<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
 
                             Washington, D.C. 20549
                                  ----------
 
                                 Form 10-K/A
 
                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
 
                      THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended December 31, 1996     Commission file number 0-19728
 
                       GRANITE BROADCASTING CORPORATION
             (Exact name of registrant as specified in its charter)

        Delaware                                               13-3458782
(State of Incorporation)                                    (I.R.S. Employer
                                                            Identification No.)


                         767 Third Avenue, 34th Floor 
                           New York, New York 10017 
                               (212) 826-2530 
             (Address, including zip code, and telephone number, 
      including area code, of registrant's principal executive offices)

                                  ----------
   
        Securities Registered Pursuant to Section 12(b) of the Act:
 
                                     None
 
        Securities Registered Pursuant to Section 12(g) of the Act:
 
              Common Stock (Nonvoting), $.01 par value per share 
Cumulative Convertible Exchangeable Preferred Stock, $.01 par value per share

                                  ----------
 
    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 any definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. / /
 
    As of March 10, 1997, 8,582,091 shares of Granite Broadcasting Corporation
Common Stock (Nonvoting) and 1,819,500 shares of Granite Broadcasting
Corporation Cumulative Convertible Exchangeable Preferred Stock were
outstanding. The aggregate market value (based upon the last reported sale price
on the Nasdaq National Market on March 10, 1997) of the shares of Common Stock
(Nonvoting) held by non-affiliates was approximately $82,148,005. The aggregate
market value (based upon the last reported sale price on the Nasdaq National
Market on March 10, 1997) of shares of Cumulative Convertible Exchangeable
Preferred Stock held by non-affiliates was approximately $97,337,287. (For
purposes of calculating the preceding amounts only, all directors and executive
officers of the registrant are assumed to be affiliates.) As of March 10, 1997,
178,500 shares of Granite Broadcasting Corporation Class A Voting Common Stock
were outstanding, all of which were held by affiliates.

                                  ----------

                      DOCUMENTS INCORPORATED BY REFERENCE
 
    Portions of Item 14 of Part IV are incorporated by reference to: Granite 
Broadcasting Corporation's Registration Statement No. 33-43770, filed on 
November 5, 1991; Granite Broadcasting Corporation's Registration Statement 
No. 33-52988, filed on October 6, 1992; Granite Broadcasting Corporation's 
Current Report on Form 8-K, filed on June 25, 1993; Granite Broadcasting 
Corporation's Quarterly Report on Form 10-Q for the quarter ended September 
30, 1993, filed on November 15, 1993; Amendment No. 2 to Granite Broadcasting 
Corporation's Registration Statement No. 33-71172, filed on December 16, 
1993; Granite Broadcasting Corporation's Quarterly Report on Form 10-Q for 
the quarter ended September 30, 1994, filed on November 14, 1994; Granite 
Broadcasting Corporation's Annual Report on Form 10-K for the year ended 
December 31, 1994, filed on March 29, 1995; Granite Broadcasting 
Corporation's Current Report on Form 8-K, filed on May 19, 1995; Granite 
Broadcasting Corporation's Current Report on Form 8-K, filed on July 14, 
1995; Granite Broadcasting Corporation's Registration Statement No. 33-94862, 
filed on July 21, 1995; Amendment No. 2 to Granite Broadcasting Corporation's 
Registration Statement No. 33-94862, filed on October 6, 1995; Granite 
Broadcasting Corporation's Annual Report on Form 10-K for the year ended 
December 31, 1995, filed on March 28, 1996; Granite Broadcasting 
Corporation's Quarterly Report on Form 10-Q for the quarter ended June 30, 
1996, filed on August 13, 1996; Granite Broadcasting Corporation's Quarterly 
Report on Form 10-Q for the quarter ended September 30, 1996, filed on 
November 14, 1996; and Granite Broadcasting Corporation's Current Report on 
Form 8-K, filed on December 17, 1996.


<PAGE>
                                    PART II
 
ITEM 6. SELECTED FINANCIAL DATA
 
    The information set forth below should be read in conjunction with the
consolidated financial statements and notes thereto included at Item 8 herein.
The selected consolidated financial data for the years ended December 31, 1992,
1993, 1994, 1995 and 1996 are derived from the Company's audited Consolidated
Financial Statements.

    The acquisitions by the Company of its operating properties during the
periods reflected in the following selected financial data materially affect the
comparability of such data from one period to another.

<TABLE>
<CAPTION>
                                                                        Years Ended December 31,
                                                      ------------------------------------------------------------
<S>                                                   <C>         <C>        <C>        <C>             <C>
Statement of Operations Data:                            1992       1993       1994          1995          1996
----------------------------------------------------  ----------  ---------  ---------  --------------  ----------
 
<CAPTION>
                                                              (Dollars in thousands except per share data)
<S>                                                   <C>         <C>        <C>        <C>             <C>
Net revenue.........................................  $   35,957  $  37,499  $  62,856  $       99,895  $  129,164
Station operating expenses..........................      21,638     22,790     37,764          55,399      72,089
Time brokerage agreement fees.......................          --         --         --              --         150
Depreciation........................................       2,279      2,398      3,420           4,514       6,144
Amortization........................................       3,678      3,359      3,873           7,592       9,737
Corporate expense...................................       1,192      1,375      2,162           3,132       4,800
Non-cash compensation...............................          --        123        282             363         496
                                                      ----------  ---------  ---------  --------------  ----------
Operating income....................................       7,170      7,454     15,355          28,895      35,748

Other expenses......................................         487        479        309             798       1,034
Equity in net loss (income) of investee.............          --         --         --            (439)        995
Interest expense, net...............................      11,675     10,977     10,707          27,026      36,765
Non-cash interest expense...........................         305        505        842           1,738       2,087
                                                      ----------  ---------  ---------  --------------  ----------
Income (loss) before income taxes and extraordinary
  item..............................................      (5,297)    (4,507)     3,497            (228)     (5,133)
(Provision) benefit for income tax..................         471        472       (450)           (555)       (761)
                                                      ----------  ---------  ---------  --------------  ----------
Income (loss) before extraordinary item.............      (4,826)    (4,035)     3,047            (783)     (5,894)
Extraordinary loss on extinguishment of debt........      (5,709)    (1,007)    --            --            (2,891)
                                                      ----------  ---------  ---------  --------------  ----------
Net income (loss)...................................  $  (10,535) $  (5,042) $   3,047  $         (783) $   (8,785)
                                                      ----------  ---------  ---------  --------------  ----------
                                                      ----------  ---------  ---------  --------------  ----------
Net loss attributable to common shareholders........  $  (10,628) $  (5,278) $    (688) $       (4,368) $  (12,310)
                                                      ----------  ---------  ---------  --------------  ----------
                                                      ----------  ---------  ---------  --------------  ----------
Loss before extraordinary item per common share.....  $    (1.22) $   (0.98) $   (0.15) $        (0.74)     $(1.09)
                                                      ----------  ---------  ---------  --------------  ----------
                                                      ----------  ---------  ---------  --------------  ----------
Net loss per common share...........................  $    (2.63) $   (1.21) $   (0.15) $        (0.74)     $(1.43)
                                                      ----------  ---------  ---------  --------------  ----------
                                                      ----------  ---------  ---------  --------------  ----------
Weighted average common shares outstanding .........       4,041      4,365      4,498           5,920       8,612
</TABLE>
 
<TABLE>
<CAPTION>
                                                                              December 31,
                                                       ----------------------------------------------------------
            Selected Balance Sheet data:                  1992        1993        1994        1995        1996
-----------------------------------------------------  ----------  ----------  ----------  ----------  ----------
<S>                                                    <C>         <C>         <C>         <C>         <C>
Total assets.........................................  $  140,948  $  191,517  $  189,881  $  452,221  $  452,563
Total debt...........................................     101,611      99,000      99,250     341,000     351,561
Redeemable preferred stock...........................       1,574      49,139      49,171      45,488      45,488
Stockholders' (deficit) equity.......................      17,211      12,075      11,729       8,868      (3,135)
</TABLE>
 

<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS
 
    Introduction
 
    The consolidated financial statements of the Company reflect increases
between the years ended December 31, 1994, 1995 and 1996 in substantially all
line items. The principal reasons for such increases are the acquisition of KEYE
on February 1, 1995, the acquisition of WWMT on June 1, 1995 and the acquisition
of WKBW on June 29, 1995.

    The Company's revenues are derived principally from local and national
advertising and, to a lesser extent, from network compensation for the broadcast
of programming and revenues from studio rental and commercial production
activities. The primary operating expenses involved in owning and operating
television stations are employee salaries, depreciation and amortization,
programming and advertising and promotion expenses. Numbers referred to in the
following discussion have been rounded to the nearest thousand.
 
    The Company's operating revenues are generally lower in the first calendar
quarter and generally higher in the fourth calendar quarter than in the other
two quarters, due in part to increases in retail advertising in the fall months
in preparation for the holiday season, and in election years due to increased
political advertising.
 
    The following table sets forth certain operating data for the three years
ended December 31, 1994, 1995 and 1996:
 
<TABLE>
<CAPTION>
                                                                Year Ended December 31,
                                                      -------------------------------------------
<S>                                                   <C>            <C>            <C>
                                                          1994           1995           1996
                                                      -------------  -------------  -------------
Operating income....................................  $  15,354,000  $  28,895,000  $  35,748,000
Add:
 Time brokerage agreement fees......................             --             --        150,000
 Depreciation and amortization......................      7,294,000     12,105,000     15,881,000
 Corporate expense..................................      2,162,000      3,132,000      4,800,000
 Non-cash compensation..............................        282,000        363,000        496,000
                                                      -------------  -------------  -------------
Broadcast cash flow.................................  $  25,092,000  $  44,495,000  $  57,075,000
                                                      -------------  -------------  -------------
                                                      -------------  -------------  -------------
</TABLE>
 
    "Broadcast cash flow" means operating income plus time brokerage agreement
fees, depreciation, amortization, corporate expense and non-cash compensation.
The Company has included broadcast cash flow data because such data are commonly
used as a measure of performance for broadcast companies and are also used by
investors to measure a company's ability to service debt. Broadcast cash flow is
not, and should not be used as, an indicator or alternative to operating income,
net income or cash flow from operations as reflected in the Consolidated
Financial Statements, is not a measure of financial performance under generally
accepted accounting principles and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with generally
accepted accounting principles.
 
    The Company has elected as provided under Statement of Financial Accounting
Standards No. 123 (Accounting for Stock-Based Compensation) to continue to
account for stock-based employee compensation under Accounting Principles Board
Opinion No. 25.

                                     -2-

<PAGE>
 
    Years Ended December 31, 1996 and 1995
 
    Net revenue for the year ended December 31, 1996 totaled $129,164,000, an 
increase of $29,269,000, or 29.3% compared to net revenue of $99,895,000 for 
the year ended December 31, 1995. Of this increase, $21,262,000 resulted from 
the inclusion of one additional month of operations of KEYE, five additional 
months of operations of WWMT and six additional months of operations of 
WKBW in 1996. The remaining increase was primarily a result of increased 
local and national advertising, political spending and increased network 
compensation.
 
    Station operating expenses for the year ended December 31, 1996 totaled 
$72,089,000, an increase of $16,690,000, or 30.1% compared to station 
operating expenses of $55,399,000 in the prior year. Of this increase, 
$10,648,000 was due to the inclusion of one additional month of operating 
expenses of KEYE, five additional months of operating expenses of WWMT and 
six additional months of operating expenses of WKBW. The remaining increase 
was primarily due to higher programming expenses and increased news expenses 
associated with the launch of a news operation at KEYE.
 
    Broadcast cash flow totaled $57,075,000 during the year ended December 31,
1996 compared to $44,495,000 during 1995, an increase of $12,580,000, or 28.3%.
Of the increase, $10,614,000 was due to the inclusion of one additional month of
operations of KEYE, five additional months of operations of WWMT and six
additional months of operations of WKBW.
 
