<PAGE>


                          SECURITIES AND EXCHANGE COMMISSION
                                           

                               Washington, D.C.  20549
                                           
                                      FORM 10-K/A
                                           

 /XX/          ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
               EXCHANGE ACT OF 1934
For the fiscal year ended        December 31, 1996        

                                          OR

/  /        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934
for the transition period from _____________ to _____________________________

                            Commission File Number 1-10321
                                           

                               THE ACKERLEY GROUP, INC.
                (Exact name of Registrant as specified in its charter)
                                           
                        Delaware                                  91-1043807 
               -------------------------------                -----------------
               (State or other jurisdiction of                (I.R.S. Employer
               incorporation or organization)                Identification No.)


               1301 Fifth Avenue, Suite 4000
               Seattle, Washington                                   98101      
               -------------------------------                 -----------------
               (Address of principal executive offices)          (Zip code)

Registrant's telephone number, including area code: (206) 624-2888

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

Securities registered pursuant to Section 12(g) of the Act: None

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

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  ___

Aggregate market value of voting Common Stock held by nonaffiliates of
Registrant as of March 14, 1997:  $120,030,253.

Number of shares of common stock, $.01 par value, outstanding as of March 14,
1997:  19,813,002 Common Stock and 11,353,810 Class B Common Stock.

Documents incorporated by reference and parts of Form 10-K into which
incorporated:  Registrant's Definitive Proxy Statement for May 5, 1997 Annual
Meeting--Part III

<PAGE>

                                     PART IV
                                           
                  ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
                               AND REPORTS ON FORM 8-K
                                              
(a)(1) and (2)  Financial Statements and Schedules.
    The following documents are being filed as part of this Report:

                            INDEX TO FINANCIAL STATEMENTS
                                                                         Page  
                                                                         Number

Report of Ernst & Young, LLP, independent auditors.......................   F-1

Consolidated balance sheets as of December 31, 1996
  and 1995...............................................................   F-2

Consolidated statements of operations for the
  years ended December 31, 1996, 1995 and 1994...........................   F-3

Consolidated statements of stockholders' deficiency
  for the years ended December 31, 1996, 1995 and 1994...................   F-4

Consolidated statements of cash flows for the years
  ended December 31, 1996, 1995 and 1994.................................   F-5

Notes to consolidated financial statements...............................   F-6

Schedules are omitted for the reason that they are not required or are not 
applicable, or the required information is shown in the consolidated 
financial statements or notes thereto. Columns omitted from schedules filed 
have been omitted because the information is not applicable.

                                     35

<PAGE>

                                   SIGNATURE

    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this amended report to be
signed on its behalf by the undersigned, thereunto duly authorized, on the 17th
day of April, 1997.

                                       THE ACKERLEY GROUP, INC.


                                       By: /s/ Keith W. Ritzmann
                                       -------------------------
                                       Keith W. Ritzmann
                                       Vice President and Controller


<PAGE>

                  REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS


The Board of Directors
The Ackerley Group, Inc.

We have audited the accompanying consolidated balance sheets of The Ackerley 
Group, Inc. as of December 31, 1996 and 1995, and the related consolidated 
statements of operations, stockholders' deficiency, and cash flows for each 
of the three years in the period ended December 31, 1996.  These financial 
statements are the responsibility of the Company's management.  Our 
responsibility is to express an opinion on these financial statements 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 consolidated financial statements referred to above 
present fairly, in all material respects, the consolidated financial position 
of The Ackerley Group, Inc. 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.



                                 /s/ Ernst & Young LLP    
                              ----------------------------------------

Seattle, Washington
February 28, 1997 


                                     F-1

<PAGE>

                               THE ACKERLEY GROUP, INC.
                             CONSOLIDATED BALANCE SHEETS
                                    -----------
                                       ASSETS
<TABLE>
<CAPTION>
<S>                                                                                  <C>                   <C>
                                                                                               December 31,
                                                                                        1996                  1995
                                                                                       ------                ------ 
                                                                                              (In thousands)
Current assets:
    Cash and cash equivalents                                                        $    2,910            $    6,421
    Accounts receivable, net                                                             43,754                43,590
    Current portion of broadcast rights                                                   5,656                 5,779
    Prepaid and other current assets                                                     16,845                 9,423
                                                                                     -----------           -----------
         Total current assets                                                            69,165                65,213
                                                  
Property and equipment, net                                                              88,136                81,368
Intangibles                                                                              41,856                31,412
Other assets                                                                             25,755                11,889
                                                                                     -----------           -----------
         Total assets                                                                $  224,912            $  189,882
                                                                                     -----------           -----------
                                                                                     -----------           -----------

                        LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
    Accounts payable                                                                 $    5,019            $    4,284
    Accrued interest                                                                      3,959                 3,628
    Other accrued liabilities                                                            16,160                12,958
    Deferred revenue                                                                     20,050                18,269
    Current portion of broadcasting obligations                                           7,032                 6,145
    Current portion of long-term debt                                                     5,791                 4,819
                                                                                     -----------           -----------
         Total current liabilities                                                       58,011                50,103

Long-term debt                                                                          229,350               215,328
Litigation accrual                                                                       13,248                14,200
Other long-term liabilities                                                               8,142                 9,344
                                                                                     -----------           -----------
         Total liabilities                                                              308,751               288,975

Stockholders' deficiency:
    Common stock, par value $.01 per share-authorized 50,000,000 shares;
    issued 21,186,724 and 20,777,012  shares at December 31, 1996 and 1995
    respectively; and outstanding 19,811,778  and 19,402,066 shares 
    at December 31, 1996 and 1995 respectively                                              212                   208 

    Class B common stock, par value $.01 per share-authorized 11,406,510
    shares;issued and outstanding 11,353,810 and 11,731,522 shares at
    December 31, 1996 and 1995 respectively                                                 114                   117

