholders, so there would ordinarily be a violation of FCC regulations
where an officer,  director or such a stockholder and a television  broadcasting
company together hold interests in stations exceeding the maximum audience reach
or more than one station that serves the same area. In the case of a corporation
controlling or operating  television  stations,  such as  Chris-Craft,  there is
attribution only to stockholders 

<PAGE> 9

     who own 5% or more of the voting stock, except for institutional investors,
including mutual funds, insurance companies and banks acting in a fiduciary
capacity, which may own up to 10% of the voting stock without being subject to
such attribution, provided that such entities exercise no control over the
management or policies of the broadcasting company.

         The FCC has begun a proceeding to consider  modification of the various
TV ownership  restrictions  described above, as well as changes in the rules for
attributing the licenses held by an enterprise to various  parties.  Chris-Craft
cannot predict the outcome of the FCC proceedings.

         FCC regulations  also prohibit common  ownership or control between two
of ABC,  NBC,  CBS, and Fox, or any one of those four networks and either UPN or
WB.

         The Telecom Act directed the FCC to conduct a rule-making proceeding to
require the inclusion,  in all television sets 13 inches or larger, of a feature
(commonly referred to as the V-Chip) designed to enable viewers to block display
of programs  carrying a common  rating and  authorized  the FCC to  establish an
advisory  committee  to  recommend a system for rating  video  programming  that
contains sexual,  violent, or other indecent material about which parents should
be informed, before it is displayed to children, if the television industry does
not establish a  satisfactory  voluntary  rating system of its own. On March 12,
1998,  the FCC voted to accept an industry  proposal  providing  for a voluntary
ratings  system of "TV Parental  Guidelines"  under which all video  programming
will be designated in one of six categories to permit the electronic blocking of
selected video programming.  The FCC has begun a separate  proceeding to address
technical  issues  related  to the  "V-Chip."  The FCC  has  directed  that  all
television receiver models with picture screens 13 inches or greater be equipped
with  "V-Chip"  technology  under a phased  implementation  beginning on July 1,
1999.  Chris-Craft  cannot  predict  how  changes in the  implementation  of the
ratings system and "V-Chip" technology will affect Chris-Craft's  business.  The
Telecom  Act also  directed  the FCC to adopt  regulations  requiring  increased
closed-captioning of video programming,  and the FCC recently did so. Subject to
various  exemptions,  television stations will be required to begin broadcasting
specified  amounts  or a  specified  percentage  of  new  programs  with  closed
captioning in the year 2000 and specified  percentages  of pre-rule  programming
commencing in the year 2008.

         FCC regulations  prohibit the holder of an  attributable  interest in a
television  station from having an attributable  interest in a cable  television
system  located  within  the  predicted  coverage  area  of  that  station.  FCC
regulations also prohibit the holder of an attributable interest in a television
station from having an attributable interest in a daily newspaper located within
the  predicted  coverage  area of that  station.  The FCC  intends  to conduct a
rule-making   proceeding  to  consider  possible  modification  of  this  latter
regulation.

         FCC regulations  implementing the Cable Television  Consumer Protection
and  Competition  Act of 1992 (the "1992 Cable  Act")  require  each  television
broadcaster to elect, at three-year intervals beginning June 17, 1993, either to
(i) require  carriage  of its signal by cable  systems in the  station's  market
("must-carry") or (ii) negotiate the terms on which such broadcast station would
permit  transmission  of its  signal  by the cable  systems  within  its  market
("retransmission  consent").  In June 1997,  the U.S.  Supreme  Court upheld the
constitutionality of the must-carry provisions.

         On August 8, 1996,  under the  Children's  Television  Act of 1990 (the
"CTA"),  the FCC amended its rules to  establish a  "processing  guideline"  for
broadcast television stations, of at least three hours per week, averaged over a
six-month   period,   of   "programming   that  furthers  the   educational  and
informational  needs of  children  16 and under in any  respect,  including  the
child's  intellectual/cognitive  or  social/emotional  needs."  Children's "Core
Programming" has been defined as educational and informational programming that,
among other things (i) has serving the  educational and  informational  needs of
children  "as a  significant  purpose,"  (ii) has a  specified  educational  and
informational  objective  and  a  specified  target  child  audience,  (iii)  is
regularly scheduled, weekly programming,  (iv) is at least 30 minutes in length,
and (v) airs between 7:00 a.m.  and 10:00 p.m.  Any station that  satisfied  the
processing  guideline  by  broadcasting  at  least  three  weekly  hours of Core
Programming will receive FCC staff-level  approval of the portion of its license
renewal application pertaining to the CTA. Alternatively,  a station may qualify
for staff-level  approval even if it broadcasts "somewhat less" than three hours
per week of Core Programming by demonstrating that it has aired a weekly package
of different  types of educational  and  informational  programming  that is "at
least equivalent" to three hours of Core Programming.  Non-Core Programming that
can  qualify  under  this   alternative   includes   specials,   public  service
announcements,  short-form programs and regularly scheduled non-weekly programs,
with "a  significant  purpose of educating and  informing

<PAGE> 10

children." A licensee that does not meet the processing guidelines under
either of these alternatives will be referred by the FCC's staff to the
Commissioners of the FCC, who will evaluate the licensee's compliance with the
CTA on the basis of both its programming and its other efforts related to
children's educational and informational programming, e.g., its sponsorship of
Core Programming on other stations in the market, or nonbroadcast activities
"which enhance the value" of such programming. A television station ultimately
found not to have complied with the CTA could face sanctions including monetary
fines and the possible non-renewal of its broadcast license. Chris-Craft
believes that each of its stations currently meets the three-hour programming
guideline.

         The FCC has taken a number  of steps to  implement  digital  television
service ("DTV")  (including high  definition) in the United States.  In December
1996,  the FCC adopted a DTV broadcast  standard.  On February 17, 1998, the FCC
affirmed  an  amended  table of  digital  channel  allotments  and rules for the
implementation  of  DTV,  initially  adopted  in  1997.  The  digital  table  of
allotments  provides each existing television station licensee or permittee with
a second broadcast channel to be used during the transition to DTV,  conditioned
upon  the  surrender  of one of the  channels  at the end of the DTV  transition
period. The DTV channels assigned to the BHC television stations are as follows:
KCOP,  channel 66; KBHK,  channel 45; KMSP,  channel 26; WWOR, channel 38; KPTV,
channel 30;  KMOL,  channel 58; KTVX,  channel 40;  KUTP,  channel 26; and WUTB,
channel  41.  Implementation  of DTV  will  improve  the  technical  quality  of
television. Furthermore, the implementing rules permit broadcasters to use their
assigned digital spectrum flexibly to provide either standard or high-definition
video signals and additional services,  including,  for example,  data transfer,
subscription  video,  interactive  materials,  and audio signals as long as they
continue to provide at least one free, over-the-air television service. However,
the digital  table of allotments  was devised on the basis of certain  technical
assumptions  which have not been subjected to extensive field testing and which,
along with specific  digital  channel  assignments,  may be subjected to further
administrative and judicial review.  Conversion to DTV may reduce the geographic
reach of the BHC television stations or result in increased interference,  with,
in either case, a corresponding loss of population coverage.  DTV implementation
will impose  additional costs on the BHC television  stations,  primarily due to
the capital costs  associated with  construction of DTV facilities and increased
operating costs both during and after the transition  period.  In addition,  the
Telecommunications  Act requires the FCC to assess and collect a fee for any use
of a broadcaster's DTV channel for which it receives  subscription fees or other
compensation  other than advertising  revenue.  The FCC has set a target date of
2006 for expiration of the  transition  period,  subject to biennial  reviews to
evaluate  the  progress  of DTV,  including  the  rate of  consumer  acceptance.
Chris-Craft  expects that,  during 1999, some of BHC's television  stations will
begin broadcasting on their DTV channels in addition to their analog broadcasts.
Future  capital  expenditures  by  Chris-Craft  will be compatible  with the new
technology  whenever  possible.   The  FCC  is  also  conducting  a  rule-making
proceeding to determine whether and the extent to which cable television systems
should be obligated to carry the signals of broadcast DTV stations.