    Depreciation and amortization increased by $3,776,000, or 31.2% during 
the year ended December 31, 1996 compared to 1995 primarily due to the 
inclusion of one additional month of operations of KEYE, five additional 
months of operations of WWMT and six additional months of operations of 
WKBW. Corporate expense increased $1,668,000, or 53.3% during the year ended 
December 31, 1996 compared to 1995, primarily due to higher administrative 
costs associated with the expansion of the Company's corporate office to 
manage its expanded station group. Non-cash compensation expense increased 
$133,000 during the year ended December 31, 1996 compared to 1995 due to the 
granting of additional awards payable in Common Stock (Nonvoting) to certain 
executive employees under the Company's Management Stock Plan.
 
    As a result of the factors discussed above, operating income increased
$6,853,000 or 23.7% during the year ended December 31, 1996 compared to 1995.
 
    The equity in net loss of investee of $995,000 for the year ended December
31, 1996 resulted from the Company recognizing its pro rata share of the losses
of Datacast LLC accounted for under the equity method of accounting. The equity
in net income of investee of $439,000 for the year ended December 31, 1995
resulted from the Company recognizing its pro rata share of the earnings of
Queen City III Limited Partnership, the ultimate parent of WKBW, under the
equity method of accounting. On June 29, 1995, the Company acquired the
remaining interest in Queen City III Limited Partnership.
 
    Net interest expense totaled $36,765,000 during the year ended December 
31, 1996, an increase of $9,739,000, or 36% compared to net interest expense 
of $27,026,000 during the year ended December 31, 1995, primarily due to 
higher levels of outstanding indebtedness as a result of the acquisitions of 
WWMT and WKBW in June of 1995.
 
    Non-cash interest expense totaled $2,087,000 for the year ended December 31,
1996, an increase of $348,000, or 20% compared to the same period a year
earlier, due to the amortization of deferred financing fees incurred in
connection with the issuance of the Company's 9 3/8% Notes (as defined below) in
February 1996.
 
    During 1996, the Company incurred an extraordinary loss of $2,891,000 on the
early extinguishment of debt.

                                     -3-

<PAGE>
 
    Net loss totaled $8,785,000 during the year ended December 31, 1996 compared
to net loss of $783,000 during 1995, an increase of $8,002,000. This change was
primarily due to the changes in the line items discussed above.
 
    Years Ended December 31, 1995 and 1994
 
    Net revenue for the year ended December 31, 1995 totaled $99,895,000, an 
increase of $37,039,000, or 58.9% compared to net revenue of $62,856,000 for 
the year ended December 31, 1994. Of this increase, $36,324,000 was due to 
the inclusion of eleven months of operations of KEYE, seven months of 
operations of WWMT and six months of operations of WKBW. The remaining 
increase of $715,000 resulted from a strong advertising environment in the 
first six months of the year and increased network compensation, offset, in 
part, by lower political advertising in a non-election year. Net revenue at 
the Company's nine stations (including revenue derived by KEYE, WWMT and 
WKBW prior to their acquisition by the Company) increased $2,316,000, or 2.0% 
during the year ended December 31, 1995 as compared to the same period in 
1994.
 
    Station operating expenses for the year ended December 31, 1995 totaled 
$55,399,000, an increase of $17,635,000, or 46.7% compared to station 
operating expenses of $37,764,000 for the same period a year earlier. Of this 
increase, $16,589,000 was due to the inclusion of eleven months of operations 
of KEYE, seven months of operations of WWMT and six months of operations 
of WKBW. The remaining increase of $1,046,000 was primarily due to increased 
news and sales development costs. Station operating expenses at the Company's 
nine stations (including station operating expenses of KEYE, WWMT and WKBW 
prior to their acquisition by the Company) decreased $1,779,000, or 2.7% 
during the year ended December 31, 1995 as compared to the same period in 
1994.
 
    Broadcast cash flow totaled $44,495,000 during the year ended December 
31, 1995 compared to $25,092,000 during the same period a year earlier, an 
increase of $19,403,000, or 77.3%. Of this increase, $19,735,000 was due to 
the inclusion of eleven months of operations of KEYE, seven months of 
operations of WWMT and six months of operations of WKBW, which was offset, 
in part, by a decrease in broadcast cash flow from the Company's initial six 
stations (the "Initial Six Stations"). Broadcast cash flow at the Company's 
nine stations (including broadcast cash flow of KEYE, WWMT and WKBW prior 
to their acquisition by the Company) increased $537,000, or 1.0% during the 
year ended December 31, 1995 as compared to the same period in 1994.
 
    Depreciation and amortization increased by $4,811,000, or 66% during the
year ended December 31, 1995 compared to the same period a year earlier
primarily due to the inclusion of eleven months of operations of KEYE, seven
months of operations of WWMT and six months of operations of WKBW. Corporate
expense increased $970,000, or 44.9% during the year ended December 31, 1995
compared to the same period a year earlier, primarily due to higher
administrative costs associated with the expansion of the Company's corporate
office to manage its expanded station group. Non-cash compensation expense
increased $81,000 during the year ended December 31, 1995 compared to the same
period a year earlier due to the granting of additional awards payable in Common
Stock (Nonvoting) to certain executive employees under the Company's Management
Stock Plan.
 
    As a result of the factors discussed above, operating income increased
$13,541,000 or 88.2% during the year ended December 31, 1995 compared to the
same period a year earlier.
 
    Net interest expense totaled $27,026,000 during the year ended December 
31, 1995, an increase of $16,319,000, or 152.4% compared to net interest 
expense of $10,707,000 during the same period a year earlier, primarily due 
to higher levels of outstanding indebtedness as a result of the acquisitions 
of KEYE, WWMT and WKBW.
 
    Non-cash interest expense totaled $1,739,000 for the year ended December 31,
1995, an increase of $897,000, or 107% compared to the same period a year
earlier due to the amortization of deferred financing fees incurred in
connection with the issuance of the Company's 10 3/8% Notes (as defined below)
on May 19, 1995.

                                     -4-

<PAGE>
 
    Other expenses increased by $490,000 during the year ended December 31, 1995
compared to the same period a year earlier primarily due to the incurrence of a
charge to terminate and change certain service contracts.
 
    Net loss totaled $783,000 during the year ended December 31, 1995 compared
to net income of $3,047,000 during the same period a year earlier, a decrease of
$3,830,000. This change is primarily due to the changes in the line items
discussed above.
 
Liquidity and Capital Resources
 
    On February 22, 1996, the Company completed an offering of $110,000,000 
principal amount of its 9 3/8% Senior Subordinated Notes due December 2005 
(the "9 3/8% Notes"). Proceeds from the sale of the 9 3/8% Notes were used to 
repay all outstanding term loan and revolving credit borrowings under the 
Company's then existing bank credit agreement and for general working capital 
purposes. In connection with the repayment of the term loan (which is not 
subject to being reborrowed), the Company incurred an extraordinary loss on 
the early extinguishment of debt of $3,510,000 related to the write-off of 
deferred financing fees. During the second quarter, the Company purchased 
$2,000,000 face amount of its 10 3/8% Senior Subordinated Notes due May 2005 
and $13,500,000 face amount of its 9 3/8% Notes at a discount. As a result of 
these transactions, the Company recognized a net extraordinary loss for the 
year ended December 31, 1996 of $2,891,000.
 
    In September 1996, the Company amended and restated its existing credit
agreement to increase the total amount of committed revolving credit borrowings
available thereunder from $60,000,000 to $200,000,000 and to permit borrowings
of up to $300,000,000 in the aggregate. The revolving credit facility can be
used to fund future acquisitions of broadcast stations and for general corporate
purposes. As of February 28, 1997, subject to compliance with financial
covenants, the Company had $149,000,000 of the revolving credit facility
borrowings available under the credit agreement available for acquisitions and
working capital purposes.
 
    In October 1996, the Company entered into agreements with the owner of WLAJ,
the ABC affiliate serving Lansing, Michigan, including a time brokerage
agreement pursuant to which the Company operates WLAJ and an agreement to
acquire substantially all the assets used in the operation of WLAJ for
approximately $19.4 million in cash and the assumption of certain liabilities.
The Company anticipates financing the acquisition of WLAJ with borrowings under
the credit agreement. In connection with these agreements, the Company agreed to
provide a loan guarantee of up to $12,000,000 in favor of the owner of WLAJ.
 
    On January 31, 1997, the Company acquired substantially all of the assets of
WXON, the WB affiliate serving Detroit, Michigan for $175,000,000 and the
assumption of certain liabilities. The Company financed the WXON Acquisition
using the proceeds from the sale of its 12 3/4% Cumulative Exchangeable
Preferred Stock (See Note 8 to the Company's Consolidated Financial Statements)
and borrowings of approximately $27,500,000 under the credit agreement.
 
    Cash flows provided by operating activities were $13,291,000 during the year
ended December 31, 1996 compared to $8,806,000 during the year ended December
31, 1995 and $5,808,000 during the year ended December 31, 1994. The increases
from year to year resulted primarily from higher broadcast cash flow offset, in
part, by higher cash interest expense.
 
    Cash flows used in investing activities were $14,435,000 during the year
ended December 31, 1996, compared to $236,343,000 during the year ended December
31, 1995 and $2,628,000 during the year ended December 31, 1994. Cash flows used
in investing activities during the year ended December 31, 1996 related to
capital expenditures, the deposit relating to the WXON Acquisition and other
capitalized acquisition costs and an investment in Datacast LLC. Cash flows used
in investing activities during the year ended December 31, 1995 related
primarily to the acquisitions of KEYE, WWMT and WKBW while cash flows used in
investing activities during the year ended December 31, 1994 were related
entirely to capital expenditures.

                                    -5-

<PAGE>
 
    Cash flows provided by financing activities were $1,565,000 during the year
ended December 31, 1996 compared to cash flows provided by financing activities
of $225,685,000 during the year ended December 31, 1995 and cash flows used in
financing activities of $2,780,000 in 1994. The decrease from 1995 to 1996
resulted primarily from a decrease in net borrowings offset in part by a
decrease in payments for deferred financing fees. The increase from 1994 to 1995
resulted primarily from a net increase in bank borrowings and the proceeds from
the sale of the 10 3/8% Notes, partially offset by higher deferred financing
fees and the redemption of the Company's adjustable rate preferred stock.
 
    The Company may recognize significant taxable income as a result of the 
acquisition in 1995 of WKBW. Such taxable income would reduce the Company's 
net operating losses for federal income tax purposes. For financial reporting 
purposes, in accordance with Statement of Financial Accounting Standards No. 
109, any taxable income arising from the consummation of the acquisition of 
WKBW is considered additional purchase price, which will be amortized in 
future periods. See Note 10 to the Company's Consolidated Financial 
Statements.
 
    The Company believes that internally generated funds from operations and
borrowings under the credit agreement's revolving credit facility will be
sufficient to satisfy the Company's cash requirements for its operations for the
next twelve months and for the foreseeable future thereafter. The Company
expects that any additional acquisitions of television stations would be
financed through funds generated from operations, borrowings under the credit
agreement's revolving credit facility and additional debt and equity financings.

                                    -6-

<PAGE>
 
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
REPORT OF INDEPENDENT AUDITORS
 
The Board of Directors and Stockholders
  Granite Broadcasting Corporation
 
    We have audited the accompanying consolidated balance sheets of Granite
Broadcasting Corporation as of December 31, 1996 and 1995, and the related
consolidated statements of operations, stockholders' equity (deficit) and cash
flows for each of the three years in the period ended December 31, 1996. Our
audits also included the financial statement schedule listed in the Index at
Item 14(a). These financial statements and the schedule are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and the schedule based on our audits.
 