    Capital in excess of par value                                                        3,195                 3,093
    Deficit                                                                             (77,271)              (92,422)
    Less common stock in treasury, at cost                                              (10,089)              (10,089)
                                                                                     -----------           -----------
         Total stockholders' deficiency                                                 (83,839)              (99,093)
                                                                                     -----------           -----------
         Total liabilities and stockholders' deficiency                              $  224,912            $  189,882 
                                                                                     -----------           -----------
                                                                                     -----------           -----------

</TABLE>
                             See accompanying notes

                                     F-2
<PAGE>

                               THE ACKERLEY GROUP, INC.
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                                 
                                           

<TABLE>
<CAPTION>
<S>                                           <C>            <C>              <C>
                                                      Year Ended December 31,
                                              -----------------------------------------
                                              1996           1995             1994
                                              ----           ----             ----
                                                         (In thousands, except
                                                           per share amounts)
Revenue                                       $ 279,662      $ 235,820        $ 211,728  
Less Agency commissions and discounts            32,364         28,423           25,626  
                                             -----------    -----------      -----------
Net Revenue                                     247,298        207,397          186,102  

Expenses and other income:                
  Operating expenses                            186,846        156,399          143,469  
  Amortization                                    6,404          5,734            3,794  
  Depreciation                                   10,592          7,509            7,089  
  Interest expense                               24,461         25,010           25,909  
  Other (income) expense                            108            (56)            (657)
  Litigation expense                                ---         14,200              ---
  Disposition of assets                             ---            ---           (2,506)
                                             -----------    -----------      -----------
Total expenses and other income                 228,411        208,796          177,098  

Income (loss) before income taxes         
  and extraordinary items                        18,887         (1,399)           9,004  
Income taxes                                      2,758          1,515               73  
                                             -----------    -----------      -----------
Income (loss) before extraordinary items         16,129         (2,914)           8,931  
Extraordinary items: loss on debt         
  extinguishment in 1996 and 1994                  (355)           ---           (2,099)
                                             -----------    -----------      -----------
Net income (loss)                             $  15,774      $  (2,914)       $   6,832
                                             -----------    -----------      -----------
                                             -----------    -----------      -----------
Income (loss) per common share,           
  before extraordinary items                  $     .51      $    (.09)       $     .28  
Extraordinary items                                (.01)           ---             (.06)
                                             -----------    -----------      -----------
Net income (loss) per common share            $     .50      $    (.09)       $     .22
                                             -----------    -----------      -----------
                                             -----------    -----------      -----------
Weighted average number of shares                31,760         31,545           31,483   
 
</TABLE>

                             See accompanying notes

                                     F-3
<PAGE>

                               THE ACKERLEY GROUP, INC.
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY

<TABLE>
<CAPTION>  
<S>                                <C>      <C>        <C>              <C>             <C>
                                                                                         Common
                                              Class B     Capital in                     stock in
                                    Common     common    excess of par                   treasury
                                     stock      stock       value          Deficit       (at cost)
                                   -------------------------------------------------------------------
Balance, January 1, 1994           $   204   $   118     $ 2,789          $  (95,876)    $ (10,089)
Exercise of stock options and
stock conversions                        1       ---          62                 ---           ---

Net income                             ---       ---         ---              6,832          ---
                                   --------   -------   ---------        -------------  -----------
Balance, December 31, 1994             205       118       2,851             (89,044)      (10,089)

Exercise of stock options and
stock conversions                        3        (1)        242                 ---           ---

Cash dividend, $0.015 per share        ---       ---         ---                (464)          ---

Net income                             ---       ---         ---              (2,914)          ---
                                   --------   -------   ---------        -------------  -----------
Balance, December 31, 1995             208       117       3,093             (92,422)      (10,089)

Exercise of stock options and
stock conversions                        4        (3)        102                 ---           ---

Cash dividend, $0.02 per share         ---       ---         ---                (623)          ---

Net income                             ---       ---         ---              15,774           ---
                                   --------   -------   ---------        -------------  -----------
Balance, December 31, 1996         $   212   $   114     $ 3,195          $  (77,271)    $ (10,089)
                                   --------   -------   ---------        -------------  -----------
                                   --------   -------   ---------        -------------  -----------

</TABLE>

                                      See accompanying notes

                                     F-4

<PAGE>
<TABLE>
<CAPTION>
<S>                                                        <C>            <C>            <C>
                                                                  Year ended December 31,
                                                          -------------------------------------------
                                                             1996          1995            1994
                                                            ------        -----           ------
                                                                      (In thousands)
Cash flows from operating activities:
  Cash received from customers                             $ 238,209      $ 215,321      $ 178,524  
  Cash paid to suppliers and employees                      (193,518)      (154,564)      (144,073)
  Interest paid, net of amount capitalized                   (21,524)       (24,032)       (22,784)
                                                          ------------   ------------   ------------
  Net cash provided by operating activities                   23,167         36,725         11,667

Cash flows from investing activities:     
  Proceeds from the sale of properties                         1,474            478         13,306
  Payments from acquisitions                                 (20,445)           ---        (17,397)
  Capital expenditures                                       (13,124)       (15,098)        (8,794)
  Other, net                                                  (7,524)          (457)        (6,162)
                                                          ------------   ------------   ------------
    Net cash used in investing activities                    (39,619)       (15,077)       (19,047)

Cash flows from financing activities:     
  Borrowings from Credit Agreements                           38,000         64,379         30,126
  Payments under Credit Agreements                           (21,907)       (79,695)       (27,180)
  Dividends paid                                                (623)          (464)           ---
  Other, net                                                  (2,529)        (1,735)           (10)
                                                          ------------   ------------   ------------
    Net cash provided (used in) financing activities          12,941        (17,515)         2,936
                                                          ------------   ------------   ------------

