<PAGE>

                                                                    Exhibit 10.4

June 30, 1999
Patrick Scott
President & CEO
Fisher Broadcasting Inc.
100 Fourth Avenue N.
Seattle, WA 98109

     Re: KATU/Portland, OR

Dear Pat:

     If approved by your station, this document will constitute a side letter
amendment to the existing affiliation agreement between American Broadcasting
Companies, Inc. (hereinafter, "ABC" or "Network") and your station (hereinafter,
the "Amendment").  ABC reserves the right to terminate this Amendment if
comparable side letter amendments have not been accepted by non-owned ABC-
affiliated stations representing 66% coverage of the country by July 16, 1999.

I.   INVENTORY SWAP/NFL CONTRIBUTION

     A.   8 Additional Primetime Spots per Week to Your Station from Network:

          1.   2 "A" program spots per week

          2.   4 "B" program spots per week

          3.   2 "C" program spots per week

          4.   Dividing the Network's weekly primetime program schedule into
               one-thirds, the "A" spots shall come from spots appearing in the
               top rated one-third, the "B" spots shall come from spots
               appearing in the middle rated one-third, and the "C" spots shall
               come from spots in the lowest rated one-third of the Network's
               primetime program schedule.  The allocation and placement of the
               spots will be made within 60 days prior to the start of each new
               Network television season.

     B.   To Network from Your Station

          1.   A total annual payment by your station of $600,901.  This payment
               will be made through an equal monthly reduction from your
               station's Network compensation.  The payment has been
<PAGE>

               calculated on the basis of the following methodology: A $45
               million aggregate annual payment by non-ABC-Owned stations
               through monthly deduction from Network compensation, and to the
               extent there is inadequate Network compensation to cover the
               payment, through equal monthly payments. The amount of payment
               required of each Station will be based upon the pro-rata
               percentage of the station's market coverage of total U.S.
               television households (excluding coverage by ABC-owned stations)
               which amounts to 74.888%. The amount of the annual $45 million
               payment by non-owned ABC stations will be reduced in proportion
               to any increase in the present percentage of coverage of U.S.
               television households by television stations owned or operated by
               ABC or its affiliated companies. (E.g. if ABC's coverage were to
               increase to 30%, the aggregate annual affiliate payment would be
               reduced to $41,528,877.) If that were to happen, the amount of
               payment required of your station would be reduced
               correspondingly.

          2.   10 Children's spots per week.

     C.   Children's Clearances:

          Your station shall maintain its current level and time period
          scheduling of Children's clearances.

          ABC warrants that during the three year term of the agreement, the
          Network will continue to provide the quantity of educational and
          informational programming that satisfies the FCC's Children's
          television rules (currently three hours per week) and that Network-
          supplied commercial matter in all Children's programming will not
          exceed FCC restrictions, ABC will indemnify and hold your station
          harmless against any breach by the network of the Children's program
          and commercial content warranty.

     D.   Term: The provisions of this Section I (Inventory Swap/NFL
          Contribution) shall have a term of 3 years beginning August l, 1999.

     E.   Guarantees Against Dilution During the Term of the Inventory Swap/NFL
          Contribution Plan:

                                      -2-
<PAGE>

          1.   The Network agrees that it will afford your station commercial
               units of the same number and length and with substantially the
               same placement as during the l998-l999 Network television reason.
               The Network will also add the two (2) units per hour of inventory
               for your station to auto racing, golf and horse racing as set out
               in the body of Pat Fili's June 4, 1999 letter.  (A copy of that
               letter is attached).

          2.   Network agrees that apart from the program categories listed in
               the body of Pat Fili's June 4, 1999 letter, and except as might
               arise in the enforcement or negotiation of individual contracts,
               Network will continue to offer your station the same cash
               compensation currently offered.

          3.   Your station guarantees that it will maintain at least its
               current level of clearance and time period scheduling of "The
               View,"and "Politically Incorrect" through July 3l, 2000.

II.  SOAP CHANNEL PARTICIPATION

     A.   Soap Channel Cable Service Revenue Sharing:

          1.   Your station, along with other affiliates accepting the terms set
               forth herein (including ABC Owned Stations) will have an economic
               participation in The Soap Channel Cable Service by receiving one
               of the following annual distributions, whichever is greater:

               a.   $0.01/month per revenue-generating Soap Channel subscriber
                    in the affiliate's market.

               b.   15% of total annual subscriber revenue generated in the
                    affiliate's market capped at $0.03 per revenue-generating
                    sub/month.

               c.   10% of total subscriber revenue generated in the affiliate's
                    market, without a cap.

               d.   15% of annual net profits generated in the affiliate's
                    market.