    We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
    In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Granite
Broadcasting Corporation at December 31, 1996 and 1995, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1996, in conformity with generally accepted accounting
principles. Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
 
                               ERNST & YOUNG LLP
 
New York, New York 
January 24, 1997
 
                                       7



<PAGE>


                        GRANITE BROADCASTING CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                           FOR THE YEARS ENDED DECEMBER 31,
                                                                     --------------------------------------------
<S>                                                                  <C>            <C>            <C>
                                                                         1994           1995            1996
                                                                     -------------  -------------  --------------
Net revenue........................................................  $  62,856,425  $  99,894,627  $  129,164,353
Station operating expenses.........................................     37,763,732     55,398,930      72,089,368
Time brokerage agreement fees......................................             --             --         150,000
Depreciation.......................................................      3,420,850      4,513,919       6,144,193
Amortization.......................................................      3,873,152      7,590,885       9,737,136
Corporate expense..................................................      2,162,621      3,131,943       4,799,984
Non-cash compensation expense......................................        281,896        363,384         495,819
                                                                     -------------  -------------  --------------
  Operating income.................................................     15,354,174     28,895,566      35,747,853

Other (income) expenses:
  Equity in net (income) loss of investee..........................       --             (439,033)        995,019
  Interest expense, net............................................     10,707,147     27,026,680      36,765,306
  Non-cash interest expense........................................        841,569      1,738,559       2,086,639
  Other............................................................        307,929        797,576       1,034,351
                                                                     -------------  -------------  --------------
  Income (loss) before income taxes and extraordinary item.........      3,497,529       (228,216)     (5,133,462)
  Provision for income taxes.......................................        450,125        554,884         761,000
                                                                     -------------  -------------  --------------

Income (loss) before extraordinary item............................      3,047,404       (783,100)     (5,894,462)
Extraordinary loss.................................................       --             --            (2,891,250)
                                                                     -------------  -------------  --------------

  Net income (loss)................................................  $   3,047,404  $    (783,100) $   (8,785,712)
                                                                     -------------  -------------  --------------
                                                                     -------------  -------------  --------------

Net loss attributable to common shareholders.......................  $    (687,730) $  (4,368,486) $  (12,310,993)
                                                                     -------------  -------------  --------------
                                                                     -------------  -------------  --------------
  Per common share:
    Loss before extraordinary item.................................  $       (0.15) $       (0.74) $        (1.09)
    Extraordinary loss.............................................       --             --                 (0.34)
                                                                     -------------  -------------  --------------

      Net loss.....................................................  $       (0.15) $       (0.74) $        (1.43)
                                                                     -------------  -------------  --------------
                                                                     -------------  -------------  --------------

Weighted average common shares outstanding.........................      4,497,758      5,920,294       8,611,606
</TABLE>

                          See accompanying notes.


                                       8


<PAGE>


                        GRANITE BROADCASTING CORPORATION
                          CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                        DECEMBER 31,
                                                              ----------------------------
<S>                                                           <C>             <C>
    ASSETS                                                       1995             1996
    ------                                                    -----------     ------------

CURRENT ASSETS:
  Cash and cash equivalents...............................    $     95,123     $   555,753
  Accounts receivable, less allowance for doubtful
    accounts ($505,759 in 1995 and $391,910 in 1996)......      26,186,579      27,057,451
  Film contract rights....................................       5,813,366       6,276,660
  Other current assets....................................       3,854,774       9,784,966
                                                              ------------    ------------
      TOTAL CURRENT ASSETS................................      35,949,842      43,674,830

PROPERTY AND EQUIPMENT, NET...............................      32,132,126      33,562,019
FILM CONTRACT RIGHTS AND OTHER NONCURRENT ASSETS..........       3,725,612       4,284,578
DEFERRED FINANCING FEES, less accumulated amortization
  ($2,947,833 in 1995 and $4,049,724 in 1996).............      14,849,529       14,181,662
INTANGIBLE ASSETS, NET....................................     365,564,029      356,860,115
                                                              ------------    -------------
                                                              $452,221,138     $452,563,204
                                                              ============    =============

    LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
    ----------------------------------------------

CURRENT LIABILITIES:
  Accounts payable........................................    $  5,285,619     $  4,016,964
  Accrued interest........................................       5,595,610        6,071,378
  Other accrued liabilities...............................       3,500,066        4,497,534
  Film contract rights payable and other current
    liabilities...........................................       6,946,068        9,578,365
                                                              ------------    -------------
      TOTAL CURRENT LIABILITIES...........................      21,327,363       24,164,241

LONG-TERM DEBT............................................     341,000,000      351,560,900
FILM CONTRACT RIGHTS PAYABLE..............................       3,669,534        3,383,428
DEFERRED TAX LIABILITY AND OTHER NONCURRENT LIABILITIES...      31,869,240       31,102,272

COMMITMENTS

REDEEMABLE PREFERRED STOCK................................      45,487,500       45,487,500

STOCKHOLDERS' EQUITY (DEFICIT):
  Common stock: 41,000,000 shares authorized consisting 
    of 1,000,000 shares of Class A Common Stock, $.01 par 
    value, and 40,000,000 shares of Common Stock 
    (Nonvoting), $.01 par value; 178,500 shares of Voting 
    Common Stock and 8,499,716 shares of Common Stock 
    (Nonvoting) (8,218,240 shares at December 31, 1995) 
    issued and outstanding................................          83,967           86,782
  Additional paid-in capital..............................      46,864,202       45,547,145
  Accumulated deficit.....................................     (36,590,198)     (45,375,910)
  Less: Unearned compensation.............................      (1,490,470)      (2,506,279)
        Note receivable from officer......................           --            (886,875)
                                                              ------------    --------------
      TOTAL STOCKHOLDERS' EQUITY (DEFICIT)................       8,867,501       (3,135,137)
                                                              ------------    --------------
                                                              $452,221,138     $452,563,204
                                                              ============    ==============
</TABLE>

                           See accompanying notes.


                                       9

<PAGE>
                        GRANITE BROADCASTING CORPORATION
           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
 
    For the Years Ended December 31, 1994, 1995 and 1996
<TABLE>
<CAPTION>
                                                    CLASS A     COMMON      SERIES B    SERIES C    ADDITIONAL
                                                    COMMON       STOCK      PREFERRED   PREFERRED     PAID-IN    (ACCUMULATED
                                                     STOCK    (NONVOTING)     STOCK       STOCK       CAPITAL      DEFICIT)
                                                    -------   -----------   ---------   ---------   -----------  ------------
<S>                                                 <C>       <C>           <C>         <C>         <C>          <C>
Balance at December 31, 1993......................  $1,785      $42,546      $ 5,006    $ 10,181    $51,362,550  $(38,854,502)
Accretion of and dividends on Series A Redeemable
  Preferred Stock.................................                                                     (91,895 )
Conversion of Redeemable Preferred Stock and
  Series B and Series C Preferred Stock into
  Common Stock (Nonvoting)........................                1,080         (373)       (102)        59,359
Dividend on Cumulative Convertible Exchangeable
  Preferred Stock and Adjustable Rate Preferred
  Stock...........................................                                                  (3,643,239 )
Issuance of 34,000 shares of Common Stock
  (Nonvoting).....................................                  340                                   (340)
Grant of Stock Award under Management Stock
  Plan............................................                                                   1,002,000
Stock expense related to Management Stock Plan....
Net income........................................                                                                 3,047,404
                                                    ------      -------       ------     -------   -----------   -----------
Balance at December 31, 1994......................   1,785       43,966        4,633      10,079    48,688,435   (35,807,098)
Accretion of and dividends on Series A Redeemable
  Preferred Stock.................................                                                     (35,116 )
 
<CAPTION>
                                                                       NOTE            TOTAL
                                                      UNEARNED      RECEIVABLE     STOCKHOLDERS'
                                                    COMPENSATION   FROM OFFICER   EQUITY (DEFICIT)
                                                    ------------   ------------   ----------------
<S>                                                 <C>            <C>            <C>
Balance at December 31, 1993......................  $  (493,000)    $  --           $12,074,566
Accretion of and dividends on Series A Redeemable
  Preferred Stock.................................                                      (91,895)
Conversion of Redeemable Preferred Stock and
  Series B and Series C Preferred Stock into
  Common Stock (Nonvoting)........................                                       59,964
Dividend on Cumulative Convertible Exchangeable
  Preferred Stock and Adjustable Rate Preferred
  Stock...........................................                                   (3,643,239)
Issuance of 34,000 shares of Common Stock
  (Nonvoting).....................................                                        --
Grant of Stock Award under Management Stock
  Plan............................................   (1,002,000)
Stock expense related to Management Stock Plan....      281,896                         281,896
Net income........................................                                    3,047,404
                                                     ----------        --------     -----------
Balance at December 31, 1994......................   (1,213,104)           --        11,728,696
Accretion of and dividends on Series A Redeemable
  Preferred Stock.................................                                      (35,116)

</TABLE>
 
<TABLE>
<CAPTION>
                                                    CLASS A     COMMON      SERIES B    SERIES C    ADDITIONAL
                                                    COMMON       STOCK      PREFERRED   PREFERRED     PAID-IN    (ACCUMULATED
                                                     STOCK    (NONVOTING)     STOCK       STOCK       CAPITAL      DEFICIT)
                                                    -------   -----------   ---------   ---------   -----------  ------------
<S>                                                 <C>       <C>           <C>         <C>         <C>          <C>
Conversion of Series A Redeemable Preferred Stock
  and Series B and C Preferred Stock into
  Common Stock (Nonvoting)........................               36,069       (4,633)     (10,079)  1,200,518
Dividend on Cumulative Convertible Exchangeable
  Preferred Stock and Adjustable Rate Preferred
  Stock...........................................                                                  (3,550,281 )
Exercise of Stock Options.........................                1,574                                 31,376
Issuance of Common Stock (Nonvoting) .............                  573                                   (573 )
Grant of Stock Award under Management Stock
  Plan............................................                                                     640,750
Stock expense related to Management Stock Plan....                                                    (110,907)
Net loss..........................................                                                                 (783,100 )
                                                    -------   -----------   ---------   ---------   -----------  ------------
Balance at December 31, 1995......................   1,785       82,182           --          --    46,864,202   (36,590,198)
Dividend on Cumulative Convertible
Exchangeable Preferred Stock......................                                                  (3,525,281 )
Exercise of Stock Options.........................                2,008                                888,805
Issuance of Common Stock (Nonvoting) .............                  807                                   (807 )
Grant of Stock Award under Management Stock
  Plan............................................                                                   1,511,628
 
<CAPTION>
                                                                       NOTE            TOTAL
                                                      UNEARNED      RECEIVABLE     STOCKHOLDERS'
                                                    COMPENSATION   FROM OFFICER   EQUITY (DEFICIT)
                                                    ------------   ------------   ----------------
<S>                                                 <C>            <C>            <C>
Conversion of Series A Redeemable Preferred Stock
  and Series B and C Preferred Stock into
  Common Stock (Nonvoting)........................                                    1,221,875
Dividend on Cumulative Convertible Exchangeable
  Preferred Stock and Adjustable Rate Preferred
  Stock...........................................                                   (3,550,281)
Exercise of Stock Options.........................                                       32,950
Issuance of Common Stock (Nonvoting) .............                                           --
Grant of Stock Award under Management Stock
  Plan............................................     (640,750)                             --
Stock expense related to Management Stock Plan....      363,384                         252,477
Net loss..........................................                                     (783,100)
                                                    ------------   ------------   ----------------
Balance at December 31, 1995......................   (1,490,470)           --         8,867,501
Dividend on Cumulative Convertible
Exchangeable Preferred Stock......................                                   (3,525,281)
Exercise of Stock Options.........................                   (886,875)            3,938
Issuance of Common Stock (Nonvoting) .............                                           --
Grant of Stock Award under Management Stock
  Plan............................................   (1,511,628)                             --

</TABLE>
 
<TABLE>
<CAPTION>
                                                    CLASS A     COMMON      SERIES B    SERIES C    ADDITIONAL
                                                    COMMON       STOCK      PREFERRED   PREFERRED     PAID-IN    (ACCUMULATED
                                                     STOCK    (NONVOTING)     STOCK       STOCK       CAPITAL      DEFICIT)
                                                    -------   -----------   ---------   ---------   -----------  ------------
<S>                                                 <C>       <C>           <C>         <C>         <C>          <C>
Stock Expense Related to Management Stock Plan....                                                    (191,402 )
Net loss..........................................                                                               (8,785,712 )
                                                    -------   -----------   ---------   ---------   -----------  ------------
Balance at December 31, 1996......................  $1,785      $84,997      $    --    $     --    $45,547,145  $(45,375,910)
                                                    -------   -----------   ---------   ---------   -----------  ------------
                                                    -------   -----------   ---------   ---------   -----------  ------------
 
<CAPTION>
                                                                       NOTE            TOTAL
                                                      UNEARNED      RECEIVABLE     STOCKHOLDERS'
                                                    COMPENSATION   FROM OFFICER   EQUITY (DEFICIT)
                                                    ------------   ------------   ----------------
<S>                                                 <C>            <C>            <C>
Stock Expense Related to Management Stock Plan..      495,819                         304,417
Net loss..........................................                                   (8,785,712)
                                                    ------------   ------------   ----------------
Balance at December 31, 1996......................  $(2,506,279)    $(886,875)      $(3,135,137)
                                                    ------------   ------------   ----------------
                                                    ------------   ------------   ----------------
</TABLE>
 
See accompanying notes.
 
