<PAGE>
 
--------------------------------------------------------------------------------

               UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

(X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 1999

                                     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  0-19728


                        GRANITE BROADCASTING CORPORATION
             (Exact name of registrant as specified in its charter)


          DELAWARE                                            13-3458782
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                           Identification No.)

                                767 Third Avenue
                                   34th Floor
                            New York, New York 10017

                        Telephone number: (212) 826-2530

     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            
    -----         ------


                     (APPLICABLE ONLY TO CORPORATE ISSUERS:)

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

         Class A Voting Common Stock, par value $.01 per share - 178,500 shares
outstanding at March 31, 1999; Common Stock (Nonvoting), par value $.01 per
share - 11,818,680 shares outstanding at March 31, 1999.
<PAGE>
 
                          PART I. FINANCIAL INFORMATION
                        GRANITE BROADCASTING CORPORATION
                           CONSOLIDATED BALANCE SHEET


<TABLE>
<CAPTION>

                                                                                          March 31,                   December 31,
ASSETS                                                                                      1999                           1998 
------                                                                                   -----------                  ------------
                                                                                         (Unaudited)
<S>                                                                                 <C>                         <C>
Current assets:

   Cash and cash equivalents                                                        $       1,247,007           $          762,392
   Accounts receivable, net                                                                28,828,041                   32,830,227
   Film contract rights                                                                     7,039,476                    9,671,443
   Other assets                                                                            10,132,844                    9,627,807
                                                                                     ----------------             ----------------
     Total current assets                                                                  47,247,368                   52,891,869

Property and equipment, net                                                                34,543,967                   33,040,152
Film contract rights and other noncurrent assets                                            6,995,422                    7,286,039
Deferred financing fees, net                                                               11,149,743                   11,086,733
Intangible assets, net                                                                    671,322,936                  677,669,324
                                                                                     ----------------             ----------------
   
                                                                                    $     771,259,436           $      781,974,117
                                                                                    =================           ==================
    

LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------

Current liabilities:

   Accounts payable                                                                 $       2,869,505           $        4,031,837
   Accrued interest                                                                        13,295,147                    5,107,551
   Other accrued liabilities                                                                7,715,132                    9,908,091
   Film contract rights                                                                    11,036,549                   13,648,629
   Other current liabilities                                                                6,442,848                    5,763,882
                                                                                     ----------------             ----------------
     Total current liabilities                                                             41,359,181                   38,459,990

Long-term debt                                                                            424,804,753                  426,399,159
Film contract rights payable                                                                4,962,250                    5,920,122
Deferred tax liability                                                                     74,717,597                   78,308,597
Other noncurrent liabilities                                                               17,224,984                   18,005,696

Commitments

Cumulative Exchangeable Preferred Stock, net of offering costs                            191,171,885                  185,167,313
Cumulative Convertible Exchangeable Preferred Stock                                        30,660,975                   31,183,400

Stockholders' deficit:

   Common Stock: 41,000,000 shares authorized consisting of 1,000,000 shares of
     Class A Common Stock, $.01 par value, and 40,000,000 shares of Common Stock
     (Nonvoting), $.01 par value; 178,500 shares of Class A Common Stock and
     11,818,680 shares of Common Stock (Nonvoting) (11,608,032
     shares at December 31,1998) issued and outstanding                                       119,971                      117,865
   Additional paid-in capital                                                               8,500,889                   14,233,125
   Accumulated deficit                                                                   (18,429,689)                 (12,006,267)
   Less: Unearned compensation                                                            (2,899,485)                  (2,881,008)
         Treasury stock                                                                      (47,000)                     (47,000)
         Note receivable from officer                                                       (886,875)                    (886,875)
                                                                                     ----------------             ----------------
     Total stockholders' deficit                                                         (13,642,189)                  (1,470,160)
                                                                                     ----------------             ----------------
   
                                                                                    $     771,259,436           $      781,974,117
                                                                                    =================           ==================
</TABLE>
    


                             See accompanying notes.



