<PAGE>
 

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON,  D.C.   20549
                                        

                      ___________________________________

                                   FORM 10-Q
                      ___________________________________
                                        
            Quarterly Report Pursuant to Section 13 or 15(d) of the
                        Securities Exchange Act of 1934

For the quarterly period ended            Commission file number:
   September 30, 1998                               0-25042

                            YOUNG BROADCASTING INC.
             (Exact name of registrant as specified in its charter)


        DELAWARE                                    13-3339681
(State of other jurisdiction of                  (I.R.S. employer
incorporation or organization)                  identification no.)

                              599 LEXINGTON AVENUE
                           NEW YORK,  NEW YORK 10022
                    (Address of principal executive offices)


Registrant's telephone number, including area code:         (212)  754-7070


                          ____________________________


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

                          ____________________________

          Number of shares of  Common Stock outstanding as of  October 31, 1998:
11,395,138 shares of Class A Common Stock, and 2,412,932 shares of  Class B
Common Stock.

================================================================================

<PAGE>
 
                            YOUNG BROADCASTING INC.

                                   FORM 10-Q

                               TABLE OF CONTENTS


Part I.                                                                    Page
                                                                           ----

     Item 1. Financial Statements.

             Consolidated Balance Sheets as of December 31, 1997 and
             September 30, 1998..............................................2

             Consolidated Statements of Operations for the Three and Nine
             Months Ended September 30, 1997 and 1998........................3
 
             Consolidated Statements of Stockholders' Equity for the Nine 
             Months Ended September 30, 1998.................................4
 
             Consolidated Statements of Cash Flows for the Nine Months 
             Ended September 30, 1997 and 1998...............................5
 
             Notes to Consolidated Financial Statements......................6

     Item 2. Management's Discussion and Analysis of Financial Condition 
             and Results of Operations.......................................9

     Item 3. Quantitative and Qualitative Disclosure about Market
             Risk...........................................................17

Part II.

     Item 6. Exhibits and Reports on Form 8-K...............................18

Signatures..................................................................19
<PAGE>
 
Item 1. FINANCIAL STATEMENTS.

                    Young Broadcasting Inc. and Subsidiaries

                          Consolidated Balance Sheets
                                        
<TABLE>
<CAPTION>
                                                                                       December 31,         SEPTEMBER 30,
                                                                                           1997*                1998
                                                                                  -----------------------------------------
Assets                                                                                                       (UNAUDITED)
<S>                                                                                 <C>                  <C>
Current assets:
 Cash and cash equivalents                                                                $  1,652,428         $    754,680
 Trade accounts receivable, less allowance for doubtful accounts of
         $1,872,000 in 1997 and $2,307,000 in 1998                                          60,192,889           49,368,785
 Current portion of program license rights                                                  23,327,160           19,127,994
 Prepaid expenses                                                                            2,307,764            9,165,726
                                                                                  ----------------------------------------- 
Total current assets                                                                        87,480,241           78,417,185
 
Property and equipment, less accumulated depreciation and amortization of
         $98,731,094 in 1997 and $117,134,757 in 1998                                      112,750,987           99,487,300
Program license rights, excluding current portion                                            1,220,121            1,731,549
Deposits and other assets                                                                    1,771,852           28,270,330
Broadcasting licenses and other intangibles, less accumulated amortization of
         $96,631,332 in 1997 and $113,328,771 in 1998                                      626,507,872          610,078,659
Deferred charges less accumulated amortization of $7,236,107 in 1997 and
         $9,690,396 in 1998                                                                 16,235,423           13,846,005
                                                                                  -----------------------------------------
TOTAL ASSETS                                                                              $845,966,496         $831,831,028
                                                                                  =========================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Trade accounts payable                                                                  $  18,997,702        $  12,807,182
 Accrued expenses                                                                           18,921,140           23,402,723
 Current installments of program license liability                                          18,026,986           15,396,061
 Current installments of long-term debt                                                      3,907,834              987,595
 Current installments of obligations under capital leases                                      470,981              197,854
                                                                                  ----------------------------------------- 
Total current liabilities                                                                   60,324,643           52,791,415
 
Program license liability, excluding current installments                                    1,052,659            1,933,356
Long-term debt, excluding current installments                                             653,076,951          664,415,726
Deferred taxes and other liabilities                                                        71,666,635           71,520,881
TOTAL LIABILITIES                                                                          786,120,888          790,661,378
                                                                                  -----------------------------------------
 
 
Stockholders' equity:
 Class A Common Stock, $.001 par value. Authorized 20,000,000 shares; issued and
  outstanding 11,850,504 shares at 1997 and 11,436,835 at 1998                                  11,851               11,437 
 Class B Common Stock, $.001 par value. Authorized 20,000,000 shares; issued and
  outstanding 1,997,340 shares at 1997 and 2,412,932 (exclusive of 50,450
  shares held in treasury) at 1998                                                               1,997                2,412
 Additional paid-in capital                                                                222,881,546          206,805,066
 Accumulated deficit                                                                      (163,049,786)        (165,649,265)
                                                                                  -----------------------------------------
Total stockholders' equity                                                                  59,845,608           41,169,650
                                                                                  -----------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                               $ 845,966,496        $ 831,831,028
                                                                                  =========================================
</TABLE>

*Derived from the audited consolidated financial statements for the year ended
 December 31, 1997.
 
 See accompanying notes to consolidated financial statements.