         The FCC  currently  is  reviewing  certain of its rules  governing  the
relationship  between broadcast  television  networks,  including UPN, and their
affiliated stations. In a rulemaking proceeding,  the FCC is examining its rules
prohibiting a national sales representative organization,  such as UTS, which is
commonly owned with a national network such as UPN, from representing affiliates
of that network other than affiliates that are also under common  ownership with
the network for the sale of non-network advertising time and from influencing or
controlling  the  rates  set by  their  affiliates  for the  sale of such  time.
Separately,  the FCC is conducting a rulemaking  proceeding to consider relaxing
or eliminating  its rules  prohibiting  broadcast  networks from (i) restricting
their affiliates' rights to reject network programming, (ii) reserving an option
to use  specified  amounts  of  their  affiliates'  broadcast  time,  and  (iii)
forbidding  their  affiliates  from  broadcasting  the  programming  of  another
network;  and to  consider  the  relaxation  of  its  rule  prohibiting  network
affiliated  stations  from  preventing  other  stations  from  broadcasting  the
programming  of their  network.  Chris-Craft is unable to predict the outcome of
these proceedings.

         The  Communications  Act limits the amount of capital stock that aliens
(including their  representatives,  foreign governments,  their representatives,
and  entities  organized  under  the  laws of a  foreign  country)  may own in a
television   station   licensee  or  any  corporation   directly  or  indirectly
controlling such licensee.  No more than 20% of a licensee's  capital stock and,
if the FCC so  determines,  no more than 25% of the  capital  stock of a company
controlling a licensee, may be owned, directly or indirectly, or voted by aliens
or their representatives.  Should alien ownership exceed this limit, the FCC may
revoke or refuse to grant or renew a television  station  license or approve the
assignment  or transfer of such license.  Chris-Craft  believes the ownership by
aliens of its stock and that of BHC and UTV to be below the applicable limit.

<PAGE> 11

         The  Communications Act prohibits the assignment of a broadcast license
or the transfer of control of a licensee  without the prior approval of the FCC.
Legislation was introduced in the past that would impose a transfer fee on sales
of broadcast  properties.  Although that  legislation  was not adopted,  similar
proposals,  or a general spectrum  licensing fee, may be advanced and adopted in
the future.  Recent legislation has imposed annual regulatory fees applicable to
BHC stations, currently ranging as high as $35,025 per station.

         The  foregoing  does not  purport to be a  complete  summary of all the
provisions  of the  Communications  Act or  regulations  and policies of the FCC
thereunder.  Reference is made to the  Communications  Act, such regulations and
the public notices promulgated by the FCC for further information.

         Other  Federal  agencies,   including  principally  the  Federal  Trade
Commission,  also impose a variety of requirements  that affect the business and
operations  of  broadcast   stations.   Proposals  for   additional  or  revised
requirements  are considered by the FCC, other Federal agencies or Congress from
time  to  time.   Chris-Craft   cannot  predict  what  new  or  revised  Federal
requirements  may result from such  consideration  or what impact,  if any, such
requirements might have upon the operation of BHC television stations.


         Competition

         BHC  television  stations  compete  for  advertising  revenue  in their
respective markets, primarily with other broadcast television stations and cable
television  channels,  and compete with other  advertising  media as well.  Such
competition is intense.

         In  addition  to  programming,   management   ability  and  experience,
technical  factors  and  television   network   affiliations  are  important  in
determining  competitive  position.  Competitive success of a television station
depends primarily on public response to the programs broadcast by the station in
relation to competing entertainment,  and the results of this competition affect
the  advertising  revenues  earned by the station  from the sale of  advertising
time.

         Audience  ratings  provided  by  Nielsen  have a direct  bearing on the
competitive position of television stations. In general,  major network programs
achieve higher ratings than other programs.

         There are at least five other  commercial  television  stations in each
market  served  by a BHC  station.  Chris-Craft  believes  that  the  three  VHF
major-network  affiliates  and the two  other  VHF  stations  in New  York  City
generally  attract a larger viewing audience than does WWOR UPN 9, and that WWOR
UPN 9 generally attracts a viewing audience larger than the audiences  attracted
by the UHF stations in the New York City market.  In Los Angeles,  the three VHF
major-network  affiliates,  three  other  VHF  stations,  and  one  UHF  station
generally  attract a larger viewing audience than does KCOP UPN 13, and KCOP UPN
13 generally attracts a viewing audience larger than the other nine UHF stations
in Los Angeles.  In Portland,  the three VHF major-network  affiliated  stations
generally  attract a larger  audience  than does  KPTV UPN 12,  which  generally
attracts an audience  equal to one and larger than the other of the  independent
stations,  both of  which  are  UHF  stations.  Chris-Craft  believes  that,  in
Minneapolis/St.  Paul, KMSP UPN 9 generally  attracts a smaller viewing audience
than the three  major  network-affiliated  VHF  stations,  but a larger  viewing
audience than the other three stations,  all of which are UHF stations.  In Salt
Lake City, KTVX generally  ranks second of the six television  stations in terms
of  audience  share.  In San  Antonio,  KMOL  generally  ranks  first of the six
stations in terms of audience share. Of the 14 commercial television stations in
San Francisco,  KBHK UPN 44,  generally  ranks fifth in terms of audience share,
behind the three major  network-affiliated  VHF television stations, and the VHF
Fox affiliate.  KUTP UPN 45 generally ranks sixth in terms of audience share, of
the eight commercial stations in the Phoenix market. Prior to its acquisition by
UTV in January 1998,  WUTB, the Baltimore  station,  operated as a Home Shopping
Network affiliate.  It now generally ranks sixth of the six commercial  stations
in terms of audience share.

         BHC  stations  may  face  increased  competition  in  the  future  from
additional television stations that may enter their respective markets. See note
(c) to the table under Television Division.

         Cable  television  is a major  competitor  of  television  broadcasting
stations.  Because cable  television  systems operate in each market served by a
BHC station, the stations are affected by rules governing cable operations. If a
station is not widely  accessible by cable in those markets  having strong cable
penetration,  it may lose effective access to a significant portion of the local
audience.  Even if a television  station is carried on a local cable system,  an

<PAGE> 12

unfavorable  channel or service tier  position on the cable system may adversely
affect the station's audience ratings and, in some  circumstances,  a television
set's  ability to receive the station being  carried on an  unfavorable  channel
position.  Some  cable  system  operators  may be  inclined  to place  broadcast
stations in unfavorable channel locations.

         While  Federal  law  has  until  recently  generally  prohibited  local
telephone  companies  from providing  video  programming to subscribers in their
service areas, this prohibition has been substantially eliminated by the Telecom
Act. The FCC has also recently  adopted rules for "Open Video  Systems" -- a new
structure of video delivery  system  authorized by the Telecom Act for provision
by local telephone  companies and, if permitted by the FCC, others.  Chris-Craft
is unable to predict  the  outcome or effect of these  developments.  As of June
1998, there were approximately 66,000 subscribers to OVS systems.

         "Syndicated  exclusivity"  rules allow  television  stations to prevent
local  cable  operators  from  importing  distant  television  programming  that
duplicates  syndicated   programming  in  which  local  stations  have  acquired
exclusive rights. In conjunction with these rules, network  nonduplication rules
protect the exclusivity of network broadcast  programming within the local video
marketplace. The FCC is also reviewing its "territorial exclusivity" rule, which
limits  the area in which a  broadcaster  can obtain  exclusive  rights to video
programming.  Chris-Craft believes that the competitive position of BHC stations
would  likely be enhanced by an expansion of  broadcasters'  permitted  zones of
exclusivity.