                                       -1-
<PAGE>
 
                       GRANITE BROADCASTING CORPORATION
                     CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                                 Three Months Ended
                                                                     March 31,
                                                              1999                  1998
                                                      -------------------    ------------------
                                                                     (Unaudited)

<S>                                                   <C>                    <C>    

Net revenues                                                 $33,874,817           $36,724,036
Station operating expenses                                    22,524,984            22,315,368
Time brokerage agreement fees                                        ---               150,000
Depreciation expense                                           1,387,257             1,364,619
Amortization expense                                           6,408,515             3,583,722
Corporate expense                                              1,972,138             2,017,063
Non-cash compensation expense                                    264,099               332,520
                                                      -------------------    ------------------

Operating income                                               1,317,824             6,960,744

Other expenses:

   Equity in net loss of investee                                133,603               486,720
   Interest expense, net                                       9,997,776             9,208,738
   Non-cash interest expense                                     707,227               474,789
   Other                                                         343,640               241,525
                                                      -------------------    ------------------

Loss before income taxes                                     (9,864,422)           (3,451,028)
(Benefit) provision for income taxes                         (3,441,000)              496,000
                                                      -------------------    ------------------

Net loss                                                    $(6,423,422)          $(3,947,028)
                                                      ===================    ==================

Net loss attributable to common shareholders               $(13,021,711)         $(10,060,463)
                                                      ===================    ==================

Basic and diluted net loss per common share                      $(1.10)               $(1.06)
                                                      ===================    ==================

Weighted average common shares outstanding                    11,890,745             9,475,600
</TABLE> 








                             See accompanying notes.

                                       -2-
<PAGE>
  
                       GRANITE BROADCASTING CORPORATION
               CONSOLIDATED STATEMENT  OF STOCKHOLDERS' DEFICIT

                       Three Months Ended March 31, 1999
                                  (Unaudited)

<TABLE> 
                                    Class A        Common         Additional                                             
                                     Common         Stock          Paid-in       Accumulated       Unearned      Note Receivable
                                     Stock       (Nonvoting)       Capital         Deficit       Compensation     from Officer  
                                   ----------    -----------      ----------     -----------     ------------    ---------------  
<S>                                <C>           <C>            <C>            <C>               <C>             <C>  
Balance at December 31, 1998        $1,785        $116,080       $14,233,126    $(12,006,267)     $(2,881,009)      $(886,875) 
Dividends on redeemable 
 preferred stock                                                  (6,473,252)
Accretion of offering costs
 related to Cumulative
 Exchangeable Preferred Stock                                       (125,037)
Exercise of stock options                              168            77,232 
Conversion of Convertible
 Preferred Stock into Common
 Stock (Nonvoting)                                   1,045           521,380
Issuance of Common Stock
 (Nonvoting)                                           893              (893)
Grant of stock award under 
 stock plans                                                         282,575                         (282,575)
Stock expense related to
 stock plans                                                         (14,242)                         264,099
Net loss                                                                          (6,423,422)
                                   ----------    -----------     -----------    ------------     ------------    ---------------  
Balance at March 31, 1999           $1,785        $118,186       $ 8,500,889    $(18,429,689)     $(2,899,485)      $(886,875) 
                                   ==========    ===========     ===========    ============     ============    ===============  

<CAPTION> 

                                                                      Total    
                                             Treasury              Stockholders'
                                              Stock                  Deficit   
                                             --------              ------------ 
<S>                                    <C>                    <C>                               
Balance at December 31, 1998                $(47,000)              $(1,470,160)
Dividends on redeemable 
 preferred stock                                                    (6,473,252)
Accretion of offering costs
 related to Cumulative
 Exchangeable Preferred Stock                                         (125,037)
Exercise of stock options                                               77,400
Conversion of Convertible
 Preferred Stock into Common
 Stock (Nonvoting)                                                     522,425
Issuance of Common Stock
 (Nonvoting)                                                               --
Grant of stock award under 
 stock plans                                                               --
Stock expense related to
 stock plans                                                           249,857
Net loss                                                            (6,423,422)
                                        ------------------      -----------------
Balance at March 31, 1999                   $(47,000)             $(13,642,189)
                                        ==================      =================
</TABLE> 





                            See accompanying notes.