<PAGE>
                        GRANITE BROADCASTING CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                                                          FOR THE YEARS ENDED DECEMBER 31,
                                                                    ---------------------------------------------
<S>                                                                 <C>            <C>             <C>
                                                                        1994            1995            1996
                                                                    -------------  --------------  --------------
Cash flows from operating activities:
Net income (loss).................................................  $   3,047,404  $     (783,100) $   (8,785,712)
Adjustments to reconcile net income (loss) to net cash provided by
  operating activities:
Amortization of intangible assets and deferred financing fees.....      4,714,721       9,329,444      11,823,775
Extraordinary loss................................................       --              --             2,891,250
Depreciation......................................................      3,420,850       4,513,919       6,144,193
Non-cash compensation expense.....................................        281,896         363,384         495,819
Non-cash deferred income taxes....................................       --             1,115,000         975,000
Deferred income taxes.............................................       --              (824,116)       (589,000)
Equity in net (income) loss of investee...........................       --              (439,033)        995,019
Change in assets and liabilities net of effects from acquisitions
  of stations:
Increase in accounts receivable...................................     (1,499,860)     (7,528,139)       (870,872)
Increase in accrued liabilities...................................      1,496,559       2,307,778       1,473,236
(Decrease) increase in accounts payable...........................       (420,205)      2,689,051      (1,268,655)
Decrease (increase) in film contract rights and other noncurrent
  assets..........................................................        640,968      (3,448,429)       (517,279)
(Decrease) increase in film contract rights payable and other
  liabilities.....................................................     (3,390,646)      3,222,796       1,193,223
Increase in other assets..........................................     (2,484,068)     (1,712,859)       (668,776)
                                                                    -------------  --------------  --------------
Net cash provided by operating activities.........................      5,807,619       8,805,696      13,291,221
                                                                    -------------  --------------  --------------
Cash flows from investing activities:
Deposit for station acquisition and other related costs...........       --              --            (5,957,000)
Investment in Datacast, LLC.......................................       --              --            (1,500,000)
Payment for acquisitions of stations, net of cash acquired........       --          (228,660,507)       --
Capital expenditures..............................................     (2,627,793)     (7,682,188)     (6,938,477)
                                                                    -------------  --------------  --------------
Net cash used in investing activities.............................     (2,627,793)   (236,342,695)    (14,395,477)
                                                                    -------------  --------------  --------------
Cash flows from financing activities:
Proceeds from bank loan...........................................      1,500,000     174,250,000      34,000,000
Retirement of senior subordinated notes...........................       --              --           (15,500,000)
Proceeds from exercise of stock options...........................       --                32,950           3,938
Repayment of bank borrowings......................................     (1,250,000)   (107,500,000)   (117,500,000)
Redemption of Adjustable Rate Preferred Stock.....................       --            (2,000,000)       --
Payment of deferred financing fees................................       (129,771)    (10,537,110)     (5,363,771)
Proceeds from senior subordinated notes...........................       --           175,000,000     109,450,000
Dividends paid....................................................     (3,564,120)     (3,561,280)     (3,525,281)
Other financing activities........................................        663,894        --              --
                                                                    -------------  --------------  --------------
Net cash provided by (used in) financing activities...............     (2,779,997)    225,684,560       1,564,886
                                                                    -------------  --------------  --------------
Net increase (decrease) in cash and cash equivalents..............        399,829      (1,852,439)        460,630
Cash and cash equivalents, beginning of year......................      1,547,733       1,947,562          95,123
Cash and cash equivalents, end of year............................  $   1,947,562  $       95,123  $      555,753
                                                                    -------------  --------------  --------------
                                                                    -------------  --------------  --------------
Supplemental information:
Cash paid for interest............................................  $  10,176,398  $   24,699,248  $   36,451,009
Cash paid for income taxes........................................        251,512         149,751         112,532
Non-cash investing and financing activities:
Non-cash capital expenditures.....................................        350,409         459,786         635,609
</TABLE>
 

    See accompanying notes.

                                      11


<PAGE>
                        GRANITE BROADCASTING CORPORATION
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 FINANCIAL STATEMENT PRESENTATION
 
    The consolidated financial statements include the accounts of the Company 
and its wholly-owned subsidiaries. All significant intercompany accounts and 
transactions have been eliminated. Certain amounts in the prior years have 
been reclassified to conform to the 1996 presentation. The Company accounts 
for its investment in Datacast, LLC under the equity method of accounting.
 
 REVENUE RECOGNITION
 
    The Company recognizes revenue from the sale of advertising at the time 
the advertisements are aired.
 
 INTANGIBLES
 
    Intangible assets at December 31 are summarized as follows:
 
<TABLE>
<CAPTION>
                                                                    1995            1996
                                                               --------------  --------------
<S>                                                            <C>             <C>
Goodwill.....................................................  $   75,192,619  $   76,202,853
Network affiliations.........................................     247,941,641     247,941,641
Broadcast licenses...........................................      67,896,861      67,896,861
                                                               --------------  --------------
                                                                  391,031,121     392,041,355
Accumulated amortization.....................................     (25,467,092)    (35,181,240)
                                                               --------------  --------------
                                                               $  365,564,029  $  356,860,115
                                                               --------------  --------------
                                                               --------------  --------------
</TABLE>
 
    The intangible assets are characterized as scarce assets with long and 
productive lives and are being amortized on a straight line basis over forty 
years.
 
    The Company continually reevaluates the propriety of the carrying amount 
of intangible assets as well as the related amortization period to determine 
whether current events and circumstances warrant adjustments to the carrying 
value and/or revised estimates of useful lives. This evaluation is based on 
the Company's projections of the undiscounted cash flows over the remaining 
lives of the amortization period of the related intangible asset. To the 
extent such projections indicate that the undiscounted cash flows are not 
expected to be adequate to recover the carrying amounts of intangible assets, 
such carrying amounts will be written down to their fair market value. At 
this time, the Company believes that no significant impairment of intangible 
assets has occurred and that no reduction of the estimated useful lives is 
warranted.
 
 DEFERRED FINANCING FEES
 
    The Company has incurred certain fees in connection with entering into a 
bank credit agreement, the sale of 12.75% Debentures (as defined), the sale 
of Cumulative Convertible Exchangeable Preferred Stock (as defined) the sale 
of 10 3/8% Notes (as defined) and the sale of 9 3/8% Notes (as defined). The 
deferred financing fees related to the bank credit agreement are being 
amortized over seven years, ten years for the 12.75% Debentures, the 10 3/8% 

                                  -12-

<PAGE>

                        GRANITE BROADCASTING CORPORATION
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(Continued)

Notes and the 9 3/8% Notes and twelve years for the Cumulative Convertible 
Exchangeable Preferred Stock. Amortization of deferred financing fees is 
classified as non-cash interest expense on the consolidated statement of 
operations.

 PROPERTY AND EQUIPMENT
 
    Property and equipment are recorded at cost and depreciated on a 
straight-line basis over their estimated useful lives ranging from three to 
32 years.
 
 FILM CONTRACT RIGHTS
 
    Film contract rights are recorded as assets at gross value when the 
license period begins and the films are available for broadcasting, are 
amortized on an accelerated basis over the estimated usage of the films, and 
are classified as current or noncurrent on that basis. Film contract rights 
payable are classified as current or noncurrent in accordance with the 
payment terms of the various license agreements. Film contract rights are 
reflected in the consolidated balance sheet at the lower of unamortized cost 
or estimated net realizable value.
 
    At December 31, 1996, the obligation for programming that had not been 
recorded because the program rights were not available for broadcasting 
aggregated $16,965,469.
 
 BARTER TRANSACTIONS
 
    Revenue from barter transactions is recognized when advertisements are 
broadcast and merchandise or services received are charged to expense when 
received or used.
 
 USE OF ESTIMATES
 
    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.
 
 CASH AND CASH EQUIVALENTS
 
    Cash and cash equivalents include funds invested overnight in Eurodollar 
deposits.
 
 NET LOSS PER COMMON SHARE
 
    Net loss per common share for each of the three years in the period ended 
December 31, 1996 is calculated by dividing net loss attributable to common 
stockholders by the weighted average number of common shares outstanding. The 
inclusion of additional shares assuming the exercise of outstanding stock 
options and the conversion of convertible preferred stock would have been 
antidilutive in all three years.

                               -13-

<PAGE>

                        GRANITE BROADCASTING CORPORATION
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 2--ACQUISITIONS

    On February 1, 1995, the Company acquired substantially all of the assets 
of KEYE-TV (formerly known as KBVO-TV), the CBS affiliate serving Austin, 
Texas from Austin Television for $54,000,000 in cash and the assumption of 
certain liabilities of KEYE-TV.
 
    On June 1, 1995, the Company acquired substantially all of the assets and 
certain liabilities of WWMT-TV, the CBS affiliate serving Grand Rapids, 
Michigan from Busse Broadcasting Corporation for $98,942,000 in cash 
(including $3,942,000 of working capital and other adjustments) and the 
assumption of certain liabilities of WWMT-TV.

    On June 29, 1995, the Company completed its acquisition of WKBW-TV, the 
ABC affiliate serving Buffalo, New York. The Company paid approximately 
$16,000,000 (including certain related expenses) for the equity interests it 
did not already own, assumed approximately $59,000,000 of debt and received 
working capital of approximately $6,760,000, of which $3,491,000 was cash.
 
    On January 31, 1997 the Company acquired substantially all the assets 
used in the operation of WXON-TV, the WB affiliate serving Detroit, Michigan 
for $175,000,000 in cash and the assumption of certain liabilities.
 
    The following table summarizes the unaudited consolidated pro forma 
results of operations for the years ended December 31, 1995 and 1996 assuming 
the acquisition of WXON-TV, KEYE-TV, WWMT-TV and WKBW-TV had occurred as of 
January 1, 1995:
 
<TABLE>
<CAPTION>
                                                                    1995            1996
                                                               --------------  --------------
<S>                                                            <C>             <C>
Net revenue..................................................  $  145,532,000  $  147,231,000
Station operating expenses...................................      74,398,000      78,577,000
Income (loss) before extraordinary item in 1996..............       5,187,000      (1,544,000)
Loss before extraordinary item per common share..............  $        (2.95) $        (2.81)
</TABLE>
 
 TIME BROKERAGE AGREEMENT
 
    The Company operates WLAJ-TV, the ABC affiliate serving Lansing, 
Michigan, pursuant to a time brokerage agreement. The terms of the agreement 
require the Company to pay a monthly fee of $50,000 and reimburse certain 
expenses in exchange for the right to provide station programming and sell 
related advertising time. Nevertheless, as the holder of the FCC license, the 
owner-operator retains full control and responsibility for the operation of 
the station, including control over all programming broadcast on the station. 
The time brokerage agreement terminates on the earlier of the date the 
Company exercises its option to acquire WLAJ-TV or October 17, 2001. The time 
brokerage agreement may be renewed at the Company's option for an additional 
five year period. The agreement to acquire substantially all of the assets 
used in the operation of WLAJ-TV is for $19,400,000 in cash and the 
assumption of certain liabilities. In connection with this agreement, the 
Company agreed to provide a loan guarantee of up to $12,000,000 in favor of 
the owner of WLAJ-TV. The guarantee is collateralized by all of the assets of 
WLAJ-TV.