Net increase (decrease) in cash and cash equivalents          (3,511)         4,133         (4,444)
Cash and cash equivalents at beginning of period               6,421          2,288          6,732
                                                          ------------   ------------   ------------
    Cash and cash equivalents at end of period             $   2,910      $   6,421      $   2,288
                                                          ------------   ------------   ------------
                                                          ------------   ------------   ------------
Reconciliation of net income to net cash provided by
 operating  activities:                    
  Net income (loss) applicable to common shares            $  15,774      $  (2,914)     $   6,832
  Adjustment to reconcile net income to net cash
   provided by operating activities:         
    Litigation expense                                           ---         14,200            ---
    Disposition of assets                                        ---            ---         (2,506)
    Loss on debt extinguishment                                  355            ---          2,099
    Depreciation and amortization                             16,996         13,243         10,883
    Gain on sale of property and equipment                      (423)           (50)          (209)
    NBA expansion proceeds                                    (3,132)         5,165            ---
  Changes in assets and liabilities, net                      (6,403)         7,081         (5,432)
                                                          ------------   ------------   ------------
  Net cash provided by operating activities                $  23,167      $  36,725      $  11,667
                                                          ------------   ------------   ------------
                                                          ------------   ------------   ------------
Supplemental disclosure of noncash transactions:    
  Broadcast rights acquired and broadcast obligations
   assumed                                                     9,165      $  10,337      $   6,020
  Assets acquired through barter transactions                  1,342          1,065            479
  Capitalized leases                                             ---          7,982            ---

</TABLE>

                                  See accompanying notes

                                     F-5

<PAGE>

                               THE ACKERLEY GROUP, INC.
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           
1.  Summary of significant accounting policies

    (a)  Organization - The Ackerley Group, Inc. (formerly know as Ackerley 
Communications, Inc.) and its subsidiaries (the "Company") is a diversified 
communications company that engages in three principal business:  (i) 
out-of-home media, including outdoor and airport advertising; (ii) television 
and radio broadcasting; and (iii) other businesses consisting principally of 
professional basketball through ownership of the Seattle SuperSonics, a 
franchise of the National Basketball Association, and professional indoor 
soccer through ownership of the Seattle Sea Dogs, a franchise of the 
Continental Indoor Soccer League.  Outdoor advertising operations are 
conducted principally in the Seattle, Portland, Boston, Miami, Ft. 
Lauderdale, and West Palm Beach markets, whereas airport advertising 
operations are conducted in airports throughout the United States.  The 
markets served by the Company's television stations and their affiliations 
are as follows:  Syracuse, New York (ABC affiliate); Colorado Springs, 
Colorado (CBS affiliate); Santa Rosa, California (independent), Bakersfield, 
California (NBC affiliate); Salinas/Monterey, California (FOX affiliate and 
CBS affiliate through a local management agreement); and Bellingham, 
Washington/Vancouver, British Columbia (independent).  Radio broadcasting 
consists of one AM and two FM stations serving the Seattle/Tacoma area. 

    (b)  Principles of consolidation - The accompanying financial statements 
consolidate the accounts of The Ackerley Group, Inc. and its subsidiaries, 
substantially all of which are wholly owned.  Minority interest is not 
material. All significant intercompany transactions have been eliminated in 
consolidation.

    (c)  Revenue recognition - Display advertising revenue is recognized 
ratably on a monthly basis over the period in which advertisement displays 
are posted on the advertising structures or in the display units.  Broadcast 
revenue is recognized in the period in which the advertisements are aired.  
Payments from clients, which are received in excess of one month's 
advertising, are recorded as deferred revenue.  Ticket payments are recorded 
as deferred revenue when received and recognized as revenue ratably as home 
basketball and soccer games are played.

    (d)  Barter transactions - The Company engages in nonmonetary 
transactions in which it provides advertising in exchange for goods or 
services.  The barter transactions are recorded at the estimated fair value 
of the asset or service received in accordance with Financial Standards Board 
Statement No. 29, "Accounting for Nonmonetary Transactions."  Revenue is 
recognized when the advertising is provided and assets or expenses are 
recorded when assets are received or services used.  Advertising provided for 
which goods or services have not yet been received is recorded in prepaid and 
other current assets. Goods and services received for which advertising has 
not yet been provided are recorded in other accrued liabilities.

                                     F-6


<PAGE>

    (e)  Property and equipment - Property and equipment are carried on the 
basis of cost.  Maintenance, repairs, and renewals, which neither materially 
add to the value of the property nor appreciably prolong its life, are 
charged to expense as incurred.  When operating property and equipment are 
retired or sold, any funds received are credited to an asset pool with no 
gain or loss recognized, unless all assets in the pool are fully depreciated. 
 Depreciation of property and equipment, including the cost of assets 
recorded under capital lease agreements, is provided on the straight-line and 
accelerated methods over the estimated useful lives of  the assets or lease 
terms.

    (f)  Intangible assets - Intangible assets are carried on the basis of 
cost and are amortized principally on the straight-line method over estimated 
useful lives, ranging from 1 to 40 years.  Franchises are recorded at cost 
and represent the acquisition cost of the rights to operate display units in 
airports.  Goodwill represents the cost of acquired businesses in excess of 
amounts assigned to certain tangible and intangible assets at the dates of 
acquisition.

    (g)  Broadcast rights and obligations - Television films and syndication 
rights acquired under license agreements (broadcast rights) and the related 
obligations incurred are recorded as assets and liabilities at the time the 
rights are available for broadcasting based upon the gross amount of the 
contract.  The capitalized costs are amortized on an accelerated basis over 
the contract period or the estimated number of showings, whichever results in 
the greater aggregate monthly amortization.  Broadcast rights are carried at 
the lower of unamortized cost or net realizable value.  The estimated cost of 
broadcast rights to be amortized during the next year has been classified as 
a current asset.

    (h)  Deferred compensation - Certain player and other personnel contracts 
include deferred compensation provisions.  The present value of such deferred 
compensation is recorded as an obligation and charged to operating expenses 
ratably over the contract period.