                                       2
<PAGE>
 
                   Young Broadcasting Inc. and Subsidiaries 

                     Consolidated Statements of Operations
                                  (Unaudited)
<TABLE> 
<CAPTION> 

                                                             Three Months Ended                    Nine Months Ended
                                                               September 30,                         September 30,
                                                          1997               1998               1997              1998
                                                 --------------------------------------------------------------------------
<S>                                                <C>                 <C>                <C>               <C>
Net operating revenue                                   $ 57,938,816       $ 62,944,230      $190,317,699      $204,771,379
                                                 --------------------------------------------------------------------------
 
Operating expenses                                        16,088,957         16,936,699        47,666,236        50,045,766
Amortization of program license rights                     6,578,860          6,598,403        26,581,363        26,956,689
Selling, general and administrative expenses              10,689,480         12,039,672        32,570,124        37,577,831
Depreciation and amortization                             13,035,291         12,350,787        37,167,700        37,310,229
Corporate overhead                                         1,308,033          1,914,084         4,425,042         6,006,985
Non-cash compensation                                        247,219            282,275           741,941           878,024
Merger-related costs                                               -                  -                 -         1,444,588
                                                 --------------------------------------------------------------------------
Operating income                                           9,990,976         12,822,310        41,165,293        44,551,267
                                                 --------------------------------------------------------------------------
 
Interest income                                               64,977             50,969           202,965           163,313
Interest expense                                         (16,379,155)       (15,765,517)      (47,670,745)      (46,696,920)
Other expense, net                                          (217,217)          (559,366)         (591,616)         (996,132)
                                                 -------------------------------------------------------------------------- 
                                                         (16,531,395)       (16,273,914)      (48,059,396)      (47,529,739)
                                                 --------------------------------------------------------------------------
Net loss                                                $ (6,540,419)      $ (3,451,604)     $ (6,894,103)     $ (2,978,472)
                                                 ==========================================================================
 
  
                                                                                          .
Net loss per common share-basic                               $(0.47)            $(0.24)           $(0.49)           $(0.21)
                                                 ==========================================================================
Weighted average shares-basic                             13,829,253         14,307,781        14,039,235        14,261,841
                                                 ==========================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       3
<PAGE>
 
                   Young Broadcasting Inc. and Subsidiaries 

                Consolidated Statements of Stockholders' Equity
                                  (Unaudited)

<TABLE> 
<CAPTION> 
                                                                            
                                                       COMMON STOCK         Additional                            Total    
                                                 ---------------------        PAID-IN        Accumulated      STOCKHOLDERS' 
                                                   CLASS A     Class B        Capital          Deficit            Equity
                                                 --------------------------------------------------------------------------
<S>                                                <C>         <C>         <C>              <C>               <C>
Balance at December 31, 1997.....................  $11,851      $1,997     $222,881,546     $(163,049,786)     $ 59,845,608
 
 
Contribution of shares into Company's
defined contribution plan........................       14           -          820,906                 -           820,920
 
Conversion of Class B Common Stock
to Class A Common Stock..........................       61         (61)               -                 -                 -
 
Exercise of common stock options.................       14           -          315,255                 -           315,269
 
Issuance of Class A Common Stock and
repurchase of Class B Common Stock for
the Adam Young Inc. merger.......................        -         476          668,269           378,993         1,047,738
 
Repurchase and retirement of Class A Common
Stock............................................     (503)          -      (17,880,910)                -       (17,881,413)
 
Net income for the nine months ended
September 30, 1998...............................        -           -                -        (2,978,472)       (2,978,472)
                                                  
                                                 --------------------------------------------------------------------------
 
Balance at September 30, 1998....................  $11,437      $2,412     $206,805,066     $(165,649,265)     $ 41,169,650
                                                 ==========================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       4
<PAGE>
 
                   Young Broadcasting Inc. And Subsidiaries 

                     Consolidated Statements Of Cash Flows
                                  (Unaudited)

<TABLE>
<CAPTION>

                                                                               Nine Months Ended September 30,
                                                                                    1997               1998
                                                                           --------------------------------------
<S>                                                                          <C>                 <C>
OPERATING ACTIVITIES
Net loss                                                                         $  (6,894,103)      $ (2,978,472)
Adjustments to reconcile net loss to net cash provided by operating
 activities:
  Depreciation and amortization of property and equipment                           17,022,940         18,158,501
  Amortization of program license rights                                            26,581,363         26,956,689
  Amortization of broadcasting licenses, other intangibles and deferred
   charges                                                                          20,144,760         19,151,728 
  Non-cash compensation                                                                741,941            878,024
  Non-cash interest expense on outstanding indebtedness                                215,178            151,536
  Loss on sale of fixed assets                                                          26,065             48,523
  Deferred acquisition and debt refinancing costs incurred                          (1,760,000)                 -
  Payments on programming license liabilities                                      (26,950,465)       (27,376,186)
  Decrease in trade accounts receivable                                             12,903,402         12,569,277
  Increase in prepaid expenses                                                      (1,759,823)        (6,640,477)
  Decrease in trade accounts payable                                                (8,950,813)        (3,983,119)
  Increase in accrued expenses and other liabilities                                 1,368,512          3,099,470
                                                                           --------------------------------------
Net cash provided by operating activities                                           32,688,957         40,035,494
                                                                           --------------------------------------
 
INVESTING ACTIVITIES
Capital expenditures                                                                (4,977,804)        (4,463,487)
Increase in deposits and other assets                                                  (93,621)       (26,418,633)
Increase in broadcast licenses and other  intangibles                               (2,499,354)          (268,226)
                                                                           --------------------------------------
Net cash used in investing activities                                               (7,570,779)       (31,150,346)
                                                                           --------------------------------------
 