         Alternative technologies could increase competition in the areas served
by BHC stations and,  consequently,  could adversely affect their profitability.
The  emergence  of  home  satellite  dish  antennas  has  made it  possible  for
individuals  to  receive  a host of  video  programming  options  via  satellite
transmission.  Four direct to home satellite  systems ("DTH")  currently provide
service.  The number of  subscribers  to DTH  services  increased  substantially
during the past four years, to  approximately  10.6 million as of December 1998.
An  additional  challenge  is now posed by  wireless  cable  systems,  including
multichannel  distribution  services ("MDS"). Two four-channel MDS licenses have
been granted in most television  markets.  MDS operation can provide  commercial
programming  on a paid basis.  A similar  service can also be offered  using the
instructional  television  fixed  service  ("ITFS").  The  FCC  now  allows  the
educational  entities that hold ITFS licenses to lease their  "excess"  capacity
for commercial  purposes.  The  multichannel  capacity of ITFS could be combined
with either an existing single channel MDS or a newer  multichannel  multi-point
distribution  service to increase the number of available channels offered by an
individual operator. At the end of 1998, wireless cable systems served about 1.0
million subscribers.

         Technological  developments in television transmission have created the
probability that one or more of the broadcast and nonbroadcast  television media
will provide enhanced or "high definition" pictures and sound to the public of a
quality that is technically superior to that of the pictures and sound currently
available.  It is not yet clear when and to what extent  technology of this kind
will be available to the various  television  media;  whether and how television
broadcast   stations  will  be  able  to  avail   themselves  of  these  various
improvements;  whether  viewing  audiences will make choices among services upon
the basis of such differences; or, if they would, whether significant additional
expense would be required for television stations to provide such services. Many
segments of the television industry are intensively  studying digital television
technology.
Chris-Craft is unable to predict the outcome of these developments.

         The  broadcasting  industry is  continuously  faced with  technological
changes,  competing  entertainment  and  communications  media and  governmental
restrictions or actions of Federal regulatory  bodies,  including the FCC. These
technological  changes may include the  introduction  of digital  compression by
cable systems that would  significantly  increase the number and availability of
cable program services with which BHC stations compete for audience and revenue,
the establishment of interactive video services,  and the offering of multimedia
services  that  include  data  networks and other  computer  technologies.  Such
factors  have  affected,  and will  continue to affect,  the revenue  growth and
profitability of Chris-Craft.


                               Industrial Division

         Chris-Craft  Industrial Products,  Inc., the wholly owned subsidiary of
Chris-Craft that constitutes its Industrial  Division,  is primarily  engaged in
manufacturing plastic flexible films and distributing containment systems to the
healthcare  industry.  These products are marketed as roll and cut stock as well
as proprietary and private-label end products.  The end products include plastic
flexible films and water-soluble hospital laundry bags.

<PAGE> 13

         Significant portions of the sales of the Industrial Division are to the
flexible film packaging  industry,  composite material  fabricators,  and health
care facilities.  Sales of particular items may vary widely from year to year as
specifications,  designs  and  other  conditions  change.  The  products  of the
Industrial   Division   are  sold  by  it  directly  and  by  sales  agents  and
distributors.

         Sales  of one kind of  plastic  film to a large  chemical  manufacturer
equaled 20.4%, and sales to two health care customers  equaled 9.7% and 8.7%, of
1998 Division revenues.  Sales to these accounts are generally made on the basis
of  competitive  bidding  on each item  sold.  Similar  arrangements  with these
customers  have  prevailed for a number of years.  The loss of these  customers,
unless their  business was replaced by others,  would have an adverse  effect on
the Industrial Division.


         Plastic Flexible Films

         Chris-Craft's  plastic  flexible films are based primarily on polyvinyl
alcohol  polymers;  some of the film products are water-soluble in their end use
applications,   while  other  applications  do  not  require  water  solubility.
Chris-Craft's  major  uses for  such  film are in  water-soluble  packaging  for
pre-measured  amounts of chemical compounds and composite material  fabrication.
The films also are used in the  manufacture of  water-soluble  hospital  laundry
bags.  Management is aware of  competition  from one other  domestic and several
foreign producers of similar film.

         Another series of polyvinyl alcohol film is used as a release medium in
connection  with the  fabrication  of  fiberglass-reinforced  and other  plastic
products.  For certain of these  applications,  Chris-Craft's film competes with
those of a number of producers of other types of films.

     M.D. Industries, Inc., a subsidiary of the Industrial Division, markets
health care products manufactured by the Division and by others, including
proprietary products made for M.D. Industries.

         The Industrial  Division is faced with keen  competition in each of its
product lines from other companies that manufacture and sell these products.


         Raw Materials

         Principal  raw  materials  used  by  the  Industrial  Division  include
polymers and chemical  additives.  These have generally  been readily  available
from many sources.

ITEM 2.        PROPERTIES.

         Television Division

         KCOP owns its  studios  and  offices in two  buildings  in Los  Angeles
containing a total of approximately 54,000 square feet located on adjacent sites
having a total area of approximately  1.93 acres.  KCOP's transmitter is located
atop Mt. Wilson on property  utilized  pursuant to a permit issued by the United
States Forest Service.

         KPTV owns its studios and  offices in a building in  Portland,  Oregon,
containing  approximately  45,300 square feet located on a site of approximately
2.0 acres.  Its  transmitter  is located on its own property at a separate  site
containing approximately 16.18 acres.

         WWOR owns  office  and  studio  facilities  in  Secaucus,  New  Jersey,
containing  approximately  110,000  square feet on  approximately  3.5 acres and
leases  additional  office space in New York City.  Along with almost all of the
television  stations  licensed to the New York  market,  WWOR's  transmitter  is
located on top of the World  Trade  Center in New York City  pursuant to a lease
agreement which expires in 2004, unless terminated by WWOR in May 1999.

         Physical  facilities  consisting of offices and studio  facilities  are
owned  by UTV in  Minneapolis,  San  Antonio  and  Phoenix  and  are  leased  in
Baltimore,  Salt Lake City and San  Francisco.  The  Baltimore  lease

expires in April 2005. The Salt Lake City lease expires in August 1999, but
can be extended through April 2000. UTV has acquired a 6.03 acre site in Salt
Lake City, on which UTV has begun construction of a new studio facility. The San
Francisco lease expires in 2007. UTV also occupies leased facilities in various
cities throughout the country.

         The Minneapolis  facility includes  approximately 49,700 square feet of
space on a 5.63-acre site. The current Salt Lake City facility is  approximately
30,400 square feet on a 2.53-acre site. The Baltimore  facility is approximately
11,700  square feet and is located in an office  park in a suburb of  Baltimore.
The San Antonio facility is approximately 41,000 square feet on a .92-acre site.
The San Francisco  facility is approximately  27,700 square feet in downtown San
Francisco.  The  Phoenix  facility  is  approximately  26,400  square  feet on a
3.03-acre site. Smaller buildings containing transmission equipment are owned by
UTV at sites separate from the studio facilities.

         UTV owns a 55-acre tract in Shoreview, Minnesota, of which 40 acres are
used by KMSP for transmitter facilities and tower.

         KTVX's  transmitter  facilities  and tower are located at a site on Mt.
Nelson,  close to Salt Lake City,  under a lease that expires in 2004. KTVX also
maintains  back-up  transmitter  facilities  and tower at a site on  nearby  Mt.
Vision under a lease that expires in July 2002 and is renewable,  at no increase
in rental, for a 50-year period.

         KMOL's transmitter facilities are located at a site near San Antonio on
land and on a tower owned by Texas Tall Tower  Corporation,  a corporation owned
in equal shares by UTV and another  television  station that also transmits from
the same tower.

         KBHK's  transmitter is located on Mt. Sutro, as part of the Sutro Tower
complex, which also houses equipment for other San Francisco television stations
and many of its FM radio stations. The lease for the Mt.
Sutro facilities expires in 2005 and is renewable for two five-year periods.

         KUTP's  transmitter  facilities  and tower are located on a site within
South Mountain Park, a communications  park owned by the City of Phoenix,  which
also  contains  transmitter  facilities  and  towers  for the  other  television
stations in Phoenix as well as  facilities  for several FM radio  stations.  The
license for this space expires in 2012.