                                  -14-

<PAGE>

                        GRANITE BROADCASTING CORPORATION
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 3--PROPERTY AND EQUIPMENT
 
    The major classifications of property and equipment are as follows:
 
<TABLE>
<CAPTION>
                                                          DECEMBER 31,
                                                  -----------------------------
<S>                                               <C>             <C>
                                                       1995             1996
                                                  -------------   -------------
Land............................................  $   2,527,708   $   2,527,708
Buildings and improvements......................     14,729,378      16,607,496
Furniture and fixtures..........................      4,380,475       5,691,019
Technical equipment and other...................     27,711,903      31,924,360
                                                  -------------   -------------
                                                     49,349,464      56,750,583
Less:Accumulated depreciation...................     17,217,338      23,188,564
                                                  -------------   -------------
Net property and equipment......................  $  32,132,126   $  33,562,019
                                                  -------------   -------------
                                                  -------------   -------------
</TABLE>
 
NOTE 4--OTHER ACCRUED LIABILITIES
 
      Other accrued liabilities are summarized below:
 
<TABLE>
<CAPTION>
                                                                           DECEMBER 31,
                                                                    --------------------------
<S>                                                                 <C>           <C>
                                                                        1995          1996
                                                                    ------------  ------------
Compensation and benefits.........................................  $  2,001,193  $  2,367,808
Other.............................................................     1,498,873     2,129,726
                                                                    ------------  ------------
Total.............................................................  $  3,500,066  $  4,497,534
                                                                    ------------  ------------
                                                                    ------------  ------------
</TABLE>
 
NOTE 5--OTHER CURRENT ASSETS
 
     Other current assets are summarized below:
 
<TABLE>
<CAPTION>
                                                                           DECEMBER 31,
                                                                    --------------------------
<S>                                                                 <C>           <C>
                                                                        1995          1996
                                                                    ------------  ------------
Barter and other receivables......................................  $  2,542,824  $  2,400,386
Escrow deposit related to station acquisition and other related
  costs...........................................................       --          5,957,000
Other.............................................................     1,311,950     1,427,580
                                                                    ------------  ------------
Total.............................................................  $  3,854,774  $  9,784,966
                                                                    ------------  ------------
                                                                    ------------  ------------
</TABLE>

                                  -15-

<PAGE>

                        GRANITE BROADCASTING CORPORATION
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 6--LONG-TERM DEBT
 
    The carrying amounts and fair values of the Company's long-term debt at 
December 31, are as follows:

<TABLE>
<CAPTION>


                                                    DECEMBER 31, 1995                  DECEMBER 31, 1996
                                               ----------------------------     --------------------------------
                                               CARRYING AMOUNT    FAIR VALUE     CARRYING AMOUNT     FAIR VALUE
                                               ---------------  --------------  ----------------  --------------
<S>                                           <C>                             <C>             <C>               <C>
Senior Bank Debt..............                    $106,000,000  $  106,000,000   $   22,500,000   $   22,500,000
9 3/8% Senior Subordinated                    
  Notes, net of unamortized
  discount....................                         --               --           96,060,900       94,087,500
10 3/8% Senior Subordinated      
  Notes.......................                     175,000,000     180,278,000      173,000,000      178,622,500
12.75% Senior Subordinated      
  Notes.......................                      60,000,000      65,559,600       60,000,000       65,625,000
                                                  ------------  --------------  ----------------  --------------
Total.........................                    $341,000,000  $  351,837,600   $  351,560,900   $  360,835,000
                                                  ------------  --------------  ----------------  --------------
                                                  ------------  --------------  ----------------  --------------
</TABLE>
 
    The fair value of the Company's Senior Subordinated Notes is estimated 
based on quoted market prices. The carrying amount of the Company's 
borrowings under its credit facility approximates fair value.
 
 SENIOR BANK DEBT
 
    The Company's existing bank credit agreement was amended and restated on 
February 1, 1995 (as amended and restated the "Amended and Restated Credit 
Agreement") to permit term borrowings of up to $100,000,000 plus a revolving 
working capital facility permitting borrowings of up to $15,000,000. The 
Amended and Restated Credit Agreement was amended and restated on May 19, 
1995 (as amended and restated the "Second Amended and Restated Credit 
Agreement") to permit term borrowings of up to $102,000,000 plus a revolving 
working capital facility permitting borrowings of up to $60,000,000. Proceeds 
from the incremental borrowings under the Second Amended and Restated Credit 
Agreement along with the proceeds from the sale of $175,000,000 principal 
amount of the Company's 10 3/8% Senior Subordinated Notes due May 15, 2005 
(the "10 3/8% Notes") were used to fund the acquisition of WWMT-TV and 
WKBW-TV and to pay fees and expenses incurred in connection with the offering 
of the 10 3/8% Notes and the Second Amended and Restated Credit Agreement.
 
    The Second Amended and Restated Credit Agreement was further amended and 
restated on September 4, 1996 (as amended and restated the "Third Amended and 
Restated Credit Agreement") to create a reducing revolving credit facility of 
up to $200,000,000 and permits borrowings of up to $300,000,000 in the 
aggregate. The proceeds from this facility are available for acquisitions and 
for general working capital purposes as defined in the agreement.
 
    Outstanding principal balances under the Third Amended and Restated 
Credit Agreement bear interest at floating rates equal to LIBOR (the "LIBOR 
Rate") plus marginal rates between 1.125% and 2.375% or the prime rate plus 
marginal rates between 0.0% and 1.125%. The LIBOR Rate was 5.6875% plus a 
marginal rate of 2.375% at December 31, 1996. The LIBOR Rate was 
5.75%--5.938% plus a marginal rate of 2.50% at December 31, 1995. The 
marginal rate is subject to change based upon changes in the ratio of 
outstanding principal balances to operating cash flow. The principal amount 
of the revolving loans are subject to reduction in installments commencing 
December 31, 1998 through December 31, 2003, when the final payment is due.

                               -16-

<PAGE>

                        GRANITE BROADCASTING CORPORATION
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 6--LONG-TERM DEBT--(Continued)
 
    The Third Amended and Restated Credit Agreement is secured by 
substantially all of the assets of the Company, as well as a pledge of all 
issued and outstanding shares of capital stock of the Company's present and 
future subsidiaries and guaranteed by all present and future subsidiaries of 
the Company. The Third Amended and Restated Credit Agreement requires the 
Company to maintain compliance with certain financial ratios. Other 
provisions place limitations on the incurrence of additional debt, payments 
for capital expenditures, prepayment of subordinated debt, merger or 
consolidation with or acquisition of another entity, the declaration or 
payment of cash dividends other than on the Cumulative Convertible 
Exchangeable Preferred Stock and other transactions by the Company.
 
 SENIOR SUBORDINATED DEBENTURES
 
    The Company has outstanding $60,000,000 aggregate principal amount of its 
12.75% Senior Subordinated Debentures (the "12.75% Debentures") due September 
1, 2002.
 
    The 12.75% Debentures are redeemable after September 1, 1997, at the 
option of the Company, in whole or in part from time to time, at certain 
prices declining annually to 100% of the principal amount on or after 
September 1, 1999, plus accrued interest. The Company is required to offer to 
repurchase all outstanding 12.75% Debentures at 101% of the principal amount 
plus accrued interest in the event of a Change of Control (as defined in the 
Indenture governing the 12.75% Debentures).
 
    The 12.75% Debentures are subordinated in right of payment to the Third 
Amended and Restated Credit Agreement and to future Senior Debt (as defined 
in the Indenture governing the 12.75% Debentures) and rank pari passu with 
all senior subordinated debt and senior to all subordinated debt of the 
Company. The Indenture governing the 12.75% Debentures contains certain 
covenants that, among other things, limit the ability of the Company and its 
subsidiaries to incur debt, pay cash dividends on or repurchase capital 
stock, enter into agreements prohibiting the creation of liens or restricting 
the ability of a subsidiary to pay money or transfer assets to the Company, 
enter into certain transactions with their affiliates, dispose of certain 
assets and engage in mergers and consolidations.
 
 SENIOR SUBORDINATED NOTES
 
    The Company issued $175,000,000 aggregate principal amount of its 10 3/8% 
Senior Subordinated Notes (the "10 3/8% Notes") due May 15, 2005. On May 6, 
1996, the Company purchased $2,000,000 face amount of its 10 3/8% Notes at a 
discount and recognized an extraordinary loss, after the write-off of a 
portion of related deferred financing fees, of $44,150.
 
    The 10 3/8% Notes will be redeemable in the event that on or before May 
15, 1998 the Company receives net proceeds from the sale of its Capital Stock 
(other than Disqualified Stock (each as defined in the Indenture governing 
the 10 3/8% Notes)), in which case the Company may, at its option and from 
time to time, use all or a portion of any such net proceeds to redeem certain 
amounts of the 10 3/8% Notes with certain limitations. In addition, the 10 3/8% 
Notes are redeemable at any time on or after May 15, 2000, at the option of 
the Company, in whole or in part from time to time, at certain prices 
declining annually to 100% of the principal amount on or after May 15, 2002, 
plus accrued interest. The Company is required to offer to purchase all 
outstanding 10 3/8% Notes at 101% of the principal amount plus accrued 
interest in the event of a Change of Control (as defined in the Indenture 
governing the 10 3/8% Notes).

                                -17-

<PAGE>

                        GRANITE BROADCASTING CORPORATION
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 6--LONG-TERM DEBT (CONTINUED)
 
    The 10 3/8% Notes are subordinated in right of payment to the Third 
Amended and Restated Credit Agreement and to future Senior Debt (as defined 
in the Indenture governing the 10 3/8% Notes) and rank pari passu with all 
senior subordinated debt and senior to all subordinated debt of the Company. 
The Indenture governing the 10 3/8% Notes contains certain covenants that, 
among other things, limit the ability of the Company and its subsidiaries to 
incur debt, pay cash dividends on or repurchase capital stock, enter into 
agreements prohibiting the creation of liens or restricting the ability of a 
subsidiary to pay money or transfer assets to the Company, enter into certain 
transactions with their affiliates, dispose of certain assets and engage in 
mergers and consolidations.
 
    On February 22, 1996, the Company completed an offering of $110,000,000 
principal amount of its 9 3/8% Senior Subordinated Notes (the "9 3/8% Notes") 
due December 1, 2005. Proceeds from the sale of the 9 3/8% Notes were used to 
repay all outstanding term loan and revolving credit borrowings under the 
Company's then existing bank credit agreement and for general working capital 
purposes. In connection with the repayment of the term loan, the Company 
incurred an extraordinary loss on the early extinguishment of debt of 
$3,510,152 related to the write-off of deferred financing fees.
 
    The 9 3/8% Notes will be redeemable in the event that on or before 
February 22, 1999 the Company receives proceeds from any sale of its Capital 
Stock (other than Disqualified Stock) in one or more offerings, in which case 
the Company may, at its option and from time to time, use all or a portion of 
any such net proceeds within 75 days of receipt to redeem certain amounts of 
the 9 3/8% Notes with certain limitations. In addition, the 9 3/8% Notes are 
redeemable at any time on or after December 1, 2000, at the option of the 
Company, in whole or in part, at certain prices declining annually to 100% of 
the principal amount on or after December 1, 2002, plus accrued interest. The 
Company is required to offer to purchase all outstanding 9 3/8% Notes at 101% 
of the principal amount plus accrued interest in the event of a Change of 
Control (as defined in the Indenture governing the 9 3/8% Notes).
 
    The 9 3/8% Notes are subordinate in right of payment to all existing and 
future Senior Debt (as defined in the Indenture) and rank pari passu with all 
senior subordinated debt and senior to all subordinated debt. The provisions 
of the Indenture contains certain covenants that, among other things, limit 
the ability of the Company and its subsidiaries to incur debt, make certain 
restricted payments, enter into certain transactions with their affiliates, 
dispose of certain assets, incur liens securing subordinated debt of the 
Company, engage in mergers and consolidations and restrict the ability of the 
subsidiaries of the Company to make distributions and transfers to the 
Company.
 
    On June 19, 1996, the Company purchased $13,500,000 face amount of its 9 
3/8% Notes at a discount and recognized an extraordinary gain, after the 
write-off of a portion of related deferred financing fees, of $663,052.
 
    There are no scheduled principal maturities on all long-term debt for the 
five years subsequent to December 31, 1996.

                                   -18-

<PAGE>

                        GRANITE BROADCASTING CORPORATION
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 7--COMMITMENTS
 
    Future minimum lease payments under long-term operating leases as of 
December 31, 1996 are as follows:
 
<TABLE>
<S>                         <C>
1997......................  $  839,000
1998......................     699,000
1999......................     598,000
2000......................     411,000
2001......................     295,000
2002 and thereafter.......   2,402,000
                            ----------
                            $5,244,000
                            ----------
                            ----------
</TABLE>
 
    Rent expense, including escalation charges, was $116,000, $559,000 and 
$929,000 for the years ended December 31, 1994, 1995 and 1996, respectively.
 