FINANCING ACTIVITIES
Proceeds from issuance of public subordinated debt                                 200,000,000                  -
Borrowings from working capital facility                                                     -         36,527,000
Principal payments on long-term debt                                              (216,322,000)       (28,260,000)
Deferred acquisition and debt refinancing costs incurred                              (877,069)           (64,871)
Repurchase of Class A Common Stock                                                 (12,338,480)       (17,881,413)
Proceeds from exercise of Common Stock options                                         365,375            315,269
Principal payments under capital lease obligations                                    (588,537)          (418,881)
                                                                           --------------------------------------
Net cash used in financing activities                                              (29,760,711)        (9,782,896)
                                                                           --------------------------------------
 
NET DECREASE IN CASH AND CASH EQUIVALENTS                                           (4,642,533)          (897,748)
Cash and cash equivalents at beginning of year                                       7,004,744          1,652,428
                                                                           --------------------------------------
CASH AND CASH EQUIVALENTS AT SEPTEMBER 30                                        $   2,362,211       $    754,680
                                                                           ======================================
 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid                                                                    $  47,285,102       $ 44,758,963
</TABLE>

See accompanying notes to consolidated financial statements.

                                       5
<PAGE>
 
                   Young Broadcasting Inc. And Subsidiaries 

                     Consolidated Statements Of Cash Flows
                                  (Unaudited)

1. PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include those of Young
Broadcasting Inc. and subsidiaries (the "Company"), consisting of eleven network
affiliated (four with CBS, six with ABC, and one with NBC) and one independent
commercial television broadcasting stations in the states of Michigan,
Wisconsin, Louisiana, Illinois, Tennessee, New York,  Virginia, Iowa, South
Dakota and California, and a national television sales representation firm (see
Merger). Significant intercompany transactions and accounts have been
eliminated. The accompanying condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial statements and with the instructions to Form 10-Q and Article
10 of Regulation S-X. The interim financial statements are unaudited but include
all adjustments, which are of a normal recurring nature, that the Company
considers necessary for a fair presentation of the consolidated financial
position and the consolidated results of operations and cash flows for such
periods. Operating results of interim periods are not necessarily indicative of
results for a full year.

2.  MERGER

On February 5, 1998, the Company entered into an Agreement and Plan of Merger
with Adam Young Inc., ("AYI") a national television sales representation firm,
and its shareholders, pursuant to which AYI was merged with and into AYI
Acquisition Corporation (now known as Adam Young Inc.), a wholly-owned
subsidiary of the Company.

The acquisition of AYI has been accounted for as a combination of companies
under common control similar to a pooling-of-interests. The Company issued
526,757 shares of the Company's Class A Common Stock and repurchased 50,450
shares of Class B Common Stock as Treasury Shares, with an approximate value of
$19.3 million, to Vincent Young, the Company's Chairman and to Adam Young, the
Company's Treasurer, and his wife in exchange for all of the outstanding stock
of AYI which was held by these persons.

The operating results of AYI are included in the accompanying consolidated
statement of operations since January 1, 1998. Historical information of AYI was
not included in the Company's historical results as the impact of this
acquisition was not deemed to be material.

In connection with the merger, the Company recorded a charge to operating
expenses of approximately $1.4 million for direct and other merger related costs
pertaining to the merger transaction and certain restructuring programs in the
first quarter of 1998, of which approximately $1.2 million has been paid as of
September 30, 1998. Merger transaction costs consisted primarily of fees for
investment bankers, attorneys, accountants and other related charges.
Restructuring costs included severance for terminated employees, consolidation
and closure of an office and exit costs.

                                       6
<PAGE>
 
                   Young Broadcasting Inc. And Subsidiaries 

                     Consolidated Statements Of Cash Flows
                                  (Unaudited)

      Details of the merger-related costs are as follows:

<TABLE>
<CAPTION>
                                                   1998 Provision
                                                 ----------------
                                                   (in thousands)
                         <S>                       <C>
                         Merger transaction costs          $  651
                         Restructuring costs
                         Employee severance                   685
                         Exit costs                           108
                                                 ----------------
                         Total                             $1,444
                                                 ================
</TABLE>

      Restructuring costs related to the consolidation of administrative and
management functions. These activities resulted in the reduction of
approximately 9 employees and included the consolidation and closure of an AYI
office. Exit costs included activities such as the termination of a lease
agreement, buyouts related to the closure of the AYI office, and moving costs
for employees and equipment. At September 30, 1998, approximately $190,000
relating to these programs were classified as current liabilities.

3.  LONG-TERM SPORTS AGREEMENT

      On June 16, 1998 the Company entered into a new long-term agreement with
the Los Angeles Lakers ("Lakers") with broadcast rights through the 2004/2005
season. Under the terms of the new seven year deal, KCAL-TV, Los Angeles,
California, will broadcast 41 Lakers pre-season and regular season away games
annually. Additionally, KCAL-TV has the broadcast rights to all post-season away
games not subject to NBA/network commitments. KCAL-TV has also obtained the
exclusive sales rights and control over broadcast, production and inventory
activities. The Company paid an initial rights fee of $30 million on August 14,
1998 and will pay an additional $18.0 million per season. In the event that all
41 games are not made available to KCAL-TV or are canceled, the Company will
receive a per game credit.