    (i)  Stock based compensation - The Company grants stock options for a 
fixed number of shares to employees with an exercise price equal to the fair 
value of the shares at the date of grant.  The Company has elected to account 
for stock option grants in accordance with APB Opinion No. 25, "Accounting 
for Stock Issued to Employees" and related Interpretations, and recognizes no 
compensation expense for the stock option grants.  In management's opinion, 
the alternative fair value accounting method provided for under FASB No. 123, 
"Accounting for Stock-Based Compensation," does not necessarily provide a 
reliable single measure of the fair value of its employee stock options.  The 
effect of valuing the stock option grants using FASB No. 123's method results 
in net income and earnings per share amounts that are not materially 
different from the reported amounts. 
                   
    (j)  Stock split - In October, 1996, the Company declared a two-for-one 
stock split.  All share, per share, and exercise price information has been 
restated to reflect the increase in stock shares and decrease in exercise 
price caused by the split.  

                                     F-7

<PAGE>

    (k)  Income per common share -  Income per common share is calculated by 
dividing net income by the weighted average number of shares of common stock, 
Class B common stock, and if dilutive, common stock equivalents outstanding 
during the period.

    (l)  Cash equivalents - The Company considers investments in highly 
liquid debt instruments with a maturity of three months or less when 
purchased to be cash equivalents.

    (m)  Concentration of credit risk and financial instruments - The Company 
sells advertising to local and national companies throughout the United 
States. The Company performs ongoing credit evaluations of its customers and 
generally does not require collateral.  The Company maintains an allowance 
for doubtful accounts at a level which management believes is sufficient to 
cover potential credit losses.  The Company invests its excess cash in 
short-term investments with major banks.  The Company has not experienced any 
losses on these investments.  The carrying value of financial instruments, 
which include cash, receivables, payables, and long-term debt, approximates 
market value at December 31, 1996.

    The Company uses interest rate swap and cap agreements to modify the 
interest rate characteristics of its long-term debt and attempts to 
effectively maintain a portion of the debt with floating interest rates.  
These agreements generally involve the exchange of fixed or floating rate 
payment obligations without an exchange of the underlying principal amount.  
The differential to be paid or received is accrued as interest rates change 
and is recognized as an adjustment to interest expense related to the debt.  
The related amount payable to or receivable from counterparties is included 
in other current liabilities or assets.  The fair values of the swap and cap 
agreements are not recognized in the financial statements.

    (n)  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. 

    (o)  Reclassifications  -  Certain prior years' amounts have been 
reclassified to conform to the 1996 presentation.

2.  Investment in radio partnership

    The Company entered into an agreement with Century Management, Inc., 
which resulted in the  formation of New Century Seattle Partners, L.P. (the 
"Partnership") for the purpose of owning and operating the assets of this 
radio stations in the Seattle market.  Upon the venture's approval by the 
Federal Communications Commission ("FCC") on July 14, 1994, the Company 
contributed the assets of two stations, with a book value of $5.5 million, to 
the Partnership. Also in July 1994, the Partnership purchased the assets of a 
third station for approximately $17.7 million financed by bank borrowings.

                                     F-8

<PAGE>

    Century Management, Inc. is the general partner of the Partnership and 
KJR Radio, Inc., a wholly owned subsidiary of the Company, is a limited 
partner in the Partnership.

    The following table summarizes on an unaudited, pro forma basis the 
consolidated results of operations of the Company for 1994 giving pro forma 
effect to the investment in New Century Seattle Partners, L.P. as if the 
investment had been made at the beginning of the years presented.  These pro 
forma consolidated statements do not necessarily reflect the results of 
operations which would have occurred had such investment taken place on the 
date indicated.  The result of the partnership's operations after the actual 
date of investment are included in the Company's financial statements.  
Minority interests are not material.  (In thousands except per share 
amounts): 

                                                   1994
                                                  ------
    Net revenue                                  $ 188,945
    Operating expenses                             182,762
    Income before extraordinary items                8,282
    Net income applicable to common shares           6,183
    Net income per common share                        .20

3. Allowance for Doubtful Accounts

   The allowance for doubtful accounts is summarized as follows (in thousands):

                                                 1996       1995        1994
                                                ------     ------      ------
Balance at beginning of year                    $ 1,163    $ 1,160    $   941
Additions charged to operating expense            1,386        979      1,375 
Write-offs of receivables, net of recoveries     (1,123)      (976)    (1,156)
                                               ---------- ---------- ----------
Balance at end of year                          $ 1,426    $ 1,163    $ 1,160
                                               ---------- ---------- ----------
                                               ---------- ---------- ----------


4.  Current Assets and Current Liabilities

    At December 31, 1996 and 1995, prepaid and other current assets consist 
of the following (in thousands):


                                     1996                1995
                                   -------              ------
Prepaid assets                    $ 13,336             $ 7,421
Other current assets                 3,509               2,002
                                 ----------           ---------
                                  $ 16,845             $ 9,423
                                 ----------           ---------
                                 ----------           ---------


                                     F-9
        
<PAGE>                          
    At December 31, 1996 and 1995, other accrued liabilities consist of the
following (in thousands):


                                    1996               1995
                                   ------             ------
Accrued wages                    $   3,969           $  1,861
Other accrued liabilities           12,191             11,097
                                -----------         ----------
                                  $ 16,160           $ 12,958
                                -----------         ----------
                                -----------         ----------
                                           

5.  Property and equipment

    At December 31, 1996 and 1995, property and equipment consisted of the
following (in thousands):
                                                                Estimated 
                                        1996        1995        useful life 
                                      --------    --------      ------------
    Land                              $  6,976    $  6,906
    Advertising structures              82,325      76,904       9-15  years
    Broadcast equipment                 52,712      49,635         10  years
    Building and improvements           33,264      29,959      20-40  years
    Office furniture and equipment      22,738      19,170         10  years
    Transportation and other equipment   9,238       9,964       5-15  years
    Equipment under capital leases       7,982       7,982         10  years
                                      --------    --------
                                       215,235     200,520
    Less accumulated depreciation      127,099     119,152 
                                      --------    --------    
                                      $ 88,136    $ 81,368
                                      --------    --------    
                                      --------    --------    

6.  Intangibles

    At December 31, 1996 and 1995, intangibles consisted of the following (in
thousands):

                                                                    Estimated 
                                              1996       1995       useful life
                                            --------   --------     -----------
    Goodwill                                $ 48,923   $ 32,660     3-40 years
    Favorable leases and contracts            15,294     15,294     1-10 years
    Broadcasting licenses and agreements       7,083      7,083     1-10 years
    Other                                      4,250      4,302     1-30 years
                                            -------    --------
                                              75,550     59,339
    Less accumulated amortization             33,694     27,927
                                            -------    --------
                                            $ 41,856   $ 31,412
                                            -------    --------
                                            -------    --------
    

                                     F-10

<PAGE>

    Cost represents the net assets' appraised value or management's best 
estimate of the fair value at the dates of acquisition.