NOTE 8--REDEEMABLE PREFERRED STOCK
 
 SERIES A PREFERRED STOCK
 
    The Company authorized 100,000 shares of its Series A Convertible 
Preferred Stock ("Series A Stock"), par value $.01 per share, which were 
issued at an aggregate price of $1,210,000. All outstanding shares of the 
Series A Stock were converted into shares of the Company's Common Stock 
(Nonvoting), par value $.01 per share (the "Common Stock (Nonvoting)") in 
August 1995. Prior to conversion, dividends accrued on the Series A Stock at 
an annual rate of $.40 per share which accumulated, without interest, if 
unpaid. Accrued but unpaid dividends on the Series A Stock totaled $262,844 
at December 31, 1995 and 1996. Accrued dividends are due and payable on the 
later of December 31, 1999 or the date on which such dividends may be paid 
under the Company's debt instruments.
 
 CUMULATIVE CONVERTIBLE EXCHANGEABLE PREFERRED STOCK
 
    The Company has authorized 3,000,000 shares of its Cumulative Convertible 
Exchangeable Preferred Stock (the "Cumulative Convertible Exchangeable 
Preferred Stock"), par value $.01 per share, of which 1,520,000 shares were 
issued on December 23, 1993 at a price of $25.00 per share. The Company also 
issued on December 23, 1993 300,000 shares of its Cumulative Convertible 
Exchangeable Preferred Stock valued at $7,500,000 as consideration for 
acquiring certain outstanding securities of Queen City III Limited 
Partnership, the ultimate parent of WKBW-TV. Holders of the Cumulative 
Convertible Exchangeable Preferred Stock are entitled to receive cash 
dividends at an annual rate of $1.9375 per share, payable quarterly on each 
March 15, June 15, September 15 and December 15 in each year, when, as and if 
declared by the Company's Board of Directors. Dividends on the Cumulative 
Convertible Exchangeable Preferred Stock are cumulative and accrue without 
interest, if unpaid.
 
    Each share of Cumulative Convertible Exchangeable Preferred Stock is 
convertible, at the option of the holder, into shares of Common Stock 
(Nonvoting). The Cumulative Convertible Exchangeable Preferred Stock is 
convertible into Common Stock (Nonvoting) on a 5 for 1 share basis. The 
current conversion price of the Cumulative Convertible Exchangeable Preferred 
Stock is $5.00 per share, subject to adjustment upon the occurrence of 
certain events. The Cumulative Convertible Exchangeable Preferred Stock is 
entitled to a preference of $25.00 

                                      -19-

<PAGE>

                        GRANITE BROADCASTING CORPORATION
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 8--REDEEMABLE PREFERRED STOCK--(Continued)

per share plus accrued and unpaid dividends in the event of liquidation, 
dissolution or winding up of the Company ($45,487,500 liquidation value at 
December 31, 1996). The Company is required, to the extent permitted by loan 
agreements or indentures to which the Company is then a party, the 
obligations of which are senior in priority to the Cumulative Convertible 
Exchangeable Preferred Stock, to redeem the Cumulative Convertible 
Exchangeable Preferred Stock at a price of $25.00 per share plus accrued and 
unpaid dividends on December 15, 2005.
 
    The Cumulative Convertible Exchangeable Preferred Stock is exchangeable 
in whole, but not in part, at the option of the Company, for the Company's 
7.75% Junior Subordinated Convertible Exchange Debentures (the "Exchange 
Debentures") on any dividend payment date beginning on December 15, 1995 at 
the rate of $25.00 principal amount of Exchange Debentures for each share of 
Cumulative Convertible Exchangeable Preferred Stock outstanding at the time 
of the exchange. The Company may only effect such exchange if accrued and 
unpaid dividends on the Cumulative Convertible Exchangeable Preferred Stock 
have been paid in full.
 
    In January 1997, the Company authorized 400,000 shares of its 12-3/4% 
Cumulative Exchangeable Preferred Stock (the "New Preferred Stock"), par 
value $.01 per share. In connection with the Company's acquisition of 
WXON-TV, 150,000 shares of the New Preferred Stock were issued in January 
1997 at a price of $1,000 per share. Holders of the New Preferred Stock are 
entitled to receive dividends at an annual rate of 12-3/4% per share payable 
semi-annually on April 1 and October 1 of each year. The Third Amended and 
Restated Credit Agreement currently prohibits the payment of cash dividends 
on the New Preferred Stock. The Company may elect to pay dividends prior to 
April 1, 2002 in additional shares of New Preferred Stock. Dividends on the 
New Preferred Stock are cumulative and accrue without interest, if unpaid.
 
    The New Preferred Stock is entitled to a preference of $1,000 per share 
initially, plus accumulated and unpaid dividends in the event of liquidation 
or winding up of the Company. The Company is required, subject to certain 
conditions, to redeem all of the New Preferred Stock outstanding on April 1, 
2009, at a redemption price equal to 100% of the then effective liquidation 
preference thereof, plus, without duplication, accumulated and unpaid 
dividends to the date of redemption.
 
    Subject to certain conditions, each share of the New Preferred Stock is 
exchangeable, in whole or in part, at the option of the Company, for the 
Company's 12-3/4% Exchange Debentures (the "New Exchange Debentures") on any 
scheduled dividend payment date at the rate of $1,000 principal amount of New 
Exchange Debentures for each share of New Preferred Stock outstanding at the 
time of the exchange.
 
NOTE 9--STOCKHOLDERS' EQUITY
 
 STOCK OPTION PLANS
 
    The Company has a stock option plan (the "Stock Option Plan") for 
officers, directors and certain key employees. On July 25, 1995, the Stock 
Option Plan was amended to increase the shares of Common Stock (Nonvoting) 
subject to options available for grant to 2,000,000 from 800,000. Options may 
be granted under the Stock Option Plan at an exercise price (for 
tax-qualified incentive stock options) of not less than 100% of the fair 
market value of the Common Stock (Nonvoting) on the date the option is 
granted, or 110% of such fair market value for option recipients who hold 10% 
or more of the Company's voting stock. The exercise price for non-

                               -20-

<PAGE>

                        GRANITE BROADCASTING CORPORATION
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 9--STOCKHOLDERS' EQUITY--(Continued)

qualified stock options may be less than, equal to or greater than the fair 
market value of the Common Stock (Nonvoting) on the date the option is 
granted. Options are normally exercisable at a rate of 20% per year beginning 
on the date of grant (or the next preceding January 1) and expire ten years 
after the date of grant, except for incentive stock options granted to 
recipients who also own 10% or more of the Company's voting stock. At 
December 31, 1994, 1995 and 1996, 204,700, 467,850 and 521,000, respectively, 
options were exercisable.
 
    On March 1, 1994, the Company adopted a Director Stock Option Plan (the 
"Director Option Plan") providing for the grant, from time to time, of 
non-qualified stock options to non-employee directors of the Company to 
purchase an aggregate of 300,000 shares of Common Stock (Nonvoting). As of 
December 31, 1995 and 1996, options granted under the Director Option Plan 
were outstanding for the purchase of 101,700 and 97,200 shares of Common 
Stock (Nonvoting), respectively. Under the Director Option Plan as amended in 
1995, at the end of the current triennial option period and each third 
anniversary thereafter all directors will automatically receive an option to 
purchase 18,000 shares of Common Stock (Nonvoting) ("Automatic Director 
Service Awards") as compensation for attendance at each regular quarterly 
meeting ("Regular Quarterly Meeting") during the triennial option period 
subsequent to the grant in lieu of cash compensation. In addition, under the 
Director Option Plan, directors receive options ("Automatic Committee 
Awards") for service on certain of the committees of the Board of Directors 
(each a "Committee"). Options become exercisable one year (or immediately in 
the case of Automatic Director Service Awards, or Automatic Committee Awards 
granted after February 27, 1997) from the date of attendance by a director at 
a Regular Quarterly Meeting or a Committee meeting, as applicable.
 
    The Company has adopted the disclosure-only provisions of Statement of 
Financial Accounting Standards No. 123 "Accounting for Stock-Based 
Compensation" ("FAS 123"). Accordingly, no compensation expense has been 
recognized for the stock option plans. For purposes of FAS 123 pro forma 
disclosures, the estimated fair value of the options is amortized to expense 
over the options' vesting period, therefore, the impact on pro forma net loss 
in 1995 and 1996 may not be representative of the impact in future years. The 
Company's pro forma information for years ended December 31, follows:
 
<TABLE>
<CAPTION>
                                                                                             1995         1996
                                                                                          ----------  ------------
<S>                                                                                       <C>         <C>
Pro forma net loss......................................................................  $  969,498  $  9,473,649
Pro forma loss per share:
 Primary................................................................................  $    (0.76) $      (1.51)
 Fully diluted..........................................................................  $    (0.76) $      (1.51)
</TABLE>
 
    The fair value for each option grant was estimated at the date of grant 
using a binomial option pricing model with the following weighted-average 
assumptions for the various grants made during 1995 and 1996: risk-free 
interest rate of 5.77% and 5.92%; no dividend yield; expected volatility of 
25%; and expected lives of two to three years.
 
    The binomial option valuation model was developed for use in estimating 
the fair value of traded options which have no vesting restrictions and are 
fully transferable. In addition, option valuation models require the input of 
highly subjective assumptions including the expected stock price volatility. 
The Company's employee stock options have characteristics significantly 
different from those of traded options and changes in the subjective input 
assumptions can materially affect the fair value estimate.

                                  -21-

<PAGE>

                        GRANITE BROADCASTING CORPORATION
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
NOTE 9--STOCKHOLDERS' EQUITY--(Continued)
 
<TABLE>
<CAPTION>
                                                                      1995                       1996
                                                                WEIGHTED-AVERAGE           WEIGHTED-AVERAGE
                                                            -------------------------  -------------------------
<S>                                                         <C>         <C>            <C>         <C>
                                                                          EXERCISE                   EXERCISE
                                                             OPTIONS        PRICE       OPTIONS        PRICE
                                                            ----------  -------------  ----------  -------------
Outstanding at beginning of year..........................     714,850    $    4.05     1,048,950   $      5.22
Granted...................................................     348,400         7.57     1,029,000         14.19
Exercised.................................................      (7,400)        4.25      (200,750)         4.44
Forfeited.................................................      (6,900)        4.87        (4,500)         7.10
                                                            ----------                 ----------
Outstanding at end of year................................   1,048,950         5.22     1,872,700         10.22
                                                            ----------                 ----------
                                                            ----------                 ----------
Exercisable at end of year................................     480,350         4.24       573,200          5.27
Weighted-average fair value of options granted during the
  year....................................................  $     1.86                 $     3.01
</TABLE>
 
<TABLE>
<CAPTION>
                                    OPTIONS OUTSTANDING                             OPTIONS EXERCISABLE
                      ------------------------------------------------  -------------------------------------
         RANGE OF       NUMBER     WEIGHTED-AVERAGE   WEIGHTED-AVERAGE       NUMBER          WEIGHTED-AVERAGE
         EXERCISE     OUTSTANDING      REMAINING          EXERCISE         OUTSTANDING           EXERCISE
          PRICES      @ 12/31/96   CONTRACTUAL LIFE        PRICE            @ 12/31/96             PRICE
      --------------  -----------  -----------------  ----------------  -------------------  ----------------
      <S>             <C>             <S>          <C>                <C>               <C>
      $        3--$7        800,500      7 Years       $    5.07              529,600        $    4.71
      $   11.25--$16      1,072,200    4.7 Years       $   14.07               43,600        $   12.80
                          ---------                                        ----------
                          1,872,700                                           573,200
</TABLE>
 
 MANAGEMENT STOCK PLAN
 
    In April 1993, the Company adopted a Management Stock Plan providing for 
the grant from time to time of awards denominated in shares of Common Stock 
(Nonvoting) (the "Bonus Shares") to salaried executive employees of the 
Company. The Company has set aside a reserve of 750,000 shares of Common 
Stock (Nonvoting) for grant under the Management Stock Plan. Shares granted 
generally vest over a five year period. As of December 31, 1996, the Company 
has allocated a total of 610,875 Bonus Shares pursuant to the Management 
Stock Plan, 310,175 of which had vested through December 31, 1996. For the 
years ended December 31, 1994, 1995 and 1996, 84,100, 92,100 and 99,975 
shares were granted pursuant to the Management Stock Plan. The 
weighted-average grant-date fair value of those shares is $3.85, $4.43 and 
$5.42, respectively.
 