4.  RECENT PRONOUNCEMENTS

      In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, "Disclosures About Segments of an
Enterprise and Related Information" ("FAS 131"), which is effective for years
beginning after December 15, 1997. FAS 131 establishes standards for the way
that public business enterprises report information about operating segments in
annual financial statements and requires that those enterprises report selected
information about operating segments in interim financial reports. It also
establishes standards for related disclosure about products and services,
geographic areas and major customers. FAS 131 is effective for financial
statements for fiscal years beginning after December 15, 1997, and therefore,
the Company will adopt the new requirements in 1998. Management has not yet
completed its review of FAS 131.

      In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" 

                                       7
<PAGE>
 
                   Young Broadcasting Inc. And Subsidiaries 

                     Consolidated Statements Of Cash Flows
                                  (Unaudited)

("FAS 133"). FAS 133 establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. The Company is required to adopt
the provisions of the standard during the first quarter of 2000. Because the
Company does not use derivatives, the Company does not expect that the adoption
of the new standard will have a material impact on the results of operations or
financial condition.

                                       8
<PAGE>
 
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

                           FORWARD-LOOKING STATEMENTS
                                        
      THE FORWARD-LOOKING STATEMENTS CONTAINED IN THIS REPORT, CONCERNING, AMONG
OTHER THINGS, INCREASES IN NET REVENUES AND BROADCAST CASH FLOW (AS DEFINED) AND
REDUCTIONS IN OPERATING EXPENSES, INVOLVE RISKS AND UNCERTAINTIES, AND ARE
SUBJECT TO CHANGE BASED ON VARIOUS IMPORTANT FACTORS, INCLUDING THE IMPACT OF
CHANGES IN NATIONAL AND REGIONAL ECONOMIES, PRICING FLUCTUATIONS IN LOCAL AND
NATIONAL ADVERTISING AND VOLATILITY IN PROGRAMMING COSTS.

INTRODUCTION

      The operating revenues of the Company's stations are derived primarily
from advertising revenues and, to a much lesser extent, from compensation paid
by the networks to the stations for broadcasting network programming and
national representation fees. The stations' primary operating expenses are for
employee compensation, news gathering, production, programming and promotion
costs.  A high proportion of the operating expenses of the stations are fixed.

      Advertising is sold for placement within and adjoining a station's network
and locally originated programming.  Advertising is sold in time increments and
is priced primarily on the basis of a program's popularity among the specific
audience an advertiser desires to reach, as measured principally by periodic
audience surveys.  In addition, advertising rates are affected by the number of
advertisers competing for the available time, the size and demographic makeup of
the market served by the station and the availability of alternative advertising
media in the market area.  Rates are highest during the most desirable viewing
hours, with corresponding reductions during other hours.  The ratings of a local
station affiliated with a national television network can be affected by ratings
of network programming.

      Most advertising contracts are short-term, and generally run only for a
few weeks. Most of the Company's annual gross revenue is generated from local
advertising, which is sold by a station's sales staff directly to local
accounts. The remainder of the advertising revenue primarily represents national
advertising, which is sold by Adam Young Inc., a national advertising sales
representative ("AYI") which was recently merged with the Company. The stations
generally pay commissions to advertising agencies on local and regional
advertising; on national advertising, the stations also pay commissions to AYI.
Effective January 1, 1998, the commissions paid to AYI have been eliminated for
consolidation purposes.

      The advertising revenues of the Company's stations are generally highest
in the second and fourth quarters of each year, due in part to increases in
consumer advertising in the spring and retail advertising in the period leading
up to and including the holiday season.  In addition, advertising revenues are
generally higher during even numbered election years due to spending by
political candidates, which spending typically is heaviest during the fourth
quarter.

     "Broadcast cash flow" is defined as operating income before income taxes
and interest income and expense, plus depreciation and amortization (including
amortization of program license rights), non-cash compensation, merger related
costs and corporate overhead, less payments for program license liabilities. The
Company has included broadcast cash flow data because such data are commonly
used as a measure of performance for broadcast companies and 

                                       9
<PAGE>
 
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 as reflected in the
consolidated financial statements, is not intended to represent funds available
for debt service, dividends, reinvestment or other discretionary uses, 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 following table sets forth certain operating data for the three and
nine months ended September 30, 1997 and 1998:

<TABLE>
<CAPTION>
 
                                                      Three Months Ended                 Nine Months Ended                        
                                                      -----------------                  -----------------
                                                        September 30,                       September 30,
                                                        -------------                       ------------- 
                                                     1997           1998                   1997           1998
                                                     ----           ----                   ----           ----
                                                    (dollars in thousands)                (dollars in thousands) 
<S>                                            <C>            <C>                 <C>              <C>
Operating income.............................       $ 9,991        $12,822              $ 41,165        $ 44,551
Add:
  Amortization of program license rights....          6,579          6,599                26,581          26,957
  Depreciation and amortization.............         13,036         12,351                37,168          37,310
  Corporate overhead........................          1,308          1,914                 4,425           6,007
  Merger-related costs......................              -              -                     -           1,444
  Non-cash compensation.....................            247            282                   742             878
Less:                                                
  Payments for program license liabilities           (6,610)        (6,705)              (26,950)        (27,376)
                                             -----------------------------      --------------------------------
Broadcast cash flow.........................        $24,551        $27,263              $ 83,131        $ 89,771
                                             =============================      ================================
</TABLE>