                                      -3-
<PAGE>
 
                        GRANITE BROADCASTING CORPORATION
                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                             Three months ended 
                                                                                                  March 31,
                                                                                           1999                   1998
                                                                                       ------------           ------------
                                                                                                   (Unaudited)
<S>                                                                                 <C>                  <C>      

Cash flows from operating activities:

    Net loss                                                                        $    (6,423,422)     $     (3,947,028)
    Adjustments to reconcile net loss to net cash
      provided by operating activities:

        Amortization of intangible assets                                                 6,408,515             3,583,722
        Depreciation                                                                      1,387,257             1,364,619
        Non-cash compensation expense                                                       264,099               332,520
        Non-cash interest expense                                                           707,227               474,789
        Equity in net loss of investee                                                      133,603               486,720
        Deferred tax benefit                                                             (3,591,000)                  ---
    Change in assets and liabilities:

        Decrease in accounts receivable                                                   4,002,186             6,476,049
        Increase in accounts payable and accrued liabilities                              4,832,305             6,973,648
        Decrease in film contract rights and other non current assets                     2,922,584             2,430,308
        Decrease in film contract rights and other current liabilities                   (2,890,986)           (3,626,464)
        Decrease in other non current liabilities                                          (780,712)           (1,252,040)
        Increase in other current assets                                                 (2,146,647)           (2,867,316)
                                                                                    --------------------------------------
      Net cash provided by operating activities                                           4,825,009            10,429,527
Cash flows from investing activities:
    Network affiliation payment                                                            (354,954)                  ---
    Insurance proceeds received                                                           1,641,662                   ---
    Investment in Datacast, LLC                                                            (133,603)             (250,000)
    Capital expenditures                                                                 (2,845,072)             (647,725)
                                                                                    --------------------------------------
      Net cash used in investing activities                                              (1,691,967)             (897,725)
Cash flows from financing activities:
    Proceeds from bank financing                                                          4,000,000                   ---
    Repayment of bank debt                                                               (5,613,399)           (7,000,000)
    Dividends paid                                                                         (594,056)             (805,283)
    Other financing activities, net                                                        (440,972)               47,755
                                                                                    -------------------------------------
   
      Net cash used in financing activities                                              (2,648,427)           (7,757,528)
                                                                                    --------------------------------------
Net increase in cash and cash equivalents                                                   484,615             1,774,274
Cash and cash equivalents, beginning of period                                              762,392             2,170,927
                                                                                    -------------------------------------
Cash and cash equivalents, end of period                                            $     1,247,007      $      3,945,201
                                                                                    ===============      ================
    
Supplemental information:

    Cash paid for interest                                                          $     1,856,632       $     3,302,011
    Income taxes paid                                                                     1,567,550                79,213
    Non-cash capital expenditures                                                            46,000               219,685
    Non-cash dividend                                                                     5,879,535             5,195,943
</TABLE>






                             See accompanying notes.



                                       -4-
<PAGE>
 
                        GRANITE BROADCASTING CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

Note 1 -  Basis of presentation
-------------------------------

The accompanying unaudited consolidated financial statements include the
accounts of Granite Broadcasting Corporation and its subsidiaries (the
"Company"), have been prepared in accordance with the instructions to Form 10-Q
and do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. Operating
results for the three month period ended March 31, 1999 are not necessarily
indicative of the results that may be expected for the year ended December 31,
1999. For further information, refer to the Company's consolidated financial
statements and notes thereto for the year ended December 31, 1998 which were
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1998. All significant intercompany accounts and transactions have been
eliminated. Data at and for the year ended December 31, 1998 are derived from
the Company's audited consolidated financial statements. In the opinion of
management, all adjustments of a normal recurring nature which are necessary for
a fair presentation of the results for the interim periods have been made.