                                      -3-
<PAGE>

          2.   The term "market" means your station's DMA.  Revenues generated
               in a DMA adjacent to that of an ABC affiliate but in which no ABC
               affiliated station exists shall be credited to an ABC station or
               stations outside that DMA based upon their respective viewing
               shares in that DMA.

          3.   The term "cable service" includes the distribution of programming
               by any video delivery system now known or hereafter devised,
               including, but not limited to, television stations, satellite,
               wireless, telephone and cable systems.

          4.   The terms "revenue-generating Soap Channel subscriber" and
               "subscriber revenue" mean the subscriber fee paid by the cable
               service, without regard to launch fees.

          5.   The term "net profits" (as used in this section) means gross
               revenue less any costs incurred by The Soap Channel cable
               service, subject to independent audit.

          6.   The term "Soap Channel Cable Service" means that programming
               service that was announced by ABC on April 8, 1999.  If that
               service is partially owned by ABC or is merged with the Soap
               Channel announced by Sony, the affiliate participation in annual
               net profits as set out in paragraph II. A.(l)(d) will be diluted
               in the same proportion as ABC's interest in the service.
               Affiliate participation under the formula set out in paragraph
               II.  A.(l)(a)-(c) will not be subject to dilution or reduction.

     B.   Daytime Clearances:

          Your station shall maintain current level and time period scheduling
          of clearances for the following ABC Soaps:  General Hospital, All My
          Children, One Life To Live and Port Charles, or for any replacement
          soap opera programming.

     C.   Exclusivity:  ABC has immediate repurposing rights for its soaps for
          the purposes and as provided in this section II for the term stated in
          paragraph D below.

     D.  Term:

                                      -4-
<PAGE>

          1.   The term of the provisions of Section II of this Amendment shall
               be for the duration of your station's ABC affiliation agreement.

          2.   The same terms of Soap Channel Participation will apply during
               the term of the renewal of current affiliation agreements.

III.  EXCLUSIVITY

     A.   Entertainment:

          1.   Series:  ABC will not repurpose any Primetime Entertainment
               series episode within 180 days of the end of its original airing
               on the Network or the expiration of that television season
               (Sept.-Sept.), whichever is earlier.  (In no event will ABC
               repurpose any such series episode within 90 days of the end of
               its original airing on the Network.)

          2.   Made for TV Movies, Mini-Series and Specials:  ABC will not
               repurpose within 60 days of the end of original airing on the
               Network.

          3.   Awards Shows and other timely Specials:  ABC will not repurpose
               within 48 hours of the end of original airing on the Network.

          4.   ABC will not promote the repurposed Entertainment programming
               prior to its original airing on the Network.  ABC will obtain
               contractual commitments from licensees imposing the same
               promotion limitations, but ABC will have no liability to
               affiliates in the event of a breach by such licensee.

          5.   The above notwithstanding, ABC will be free to repurpose up to
               25% of the Primetime Entertainment schedule without any
               restrictions.

     B.   Sports:

          1.   Programs:  ABC will not repurpose any Sports program in its
               entirety within 48 hours of the end of its original airing on the
               Network.

                                      -5-
<PAGE>

          2.   Excerpts:  ABC will not repurpose excerpts (defined as 40% or
               less) of any Sports program within 4 hours of the end of its
               original airing on the Network.

          3.   Highlights:  ABC will continue to be free to use highlights drawn
               from any Sports program anytime after its original airing on the
               Network.  The term "highlight" is defined by reference to custom
               and practice within the broadcast industry.

     C.   News:

          1.   ABC has immediate and unrestricted repurposing rights for
               breaking news coverage unless it has preempted Network
               programming for such coverage in which case it will have
               unrestricted repurposing rights immediately following the
               preemption of Network programming for such coverage.

          2.   ABC will not repurpose any "hard" News program (e.g.,WNT &
               Nightline) within 4 hours of the end of its original airing on
               the Network, and any timely News program (e.g., GMA) within 2
               hours of the end of its original airing on the Network.  Upon
               request by ABC, affiliates will not repurpose in the same time
               period in which ABC is airing "hard" News any News program
               content that has been provided by ABC.

          3.   ABC will not repurpose any "soft'' News program (e.g.,
               Newsmagazines) in its entirety within 60 days of the end of its
               original airing on the Network.  ABC may repurpose excerpts of
               any Newsmagazine program within 60 days after the end of its
               original airing on the Network if the new program does not
               contain more than 50% of any one original Newsmagazine program
               and the original Newsmagazine program titles are not used unless
               modified (e.g., "Best of 20/20").