TELEVISION REVENUES

      Set forth below are the principal types of television revenues received by
the Company's stations for the periods indicated and the percentage contribution
of each to the Company's total revenues, as well as agency and national sales
representative commissions:
<TABLE>
<CAPTION>
 
                                      THREE MONTHS ENDED                                       NINE MONTHS ENDED
                                      -------------------                                      ------------------
                                          September 30,                                           SEPTEMBER 30,
                                          -------------                                           -------------
                                    1997                    1998                         1997                      1998
                                    ----                    ----                         ----                      ----
                            Amount        %          AMOUNT        %             AMOUNT         %           AMOUNT         %
                            ------        -          ------        -             ------         -           ------         -
                                     (dollars in thousands)                                    (dollars in thousands)
<S>                       <C>            <C>       <C>            <C>            <C>            <C>       <C>            <C>
Revenues
  Local............       $ 42,437       62.2      $  44,364      60.9           $140,804       62.9      $  148,647      62.8
  National.........         21,849       32.0         21,422      29.4             69,756       31.1          68,569      29.0
  Network..........          3,100        4.5          3,152       4.3              9,534        4.3           9,602       4.1
  Political........            187        0.3          2,947       4.1                851        0.4           6,032       2.5
  Production/Other             691        1.0            926       1.3              2,856        1.3           3,728       1.6
                   ---------------------------------------------------     ---------------------------------------------------
   Total...........         68,264      100.0         72,811     100.0            223,801      100.0         236,578     100.0
 
   Commissions.....        (10,325)     (15.1)        (9,867)/1/ (13.5)           (33,483)     (15.0)        (31,807)/1/ (13.4)
                   ---------------------------------------------------     ---------------------------------------------------
 
Net Revenue........       $ 57,939       84.9      $  62,944      86.5           $190,318       85.0      $  204,771      86.6
                   ===================================================     ===================================================
</TABLE>

/1/ National sales commissions paid to AYI eliminated for consolidation purposes
were $1.5 million and $4.7 million for the three and nine months ended September
30, 1998, respectively.

                                       10
<PAGE>
 
RESULTS OF OPERATIONS

Three Months ended September 30, 1998 Compared to Three Months Ended September
30, 1997

 
  The following historical financial information for the three months ended
September 30, 1998 includes the results of Adam Young Inc. (merger agreement
entered into on February 5, 1998), for the entire quarter. The operating results
for the three months ended September 30, 1997 do not include Adam Young Inc. as
the results of Adam Young Inc. were not deemed to be material.

  Net revenue for the three months ended September 30, 1998 was $62.9 million,
an increase of $5.0 million, or 8.6%, compared to $57.9 million for the three
months ended September 30, 1997. Improvement in various local market economies
led to an increase in the Company's gross local revenue of 4.5%, while gross
national decreased 2.0% in 1998 compared to the third quarter of 1997. Political
revenue for the three months ended September 30, 1998 was $2.9 million, an
increase of $2.8 million from the same period in 1997.

  Operating expenses, including selling, general and administrative expenses,
for the  three months ended September 30, 1998 were $29.0 million, compared to
$26.8 million for the three months ended September 30, 1997, an increase of $2.2
million, or 8.2%, with Adam Young Inc. accounting for $1.0 million of such
increase.  Additional news costs at several stations accounted for an additional
$764,000 of this increase.

  Amortization of program license rights for the three months ended September
30, 1998 and 1997 was $6.6 million.

  Depreciation of property and equipment and amortization of intangible assets
was $12.3   million for the three months ended September 30, 1998, compared to
$13.0 million for the three months ended September 30, 1997, a decrease of
$684,000, or 5.2%.

  The Company made payments for program license liabilities of $6.7 million
during the three months ended September 30, 1998, compared to $6.6 million for
the three months ended September 30, 1997, an increase of $95,000.

  Corporate overhead for the three months ended September 30, 1998 was $1.9
million, compared to $1.3 million for the three months ended September 30, 1997,
an increase of $606,000. This increase was the result of additional personnel,
administrative costs and incentive compensation programs in 1998.

  Non-cash compensation was $282,000 for the three months ended September 30,
1998, compared to $247,000 for the comparable period in 1997. These amounts
represented non-cash charges for an employee-matching stock plan established
January 1, 1997, included in the Company's 401(k) Plan.

  Interest income for the three months ended September 30, 1998 was $51,000
compared to $65,000 for the three months ended September 30, 1997, a decrease of
$14,000. This decrease is primarily attributable to lower cash levels resulting
from the use of cash and cash equivalents to make principal payments on long-
term debt.

                                       11
<PAGE>
 
  Interest expense was $15.8 million for the three months ended September 30,
1998, compared to $16.4 million for the three months ended September 30, 1997, a
decrease of $614,000. This decrease is primarily attributable to the Company's
lower debt levels following the payment of approximately $32.7 million in debt
since September 30, 1997 and reduced interest rates on its bank debt.

  As a result of the factors discussed above, the net loss was $3.5 million for
the three months ended September 30, 1998, compared to a net loss of $6.5
million for the three months ended September 30, 1997.

  Broadcast cash flow was $27.3 million for the three months ended September 30,
1998, compared to $24.6 million for the three months ended September 30, 1997,
an increase of $2.7 million, or 11.0%. Broadcast cash flow margins (broadcast
cash flow divided by net revenues) were 43.3% for the three months ended
September 30, 1998, compared to 42.4% for the three months ended September 30,
1997.