Note 2 - Station Disposition
----------------------------

On April 29, 1999 the Company entered into a definitive agreement with CBS
Corporation ("CBS") whereby CBS will acquire from the Company substantially all
of the assets of KEYE-TV, the CBS affiliate serving Austin, Texas, for
$160,000,000 in cash, subject to certain adjustments. Consummation of the
transaction is contingent upon approval by the Federal Communications Commission
and satisfaction of other customary closing conditions. The sale is expected to
be consummated during the fourth quarter of 1999. It is anticipated that the
proceeds from the sale will be used to reduce indebtedness, thus providing the
Company with the flexibility necessary to improve its capital structure and
lower its cost of capital.


Note 3 - Stock Option Grants
----------------------------

In a continuing effort to align the interests of the Company's officers and
certain key corporate and station employees with that of its shareholders, the
Board of Directors granted certain options to purchase shares of the Company's
Common Stock (Nonvoting). The Board of Directors granted 1,110,000 options,
exercisable at $10, which vest as follows: (i) half when the closing price of
the Company's Common Stock (Nonvoting) averages $15 or more for 10 consecutive
business days and (ii) half when the closing price of the Company's Common Stock
(Nonvoting) averages $20 or more for 10 consecutive business days. The fair
market value of the Company's Common Stock (Nonvoting) on the date of the grant
was $6.125. The Board of Directors also granted 1,132,000 options exercisable at
$6.875 and 727,000 options exercisable at $6.125. The exercise price was the
fair market value of the Company's Common Stock (Nonvoting) on the date of grant
and the options vest over four or five years.





                                       -5-
<PAGE>
 
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Certain sections of this Form 10-Q contain various forward looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, which
represent the Company's expectations or beliefs concerning future events. The
forward-looking statements include, without limitation, the Company's ability to
meet its future liquidity needs and its disclosure concerning Year 2000 issues.
The Company cautions that these forward-looking statements are further qualified
by important factors that could cause actual results to differ materially from
those in the forward looking statements. Such factors include, without
limitation, general economic conditions, competition in the markets in which the
Company's stations are located, technological change and innovation in the
broadcasting industry and proposed legislation.


Introduction
------------

The Company is a group broadcaster that operates ten network-affiliated
television stations and one radio station. The Company's revenues are derived
principally from local and national advertising and, to a lesser extent, from
network compensation for the broadcast of programming and revenues from studio
rental and commercial production activities. The primary operating expenses
involved in owning and operating television stations are employee salaries,
depreciation and amortization, programming and advertising and promotion
expenses. Comparisons of the Company's consolidated financial statements for the
three month period ended March 31, 1999 against prior periods have been affected
by the acquisition of KBWB-TV, which occurred on July 20, 1998, the sale of
WWMT-TV, which occurred on July 15, 1998, and the sale of WLAJ-TV, which
occurred on August 17, 1998. It is anticipated that comparisons of the Company's
consolidated financial statements for the year ended December 31, 1999 against
prior periods will be affected by the aforementioned transactions. Numbers
referred to in the following discussion have been rounded to the nearest
thousand.

The following table sets forth certain operating data for the three months ended
March 31, 1999 and 1998:

                                                 1999                 1998
                                                 ----                 ----

Operating income                           $    1,318,000      $      6,961,000
Add:
    Time brokerage agreement fees                     ---               150,000
    Depreciation and amortization               7,796,000             4,949,000
    Corporate expense                           1,972,000             2,017,000
    Non-cash compensation                         264,000               332,000
                                           --------------      ----------------

    
Broadcast cash flow                        $   11,350,000      $     14,409,000
                                           ==============      ================



      

                                       -6-
<PAGE>
 
"Broadcast cash flow" means operating income plus time brokerage agreement fees,
depreciation, amortization, corporate expense and non-cash compensation. The
Company has included broadcast cash flow data because such data are commonly
used as a measure of performance for broadcast companies and are also used by
investors to measure a company's ability to service debt. Broadcast cash flow is
not, and should not be used as, an indicator or alternative to operating income,
net income or cash flow as reflected in the consolidated financial statements,
is not a measure of financial performance under generally accepted accounting
principles and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with generally accepted
accounting principles.