         WUTB's transmitter facilities are located on a site near Baltimore. The
building  containing  the  transmitter,  and the tower on which the  antenna  is
mounted, are shared with another television station. The lease for the tower and
building expires in December 1999 and is renewable for two five-year periods.


         Industrial Division

         As  described  below,  the  Industrial  Division  owns a plant in Gary,
Indiana and leases  facilities  in  Northbrook,  Illinois and in South  Holland,
Illinois,   which  leases  expire  on  October  31,  1999  and  June  30,  2003,
respectively.
<TABLE>
<CAPTION>

                                                   Factory and
                                                   Office Space
                                                   (Square           Site
Plant Location       Principal Product             Feet)             (Acres)
--------------       -----------------            -------------      -------
<S>                  <C>                          <C>                   <C>

Gary, Indiana        Plastic flexible films
                     and water-soluble
                     hospital bags                48,000                 5


Northbrook, 
Illinois             Health care products          5,166                 --


South Holland, 
Illinois             Warehouse for healthcare 
                     products distribution        33,000                 --

                               ------------------
</TABLE>

<PAGE> 15

         Chris-Craft  believes its  properties  are  adequate for their  present
uses.
ITEM 3.        LEGAL PROCEEDINGS.

         Montrose Chemical Corporation of California  ("Montrose"),  whose stock
is 50% owned by Chris-Craft  and 50% by a subsidiary of Zeneca Inc.  ("Zeneca"),
discontinued its  manufacturing  operations in 1983 and has since been defending
claims for costs and damages relating to environmental matters.

         In 1983,  the  United  States of  America  and the State of  California
instituted an action in the Federal  District Court for the Central  District of
California,  entitled United States of America et al. v. J.B.  Stringfellow,  et
al., Case No. 83-2501 JMI (MCX),  against  Montrose and  approximately  20 other
defendants  relating to alleged  environmental  impairment  at the  Stringfellow
Hazardous  Waste Disposal Site in California.  Chris-Craft is not a defendant in
this action.  The action seeks to impose joint and several liability against all
defendants for all costs of removal and remedial  action incurred by the Federal
and state  governments  at the site. In 1990,  the United  States  Environmental
Protection  Agency  ("EPA")  issued  a Record  of  Decision  for the site  which
selected  some of the interim  remedial  measures  preferred  by the EPA and the
State,  the estimated  present value of the capital costs of which was estimated
by them to be $169  million  although  the  estimate  purports  to be subject to
potential  variations of up to 50%.  Plaintiffs  also seek recovery for remedial
expenditures and unspecified  damages for alleged harm to natural resources.  In
September 1998, the District Court entered a ruling allocating  liability at the
site under  both the  Comprehensive  Environmental  Response,  Compensation  and
Liability  Act of 1980,  as amended  ("CERCLA" or the  "Superfund"  statute) and
state law. The CERCLA allocation was 65% to the State of California,  10% to the
owners of the site and 25% to the generator defendants (including Montrose). The
state law  allocation  was 100% to the State.  In December  1998, the defendants
(including  Montrose)  and  the  State  executed  a  settlement  agreement  that
establishes a framework for resolving the  litigation.  The agreement is subject
to certain  conditions,  but does not contemplate  any monetary  contribution by
Chris-Craft.

         In May 1998, a group of current or former  residents of the vicinity of
the Stringfellow Site filed suit,  entitled Austin v. Stringfellow,  No. 312339,
California  Superior  Court,  Riverside  County,  alleging  personal  injury and
property damage from exposure to the site. A second amended  complaint was filed
in November 1998 on behalf of approximately 750 plaintiffs, approximately 100 of
whom are minors, and names Montrose and Chris-Craft and more than 160 additional
defendants.  The defendants  have moved to dismiss the complaint as to the adult
defendants on statute of  limitations  grounds.  A similar  action filed in 1984
entitled Newman v.  Stringfellow  was resolved by means of a settlement in which
Montrose,  but not  Chris-Craft,  made a monetary  contribution  to resolve  the
claims of approximately 3,000 individual plaintiffs.

         In June 1990,  the United States of America and the State of California
commenced an action in the United States District Court for the Central District
of  California,  entitled  United States of America et al. v. Montrose  Chemical
Corporation of California et al.,  Civil Action No. 90-3122 AAH (JRX),  against,
among others,  Montrose and  Chris-Craft.  Certain  United States  affiliates of
Zeneca  (the  "Zeneca  Affiliates"),   as  well  as  CBS  Corporation  (formerly
Westinghouse  Electric  Corporation),  which has no connection with Chris-Craft,
were also named as  defendants.  Brought under CERCLA,  plaintiffs  alleged with
respect to Montrose,  Chris-Craft, and the Zeneca Affiliates, in the first cause
of action, that Montrose released hazardous substances,  including DDT, into the
environment  in  and  around  Los  Angeles,  California,  including  the  waters
surrounding the Palos Verdes Peninsula,  the Los Angeles-Long  Beach Harbor, and
the Channel  Islands.  The first cause of action also alleged that  Westinghouse
(now CBS) released PCBs into the same waters. The complaint sought a declaration
that  defendants  are jointly and  severally  liable for damages (in amounts not
specified)  resulting  from  injury to natural  resources  caused by the alleged
releases, including loss of use and costs of restoration, plus plaintiffs' costs
in assessing such damages. Montrose,  Chris-Craft and the Zeneca Affiliates have
counterclaimed  against the United States and the State on the grounds that they
are the former and current owners of the contaminated  sediments and allowed the
sediments to be used as a repository for industrial  sewage. In the second cause
of action, plaintiffs also sought to hold Montrose,  Chris-Craft, and the Zeneca
Affiliates  jointly  and  severally  liable  for all  costs  incurred  and to be
incurred in connection with alleged  hazardous  substance  contamination to soil
and ground water at the site of Montrose's former plant in Torrance, California.
Montrose  and EPA  are  investigating  the  former  plant  site  and  evaluating
potential response actions.

<PAGE> 16

         In July 1996,  EPA issued two internal  memoranda in which it concluded
that ocean  sediments on the Palos Verdes  Shelf  threaten  human health and the
environment,   and  stated   its   intention   to   undertake   an   Engineering
Evaluation/Cost  Analysis ("EE/CA") under CERCLA to identify appropriate interim
response actions.  EPA has said it may select such response actions by mid-1999.
The actions under  consideration  include capping a portion of the  contaminated
sediments and/or instituting controls aimed at preventing contaminated fish from
being  caught and eaten.  In August  1997,  EPA  initiated  a formal  rulemaking
proceeding,  which  currently is ongoing,  to add the area of sediments to EPA's
National Priorities List of Contaminated Sites.

         In March 1997, the plaintiffs lodged with the District Court an amended
$45.7 million  settlement with the Los Angeles County Sanitation  District and a
series of other  local  governmental  entities  that had been sued by  Montrose,
Chris-Craft  and  other   defendants  as  third-party   defendants  (the  "LACSD
Defendants"),  which purports to cover claims both for natural  resource damages
and also for response  costs  (which are asserted by EPA)  relating to the Palos
Verdes Shelf. In attempting to justify the settlement, plaintiffs have said they
value their total natural  resource damage and response cost claims with respect
to the area of sediments at  approximately  $482 million.  In December 1998, the
plaintiffs  lodged with the District  Court a $9.5 million  consent  decree with
CBS. The plaintiffs have not yet sought judicial  approval of either the amended
LACSD or the CBS consent decrees.

         As to both causes of action, Chris-Craft contends that it is not liable
and that it neither  owned nor  operated  the  facilities  involved,  nor did it
arrange  for  the  disposal  of  hazardous   substances.   Chris-Craft  and  its
predecessors  were  shareholders  of Montrose  and provided  certain  management
services to Montrose as it  conducted  its  operations.  Based on the  available
information,  the  status  of the  proceedings,  and the  applicable  legal  and
accounting  standards,  Chris-Craft,  in reliance  on, among other  things,  the
advice of counsel,  believes  that it should have no liability  (under CERCLA or
otherwise)  for the  operations  of  Montrose  and does not  presently  consider
liability to be "probable" in any of the  Montrose-related  cases.  Accordingly,
under  Statement  of  Financial  Accounting  Standards  No. 5,  "Accounting  for
Contingencies,"   no  amount  has  been  reserved  in  Chris-Craft's   financial
statements.