Nine Months Ended September 30, 1998 Compared to Nine Months Ended September 30,
1997

 
  The following historical information for the nine months ended September 30,
1998 includes the results of Adam Young Inc. (merger agreement entered into on
February 5, 1998), for the entire period. The operating results for the nine
months ended September 30, 1997 do not include Adam Young Inc. as the results of
Adam Young Inc. were not deemed to be material.

  Net revenue for the nine months ended September 30, 1998 was $204.8 million,
an increase of $14.5 million, or 7.6%, compared to $190.3 million for the nine
months ended September 30, 1997. Improvement in various local market economies
led to an increase in the Company's gross local revenues of 5.6%, while gross
national was down 1.7% in 1998 compared to the same period in 1997. Political
revenue for the nine months ended September 30, 1998 was $6.0 million, an
increase of $5.2 million from the same period in 1997.

  Operating expenses, including selling and general administrative expenses,
were $87.6 million for the nine months ended September 30, 1998, compared to
$80.2 million for the nine months ended September 30, 1997, an increase of $7.4
million, or 9.2%, with Adam Young Inc. accounting for $3.6 million of such
increase. Additional news costs at several stations and higher sales expense
relating to the increased sales accounted for an additional $2.3 million and
$688,000, respectively.

  Amortization of program license rights for the nine months ended September 30,
1998 was $27.0 million compared to $26.6 million for the nine months ended
September 30, 1997, an increase of $376,000.

  Depreciation of property and equipment and amortization of intangible assets
was $37.3 million for the nine months ended September 30, 1998, compared to
$37.2 million for the nine months ended September 30, 1997, an increase of
$142,000, or 0.4%.

  The Company made payments for program license liabilities of  $27.4 million
during the nine months ended September 30, 1998, compared with payments of $27.0
million during the nine months ended September 30, 1997, an increase of
$426,000.

                                       12
<PAGE>
 
  Corporate overhead was $6.0 million for the nine months ended September 30,
1998, compared to $4.4 million for the period ended September 30, 1997, an
increase of $1.6 million. This increase was the result of additional personnel,
administrative costs and incentive compensation programs in 1998.

  Non-cash compensation was $878,000 for the nine months ended September 30,
1998, compared to $742,000 for the same period in 1997. These amounts
represented non-cash charges for an employee-matching stock plan established
January 1, 1997, included in the Company's 401(k) Plan.

  Interest income for the nine months ended September 30, 1998 was $163,000
compared to $203,000 for the same period in 1997, a decrease of $40,000. This
decrease is primarily attributable to the lower cash levels resulting from the
use of cash and cash equivalents to prepay long-term debt.

  Interest expense was $46.7 million for the nine months ended September 30,
1998, compared with $47.7 million for the prior year period, a decrease of $1.0
million, or 2.1%. The decrease in interest expense is due to the Company's lower
debt levels following the payment of approximately $32.7 million in debt since
September 30, 1997 and reduced interest rates on its bank debt.

  As a result of the factors discussed above, the Company's net loss was $3.0
million for the nine months ended September 30, 1998, compared with a net loss
of $6.9 million for the same period in 1997.

  Broadcast cash flow was $89.8 million for the nine months ended September 30,
1998, compared to $83.1 million for the same period in 1997, an increase of $6.7
million, or 8.1%. Broadcast cash flow margins (broadcast cash flow divided by
net revenues) were 43.8% for the nine months ended September 30, 1998, compared
to 43.7% for the same period in 1997.


LIQUIDITY AND CAPITAL RESOURCES

  Cash provided by operations for the nine months ended September 30, 1998 was
$40.0 million as compared to cash provided by operations of $32.7 million for
the same period in 1997. Changes in the Company's net cash flows from operating
activities are primarily the result of improvement in net income and a reduction
of accounts payable during the nine months ended September 30, 1998 as compared
to the nine months ended September 30, 1997.

  The Company used cash in investing activities for the nine months ended
September 30, 1998 and 1997 of $31.2 million and $7.6 million, respectively. The
increase in 1998 was primarily attributable to the prepayment of programming.

  Cash used in financing activities for the nine months ended September 30, 1998
and 1997 was $9.8 million and $29.8 million, respectively. Financing activities
for the nine months ended September 30, 1998 and 1997 include principal payments
under the Company's senior credit facility (the "Senior Credit Facility") of
$28.3 million and $216.3 million, respectively. In the third quarter of 1998,
the Company borrowed $36.5 million under the working capital facility to prepay
certain programming contracts. In June 1997, the Company received $200.0 million
in proceeds from the issuance of public subordinated debt and applied the net
proceeds therefrom to repay principal under the Senior Credit Facility. In
addition, in the third quarter of 1998 and the 

                                       13
<PAGE>
 
second quarter of 1997, the Company repurchased 502,800 shares for $17.9 million
and 459,000 shares for $12.3 million, respectively, in Class A Common Stock.

  It is anticipated that the Company will be able to meet the working capital
needs of the stations, principal and interest payments under the Senior Credit
Facility and the Company's senior subordinated notes (the "Senior Subordinated
Notes"), and to a lesser extent, capital expenditures from cash on hand, cash
flows from operations and funds available under the Senior Credit Facility.

  On November 25, 1997, the Senior Credit Facility was amended and restated to
provide the Company with the ability to borrow up to $300.0 million in the form
of a five-year revolving credit facility. As of September 30, 1998, there was
$93.5 million outstanding under the Senior Credit Facility.