Three months ended March 31, 1999 and 1998
------------------------------------------

Net revenue for the three months ended March 31, 1999 totaled $33,875,000; a
decrease of $2,849,000 or 8 percent compared to $36,724,000 for the three months
ended March 31, 1998. The decrease was primarily due to the loss of
Olympic-related advertising revenue at the Company's CBS affiliated stations and
the loss of political advertising in a non-election year. The decrease was also
due to the loss of revenue from the disposition of WWMT-TV and WLAJ-TV, offset,
in part, by the added revenues from the acquisition of KBWB-TV.

Station operating expenses for the three months ended March 31, 1999 totaled
$22,525,000; an increase of $210,000 or 1 percent compared to $22,315,000 for
the three months ended March 31, 1998. The increase was primarily due to
increases in programming and promotion expenses, offset, in part, by a net
reduction in expenses due to the disposition of WWMT-TV and WLAJ-TV and the
acquisition of KBWB-TV.

Depreciation and amortization increased $2,847,000 or 58 percent during the
three months ended March 31, 1999 compared to the same period a year earlier
primarily due to the amortization of intangible assets acquired in the
acquisition of KBWB-TV, offset, in part, by reduced amortization expense
resulting from the disposition of WWMT-TV.

Net interest expense increased $789,000 or 9 percent during the three months
ended March 31, 1999 as compared to the same period a year earlier. The increase
was primarily due to higher levels of outstanding indebtedness as a result of
the acquisition of KBWB-TV, offset in part, by the results of the Company's
strategic plan to reduce its cost of borrowing. During the second quarter of
1998, the Company completed an offering of $175,000,000 of its 8 7/8% Senior
Subordinated Debentures, due May 15, 2008. The proceeds of the offering were
used to repay all of the then outstanding borrowings under the Company's then
existing bank credit agreement and to repurchase $22,960,000 of its 10 3/8%
Senior Subordinated Notes, due May 15, 2005 at a repurchase price of 105.75%.
During the third quarter of 1998, the Company used lower rate





                                       -7-
<PAGE>
 
bank borrowings to repurchase an additional $9,500,000 of its 10 3/8% Notes at a
repurchase price of 101.50%. During the fourth quarter, the Company used lower
rate bank borrowings to repurchase an additional $45,600,000 of various issues
of its subordinated debt at discounts ranging from 89% to 95%.


Liquidity and Capital Resources
-------------------------------

The Company's bank credit agreement (the "Credit Agreement") provides for
revolving credit borrowings of $260,000,000 and permits borrowings of up to an
additional $240,000,000 on an uncommitted basis. The Credit Agreement can be
used to fund future acquisitions of broadcast stations and for general working
capital purposes, subject to certain limitations of the financial covenants
thereunder. As of March 23, 1999, the Company amended the Credit Agreement to
revise the maximum consolidated total debt to consolidated cash flow ratio
covenant contained therein. As of May 14, 1999, the Company had $77,992,000 of
borrowings outstanding under the Credit Agreement.

On April 29, 1999, the Company entered into a definitive agreement with CBS
Corporation ("CBS") whereby CBS will acquire from the Company substantially all
of the assets of KEYE-TV, the CBS affiliate serving Austin, Texas, for
$160,000,000 in cash, subject to certain adjustments. Consummation of the
transaction is contingent upon approval by the Federal Communications Commission
and satisfaction of other customary closing conditions. The sale is expected to
be consummated during the fourth quarter of 1999. It is anticipated that the
proceeds from the sale will be used to reduce indebtedness, thus providing the
Company with the flexibility necessary to improve its capital structure and
lower its cost of capital.