         Since 1984,  Montrose has been  complying  with a Consent Order entered
into with the Nevada Department of Conservation and Natural  Resources  Division
of  Environmental  Protection  ("DEP")  requiring  operation  of a ground  water
intercept  treatment  system near a production  facility used by Montrose  until
1985 in Henderson,  Nevada. The EPA and DEP are currently  reconsidering whether
the complex  that  includes  the  Henderson  facility  should be included on the
National  Priority  List.  In April 1991,  and again in February  and June 1996,
Montrose  entered  into  additional  consent  orders with DEP and other  parties
requiring investigation of environmental conditions at the Henderson facility.

         In  September  1994,  the EPA  notified  Chris-Craft  that it had  been
designated  as a  "potentially  responsible  party"  under  CERCLA  (a "PRP") in
connection  with the  Diamond  Alkali  Superfund  Site on the  Passaic  River in
Newark, New Jersey. The EPA alleges that hazardous substances were released into
the river from a facility  operated by a predecessor  company.  The facility was
located near the Diamond Alkali  property,  but not on the  riverfront,  and was
sold by  Chris-Craft  in 1972.  Chris-Craft  disputes  that it is a  responsible
party.  At the request of the EPA,  Maxus Energy Corp.,  the former owner of the
Diamond  Alkali  property  and a  designated  PRP  at  the  site,  is  currently
performing a feasibility  study estimated to cost  approximately  $10 million to
determine  the  extent of  contamination  in the area and to  evaluate  possible
corrective  actions.  The Diamond Alkali  Superfund Site matter does not involve
Montrose,  and based on the review to date by Chris-Craft and its counsel,  they
believe  Chris-Craft  has  been  erroneously  identified  as a PRP at the  site;
Chris-Craft  is unable to determine at this stage if it could have any liability
at the site.

         If a court ultimately rejected Chris-Craft's defenses in one or more of
the  foregoing  matters,  under  CERCLA  Chris-Craft  might be held  jointly and
severally  liable,  without  regard to fault,  for  response  costs and  natural
resource  damages.  A party's ultimate  liability at a site generally depends on
its involvement at the site, the nature and extent of contamination,  the remedy
selected,  the role of other parties in creating the alleged  contamination  and
the availability of contribution from those parties, as well as any insurance or
indemnification  agreements which may apply. In most cases,  both the resolution
of the complex issues involved and any necessary remediation  expenditures occur
over a number of years.  Future legal and technical  developments in each of the
foregoing  matters will be  periodically  reviewed to determine if an accrual of
reserves  would be  appropriate.

<PAGE> 17

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

         Not applicable.


         EXECUTIVE OFFICERS OF THE REGISTRANT.

         The executive officers of Chris-Craft,  as of February 28, 1999, are as
follows:

<TABLE>
<CAPTION>
                                                                      Has served
                   Positions with Chris-Craft and                     as officer
Name               age as of February 28, 1999                        since
----               ------------------------------                     ---------
<S>                <C>                                                <C>


Herbert J. Siegel  Chairman of the Board and President; 70            1968


Evan C Thompson    Executive Vice President and President,            1982
                   Television Division; 56


John C. Siegel     Senior Vice President; 46                          1985


William D. Siegel  Senior Vice President; 44                          1985


Joelen K. Merkel   Vice President and Treasurer; 47                   1980


Brian C. Kelly     Vice President and General Counsel
                   and Secretary; 47                                  1992

</TABLE>


         The principal  occupation of each of the  individuals for the past five
years is stated in the foregoing table.

         All officers  hold office until the meeting of the Board  following the
next annual meeting of stockholders or until removed by the Board.


<PAGE> 18

                                    PART II

ITEM 5.        MARKET FOR REGISTRANT'S COMMON EQUITY AND
               RELATED STOCKHOLDER MATTERS.

         The information  appearing in the Annual Report under the caption STOCK
PRICE,   DIVIDEND  AND  RELATED  INFORMATION  is  incorporated  herein  by  this
reference.

ITEM 6.        SELECTED FINANCIAL DATA.

         The  information  appearing  in the  Annual  Report  under the  caption
SELECTED FINANCIAL DATA is incorporated herein by this reference.

ITEM 7.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS.

         The  information  appearing  in the  Annual  Report  under the  caption
MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS ("MD&A") is incorporated herein by this reference.

ITEM 7A.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     The last two paragraphs before the subcaption RESULTS OF OPERATIONS - 1998
VERSUS 1997 in the MD&A are incorporated herein by this reference. 

ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         The  Consolidated  Financial  Statements,   Notes  thereto,  Report  of
Independent  Accountants thereon and Quarterly Financial Information (unaudited)
appearing in the Annual Report are incorporated herein by this reference. Except
as specifically set forth herein and elsewhere in this Form 10-K, no information
appearing in the Annual Report is  incorporated  by reference  into this report,
nor is the  Annual  Report,  deemed  to be  filed,  as part of  this  report  or
otherwise, pursuant to the Securities Exchange Act of 1934.

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

         Not applicable.


<PAGE> 19

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         The  information  appearing in the Proxy  Statement  under the captions
ELECTION  OF  DIRECTORS--Nominees  of the Board of  Directors  and  ELECTION  OF
DIRECTORS--Section  16(a) Beneficial Ownership Compliance is incorporated herein
by this reference.  Information relating to Chris-Craft's  executive officers is
set forth in Part I under the caption EXECUTIVE  OFFICERS OF THE REGISTRANT.  

ITEM 11. EXECUTIVE COMPENSATION.

         The  information  appearing  in the Proxy  Statement  under the caption
ELECTION OF  DIRECTORS--Executive  Compensation is  incorporated  herein by this
reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
          AND MANAGEMENT.

         The  information  appearing  in the Proxy  Statement  under the caption
ELECTION  OF  DIRECTORS--Voting  Securities  of  Certain  Beneficial  Owners and
Management is incorporated herein by this reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         The  information  appearing  in the Proxy  Statement  under the caption
ELECTION  OF  DIRECTORS--Certain   Relationships  and  Related  Transactions  is
incorporated herein by this reference.


<PAGE>  20


ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
         REPORTS ON FORM 8-K.

     (a)  The following documents are filed as part of this report:

     1. The financial statements and quarterly financial information
incorporated by reference from the Annual Report pursuant to Item 8. 

     2. The financial statements of UPN and report thereon listed under the
caption Schedules in the Index to Consolidated Financial Statements and
Schedules.

     3. Exhibits listed in the Exhibit Index, including compensatory plans or
arrangements listed below:

          -- Benefit Equalization Plan
          -- 1994 Management Incentive Plan
          -- 1994 Director Stock Option Plan
          -- Employment Agreement dated as of January 1, 1994 between Herbert J.
                Siegeland Chris-Craft.
          -- Employment Agreement dated as of January 1, 1994 between Evan C
                Thompson and Chris-Craft. 

     (b) No reports on Form 8-K were filed by the registrant during the last
quarter of the period covered by this report.