    During 1996, the majority of the additions to Intangible Assets came from 
two acquisitions:  $4,482,000 from the Santa Rosa, California television 
station, and $11,274,000 from billboards and three land parcels in the Boston 
area.  The Company does not consider the acquisitions' operating results to 
have a material impact on the Company's consolidated results.  

7.  Debt

    Long-term debt at December 31, 1996 and 1995 reflected the following 
(in thousands):

<TABLE>
<CAPTION>
    <S>                                               <C>              <C>
                                                          1996             1995
                                                      -------------    ------------
    Credit Agreement                                  $    55,000      $   35,000
    Senior notes                                          120,000         120,000
    Subordinated notes payable                             35,000          35,000
    Partnership debt                                       13,903          16,879
    Capital lease obligation                                7,268           7,982
    Deferred employment compensation, net of 
      imputed interest discount of $1,395 in 1996
      and $955 in 1995                                      3,378           4,137
    Other                                                     592           1,149
                                                      -------------    ------------
                                                          235,141         220,147
    Less amounts classified as current                      5,791           4,819
                                                      -------------    ------------
                                                      $   229,350      $  215,328
                                                      -------------    ------------
                                                      -------------    ------------
</TABLE>

    Aggregate annual payments of long-term debt during the next five years 
are as follows (in thousands):

                   Credit Agreement             Deferred
                   And Subordinated           Compensation
                        Notes                   And Other  
                   ----------------         ----------------
     1997          $     5,125              $     740
     1998               15,610                    520
     1999               29,406                    963
     2000               29,149                    271
     2001               19,414                    594

                                     F-11

<PAGE>
 
    Future minimum payments under the capitalized lease obligation are as 
follows (in thousands):    

                                                  Capitalized
                                                     Lease
                                                -----------------
    1997                                          $ 1,237
    1998                                            1,237
    1999                                            1,237
    2000                                            1,237
    2001                                            1,237
    Later years                                     2,937
                                                -----------------
                                                    9,122
    Less amount representing interest               1,854
                                                -----------------
    Present value of lease payments                 7,268
    Less amount classified as current                 750
                                                -----------------
      Long-term capitalized lease obligation      $ 6,518
                                                -----------------
                                                -----------------

    On September 30, 1996, the Company entered into an Amended and Restated 
Credit Agreement (the "Credit Agreement") with the senior bank lenders 
increasing the aggregate principal amount under the lending facility from 
$65.0 million to $77.5 million.  Losses of $355,000 related to the amendment 
of Credit Agreement are reflected as an extraordinary item in the 1996 
statement of operations.  Losses of $2,099,000 related to refinancing the 
Company's senior bank debt in 1994 are reflected as an extraordinary item in 
1994. 

    At December 31, 1996, the Credit Agreement provided for borrowings up to 
$77.5 million from five banks which includes the availability of up to $7.5 
million of a letter of credit facility.  Usage of the letter of credit 
facility reduces total available borrowings.  At December 31, 1996, $55.0 
million of borrowings were outstanding, and $1.5 million of the letter of 
credit facility was utilized.  Interest on borrowings is payable quarterly 
based on either the prime rate or LIBOR, at the discretion of the Company, 
plus a margin determined by the Company's total leverage ratio, as defined in 
the Credit Agreement.  At December 31, 1996, interest on borrowings was 
payable at LIBOR (5.6875% at December 31, 1996) plus 2.00%.  The fee on the 
letter of credit facility is payable quarterly at  a rate determined by the 
Company's total leverage ratio.  At December 31, 1996, the fee on the letter 
of credit facility was payable at 2.00%.  Based on the balance outstanding, 
principal payments are due quarterly from March 31, 1998, through March 31, 
2002. The Credit Agreement has certain restrictive covenants which require, 
among other things, that the Company maintain certain debt coverage ratios.  
In addition, the Company is restricted as to borrowings, the amount of 
dividend payments on common stock, stock repurchases, and sales of assets.

    The Company has $120 million borrowed at December 31, 1996 under senior 
secured notes, with an effective interest rate of 10.75%.  Interest payments 
are due semiannually in April and October.  All principal is due in a single 
payment of $120 million on October 1, 2003.  The senior notes include certain 
restrictive covenants similar to the Credit Agreement mentioned above.

    All outstanding stock of the Company's subsidiaries is pledged as 
collateral for the Credit Agreement and senior notes.  In addition, the 

                                     F-12

<PAGE>

Company and its subsidiaries are subject to restrictions on the transfer of 
assets by the Company's senior debt covenants.

    The Company has $35 million borrowed at December 31, 1996 from several 
insurance companies under various subordinated notes payable agreements, with 
effective interest rates ranging from 10.48% to 11.2%.  Interest payments are 
due quarterly.  Principal payments of $2.5 million, $12.5 million, $10 
million, and $10 million are due in 1997 through 2000, respectively.  The 
subordinated notes payable agreements include certain restrictive covenants 
similar to the Credit Agreement mentioned above.