Cash flows provided by operating activities were $4,825,000 during the three
months ended March 31, 1999 compared to cash flows provided by operating
activities of $10,430,000 during the three months ended March 31, 1998, a
decrease of $5,605,000 or 54 percent. The decrease was due to a decrease in
broadcast cash flow, increased interest expense and a less significant decrease
in net operating assets as compared to the prior period.

Cash flows used in investing activities were $1,692,000 during the three months
ended March 31, 1999 compared to $898,000 during the three months ended March
31, 1998. The increase was due to increased capital expenditures, which
primarily related to the replacement of assets destroyed in a fire at KBJR-TV.
Such expenditures at KBJR-TV were offset by insurance proceeds received relating
to the fire. The Company expects to receive additional reimbursements from
insurance proceeds as additional replacement equipment is purchased. The Company
anticipates that future requirements for capital expenditures will include those
incurred during the ordinary course of business, which include costs associated
with the implementation of digital television technology and costs associated
with the Year 2000 Issue (identified below).

Cash flows used in financing activities were $2,648,000 during the three months
ended March 31, 1999 compared to $7,758,000 during the three months ended March
31, 1998. The decrease resulted primarily from a net decrease in repayments of
Credit Agreement borrowings.




                                       -8-
<PAGE>
 
The Company believes that internally generated funds from operations and
borrowings under the Credit Agreement will be sufficient to satisfy the
Company's cash requirements for its existing operations for the next twelve
months and for the foreseeable future thereafter. The Company expects that any
future acquisitions of television stations would be financed through funds
generated from operations and additional debt and equity financings.


Year 2000
---------

The Company is preparing for the impact of the Year 2000 on its business, as
well as on the businesses of its customers, suppliers and business partners. The
"Year 2000 Issue" is the result of computer programs that were written using two
digits rather than four to define the applicable year. Any of the computer
programs and/or hardware used by the Company that have date-sensitive software
or embedded chips may recognize a date using "00" as the year 1900 rather than
the year 2000. The Year 2000 Issue could result in system failure or
miscalculations in the operations at the Company's broadcast and corporate
locations. The disruption of operations could include, among other things, a
temporary inability to originate and transmit broadcast programming and
commercials, process financial information or engage in other normal business
activity. The Company may also be exposed to risks from third parties with which
the Company interacts who fail to adequately address their own Year 2000 Issues.


State of Readiness
------------------

The Company has developed a multiple phase approach to identify and evaluate its
state of Year 2000 readiness for both its information technology (IT) and non-IT
systems. The first phase was to develop a Company-wide, uniform strategy for
addressing the Year 2000 Issue and to assess the Company's current state of Year
2000 readiness. This included an internal review at each location of all IT and
non-IT systems for potential Year 2000 Issues. The Company has completed this
review and has identified the systems that need to be updated or replaced to
ensure Year 2000 compliance. Based on these system evaluations, the Company has
determined that it will be required to modify or replace portions of its
software and certain hardware so that its systems will properly utilize dates
beyond December 31, 1999. The primary systems that are being addressed are the
master control automation systems, IBM AS/400, the computer used to process
sales, traffic, accounts receivable, accounts payable and the general ledger,
and systems with embedded chips, including telephone and security systems.

The next phase was to develop uniform test plans and test methodologies. The
Company has begun to test and update its systems, and expects that all testing
will be completed by August 1999.

Although the Company has not yet completed all necessary phases of its Year 2000
program, it believes that it has an effective program in place to resolve its
critical internal Year 2000 Issues in a timely manner.





                                       -9-
<PAGE>
 
Costs to Address the Company's Year 2000 Issues
-----------------------------------------------

The Company will incur capital expenditures and incremental expenses to bring
current systems into compliance. Total incremental expenses have not had a
material impact on the Company's financial condition to date and are not at
present, based on known facts, expected to have a material impact on the
Company's financial condition. The Company estimates the total cost of upgrading
equipment will be approximately $700,000, of which approximately $160,000 has
been incurred through March 31, 1999. All Year 2000 expenditures are made out of
each location's operating budget. There are no IT projects that have been
delayed due to Year 2000 efforts.


