<PAGE>
 
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  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 September 30, 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  0-19728

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

          DELAWARE                                        13-3458782
(State or other jurisdiction of incorporation           (I.R.S. Employer
      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 September 30, 1996; Common Stock (Nonvoting), par value $.01 per
share - 8,499,716 shares outstanding at September 30, 1996.
<PAGE>
 
                         PART I.  FINANCIAL INFORMATION
                        GRANITE BROADCASTING CORPORATION
                           CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
 
                                                               September 30,   December 31,
ASSETS                                                              1996           1995
------                                                         -------------   ------------
                                                                (Unaudited)
<S>                                                            <C>             <C>
Current assets:
 Cash and cash equivalents                                      $  3,259,171   $     95,123
 Accounts receivable, net                                         22,670,334     26,186,579
 Film contract rights                                              7,811,272      5,813,366
 Other assets                                                      5,577,677      3,854,774
                                                                ------------   ------------
       Total current assets                                       39,318,454     35,949,842
 
Property and equipment, net                                       33,017,759     32,132,126
Film contract rights and other noncurrent assets                   4,650,220      3,725,612
Deferred financing fees, net                                      14,774,432     14,849,529
Intangible assets, net                                           359,287,343    365,564,029
                                                                ------------   ------------
                                                                $451,048,208   $452,221,138
                                                                ============   ============
         LIABILITIES AND STOCKHOLDERS' EQUITY
         ------------------------------------
 
Current liabilities:
 Accounts payable                                               $  2,652,180   $  4,770,793
 Accrued interest                                                 10,450,837      5,595,610
 Other accrued liabilities                                         3,390,355      3,252,518
 Film contract rights and other current liabilities               11,157,466      7,708,442
                                                                ------------   ------------
         Total current liabilities                                27,650,838     21,327,363
 
Long-term debt                                                   344,548,600    341,000,000
 
Film contract rights payable                                       3,478,828      3,669,534
 
Deferred tax and other noncurrent liabilities                     31,340,201     31,869,240
 
Redeemable preferred stock                                        45,487,500     45,487,500
 
Stockholders' equity:
 Common Stock:  41,000,000 shares authorized consisting of
   1,000,000 shares of Voting Common Stock, $.01 par value,
   and 40,000,000 shares of Common Stock (Nonvoting), $.01
   par value; 178,500 shares of Voting Common Stock and
   8,499,716  shares of Common Stock (Nonvoting) (8,218,240
   shares at December 31,1995) issued and outstanding                 86,782         83,967
 Additional paid-in capital                                       46,566,934     46,864,202
 Accumulated deficit                                             (44,631,697)   (36,590,198)
 Less: Unearned compensation                                      (2,592,903)    (1,490,470)
       Note receivable from officer                                 (886,875)           ---
                                                                ------------   ------------
         Total stockholders' equity                               (1,457,759)     8,867,501
                                                                ------------   ------------
                                                                $451,048,208   $452,221,138
                                                                ============   ============
</TABLE>

                            See accompanying notes.

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

<TABLE> 
<CAPTION> 
                              Three Months Ended September 30,  Nine Months Ended September 30,
                              --------------------------------  -------------------------------
                                         1996          1995            1996         1995
                                     ------------  ------------     ----------  ------------
                                              (Unaudited)                  (Unaudited)
<S>                                  <C>           <C>           <C>           <C>
 
Net revenues                         $29,467,805   $28,187,056    $92,058,635   $67,311,925
Station operating expenses            17,440,319    15,811,684     51,967,854    38,058,588
Depreciation expense                   1,571,252     1,404,108      4,573,801     3,044,610
Amortization expense                   2,985,076     3,054,687      8,819,689     6,371,587
Corporate expense                      1,235,343       731,686      3,247,239     2,196,119
Non-cash compensation expense            126,402        93,021        356,258       253,768
                                     -----------   -----------      ---------   -----------
 
 Operating income                      6,109,413     7,091,870     23,093,794    17,387,253
 
Other (income) expenses:
 Equity in net income of investee              -             -              _      (439,033)
 Interest expense, net                 9,172,025     8,981,023     27,220,056    17,463,590
 Other                                   366,433       201,112        711,291       472,113
                                     -----------   -----------      ---------   -----------
 
Loss before income taxes and
 extraordinary items                  (3,429,045)   (2,090,265)    (4,837,553)     (109,417)
Provision for income taxes               (77,007)     (155,147)      (312,696)     (246,147)
                                     -----------   -----------      ---------   -----------
 
Loss before extraordinary
 items                                (3,506,052)   (2,245,412)    (5,150,249)     (355,564)
Extraordinary loss                             -             -     (2,891,250)            -
                                     -----------   -----------   ------------   -----------
 
Net loss                             $(3,506,052)  $(2,245,412)   $(8,041,499)  $  (355,564)
                                     ===========   ===========    ===========   ===========
 
Net loss attributable to
 common stockholders                 $(4,387,372)  $(3,126,732)  $(10,685,456)  $(3,035,524)
                                     ===========   ===========    ===========   ===========
 
Per common share:
 Loss before extraordinary items          $(0.51)       $(0.55)  $      (0.91)  $     (0.60)
 Extraordinary loss                          ---           ---          (0.34)          ---
                                     -----------   -----------      ---------   -----------
 Net loss                                 $(0.51)       $(0.55)  $      (1.25)  $     (0.60)
                                     ===========   ===========   =  =========   ===========
 
Weighted average shares
 outstanding                           8,677,841     5,726,513      8,589,403     5,094,811
</TABLE>

                            See accompanying notes.