    Partnership debt is related to the Company's interest in the New Century 
Seattle Partners, L.P., and includes the following:
               
       A senior term loan of $7,300,000 bearing interest at the election of the 
       Partnership of either prime plus 1.25% or the Eurodollar rate plus 2.5%.
       Principal and interest is payable quarterly through September 30, 2000.
       The loan requires additional payments from excess cash flow, and 
       includes certain penalties if repaid prior to July 15, 1997.  A senior 
       term loan of $1,000,000 due December 31, 2000 bearing interest at the 
       election of the Partnership of either prime plus 3.75% or the Eurodollar
       rate plus 5.0%.  Substantially all of the Partnership's assets are 
       pledged as collateral for these senior term loans.
               
       Subordinated notes payable of $5,602,847 bearing interest at 18.0% per 
       annum due July 7, 2001.  The notes can be repaid without penalty after 
       July 15, 1998.
               
       Miscellaneous contracts payable of $333,274.

    At December 31, 1996, the Company had outstanding an interest rate 
contract with a financial institution which involves the exchange of fixed 
for floating rate of LIBOR (5.625% at December 27, 1996) on a notional 
principal amount of $30 million.  The Company's risk in this transaction is 
the cost of replacing, at current market rates, the contract in the event of 
default by the counterparty.  At December 31, 1996, the fair value of the 
contract, as quoted by the counterparty, was $110,000.  Management believes 
the risk of incurring a loss as a result of non-performance by the 
counterparty is remote as the contract is with a major financial institution.

                                     F-13
<PAGE>

8.  Income taxes

     At December 31, 1996, the Company has net operating loss carryforwards 
of approximately $59.5 million that expire in the years 2002 through 2007 and 
investment tax credit carryforwards of approximately $1.3 million that expire 
in the years 1997 through 2000.

    Deferred income taxes reflect the net 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.  
At December 31, 1996 and 1995 significant components of the Company's 
deferred tax liabilities and assets are as follows (in thousands):    



                                                 1996            1995
                                                ------          ------
Deferred tax liabilities:                 
  Tax over book depreciation                   $   8,701       $   8,265
  Prepaid player compensation                      4,457               0
                                               ---------       ---------
Total deferred tax liabilities                    13,158           8,265
                                          
Deferred tax assets:                      
  Net operating loss carryforwards                22,752          25,793
  Book over tax amortization                       5,210           1,990
  Tax credit carryforwards                           951           2,116
  Deferred compensation agreements                 1,293           1,582
  Litigation accrual                               5,067           5,432
  Deferred NBA expansion revenue                   1,958           3,166
  Other                                            3,129           2,657
                                               ----------      ----------
Total deferred tax assets                         40,360          42,736
Valuation allowance for deferred tax assets      (27,202)        (34,471)
                                               ----------      ----------
Net deferred tax assets                           13,158           8,265
                                               ----------      ----------
Net deferred taxes                             $       0       $       0 
                                               ----------      ----------
                                               ----------      ----------

    Significant components of the provision for income taxes attributable to 
continuing operations are as follows (in thousands):

                                         1996      1995     1994 
                                         ----      ----     ----
    Current:
      Federal                          $ 1,561    $  422   $  68  
      State                              1,197     1,093       5
                                       -------    ------   -----
    Provision for income taxes         $ 2,758    $1,515   $  73
                                       -------    ------   -----
                                       -------    ------   -----

    At December 31, 1996, 1995, and 1994 the reconciliation of income taxes 
attributable to continuing operations computed at the U.S. federal statutory 
tax rate to income tax expense is as follows (in thousands):

                                     F-14

<PAGE>

                                         1996       1995        1994
                                         ----       ----        ----
Tax at U.S. statutory rate (34%)       $  6,422   $   (476)   $  2,348
State income taxes and other              1,732      1,569         283
Net operating loss carryforwards         (7,004)       ---      (2,626)
Alternative minimum tax                   1,608        422          68
                                       ---------  ---------   ---------
Provision for income taxes             $  2,758   $  1,515    $     73 
                                       ---------  ---------   ---------
                                       ---------  ---------   ---------

    The Company made income tax payments of  $2,157,000 in 1996, $538,000 in 
1995, and $1,302,000 in 1994.
    
9.  Employee benefit plan

    The Company has a voluntary defined contribution 401(k) savings and 
retirement plan for the benefit of its nonunion employees, who may contribute 
from 2% to 15% of their compensation.  This amount, plus a matching amount up 
to 4% provided by the Company, is contributed to the plan ($1,058,000 in 
1996, $831,000 in 1995, and $700,000 in 1994).  The Company may also make an 
additional voluntary contribution to the plan.

10. Stockholders' deficiency

    On September 19, 1996, the Board of Directors declared an increase of all 
classes of its common stock which the Company is authorized to issue from 
56,972,230 shares to 61,406,510 shares.  In conjunction with this increase, 
the Board also declared a two-for-one stock split effective October 15 for 
stockholders of record on October 4.  The stock split resulted in the 
issuance of 15,582,794 additional shares.  

    The Class B common stock has the same rights as common stock, except that 
the Class B common stock has ten times the voting rights of common stock and 
is restricted as to its transfer.  The Class B common stock may be converted 
into common stock at any time at the option of the stockholder.  Giving 
effect to the stock split in 1996, the amount of authorized shares of Class B 
on December 31, 1995 was 11,784,222 shares.

    Between January and June 1981, the Company agreed to sell shares of its 
common stock and Class B common stock to key employees and officers at fair 
market value at the time the agreements were executed.  The stock is issued 
upon payment to the Company of the agreed purchase price.  At December 31, 
1995 and 1996, rights to purchase 52,500 shares of common stock and Class B 
common stock were outstanding at $2.00 per share (an aggregate of $105,000).  
In 1995, rights to purchase 82,500 shares of common and 82,500 shares of 
Class B common were exercised at an average price of $0.9287 per share.  No 
rights were exercised in 1996.

    The Company's Employee Stock Option Plan (the "Plan") was approved by the 
Board of Directors and the stockholders of the Company in 1983.  In 1994, the 

                                     F-15

<PAGE>

Plan was amended to extend the term of the plan and to increase the amount of 
common stock reserved for issuance to 1,000,000 shares.  In connection with 
the Class B common stock dividend in June 1987, the Company amended the Plan 
to provide for the distribution of one share of Class B common stock for each 
share of common stock subject to outstanding options under the Plan on such 
date, which distribution occurs at the time an optionee exercises an option.