Risks of the Company's Year 2000 Issues
---------------------------------------

While the Company believes its efforts will provide reasonable assurance that
material disruptions will not occur due to internal Year 2000 failures, the
possibility of disruption, especially from third parties, still exists. The
Company's operations are vulnerable to system failures experienced by the
network program providers, certain satellite services, software and hardware
providers, local and long distance telephone providers, power companies,
financial services providers and others upon whom the Company relies for
supporting services. In an effort to determine its vulnerabilities to
third-party Year 2000 failures, the Company currently is requesting Year 2000
compliance data from all of its suppliers and vendors. The Company will use this
information in an attempt to identify whether any of these parties has a Year
2000 Issue that may materially impact the Company's operations, liquidity,
capital resources or certain other functions. The Company does not, however,
control the systems of other companies, and cannot assure that these systems
will be timely converted and, if not converted, would not have an adverse effect
on the Company's business operations. In the event that the Company and/or its
significant vendors or suppliers do not complete their Year 2000 compliance
efforts, the Company could experience disruptions in its operations, including a
temporary inability to engage in normal broadcast or business activities.
Disruptions in the economy generally resulting from Year 2000 Issues also could
affect the Company.


Contingency Plan
----------------

The Company is developing a contingency plan to address system failures that are
critical to conduct its business. This plan includes, but is not limited to,
increases in overtime salaries and/or increases in personnel to operate systems
that would ordinarily be operated by a computer. The Company expects to have its
contingency plan completed by September 1999.





                                      -10-
<PAGE>
 
Year 2000 Forward-Looking Statements
------------------------------------

The foregoing Year 2000 discussion contains "forward-looking statements" within
the meaning of Section 21E of the Securities Exchange Act of 1934. Such
statements, including without limitation, anticipated costs and the dates by
which the Company expects to complete certain actions, are based on management's
best current estimates, which were derived utilizing numerous assumptions about
future events, including the continued availability of certain resources,
representations received from third parties and other factors. However, there
can be no guarantee that these estimates will be achieved, and actual results
could differ materially from those anticipated. Specific factors that might
cause such material differences include, but are not limited to, the ability to
identify and remediate all relevant IT and non-IT systems, results of Year 2000
testing, adequate resolution of Year 2000 Issues by businesses and other third
parties who are service providers, suppliers or customers of the Company,
unanticipated system costs, the adequacy of and ability to develop and implement
contingency plans and similar uncertainties. The "forward-looking statements"
made in the foregoing Year 2000 discussion speak only as of the date on which
such statements are made, and the Company undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of unanticipated
events.





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<PAGE>
 
                                     PART II

                                OTHER INFORMATION



ITEM 4. Submission of Matters to a Vote of Securities Holders.
        -----------------------------------------------------

        On January 8, 1999, the holders of all of the Company's Voting
        Common Stock adopted a resolution by written consent in lieu of
        a special meeting amending the Company's Stock Option Plan (the
        "Plan") to increase the shares of Common Stock (Nonvoting)
        subject to options available for grant under the Plan.

        On February 23, 1999, the holders of all of the Company's Voting
        Common Stock adopted a resolution by written consent in lieu of
        a special meeting amending the Plan to increase the shares of
        Common Stock (Nonvoting) subject to options available for grant
        under the Plan.

ITEM 6. Exhibits and Reports on Form 8-K
        --------------------------------

        a.  Exhibits
            --------

            27.  Financial Data Schedule

        b.  Reports on Form 8-K
            -------------------

            None




                                      -12-
<PAGE>
 
                                   SIGNATURES

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

                          GRANITE BROADCASTING CORPORATION

                                   Registrant

Date:    May 14, 1999     /s/   W. DON CORNWELL                        
                          --------------------------------------
                               (W. Don Cornwell)
                             Chief Executive Officer

Date:    May 14, 1999     /s/      LAWRENCE I. WILLS                         
                          --------------------------------------
                                  (Lawrence I. Wills)
                          Vice President, Finance and Controller
                             (Principal Accounting Officer)







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