    The total number of common shares outstanding at December 31, 1996 
assuming conversion of all outstanding convertible preferred stock and 
exercise of all outstanding stock options is as follows:
 
<TABLE>
<S>                                                               <C>
Class A Common Stock............................................    178,500
Common Stock (Nonvoting)........................................  8,499,716
Conversion of Cumulative Convertible
Exchangeable Preferred Stock....................................  9,097,500
                                                                  ---------
Stock option plans..............................................  1,872,700
                                                                  ---------
                                                                  ---------
                                                                  19,648,416
</TABLE>

                                       22

<PAGE>

                        GRANITE BROADCASTING CORPORATION
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 10--INCOME TAXES
 
    The Company files a consolidated federal income tax return for its 
entities with the exception of the subsidiary that holds the investment in 
WKBW-TV. For all periods presented, the Company provides for income taxes as 
required under Statement of Financial Accounting Standards No. 109, 
"Accounting for Income Taxes" ("SFAS No. 109"). Under SFAS No. 109, the 
Company records income taxes using a liability approach for financial 
accounting and reporting which results in the recognition and measurement of 
deferred tax assets based on the likelihood of realization of tax benefits in 
future years.
 
    The provision for income taxes for the years ended December 31 consists 
of the following:
 
<TABLE>
<CAPTION>
                                                                           1994         1995        1996
                                                                       -----------  ----------  ----------
<S>                                                                    <C>           <C>        <C>
Current taxes:
 Federal.............................................................  $   100,000  $   --      $   --
 State...............................................................      416,125     264,000     375,000
                                                                       -----------  ----------  ----------
                                                                           516,125     264,000     375,000

Deferred taxes:
                                                                  
 Federal.............................................................     (101,000)    154,400     285,700
 State...............................................................       35,000     136,484     100,300
                                                                       -----------  ----------  ----------
                                                                           (66,000)    290,884     386,000
                                                                       -----------  ----------  ----------
Provision for income taxes...........................................  $   450,125  $  554,884  $  761,000
                                                                       -----------  ----------  ----------
                                                                       -----------  ----------  ----------
</TABLE>
 
    The provision for income taxes for the years ended December 31, 1995 and 
1996 is comprised of a non-cash provision for income taxes, relating to 
WKBW-TV of $1,100,000 and $975,000, respectively, partially offset by the 
deferred tax benefit recorded on companies included in the Granite 
Broadcasting Corporation U.S. consolidated income tax return. Also included 
are the provisions for state and local taxes.
 
    During 1995, the Company utilized approximately $2,800,000 of net 
operating loss carryforwards relating to WKBW-TV to eliminate its income tax 
liability. This tax benefit of approximately $1,100,000 reduced goodwill. The 
Company has remaining net operating loss carryforwards relating to WKBW-TV of 
approximately $19,000,000, which expire no sooner than December 31, 2004. The 
net operating loss carryforwards are restricted to offsetting future years' 
U.S. federal income tax liabilities of that subsidiary. If realized, the 
benefit will be used to further reduce goodwill.
 
    The provision for income taxes for the year ended December 31, 1994 
includes a provision for federal alternative minimum tax and state and local 
taxes.

                                     -23-

<PAGE>

                        GRANITE BROADCASTING CORPORATION
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 10--INCOME TAXES--(Continued)

    Deferred income taxes reflect the tax effects of temporary differences 
between the carrying amounts of assets and liabilities for financial 
reporting purposes and the amounts used for income tax purposes. Components 
of the Company's deferred tax asset and liability as of December 31 are as 
follows:
 
<TABLE>
<CAPTION>
                                                                         DECEMBER 31,
                                                                 ----------------------------
<S>                                                              <C>            <C>
                                                                     1995           1996
                                                                 -------------  -------------
Deferred tax liability from excess carrying value of non-
  goodwill intangible assets over tax basis....................  $  31,245,043  $  39,648,565
Deferred tax assets:
Net operating loss carryforward................................     15,168,786     24,293,786
Other..........................................................        400,134        304,862
                                                                 -------------  -------------
Total deferred tax assets......................................     15,568,920     24,598,648
Valuation allowance............................................     (6,542,673)    (7,554,878)
                                                                 -------------  -------------
Net deferred tax assets........................................      9,026,247     17,043,770
                                                                 -------------  -------------
Net deferred tax liability.....................................  $  22,218,796  $  22,604,795
                                                                 -------------  -------------
                                                                 -------------  -------------
</TABLE>
 
    The difference between the U.S. federal statutory tax rate and the 
Company's effective tax rate for the years ended December 31 is as follows:
 
<TABLE>

<CAPTION>
                                                                                              1994       1995       1996
                                                                                            ---------  ---------  ---------
<S>                                                                                         <C>        <C>        <C>
U.S. statutory rate.......................................................................       35.0%     (35.0%)    (35.0%)
Nondeductible amortization................................................................        7.4      201.4       22.2
State and local taxes.....................................................................       10.0      160.8        9.3
Alternative minimum tax...................................................................        2.9     --         --
Increase (decrease) in valuation allowance................................................      (42.4)     (84.1)      18.3
                                                                                                  ---  ---------  ---------
Effective tax rate........................................................................       12.9%     243.1%      14.8%
                                                                                                  ---  ---------  ---------
                                                                                                  ---  ---------  ---------
</TABLE>
 
    At December 31, 1996, the Company had a net operating loss carryforward 
for federal tax purposes of approximately $49,000,000 which will expire no 
sooner than December 31, 2004. The future utilization of the net operating 
losses may be subject to limitation under Section 382 of the Internal Revenue 
Code. This possible limitation has been reflected in the valuation allowance. 
The Company has provided a valuation allowance against a portion of the net 
deferred tax asset as the past history of the Company makes realization of 
taxable income uncertain. During 1994, 1995 and 1996, the change in valuation 
allowance relates to the utilization of or increase in net operating loss 
carryforwards.

                               -24-

<PAGE>

                        GRANITE BROADCASTING CORPORATION
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

 
NOTE 11--DEFINED CONTRIBUTION PLAN
 
    The Company has a trusteed profit sharing and savings plan (the "Plan") 
covering substantially all of its employees. Contributions by the Company to 
the Plan are based on a percentage of the amount of employee contributions to 
the Plan and are made at the discretion of the Board of Directors. Company 
contributions, which are funded quarterly, amounted to $237,000, $499,000 and 
$642,000 for the years ended December 31, 1994, 1995 and 1996, respectively.
 
NOTE 12--RELATED PARTY
 
    The Company paid a company, as to which a director of Granite was the 
Chairman and Chief Executive Officer until August 19, 1994, $518,257 for the 
year ended December 31, 1994, relating to services rendered as the exclusive 
representative and sales agent for three of the stations' national 
broadcasting revenue.
 
    In 1995, the Company lent two of its officers an aggregate of $570,000 to 
pay certain personal taxes. The terms of the loans provide for an annual 
interest rate of 9% payable semi-annually on December 29 and June 29 of each 
year, with all principal and remaining interest due on December 29, 2004.
 
    In 1996, the Company lent one of its officers $886,875 to pay the 
exercise price incurred in connection with exercising options and $409,000 to 
pay related personal income taxes. The loans are term loans which provide for 
an annual interest rate of 8%, payable annually on April 23 and December 31, 
respectively, of each year, with all principal and remaining interest due on 
April 23 and December 31, 2001, respectively. The amount of the loan made in 
connection with exercising options is shown in the balance sheet at December 
31, 1996 as a reduction to stockholders' equity.
 
NOTE 13--PRICE RANGE OF COMMON STOCK (NONVOTING) AND CUMULATIVE CONVERTIBLE
         EXCHANGEABLE PREFERRED STOCK (UNAUDITED)
 
    The Company's Common Stock (Nonvoting) is traded in the over-the-counter 
market and is quoted on the Nasdaq National Market under the symbol "GBTVK". 
The following table sets forth the market price ranges per share of Common 
Stock (Nonvoting) during 1995 and 1996, as reported by Nasdaq:
 
<TABLE>
<CAPTION>
                                                                              HIGH        LOW
                                                                            ---------  ---------
<S>                                                                         <C>        <C>
1995
First Quarter.............................................................  $   7-3/8  $   6-1/8
Second Quarter............................................................      8-3/8      6-3/4
Third Quarter.............................................................     13-1/4      7-1/2
Fourth Quarter............................................................     11-3/4      8-5/8

1996
First Quarter.............................................................  $  12-1/8  $   9-1/4
Second Quarter............................................................     13-1/2     11-1/4
Third Quarter.............................................................         15     11-1/2
Fourth Quarter............................................................         14      9-7/8
</TABLE>

                                 -25-

<PAGE>

                        GRANITE BROADCASTING CORPORATION
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 13--PRICE RANGE OF COMMON STOCK (NONVOTING) AND CUMULATIVE CONVERTIBLE
         EXCHANGEABLE PREFERRED STOCK (UNAUDITED)--(Continued)
 
    As of March 3, 1997, the closing price per share for the Company's Common 
Stock (Nonvoting), as reported by Nasdaq was $9-5/8 per share.
 
    The Cumulative Convertible Exchangeable Preferred Stock is traded 
over-the-counter and is quoted on the Nasdaq National Market under the symbol 
"GBTVP". The following table sets forth the market price ranges per share of 
Cumulative Convertible Exchangeable Preferred Stock during 1995 and 1996, as 
reported by Nasdaq:
 
<TABLE>
<CAPTION>
                                                                             HIGH        LOW
                                                                           ---------  ---------
<S>                                                                        <C>        <C>
1995
First Quarter............................................................  $  40-3/8  $  34
Second Quarter...........................................................     45         38-1/4
Third Quarter............................................................     67-1/2     43-1/2
Fourth Quarter...........................................................     58-3/8     48

1996
First Quarter............................................................  $  61-7/8  $  48-1/8
Second Quarter...........................................................     68-5/8     60
Third Quarter............................................................     75-1/2     60
Fourth Quarter...........................................................     75-1/2     50
</TABLE>
 
    As of March 3, 1997, the closing price for the Company's Cumulative 
Convertible Exchangeable Preferred Stock, as reported by Nasdaq, was $50-5/8 
per share.

                                 -26-

<PAGE>
 
                                  SCHEDULE II
                        GRANITE BROADCASTING CORPORATION
                       VALUATION AND QUALIFYING ACCOUNTS
 
<TABLE>
<CAPTION>
                                                           ACQUIRED
                                           BALANCE AT   ALLOWANCE FOR    AMOUNT CHARGED     AMOUNT      BALANCE
ALLOWANCE FOR                              BEGINNING       DOUBTFUL         TO COSTS        WRITTEN      AT END
DOUBTFUL ACCOUNTS                           OF YEAR        ACCOUNTS       AND EXPENSES       OFF1       OF YEAR
-----------------------------------------  ----------  ----------------  ---------------  -----------  ----------
<S>                                        <C>         <C>               <C>              <C>          <C>
For the year ended December 31, 1994.....  $  227,365     $   --           $   347,382     $ 318,920   $  255,827
For the year ended December 31, 1995.....     255,827        229,171           402,619       381,858      505,759
For the year ended December 31, 1996.....     505,759         --               212,665       326,514      391,910
</TABLE>
 
------------------------
(1) Net of recoveries.
 
                                       -27-


<PAGE>
                                    PART IV
 
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
 
    (a)1 Financial Statements
 
       GRANITE BROADCASTING CORPORATION
 
       Report of Independent Auditors
       Consolidated Statements of Operations for the Years
         Ended December 31, 1994, 1995 and 1996
       Consolidated Balance Sheets as of December 31, 1995 and 1996
       Consolidated Statements of Stockholders' Equity (Deficit) 
         for the Years Ended December 31, 1994, 1995 and 1996
       Consolidated Statements of Cash Flows for the Years
         Ended December 31, 1994, 1995 and 1996
       Notes to Consolidated Financial Statements
 
    (a)2 Financial Statement Schedule
 
         Schedule II--Granite Broadcasting Corporation:
           Valuation and Qualifying Accounts
 

    (a)3 Exhibits
 

1.1       Purchase Agreement, dated January 27, 1997, among Granite
          Broadcasting Corporation and the Purchasers named therein.