    At December 31, 1996, options to purchase 658,000 shares of common stock 
were outstanding under the Plan at prices ranging from $0.688 to $7.625 (an 
aggregate of $1,947,725).  Options to purchase 690,000 of common stock were 
outstanding at December 31, 1995.  Options to purchase 20,000 shares of 
common stock were exercisable at December 31, 1995.  No options were 
exercisable at December 31, 1996.  Options to purchase 32,000 shares of 
common stock were exercised in 1996 at an average price of $3.22 per share.  
Options to purchase 20,000 shares of common stock and 20,000 shares of Class 
B common stock were exercised in 1995 at a price of $2.25 per share.

11. Commitments and contingencies

    The Company becomes involved from time to time in various claims and 
lawsuits incidental to the ordinary course of its operations, including such 
matters as contract and lease disputes and complaints alleging employment 
discrimination.  In addition, the Company participates in various 
governmental and administrative proceedings relating to, among other things, 
condemnation of outdoor advertising structures without payment of just 
compensation, disputes regarding airport franchises and matters affecting the 
operation of broadcasting facilities.  Other than as indicated above, the 
Company believes that the outcome of any such pending claims or proceedings, 
individually or in the aggregate, will not have a material adverse effect 
upon its business or financial condition.

    The Company incurred expenses of $457,000 in 1996, $290,000 in 1995, and  
$288,000 in 1994, for legal services provided by a law firm, one of whose 
partners is an officer of the Company.  The Company has incurred 
transportation costs of $2,041,000 and made advance payments of $38,000 at 
December 31, 1996, to a company controlled by the Company's major stockholder.

    The Company has employment contracts extending beyond December 31, 1996.  
Most of these contracts require that payments continue to be made if the 

                                     F-16
<PAGE>

individual should be unable to  perform because of death or disability.  
Future minimum obligations under these contracts are as follows (in 
thousands):

         1997                     $    29,121
         1998                          32,015
         1999                          23,418
         2000                          22,726
         2001                          22,487
         Later years                   44,350
                                  -------------
                                  $   174,117
                                  -------------
                                  -------------

    The Company is required to make the following minimum operating lease 
payments for equipment and facilities under non-cancelable lease agreements, 
guaranteed display advertising franchises, and broadcasting obligations which 
expire in more than one year as follows (in thousands):

<TABLE>
<CAPTION>
<S>                   <C>                       <C>              <C>
                      Equipment/Facilities      Franchises       Broadcast Obligations
                      ---------------------     -----------      ----------------------
1997                        $   4,675            $ 11,937             $ 5,363
1998                            4,297               7,325               2,384
1999                            3,819               5,087               1,105
2000                            3,133               4,252                 285
2001                            2,876               2,624                 133
Later years                    13,864                 704                   0
                            ----------           ---------            ---------
                            $  32,664            $ 31,929             $ 9,270 
                            ----------           ---------            ---------
                            ----------           ---------            ---------

</TABLE>

    Rent expense for operating leases aggregated $4,513,000 in 1996, 
$3,167,000 in 1995, and $2,609,000 in 1994. Franchise fee expense aggregated 
$16,116,000 in 1996, $17,236,000 in 1995, and $17,551,000 in 1994.  
Broadcasting film and programming expense aggregated $8,205,000 in 1996, 
$6,679,000 in 1995, and $7,507,000 in 1994.

    At December 31, 1996, in conjunction with a time brokerage agreement with 
a FCC licensee, the Company has guaranteed a bank loan obligation of the 
licensee which had an aggregate principal amount of $4,825,000 maturing in 
April 1999.  The Company began making payment under this guarantee in January 
1997.  No revenue is being recognized as part of this guarantee agreement.    
       

12. Litigation accrual

    The Company and two of its executive officers were defendants in a 
wrongful termination suit brought by former employees.  On February 29, 1996, 
a jury issued a verdict awarding the plaintiffs compensatory and punitive 
damages of approximately $13.0 million.  The Company recorded an accrual of 
$14.2 million related to the verdict which also included an estimate for 

                                     F-17
<PAGE>

additional legal costs.  The verdict is currently under appeal.  The appeal 
will likely defer settlement of the liability beyond 1997, and therefore, it 
is classified as non-current.

13. Supplement Cash Flow Information

The following table summarizes the change in operating assets and liabilities 
(in thousands):

<TABLE>
<CAPTION>
<S>                                                  <C>          <C>         <C>
                                                       1996         1995         1994
                                                       ----         ----         ----
Accounts receivable                                  $   (164)    $ (1,037)   $  (6,691)
Other current assets                                   (7,422)         965          315  
Accounts payable and accruals                           3,937          818       (2,821)
Accrued interest                                          331       (1,171)         820  
Deferred revenue                                        1,781        4,574        2,191  
Other, net                                             (4,866)       2,932          754
                                                     -----------  ----------  ------------
 Changes in operating assets and liabilities, net    $ (6,403)    $  7,081    $  (5,432) 
                                                     -----------  ----------  ------------
                                                     -----------  ----------  ------------
</TABLE>

14. Industry segment information

    The Company is engaged in three business segments:  Out-of-home media, 
Broadcasting, and Other.  Selected financial information for these segments 
for the years ended December 31, 1996, 1995 and 1994 is presented as follows 
(in thousands):