<PAGE> 21



                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated:  March 26, 1999

                                            CHRIS-CRAFT INDUSTRIES, INC.     
                                                 (Registrant)

                                            By:  WILLIAM D. SIEGEL         
                                                 William D. Siegel
                                               Senior Vice President

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


Signature and Title                                        Date


HERBERT J. SIEGEL                                          March 26, 1999
Herbert J. Siegel
Chairman, President and
Director (principal
executive officer)


WILLIAM D. SIEGEL                                          March 26, 1999
William D. Siegel
Senior Vice President and
Director (principal
financial officer)


JOELEN K. MERKEL                                           March 26, 1999
Joelen K. Merkel
Vice President and Treasurer
(principal accounting officer)


EVAN C THOMPSON                                            March 26, 1999
Evan C Thompson
Executive Vice President
and Director


HOWARD ARVEY                                               March 26, 1999
Howard Arvey
Director

<PAGE> 22

LAWRENCE R. BARNETT                                        March 26, 1999
Lawrence R. Barnett
Director


JOHN C. BOGLE                                              March 26, 1999
John C. Bogle
Director


T. CHANDLER HARDWICK, III                                  March 26, 1999
T. Chandler Hardwick, III
Director



JEANE J. KIRKPATRICK                                       March 26, 1999
Jeane J. Kirkpatrick
Director


DAVID F. LINOWES                                           March 26, 1999
David F. Linowes
Director


NORMAN PERLMUTTER                                          March 26, 1999
Norman Perlmutter
Director


JAMES J. ROCHLIS                                           March 26, 1999
James J. Rochlis
Director


JOHN C. SIEGEL                                             March 26, 1999
John C. Siegel
Director


<PAGE> 23


                 CHRIS-CRAFT INDUSTRIES, INC. AND SUBSIDIARIES
            INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES


CONSOLIDATED FINANCIAL STATEMENTS:

         Report of Independent Accountants

         Consolidated Balance Sheets - December 31, 1998 and 1997

         Consolidated  Statements  of Income - For the Years Ended  December 31,
           1998, 1997 and 1996

         Consolidated  Statements  of Cash Flows - For the Years Ended  December
           31, 1998, 1997 and 1996

         Consolidated  Statements  of  Shareholders'  Investment - For the Years
           Ended December 31, 1998, 1997 and 1996

         Notes to Consolidated Financial Statements


SCHEDULES:

         UPN Financial Statements --

                  Report of Independent Accountants

                  Balance Sheets - December 31, 1998 and 1997

                  Statements of Operations -
                    For the Years Ended December 31, 1998, 1997 and 1996

                  Statements of Changes in Partners'  Capital  (Deficit) For the
                    Years Ended December 31, 1998, 1997 and 1996

                  Statements  of Cash Flows - For the Years Ended  December  31,
                    1998, 1997 and 1996

                  Notes to Financial Statements
<PAGE>

United Paramount Network 
(a partnership between BHC Network 
Partner, Inc., BHC Network Partner II, Inc.,
BHC Network Partner III, Inc.,
PCI Network Partner Inc. and
PCI Network Partner II Inc.)
Report and Financial Statements
December 31, 1998, 1997 and 1996

Report of Independent Accountants


January 29, 1999


To the Partners
of United Paramount Network


In our opinion, the accompanying balance sheets and the related
statements of operations, of changes in partners' capital (deficit)
and of cash flows present fairly, in all material respects, the
financial position of United Paramount Network (a partnership between
BHC Network Partner, Inc., BHC Network Partner II, Inc., BHC Network
Partner III, Inc., PCI Network Partner Inc., and PCI Network Partner
II Inc.) at December 31, 1998 and 1997, and the results of its
operations and its cash flows for each of the three years in the
period ended December 31, 1998, in conformity with generally accepted
accounting principles.  These financial statements are the
responsibility of United Paramount Network's management; our
responsibility is to express an opinion on these financial statements
based on our audits.  We conducted our audits of these financial
statements in accordance with generally accepted auditing standards
which require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for the opinion expressed above.

<PAGE>

UNITED PARAMOUNT NETWORK
BALANCE SHEETS
---------------------------------------------------------------------
(in thousands)
                                                    December 31,
                                               ----------------------
                                                  1998        1997
Assets                                         ---------    ---------
------
Current assets:
  Cash and cash equivalents                    $  24,704    $  23,622
  Accounts receivable (net of allowance
    for doubtful accounts of $430 and
    $430, respectively)                           18,787       39,287
  Program rights and development costs (net
    of reserve for abandonment of $5,055 and
    $7,721, respectively)                         46,893       16,596
  Other current assets                             2,550          512
                                               ---------    ---------
     Total current assets                         92,934       80,017
                                               ---------    ---------
Restricted investments                             5,340        8,755
Property and equipment, at cost: 
  Furniture, fixtures, computer equipment
   and other (net of accumulated depreciation
   of $1,454 and $901, respectively)               1,949          966
Intangible assets (net of accumulated
   amortization of $2,972 and $1,484,
   respectively)                                   4,194        5,682
Other assets                                      15,822       14,523
                                               ---------    ---------
                                               $ 120,239    $ 109,943
                                               =========    =========

Liabilities and Partners' Capital (Deficit)
------------------------------------------
Current liabilities:
 Accounts payable                              $  11,654    $  16,258
 Accrued program costs                            73,130       61,040
 Accrued expenses and other liabilities           34,224       30,421
                                               ---------    ---------
    Total current liabilities                    119,008      107,719
                                               ---------    ---------
Commitments and contingencies (Note 7)         

Partners' capital (deficit):         
 BHC Network Partner                              (4,192)      (4,179)
 BHC Network Partner II                           (4,072)      (3,837)
 BHC Network Partner III                           8,879        9,128
 PCI Network Partner                                 492          890
 PCI Network Partner II                              124          222
                                               ---------    ---------
   Total partners' capital                         1,231        2,224
                                               ---------    ---------
                                               $ 120,239    $ 109,943
                                               =========    =========

The accompanying notes are an integral part of these financial
statements.
<PAGE>
UNITED PARAMOUNT NETWORK
STATEMENTS OF OPERATIONS
-------------------------------------------------------------------
(in thousands)
                                            For the Year Ended
                                                December 31,
                                      ------------------------------
                                        1998        1997      1996
                                      --------   --------   --------
Net revenues                          $ 96,401   $ 89,997   $ 56,948
                      
Operating costs and expenses:                      
  Operating expenses                   182,225    177,874    132,593
  Selling, general and
   administrative expenses              90,871     82,294     67,359
  Depreciation and amortization          2,069      1,794        364
                                      --------   --------   --------
                                       275,165    261,962    200,316
                                      --------   --------   --------
Operating loss                        (178,764)  (171,965)  (143,368)
                                      --------   --------   --------
Other income (expense):                      
  Interest expense to related parties     -          -       (14,147)
  Interest and other income              1,571      1,736        193
  Net income (loss) on investment
   in joint venture                       -            32     (3,138)
                                      --------   --------   --------
                                         1,571      1,768    (17,092)
                                      --------   --------   --------
Net loss                             ($177,193) ($170,197) ($160,460)
                                      ========   ========   ========
<PAGE>
UNITED PARAMOUNT NETWORK
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
---------------------------------------------------------------------
(in thousands)

<TABLE>
<CAPTION>

                        BHC        BHC          BHC         PCI         PCI   
                      Network    Network      Network     Network     Network          
                      Partner   Partner II  Partner III   Partner   Partner II    Total
                     ---------  ----------  -----------  ---------  ----------  ----------
<S>                  <C>        <C>         <C>          <C>        <C>         <C>
Balance at
December 31, 1995    $  (8,942)  $ (98,872) $      -     $    -    $      -     $ (107,814)
Capital
 contributions            -           -          20,000       -           -         20,000
Conversion of
 debt to equity          8,398     164,101       63,016       -           -        235,515
Conversion of
 accrued interest
 to equity                  12       9,500        4,641       -           -         14,153
Allocation of 1996
 net loss               (3,640)    (78,432)     (78,388)      -           -       (160,460)
                     ---------  ----------  -----------  ---------  ----------  ----------
Balance at
December 31, 1996       (4,172)     (3,703)       9,269       -           -          1,394
Exercise of option 
 by PCI Partners          -           -            -       155,014      38,754     193,768
Allocation of
 option exercise         3,881      73,731       77,612   (124,178)    (31,046)       -
Distribution to
 partners               (2,907)    (55,224)     (58,130)      -           -       (116,261)
Capital
 contributions           1,205      22,888       24,092     36,268       9,067      93,520
Allocation of 1997
 net loss               (2,186)    (41,529)     (43,715)   (66,214)    (16,553)   (170,197)
                     ---------  ----------  -----------  ---------  ----------  ----------
Balance at
 December 31, 1997      (4,179)     (3,837)       9,128        890         222       2,224
Capital
 contributions           2,202      41,848       44,050     70,480      17,620     176,200
Allocation of 1998
 net loss               (2,215)    (42,083)     (44,299)   (70,878)   (17,718)    (177,193)
                     ---------  ----------  -----------  ---------  ----------  ----------
Balance at
 December 31, 1998   $  (4,192) $  (4,072)  $     8,879  $     492  $     124   $    1,231
                     =========  =========   ===========  =========  =========   ==========
</TABLE>
<PAGE>
UNITED PARAMOUNT NETWORK
STATEMENTS OF CASH FLOWS
------------------------------------------------------------------