3.1(g)    Third Amended and Restated Certificate of Incorporation of the
          Company, as amended.
         
3.2(g)    Amended and Restated Bylaws of the Company, as amended.
         
3.3       Certificate of Designations of the Powers, Preferences and Relative,
          Participating, Optional and Other Special Rights of the Company's
          12 3/4%, Cumulative Exchangeable Preferred Stock and Qualifications,
          Limitations and Restrictions Thereof.
         
4.27(2)   Indenture dated as of September 1, 1992 between Granite Broadcasting
          Corporation and The United States Trust Company of New York, as
          Trustee, relating to the Company's $60,000,000 Principal Amount
          12.75% Senior Subordinated Debentures due September 1, 2002.
         
4.28(2)   Form of 12.75% Senior Subordinated Debenture due September 1, 2002.
         
4.30(3)   Form of Indenture relating to the Company's Junior Subordinated
          Convertible Debentures issuable upon the exchange of the Company's
          Cumulative Convertible Exchangeable Preferred Stock.
         
4.31(3)   Form of Junior Subordinated Convertible Debenture.
         
         
         
         
                                        -28-
         
<PAGE>


4.35(i)   Third Amended and Restated Credit Agreement, dated as of September 4,
          1996, among Granite Broadcasting Corporation, the Lenders named
          therein, Bankers Trust Company, as Agent, and The Bank of New York,
          First Union National Bank of North Carolina, Goldman Sachs Credit
          Partners L.P. and Union Bank of California, as Co-Agents.
         
4.37(4)   Indenture, dated as of May 19, 1995, between Granite Broadcasting
          Corporation and United States Trust Company of New York for the 
          Company's $175,000,000 Principal Amount 10 3/8% Senior Subordinated
          Notes due May 15, 2005.
         
4.38(5)   Form of 10 3/8% Senior Subordinated Note due May 15, 2005.
         
4.39(g)   Exchange and Registration Rights Agreement, dated as of February 22,
          1996, by and between Granite Broadcasting Corporation and Goldman
          Sachs & Co., BT Securities Corporation and Lazard Freres & Co. LLC.
         
4.41(g)   Indenture, dated as of February 22, 1996, between Granite Broadcasting
          Corporation and The Bank of New York relating to the Company's
          $110,000,000 Principal Amount 9 3/8% Series A Senior Subordinated
          Notes due December 1, 2005.
         
4.42(g)   Form of 9 3/8% Series A Senior Subordinated Note due December 1, 2005.
         
4.43      Exchange and Registration Rights Agreement, dated as of January 31,
          1997, by and between Granite Broadcasting Corporation and Goldman,
          Sachs & Co., BT Securities Corporation, Lazard Freres & Co. LLC and
          Salomon Brothers Inc. 
         
4.44      Indenture, dated as of January 31, 1997, between Granite Broadcasting
          Corporation and The Bank of New York for the Company's 12 3/4% Series
          A Exchange Debentures and 12 3/4 Exchange Debentures due April
          1, 2009.
         
4.45      Form of 12 3/4% Exchange Debenture due April 1, 2009 (included in the
          Exhibit 4.4 Indenture filed herewith).

10.1(h)   Granite Broadcasting Corporation Stock Option Plan, as amended on July
          24, 1996.
         
10.2(1)   Target Cash Flow Option Plan and Agreement dated as of October 31,
          1988 among Granite Broadcasting Corporation, W. Don Cornwell and 
          Stuart J. Beck.
         
10.9(5)   Network Affiliation Agreement (KBJR-TV).
         
10.10(5)  Network Affiliation Agreement (WEEK-TV).

10.11(g)  Network Affiliation Agreement (KNTV(TV)).

10.12(g)  Network Affiliation Agreement (WPTA-TV).

10.13(1)  Employment Agreement dated as of September 20, 1991 between Granite
          Broadcasting Corporation and W. Don Cornwell.

10.14(1)  Employment Agreement dated as of September 20, 1991 between Granite
          Broadcasting Corporation and Stuart J. Beck.

10.15(h)  Granite Broadcasting Corporation Management Stock Plan, as amended
          July 24, 1996.



                                         -29-

<PAGE>


10.16(a)  Purchase and Sale Agreement between the Company and Meredith
          Corporation, dated June 15, 1993.

10.17(b)  Letter Agreement between the Company and the Sellers (as defined 
          therein) to acquire certain securities of Queen City III Limited
          Partnership dated as of October 20, 1993.

10.18(3)   Letter Agreement, dated December 7, 1993, between Granite and
           Meredith Corporation, amending the Purchase and Sale Agreement dated
           June 15, 1993.

10.19      Granite Broadcasting Corporation Director Stock Option Plan, as
           amended on February 25, 1997.

10.20(4)   Network Affiliation Agreement (WTVH-TV).

10.21(5)   Network Affiliation Agreement (KSEE-TV).

10.22(c)   Purchase and Sale Agreement among Granite Broadcasting Corporation,
           Austin Television, a Texas general partnership, Cannan
           Communications, Inc. and Beard Management, Inc. dated as of 
           October 2, 1994.

10.23(d)   Purchase and Sale Agreement, dated as of February 20, 1995, among
           Granite Broadcasting Corporation, Busse Broadcasting Corporation and
           WWMT, Inc.

10.24(4)   Network Affiliation Agreement (KEYE-TV).

10.25(d)   Granite Broadcasting Corporation Employee Stock Purchase Plan, dated 
           February 28, 1995.

10.26(4)   Network Affiliation Agreement (WWMT).

10.27(e)   Purchase Agreement, dated May 15, 1995, among Granite Broadcasting
           Corporation, Queen City III Limited Partnership, Queen City
           Broadcasting of New York, Inc. and the General Partners of Queen City
           III Limited Partnership.

10.28(f)   Network Affiliation Agreement (WKBW).

10.29(j)   Purchase and Sale Agreement, dated as of December 2, 1996, by and 
           between Granite Broadcasting Corporation and WXON-TV, Inc.

10.30      Employment Agreement dated as of September 19, 1996 between Granite
           Broadcasting Corporation and Robert E. Selwyn, Jr.

11.(k)     Statement of Computation of Per Share Earnings.

21.        Subsidiaries of the Company.

23.        Consent of Independent Auditors (Ernst & Young LLP).

27.        Financial Data Schedule.


                                         -30-

<PAGE>

---------------------------
(1)        Incorporated by reference to the similarly numbered exhibits to the
           Company's Registration Statement No. 33-43770 filed on November
           5, 1991.

(2)        Incorporated by reference to the similarly numbered exhibits to the
           Company's Registration Statement No. 33-52988 filed on October 6,
           1992.

(3)        Incorporated by reference to the similarly numbered exhibits to
           Amendment No. 2 to Registration Statement No. 33-71172 filed December
           16, 1993.

(4)        Incorporated by reference to the similarly numbered exhibits to the
           Company's Registration Statement No. 33-94862 filed on July 21, 1995.

(5)        Incorporated by reference to the similarly numbered exhibits to
           Amendment No. 2 to Registration Statement No. 33-94862 filed on
           October 6, 1995.

(a)        Incorporated by reference to Exhibit 10.1 to the Company's Current
           Report on Form 8-K, filed on June 25, 1993.

(b)        Incorporated by reference to the similarly numbered exhibit to the
           Company's Quarterly Report on Form 10-Q for the quarter ended
           September 30, 1993, Commission File No. 0-19728, filed on November 
           15, 1993.

(c)        Incorporated by reference to the similarly numbered exhibit to the
           Company's Quarterly Report on Form 10-Q for the quarter ended 
           September 30, 1994, Commission File No. 0-19728, filed on November
           14, 1994.

(d)        Incorporated by reference to the similarly numbered exhibit to the
           Company's Annual Report on Form 10-K for the fiscal year ended
           December 31, 1994, filed on March 29, 1995.

(e)        Incorporated by reference to Exhibit Number 3 to the Company's
           Report on Form 8-K, filed on May 19, 1995.

(f)        Incorporated by reference to the similarly numbered exhibit to the 
           Company's Report on Form 8-K filed on July 14, 1995.

(g)        Incorporated by reference to the similarly numbered exhibit to the
           Company's Annual Report on Form 10-K for the fiscal year ended
           December 31, 1995, filed on March 28, 1996.

(h)        Incorporated by reference to the similarly numbered exhibit to the
           Company's Quarterly Report on Form 10-Q for the quarter ended June
           30, 1996, as filed on August 13, 1996.

(i)        Incorporated by reference to the similarly numbered exhibit to the 
           Company's Quarterly Report on Form 10-Q for the quarter ended
           September 30, 1996, filed on November 14, 1996.

(j)        Incorporated by reference to Exhibit Number 1 to the Company's
           Current Report on Form  8-K, filed on December 17, 1996.

(k)        Incorporated by reference to the similarly numbered exhibit to the
           Company's Amendment No. 2 to the Registration Statement on Form S-4
           (Registration No. 333-24907) filed on June 24, 1997.



                                          -31-

<PAGE>

    (b) Reports on Form 8-K.

1.         Current Report on Form 8-K filed December 17, 1996, reporting a
           definitive agreement entered into by and between Granite
           Broadcasting Corporation and WXON-TV, Inc., a Michigan corporation,
           whereby Granite Broadcasting Corporation would acquire WXON-TV, the
           WB Network affiliated station serving Detroit, Michigan, for
           approximately $175 million in cash. No financial statements were
           filed at such time.
 
2.         Current Report on Form 8-K filed January 15, 1997, reporting the
           announcement by Granite Broadcasting Corporation of its intention to
           commence a private offering of securities to raise funds to
           consummate the acquisition of WXON-TV. No financial statements
           were filed at such time.
 
3.         Current Report on Form 8-K filed February 7, 1997, announcing the
           completion of the acquisition by Granite Broadcasting Corporation of
           substantially all of the assets used in the operation of WXON-TV.
           Pro Forma Condensed Consolidated Financial Statements (unaudited)
           were filed on such date.
 








                                             -32-
<PAGE>
                                   SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, as amended, the Registrant has duly caused this report 
to be signed on its behalf by the undersigned, thereunto duly authorized, in 
the City of New York, State of New York, on the 27th day of June, 1997.

                                GRANITE BROADCASTING CORPORATION

                                BY:             /s/ W. DON CORNWELL
                                     -----------------------------------------
                                     W. Don Cornwell
                                     Chief Executive Officr and Chairman
                                     of the Board of Directors

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

          SIGNATURE                        TITLE                    DATE
------------------------------  ---------------------------  -------------------
                                Chief Executive Officer
     /s/ W. DON CORNWELL          (Principal Executive
------------------------------    Officer) and Chairman of      June 27, 1997
      (W. Don Cornwell)           the Board of Directors

     /s/ STUART J. BECK         President, Secretary
------------------------------    (Principal Financial          June 27, 1997
       (Stuart J. Beck)           Officer) and Director

    /s/ LAWRENCE I. WILLS       Vice President--Finance and
------------------------------    Controller (Principal         June 27, 1997
     (Lawrence I. Wills)          Accounting Officer)

      /s/ MARTIN F. BECK        Director
------------------------------                                  June 27, 1997
       (Martin F. Beck)

    /s/ JAMES L. GREENWALD      Director
------------------------------                                  June 27, 1997
     (James L. Greenwald)

   /s/ VICKEE JORDAN ADAMS      Director
------------------------------                                  June 27, 1997
    (Vickee Jordan Adams)

    /s/ EDWARD DUGGER III       Director
------------------------------                                  June 27, 1997
     (Edward Dugger III)

                                Director
------------------------------                                  
      (Thomas R. Settle)

 /s/ CHARLES J. HAMILTON, JR.   Director
------------------------------                                  June 27, 1997
   Charles J. Hamilton, Jr.

     /s/ MIKAEL SALOVAARA       Director
------------------------------                                  June 27, 1997
      (Mikael Salovaara)