  The Senior Credit Facility has a $285.0 million sublimit (the "Sublimit") for
borrowings in connection with the acquisition of additional television stations
(and businesses, if any, incidental thereto) pursuant to transactions which meet
the following criteria: (i) each of the acquired stations will become a wholly-
owned subsidiary of the Company and will become a part of the lenders' security
package under the Senior Credit Facility, and (ii) the Company can demonstrate
that after giving pro forma effect to each such acquisition (based upon
assumptions, including identified cost savings, that the agents for the lenders
find reasonable), the Company will be in compliance with all of the terms and
conditions of the Senior Credit Facility.

  Pursuant to the Senior Credit Facility, the Company is prohibited from making
investments or advances to third parties exceeding $7.5 million in the aggregate
unless the third party becomes a guarantor of the Company's obligations.
However, the Company may utilize up to $70.0 million of its borrowing
availability under the Sublimit for the purpose of repurchasing shares of Common
Stock and for paying dividends, subject to the limitations set forth in the
Company's existing indentures (the "Indentures") relating to the Senior
Subordinated Notes.  In addition, the Company may utilize the undrawn amounts
under the Sublimit to retire or prepay subordinated debt, subject to the
limitations set forth in the Indentures. Undrawn amounts under the Senior Credit
Facility are available to the Company for working capital requirements and
general corporate purposes.

  Interest under the Senior Credit Facility is payable at the LIBOR rate, "CD
Rate" or "Base Rate." In addition to the index rates, the Company pays a
floating percentage tied to the Company's ratio of total debt to operating cash
flow; ranging, in the case of LIBOR rate loans, from 0.75% based upon a ratio
under 4:1 to 2.00% based upon a 6:1 or greater ratio.

  Each of the Company's subsidiaries (the "Subsidiaries") has guaranteed the
Company's obligations under the Senior Credit Facility. The Senior Credit
Facility is secured by the pledge of all the stock of the Subsidiaries and a
first priority lien on all of the assets of the Company and its Subsidiaries.

  The Senior Credit Facility imposes restrictions on the Company's ability to
incur additional indebtedness. The Company is permitted to incur, subject to the
terms of the Indentures and satisfaction of the financial covenants of the
Senior Credit Facility, unsecured subordinated debt, provided that the
subordination and mandatory redemption provisions and the maturity of such
indebtedness are comparable to the Company's existing Senior Subordinated Notes
and that the net proceeds in excess of any permitted acquisition are used to
repay the outstanding balance of the Senior Credit Facility by the amount of
such excess. The Company is 

                                       14
<PAGE>
 
also restricted as to the amount of its capital lease obligations and
guarantees. The Senior Credit Facility also restricts the ability of the Company
to amend material terms of the Indentures.

  The Senior Credit Facility requires the Company to maintain certain financial
ratios. The Company is required to maintain a total debt/operating cash flow
ratio ranging from 6.25x to 5.00x depending on senior debt leverages. The
Company is also required to maintain a senior debt/operating cash flow ratio
ranging from 2.75x to 2.25x depending on senior debt leverages. Additionally,
the Company is required to maintain an operating cash flow/total interest
expense ratio ranging from 1.75x to 2.25x depending on senior debt leverages.
The Company is also required to maintain an operating cash flow minus capital
expenditures to pro forma debt service ratio of no less than 1.10x at any time.
Such ratios must be maintained as of the last day of the quarter for each of the
periods.

  The Company is required to apply the proceeds from permitted equity issuances
and certain subordinated debt issuances, to the extent it exceeds the purchase
price for permitted acquisitions or permitted redemptions of Senior Subordinated
Debt, to reduce the Company's senior debt levels. The Senior Credit Facility
also contains a number of customary covenants including, among others,
limitations on investments and advances, mergers and sales of assets, liens on
assets, affiliate transactions and changes in business. The Company may, subject
to the financial covenants of the Senior Credit Facility, sell assets
constituting less than 15% of its operating cash flow.

  The Indentures impose certain limitations on the ability of the Company and
certain of its Subsidiaries to, among other things, pay dividends or make
certain other restricted payments, consummate certain asset sales, enter into
certain transactions with affiliates, incur indebtedness that is subordinate in
right of payment to any senior debt and senior in right of payment to the Senior
Subordinated Notes, incur liens, impose restrictions on the ability of  a
Subsidiary to pay dividends or make certain payments to the Company, merge or
consolidate with any other person or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of the assets of the Company.

  The Company regularly enters into program contracts for the right to broadcast
television programs produced by others and program commitments for the right to
broadcast programs in the future.  Such programming commitments are generally
made to replace expiring or canceled program rights.  Payments under such
contracts are made in cash or the concession of advertising spots to the program
provider to resell, or a combination of both.

  On June 16, 1998 the Company entered into a new long-term agreement with the
Los Angeles Lakers ("Lakers") with broadcast rights through the 2004/2005
season. Under the terms of the new seven year deal, KCAL-TV, Los Angeles,
California, will broadcast 41 Lakers pre-season and regular season away games
annually. Additionally, KCAL-TV has the broadcast rights to all post-season away
games not subject to NBA/network commitments. KCAL-TV has also obtained the
exclusive sales rights and control over broadcast, production and inventory
activities. The Company paid an initial rights fee of $30 million on August 14,
998 and will pay an additional $18.0 million per season. In the event that all
41 games are not made available to KCAL-TV or are canceled, the Company will
receive a per game credit.

  The Company is regularly presented with opportunities to acquire television
stations which it evaluates on the basis of its acquisition strategy. The
Company does not presently have any agreements to acquire any television
stations.