(in thousands)
<TABLE>
<CAPTION>
                                                   For the Year Ended
                                                      December 31,
                                          -----------------------------------
                                            1998          1997         1996
                                          ---------    ---------    ---------
<S>                                       <C>          <C>          <C>
Cash flows from operating activities:
 Net loss                                 $(177,193)   $(170,197)   $(160,460)
 Adjustments to reconcile net loss to net
  cash used in operating activities:
    Amortization of program costs           177,771      169,771      126,793
    Payments for programming               (195,580)    (118,912)    (121,822)
    Depreciation and amortization             2,069        1,794          364
    Abandonment reserve                      (2,666)       2,108          982
    Changes in assets and liabilities:
     (Increase) decrease in accounts
       receivable                            20,500      (14,230)     (16,017)
     Increase in accounts payable,
       accrued expenses and other current
       liabilities                            1,468        8,470       25,116
     (Increase) decrease in other assets     (3,329)     (12,110)         207
                                          ---------    ---------    ---------
 Net cash used in operating activities     (176,960)    (133,306)    (144,837)
                                          ---------    ---------    ---------
Cash flows from investing activities:
 Additions to property and equipment         (1,565)        (467)        -
 Cash removed from (placed in)
  restricted account                          3,415       (7,598)        (183)
 Net investment in joint venture                 (8)         304          (77)
                                          ---------    ---------    ---------
 Net cash used in investing activities        1,842       (7,761)        (260)
                                          ---------    ---------    ---------
Cash flows from financing activities:
 Advances from related party                   -            -         125,580
 Exercise of option by PCI Partners            -         186,873         -
 Capital contributions                      176,200       93,520       20,000
 Distributions to partners                     -        (116,261)        -
                                          ---------    ---------    ---------
 Net cash provided by financing activities  176,200      164,132      145,580
                                          ---------    ---------    ---------

 Net increase in cash and cash equivalents    1,082       23,065          483

Cash and cash equivalents:
 Beginning of year                           23,622          557           74
                                          ---------    ---------    ---------
 End of year                              $  24,704    $  23,622    $     557
                                          =========    =========    =========
Supplemental schedule of non-cash items:
 Non-cash additions to program costs      $   9,822    $  51,748    $  10,875
                                          =========    =========    =========
 Start-up costs incurred by PCI Partners
   and contributed to the partnership     $    -       $   6,895    $    -
                                          =========    =========    =========
 Advances from related party converted
   to equity                              $    -       $    -       $ 235,515
                                          =========    =========    =========
 Accrued interest converted to equity     $    -       $    -       $  14,153
                                          =========    =========    =========

The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
UNITED PARAMOUNT NETWORK
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
-------------------------------------------------------------------

NOTE 1  -  ORGANIZATION

     In July 1994, BHC Network Partner, Inc. ("BHC/NP"), a then wholly
owned subsidiary of Chris-Craft Industries, Inc.'s majority owned
subsidiary, BHC Communications, Inc. ("BHC"), along with PCI Network
Partner Inc. ("PCI/NP"), a wholly owned indirect subsidiary of Viacom
Inc.'s Paramount Television Group ("Viacom"), formed the United
Paramount Network ("UPN" or the "Network"), a broadcast television
network.

     UPN was organized as a partnership in December 1994 between
BHC/NP and BHC Network Partner II, Inc. ("BHC/NP II"), a wholly owned
indirect subsidiary of BHC.  BHC Network Partner III, Inc. ("BHC/NP
III"), a wholly owned indirect subsidiary of BHC, became a partner in
1996.  On December 30, 1996, all advances from related parties and
related accrued interest were converted to partnership equity.  PCI/NP
had an option to acquire an interest in UPN equal to that of BHC/NP,
BHC/NP II, and BHC/NP III (collectively referred to as the "BHC
Partners").  The option price included approximately one-half of the
BHC Partners' aggregate cash contributions to UPN through the exercise
date, plus interest, and additional cash available for ongoing UPN
expenditures.  On January 15, 1997, PCI/NP and PCI Network Partner
II, Inc., a wholly owned indirect subsidiary of Viacom, (collectively
referred to as the "PCI Partners") completed the exercise of the
option in accordance with the terms of the option agreement and became
equal partners with BHC Partners in UPN.  In accordance with the
option agreement,  BHC Partners received distributions amounting to
approximately $116 million.

     UPN began providing programming for broadcast in January 1995. 
At December 31, 1998, 1997 and 1996, the Network had 185 affiliates in
markets covering approximately 95%, 187 affiliates in markets covering
approximately 97%, and 164 affiliates in markets covering over 92% of
U.S. television households, respectively.  The Network's revenues are
derived primarily from providing television programming and are,
therefore, subject to fluctuations in the advertising industry.

     Operating costs of the Network have been funded through capital
contributions and loans made by BHC Partners and PCI Partners 
(collectively known as "Partners") and the sale of advertising.  
Profits or losses are allocated between the Partners in accordance
with the partnership agreement.  UPN is still in its development and
the cost of developing and expanding its programming is expected to
remain significant for several years.  The Partners intend to continue
funding UPN as UPN incurs obligations arising through the normal
course of its business.


NOTE 2 - ACCOUNTING POLICIES

     Financial Instruments
     ---------------------

     Cash equivalents are securities having maturities at time of
purchase not exceeding three months.

     Program Rights and Development Costs
     ------------------------------------

     Network programming rights and related liabilities are recorded
at the contractual amounts when the programming becomes available for
telecasting.  Program costs are recorded at the lower of cost or net
realizable value.  Capitalized program costs are amortized over the
estimated number of showings, using accelerated methods based on
management's estimate of the flow of revenues.  Management assesses
the net realizable value of program rights on a day-part basis.  The 
estimated costs of recorded program rights to be charged to income
within one year are included in current assets; payments on such
program rights due within one year are included in current
liabilities.

     Costs incurred for the development of programs are capitalized
and included in the accompanying balance sheets, net of reserves
established for projects which may be terminated prior to being placed
into production.

     Restricted Investments
     ----------------------

     Restricted investments consist of cash and marketable securities
placed in an account as a security deposit and as collateral for a
loan to a third party.  The restricted investments are not available
for current operations of the Network and, therefore, have been
classified as non-current in the accompanying balance sheets.  In
accordance with Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities,"
marketable securities have been classified as held-to-maturity and are
therefore carried at amortized cost.

     Property and Equipment
     ----------------------

     Property and equipment is recorded at cost.  Depreciation of
furniture, fixtures and computer equipment is computed on the
straight-line method over the estimated useful lives of the assets
which range from three to five years.  Amortization of leasehold
improvements is computed on a straight-line basis over the life of the
lease.

     Intangible Assets
     -----------------

     Intangible assets represent primarily the costs incurred by PCI
Partners during the start up phase of the Network and contributed to
the partnership as a result of the acquisition by PCI Partners of an
interest in the partnership (Note 1).  Also included in intangible
assets are costs associated with logo design and development.  The
assets have been amortized on a straight-line basis over five years.  
See New Accounting Pronouncements for information relating to the
future treatment of these costs.

     Other Assets
     ------------

     Other assets represent primarily an investment in a joint venture
with Saban Entertainment and deferred network costs.  The joint
venture was entered into for the purpose of developing, producing, and
distributing children's television programming.  Under terms of the
joint venture agreement, UPN funded certain programming costs in
return for certain distribution rights to such programming and a share
of aggregate revenue.  UPN accounts for its interest in the joint
venture using the equity method.  Network costs are amortized over the
same period as the related agreements.