          4.   Politically Incorrect:  ABC will not repurpose within 4 hours of
               the end of its original airing on the Network.

     D.  Daytime:

          1.   ABC has immediate and unrestricted repurposing right for its
               soaps as provided for herein.  ABC will limit its repurposing of
               its soaps to the Soap Channel Cable Service unless and until the

                                      -6-
<PAGE>

               launch of such channel fails.  In the event that ABC repurposes
               its soaps apart from the Soap Channel Cable Service, your station
               will be entitled to an economic participation from such
               repurposing by receiving an annual distribution based on 15% of
               annual net profits generated by such repurposing in your
               station's market.  For the purposes of this paragraph only "net
               profits" means gross revenue less any direct out-of-pocket costs
               incurred by ABC in repurposing its soaps.  The term "direct out-
               of-pocket costs" means amounts paid by ABC to third parties
               specifically and solely for the repurposing of the soap operas
               (e.g. third party participations, residuals, rights clearance
               costs and the like).  The term excludes amounts paid to
               Disney/ABC, any of their respective subsidiaries or any of their
               employees, save residuals or third party participations that may
               be owed to such employees.  The calculation of net profits as set
               out in this paragraph will be subject to independent audit.  The
               provision of this paragraph related to ABC's repurposing soaps
               apart from a Soap Channel Cable Service and the right of your
               station to an economic participation in such repurposing shall be
               subject to the term limitations set out in paragraph E below.

          2.   ABC will not repurpose The View or any replacement programming
               referenced in paragraph II.B above that is not a soap opera
               within 4 hours of the end of its original airing on the Network.

     E.   Term:  The term of the provisions of this Section III shall be
          coterminous with the term of Section I (the Inventory Swap/NFL
          Contribution Plan) of this Amendment.

IV.  FURTHER FLEXIBILITY

          The parties recognize that ABC may wish to repurpose certain
          programming in a manner that is at variance with the limitations set
          forth above.  Your station authorizes the Network's Affiliate Board to
          act fully on your behalf to accept or reject ABC's requests for such a
          variance and agrees that neither the Affiliate Board nor those acting
          on its behalf will be liable to you for the decisions it makes to
          accept or reject a variance.  The Affiliate Board will be required to
          meet with ABC promptly upon

                                      -7-
<PAGE>

          receiving a request for such a variance, and will not act unreasonably
          in withholding its approval.

V.   MISCELLANEOUS

          1.   The geographical scope of exclusivity shall be your station's DMA
               or any lesser area as may be required by the FCC under existing
               rules.

          2.   The exclusivity provisions prohibit repurposing by any video
               delivery system now known or hereafter devised, including, but
               not limited to, television stations, satellite, wireless,
               telephone and cable systems.

          3.   The prohibition against and the contractual provisions
               restricting the pre-promotion of Entertainment programming (as
               set out in paragraph III.A (4)) apply as well to all other
               program classifications, e.g., news and sports.

          4.   If comparable side letter amendments are accepted by the
               requisite number of affiliates, then as to those accepting
               affiliates ABC agrees not to implement before August 1, 2002 any
               of the measures outlined in the attachment to Pat Fili's June 4,
               1999 letter entitled "1999-2000 Season Format Adjustments",
               except the compensation reduction outlined in the body of that
               letter which will be implemented as to all affiliates.  With
               respect to any affiliates who do not accept such a comparable
               side letter agreement, ABC reserves all of its rights including
               the measures outlined in the attachment to the letter.

          5.   If ABC should desire to program or create a channel that is
               designed to repurpose a significant portion of any class of ABC
               Network programming that involves the creation of an asset, ABC
               agrees to enter into good faith negotiations about affiliate
               financial participation in such asset but ABC shall be under no
               legally enforceable obligation to come to agreement with
               affiliates about any such participation.

          6.   In the event that your station's existing affiliation agreement
               imposes greater clearance obligations than set forth herein,
               those clearance obligations will continue to apply.

                                      -8-
<PAGE>

          7.   The provisions of your station's existing affiliation agreement
               relating to the application of FCC rules to clearance commitments
               will continue to apply.

          8.   This Amendment shall be governed by New York Law.

                                    *  *  *

     If your station wishes to agree to the Amendment, please execute the
enclosed copy of this letter in the space provided below and return it to me
before July 16, 1999.

                              Very truly yours,



                              John L. Rouse
                              Senior Vice President
                              Affiliate Relations

Accepted and Agreed to:

KATU/Portland, OR

By: _______________________

Title: ____________________

Dated: ____________________

                                      -9-