                                       15
<PAGE>
 
  In June 1998, the Company retained  Lazard Freres & Co. LLC to explore
potential strategic alternatives for the Company, including a merger or sale,
among other possibilities. On September 10, 1998, the Company reported that it
was suspending the exploration of a sale of the Company as one if its potential
strategic alternatives.


IMPACT OF YEAR 2000

  The Company has performed a review of its Year 2000 preparedness relative to
its products and systems, its accounting software and its computer hardware. The
Company believes that it will not incur material costs in connection with
becoming Year 2000 compliant. All computer software is purchased or leased from
third party vendors, and the Company does not employ or contract computer
programmers to write software for our specific Company. The Company has received
communications from its significant third party vendors and service providers
stating that they are generally on target to become Year 2000 compliant in 1999
if they have not already done so. There can be no assurance that these third
party vendors and service providers will complete their own Year 2000 compliant
projects in a timely manner and that failure to do so would not have an adverse
impact on the Company's business.


INCOME TAXES

  The Company and its Subsidiaries file a consolidated federal income tax return
and such state or local tax returns as are required. As of December 31, 1997,
the Company had $188.5 million of net operating loss ("NOL") carryforwards which
were subject to annual limitations imposed by Internal Revenue Code Section 382.

                                       16
<PAGE>
 
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

 
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("FAS 133"). FAS 133 establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contract, and for hedging activities. The Company
is required to adopt the provisions of the standard during the first quarter of
2000. Because the Company does not use derivatives, the Company does not expect
that the adoption of the new standard will have a material impact on the results
of operations or financial condition.

                                       17
<PAGE>
 
Item 6.  EXHIBITS AND REPORTS ON FORM  8-K.


         (a) Exhibits.

Exhibit
Number    Exhibit Description
------    -------------------

11        Statement Re Computation of Per Share Earnings.
27        Financial Data Schedule


          (b)  Reports on Form 8-K.  The Company filed no reports on Form 8-K
during the third quarter of the year ending December 31, 1998.

                                       18
<PAGE>
 
                                   SIGNATURES

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

                                YOUNG BROADCASTING INC.



Date:  November 9, 1998        By: /s/ Vincent J. Young
                                  ------------------------------
                                       Vincent J. Young
                                       Chairman



Date:  November 9, 1998        By: /s/ James A. Morgan
                                  -------------------------------
                                       James A. Morgan
                                       Executive Vice President and
                                       Chief Financial Officer
                                       (principal financial officer)

                                       19
<PAGE>
 
                                   EXHIBIT 11

                    YOUNG BROADCASTING INC. AND SUBSIDIARIES
                     RE COMPUTATION OF PER SHARE EARNINGS
                                  (Unaudited)
<TABLE>
<CAPTION>
 
 
                                                                           THREE MONTHS ENDED                NINE MONTHS ENDED
                                                                           ------------------                -----------------
                                                                       SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,
                                                                           1997            1998            1997             1998
                                                                       ------------------------------------------------------------
<S>                                                                    <C>             <C>             <C>             <C>
SHARES OF COMMON STOCK OUTSTANDING
     FOR THE ENTIRE  PERIOD..........................................   13,823,788      14,338,401      14,230,357      13,847,844
 
ISSUANCE OF 13,866 SHARES OF COMMON STOCK  TO THE
      COMPANY'S DEFINED CONTRIBUTION  PLAN IN 1998...................            -           3,863               -           8.081
 
ISSUANCE OF 46,268 SHARES OF COMMON STOCK  TO THE
      COMPANY'S DEFINED CONTRIBUTION  PLAN IN 1997...................        5,367               -          35,369
 
ISSUANCE OF 14,550 SHARES OF COMMON STOCK
      UPON EXERCISE OF OPTIONS IN 1998...............................            -           9,239               -           7,152
 
ISSUANCE OF 18,500 SHARES OF COMMON STOCK
      UPON EXERCISE OF OPTIONS IN 1997...............................           98               -           7,212               -
 
REPURCHASE OF 502,800 SHARES OF COMMON STOCK
      BUYBACK PROGRAM IN 1998....................................                -         (43,722)              -         (14,734)
 
ISSUANCE OF 526,757 SHARES OF COMMON STOCK
      FOR THE MERGER OF ADAM YOUNG INC.....................                      -               -               -         457,295
 
RETIREMENT OF 50,450 SHARES OF COMMON STOCK FOR
     THE MERGER OF ADAM YOUNG INC...........................                     -               -               -         (43,797)
 
REPURCHASE OF 459,000 SHARES OF COMMON STOCK
     UNDER THE BUYBACK PROGRAM IN 1997.....................                      -               -        (233,703)              -
                                                                     ---------------  --------------  --------------  ------------  
WEIGHTED AVERAGE SHARES OF COMMON                                                                                     
      STOCK OUTSTANDING..............................................   13,829,253      14,307,781      14,039,235      14,261,841
                                                                     ---------------  --------------  --------------  ------------
                                                                                                                      
NET LOSS.............................................................  $(6,540,419)    $(3,451,604)    $(6,894,103)    $(2,978,472)
                                                                     ===============  ==============  ==============  ============ 
NET LOSS PER COMMON SHARE                                                                                             
                                                                                                                      
       NET LOSS......................................................  $     (0.47)         $(0.24)         $(0.49)    $     (0.21)
                                                                     ===============  ==============  ==============  ============
</TABLE>

                                       20