     Revenue Recognition
     -------------------

     Revenues are recognized as advertisements are aired, at
contractual rates.

     Use of Estimates in Preparation of Financial Statements
     -------------------------------------------------------

     The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes.  Actual results could
differ from those estimates.

     Income Taxes
     ------------

     As a general partnership, the Network's losses are allocated to,
and reported by, the individual Partners.  Therefore, no income tax
benefit is included in the accompanying financial statements.

     New Accounting Pronouncements
     -----------------------------

     In April 1998, the American Institute of Certified Public
Accountants Accounting Standards Executive Committee issued Statement
of Position ("SOP") 98-5, "Reporting on the Costs of Start-Up
Activities".  This SOP provides guidance on the financial reporting of
start-up costs and organization costs.  It requires costs of start-up
activities and organization costs to be expensed as incurred.  Initial
application of this SOP will be reported as a cumulative change in
accounting principles, as described in Accounting Principles Board
Opinion No. 20, "Accounting Changes".  The SOP is effective for the
Network for the year ending December 31, 1999.  The Network will adopt
the SOP during the first quarter of 1999.  Adoption of this SOP will
require the Network to write-off unamortized start-up costs of
$4,194,000 as of December 31, 1998, incurred by PCI Partners during
the start-up phase of the Network and contributed to the Network.

NOTE 3 - OTHER ASSETS

     At December 31, 1998 and 1997, other assets are comprised of
deferred network costs of $13,291,000 and $12,000,000, respectively,
and investment in joint venture of $2,531,000 and $2,523,000,
respectively.  The investment in joint venture is presented net of
reserves of $2,119,000 at December 31, 1998 and 1997.

NOTE 4 - ACCRUED EXPENSES AND OTHER LIABILITIES

     Accrued expenses and other liabilities consist of the following:

(in thousands)                           December 31,
                                    ----------------------
                                      1998          1997
                                    ---------    ---------
Accrued advertising and
  marketing costs                   $  24,123    $  19,907
Accrued compensation                    5,135        4,917
Other accrued expenses                  4,966        5,597
                                    ---------    ---------
                                    $  34,224    $  30,421
                                    =========    =========

NOTE 5 - RELATED PARTY TRANSACTIONS

     Prior to September 1997, advertising time was sold through
Premier Advertising Sales ("Premier") a wholly owned subsidiary of
Paramount Communications, Inc., which is a subsidiary of Viacom Inc.
(Note 1).  Net revenues for sales made by Premier totaled $43,019,000
in 1997 and at December 31, 1997, the Network had an accounts
receivable balance with Premier of $1,825,000.  In September 1997, the
Network established its own sales force which sells advertising time
for broadcast on UPN programs.

     During the normal course of business, the Network enters into
various contracts to purchase programming from related parties.  In
1998 and 1997, additions to capitalized programming costs from related
parties totaled $120,335,000 and $71,663,000, respectively.

     Prior to September 1997, with respect to certain of its
programming provided by Viacom, UPN derived no revenue and incurred no
programming expense.

     During the normal course of business, various services are
provided to the Network by related parties.  In 1998 and 1997,
payments for these services totaled approximately $3,240,000 and
$2,404,000, respectively.

NOTE 6 - COMMITMENTS AND CONTINGENCIES

     During 1995, UPN entered into a five year lease obligation for
its office space with an option to extend for an additional period of
five years.  The lease calls for certain penalty payments upon
cancellation after three years.  Rental expense was $802,000, $766,000
and $766,000 for the years ended December 31, 1998, 1997 and 1996,
respectively.

     During 1998, UPN entered into a nine year and ten month lease
obligation for its New York office space with an option to extend for
an additional period of five years.  The lease is noncancelable for
six years and three months and calls for a cancellation fee if the
early cancellation clause is utilized.  Rental expense was $354,000
for the year ended December 31, 1998.  Additionally, as required by
the lease agreement, UPN obtained an irrevocable letter of credit in
the amount of $1,200,000 on behalf of the lessor.

     As of December 31, 1998 the future minimum rental payments under
operating leases are as follows:

                     1999        $1,164,000
                     2000           839,000
                     2001           403,000
                     2002           403,000
                     2003           435,000
                     Thereafter   1,912,000
                                 ----------
                     Total       $5,156,000
                                 ==========

     As of December 31, 1998, the Network had entered into various
network related agreements and contracts for programming which was not
currently available for telecasting.  The aggregate amounts of the
payments required under these agreements totaled approximately
$121,556,000 and $168,807,000 at December 31, 1998 and 1997,
respectively.

     In the normal course of business, the Network is at times subject
to pending and threatened legal actions.  In management's opinion, any
liabilities or benefits resulting from these matters will not have a
material effect on the financial position or results of operations of
the Network.


<PAGE> 


                                  EXHIBIT INDEX

Incorporated by
Reference to:            Exhibit No.         Exhibit
---------------          -----------         --------

Exhibit 3(A) [1]             3.1         Restated Certificate of Incorporation


Exhibit 3(B) [1]             3.2         By-Laws


Exhibit 11(H) [2]           10.1         Benefit Equalization Plan of
                                         registrant


Exhibit 10(B)(1) [5]        10.2         Amendment No. 1 thereto


Exhibit 10.3 [9]            10.3         Amendment No. 2 thereto


Exhibit 10(B) [7]           10.4         Employment Agreement dated January
                                         1, 1994 between registrant and
                                         Herbert J. Siegel


Exhibit 10(C) [7]           10.5         Split-Dollar Agreement dated January
                                         6, 1994 between registrant and
                                         William D. Siegel


Exhibit 10(D) [7]           10.6         Split-Dollar Agreement dated January
                                         6, 1994 between registrant and John
                                         C. Siegel


Exhibit 10(E) [3]           10.7         Form of Agreement under Executive
                                         Deferred Income Plan of registrant


Exhibit 10(F) [7]           10.8         Employment Agreement dated January
                                         1, 1994 between registrant and Evan
                                         C Thompson


Exhibit 10(c) [4]           10.9         Management Agreement between the
                                         registrant and BHC dated July 21,
                                         1989


Exhibit 19 [6]              10.10        Amendment No. 1 thereto dated
                                         October 31, 1991


Exhibit 10(H)(2) [7]        10.11        Amendment No.2 thereto dated  March
                                         24, 1994


Exhibit A to registrant's
proxy statement dated March
25, 1994 (File No.1-2999)   10.12        1994 Management Incentive Plan



Exhibit B to registrant's 
proxy statement dated March
25, 1994 (File No. 1-2999)  10.13        1994 Director Stock Option Plan

<PAGE> 

Exhibit 10.10 [8]           10.14        Option Agreement dated July 19, 1994
                                         between BHC Network Partner, Inc.
                                         and PCI Network Partner, Inc.


         *                  13           Portions of the Annual Report
                                         incorporated by reference


         *                  21           Subsidiaries of the registrant


         *                  23           Consent of PricewaterhouseCoopers LLP


         *                  27           Financial Data Schedule


-------------------------

  *      Filed herewith.

 [1]  Registrant's  Annual  Report on Form 10-K for the year ended  December 31,
      1986.

 [2]  Registrant's Registration Statement on Form S-1 (Regis. No. 2-65906).

 [3]  Registrant's  Annual  Report on Form 10-K for the fiscal year ended August
      31, 1983.

 [4]  BHC's Registration Statement on Form S-1 (Regis. No. 33-31091).

 [5]  Registrant's  Annual  Report on Form 10-K for the year ended  December 31,
      1989.

 [6]  Registrant's  Quarterly Report on Form 10-Q for the quarterly period ended
      September 30, 1991.

 [7]  Registrant's  Annual  Report on Form 10-K for the year ended  December 31,
      1993.

 [8]  BHC's Annual Report on Form 10-K for the year ended December 31, 1994.

 [9]  Registrant's  Annual  Report on Form 10-K for the year ended  December 31,
      1994.