<TABLE>
<CAPTION>
<S>                                                   <C>            <C>                <C>               <C>
                                                      Out-of-home    Broad-
                                                        media        casting            Other             Consolidated
                                                      -----------    -------------      -----------       -------------
1996
----
Net revenue                                           $ 99,833       $ 118,171          $  29,294         $  247,298
                                                      -----------    -------------      -----------       -------------
                                                      -----------    -------------      -----------       -------------
Operating cash flow before expenses listed below:     $ 35,909       $  48,880          $ (24,445)            60,344
  Depreciation and amortization                         (5,615)        (10,273)            (1,108)           (16,996)
                                                      -----------    -------------      -----------       -------------
Income (loss) before expenses listed below:           $ 30,294       $  38,607          $ (25,553)            43,348
                                                      -----------    -------------      -----------
                                                      -----------    -------------      -----------
Interest expenses                                                                                             24,461
                                                                                                          -------------
Income before taxes and extraordinary item                                                                $   18,887
                                                                                                          -------------
                                                                                                          -------------
Identifiable assets                                   $ 67,918       $ 124,656          $  32,238         $  224,912
                                                      -----------    -------------      -----------       -------------
                                                      -----------    -------------      -----------       -------------
Capital expenditures, net of proceeds from
  retirements and disposals                           $  4,590       $   5,214          $   1,846         $   11,650
                                                      -----------    -------------      -----------       -------------
                                                      -----------    -------------      -----------       -------------



1995
----
Net revenue                                           $ 93,177       $  94,108          $  20,112         $  207,397
                                                      -----------    -------------      -----------       -------------
                                                      -----------    -------------      -----------       -------------
Operating cash flow before expenses listed below:     $ 31,978       $  39,507          $ (20,431)        $   51,054
  Depreciation and amortization                         (5,226)         (7,223)              (794)           (13,243)
                                                      -----------    -------------      -----------       -------------
Income (loss) before expenses listed below:           $ 26,752       $  32,284          $ (21,225)            37,811
                                                      -----------    -------------      -----------
                                                      -----------    -------------      -----------
Litigation expense                                                                                            14,200
Interest expenses                                                                                             25,010
                                                                                                          -------------
Income before taxes and extraordinary item                                                                $   (1,399)
                                                                                                          -------------
                                                                                                          -------------
Identifiable assets                                   $ 53,281       $ 112,430          $  24,171         $  189,882
                                                      -----------    -------------      -----------       -------------
                                                      -----------    -------------      -----------       -------------
Capital expenditures, net of proceeds from
  retirements and disposals                           $  2,631       $  19,098          $     873         $   22,602
                                                      -----------    -------------      -----------       -------------
                                                      -----------    -------------      -----------       -------------

</TABLE>
                                     F-18

<PAGE>

<TABLE>
<CAPTION>
<S>                                                      <C>            <C>                <C>               <C>
                                                         Out-of-home    Broad-
                                                           media        casting            Other             Consolidated
                                                         -----------    -------------      -----------       -------------
1994
----
Net revenue                                                $ 85,436       $ 83,463          $  17,203         $  186,102
                                                         -----------    -------------      -----------       -------------
                                                         -----------    -------------      -----------       -------------
Operating cash flow before gain expenses listed below:     $ 27,028       $ 33,561          $ (17,299)            43,290
  Disposition of assets                                         ---          2,506                ---              2,506
  Depreciation and amortization                              (5,297)        (4,954)              (632)           (10,883)
                                                         -----------    -------------      -----------       -------------
Income (loss) before expenses listed below:                $ 21,731       $  31,113         $ (17,931)            34,913
                                                         -----------    -------------      -----------
                                                         -----------    -------------      -----------
Interest expenses                                                                                                 25,909
                                                                                                             -------------
Income before taxes and extraordinary item                                                                    $    9,004
                                                                                                             -------------
                                                                                                             -------------
Identifiable assets                                        $ 54,291       $  86,952          $ 29,540         $  170,783
                                                         -----------    -------------      -----------       -------------
                                                         -----------    -------------      -----------       -------------
Capital expenditures, net of proceeds from
  retirements and disposals                                $  2,709       $   2,036          $  3,990         $    8,735
                                                         -----------    -------------      -----------       -------------
                                                         -----------    -------------      -----------       -------------

</TABLE>

    The Other segment consists of basketball operations (other than the 
    basketball team's TV, radio, and related operations which are included in 
    the "Broadcasting" segment), soccer operations, and the Corporate office in 
    1996, 1995, and 1994.  Net revenue for the Other segment consists 
    principally of revenues from the sports ticket sales.

15. Summary of quarterly financial data (unaudited) 

    The Company's results of operations may vary from quarter to quarter due 
in part to the timing of acquisitions and to seasonal variations in the 
operations of the broadcasting segment.  In particular, the Company's net 
revenue and operating cash flow historically have been affected positively 
during the NBA basketball season (the first, second, and fourth quarters) and 
by increased advertising activity in the second and fourth quarters.

    The following table sets forth a summary of the quarterly results of 
operations for the years ended December 31, 1996 and 1995 (in thousands, 
except per share information):                                               

<TABLE>
<CAPTION>

<S>                                                   <C>            <C>           <C>            <C>
                                                       First         Second        Third          Fourth
1996                                                   Quarter       Quarter       Quarter        Quarter
----                                                  ----------     ----------    -----------    -----------
Net revenue                                           $62,927        $68,235       $45,842         $70,294
Operating cash flow before depreciation,
  amortization, and interest expense                   12,674         19,986        11,255          16,428
Income before extraordinary item                        3,123          9,147           379           3,480
Extraordinary loss                                        ---            ---           ---             355
Net income
Net income per share before extraordinary item          3,123          9,147           379           3,125
Net income per share                                      .10            .29           .01             .11
                                                          .10            .29           .01             .10

</TABLE>
                                     F-19

<PAGE>

<TABLE>
<CAPTION>
<S>                                                 <C>         <C>        <C>        <C>
1995
----
Net revenue                                         $56,791     $49,404    $40,548    $60,654
Operating cash flow before depreciation,
  amortization, litigation, and interest expense      9,480      13,947     10,199     17,428
Net income (loss)                                       434       3,689      1,079    *(8,116)
Net income (loss) per share                             .01         .12        .03       (.25)
___________
  * Reflects litigation accrual discussed in Note 12.

</TABLE>
 
                                     F-20