                                      -2-
<PAGE>

                       GRANITE BROADCASTING CORPORATION
                CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
 
                     Nine Months Ended September 30, 1996
                                  (Unaudited)
<TABLE>
<CAPTION>


                            Class A       Common     Additional                                                       Total
                             Common       Stock       Paid-in     Accumulated      Unearned      Note Receivable   Stockholders'
                             Stock      (Nonvoting)   Capital       Deficit      Compensation      from Officer        Equity
                            --------   -----------   ----------  -------------  ------------     ---------------   ------------
<S>                          <C>       <C>           <C>          <C>            <C>             <C>               <C> 
Balance at December 31, 1995 $1,785    $82,182       $46,864,202  $(36,590,198)  $(1,490,470)                      $8,867,501
Dividend on Cumulative
  Convertible Exchangeable
  Preferred Stock                                    (2,643,957)                                                   (2,643,957)
Exercise of Stock Options                2,008          888,805                                      $(886,875)         3,938
Issuance of Common Stock
  (Nonvoting)                              807             (807)                                                            -
Grant of Stock Award Under
  Management Stock Plan                               1,458,691                   (1,458,691)                               -
Stock expense related to
  Management Stock Plan                                                              356,258                          356,258
Net loss                                                            (8,041,499)                                    (8,041,499)
                            --------   -----------   ----------  -------------  ------------     ---------------   ------------
Balance at September         $1,785    $84,997      $46,566,934   $(44,631,697)  $(2,592,903)      $(886,875)     $(1,457,759)
  30, 1996                  =======    ==========   ===========   ============   ===========      =============   ============

</TABLE>

                            See accompanying notes.

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

<TABLE> 
<CAPTION> 
 
                                               Nine Months Ended September 30,
                                               -------------------------------

                                                     1996            1995
                                                --------------  --------------
                                                         (Unaudited)

<S>                                             <C>             <C>  
Cash flows from operating activities:
 Net loss                                       $  (8,041,499)    $  (355,564)
 Adjustments to reconcile net loss to net cash
   provided by operating activities:
    Amortization of intangible assets and
     deferred
     financing fees                                 8,819,689       6,371,587
    Depreciation                                    4,573,801       3,044,610
    Non-cash compensation expense                     356,258         253,768
    Non-cash deferred income taxes                        ---         146,000
    Extraordinary loss                              2,891,250             ---
    Equity in net income of investee                      ---        (439,033)
 
 Change in assets and liabilities net of
  effects from
   acquisitions of stations:
     Decrease (increase) in accounts
      receivable                                    3,516,245      (4,953,802)  
     Increase in accrued liabilities                4,993,064       5,687,431
     (Decrease) increase in accounts payable       (2,118,613)      1,924,532
     Increase in film contract rights
      and other noncurrent assets                  (2,922,514)     (4,632,085)
     Increase in film contract rights
      payable and other liabilities                 2,729,279       6,124,873
     Increase in other assets                      (1,989,039)     (2,030,469)
                                                -------------   -------------
   Net cash provided by operating activities       12,807,921      11,141,848
                                                -------------   -------------
 
Cash flows from investing activities:
 Payment for acquisitions of stations, net of
   cash acquired                                          ---    (227,263,218)
 Capital expenditures                              (5,062,410)     (6,337,247)
                                                -------------   -------------
    Net cash used in investing activities          (5,062,410)   (233,600,465)
                                                -------------   -------------
 
Cash flows from financing activities:
 Net borrowings under credit facility              16,500,000     170,250,000
 Proceeds from senior subordinated notes          109,450,000     175,000,000
 Repayment of bank debt                          (107,000,000)   (105,500,000)
 Retirement of senior subordinated notes          (15,500,000)            ---
 Dividends paid                                    (2,643,957)     (2,679,960)
 Payment of deferred financing fees                (5,391,444)    (10,473,452)
 Proceeds from exercise of stock options                3,938          32,950
 Redemption of Adjustable Rate Preferred Stock            ---      (2,000,000)
                                                -------------   -------------
    Net cash (used in) provided by financing
     activities                                    (4,581,463)    224,629,538
                                                -------------   -------------
 
Net increase in cash and cash equivalents           3,164,048       2,170,921
Cash and cash equivalents, beginning of period         95,123       1,947,562
                                                -------------   -------------
 
Cash and cash equivalents, end of period        $   3,259,171   $   4,118,483
                                                =============   =============
 
Supplemental information:
 Cash paid for interest                         $  22,472,970   $  11,251,635
 Income taxes paid                                    116,593         169,893
 Non-cash capital expenditures                        397,024         200,623
</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 and nine-month periods ended September 30, 1996 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1996.  For further information, refer to the Company's consolidated
financial statements and notes thereto for the year ended December 31, 1995
which were included in the Company's Form 10-K dated March 28, 1996.  All
significant intercompany accounts and transactions have been eliminated.  Data
at and for the year ended December 31, 1995 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 - Long term debt
-----------------------

On February 22, 1996, the Company completed an offering of $110,000,000
principal amount of its 9-3/8% Series A Senior Subordinated Notes (the "9-3/8%
Notes") due December 1, 2005.  Proceeds from the sale of the 9-3/8% Notes were
used to repay all outstanding term loan and revolving credit borrowings under
the Company's existing bank credit agreement and for general working capital
purposes. In connection with the repayment of the term loan (which is not
subject to being reborrowed), the Company incurred an extraordinary loss on the
early extinguishment of debt of $3,510,152 related to the write-off of deferred
financing fees.

On May 6, 1996, the Company purchased $2,000,000 face amount of its 10-3/8%
Senior Subordinated Notes (the "10-3/8% Notes") due May 1, 2005 at a discount.
On June 19, 1996, the Company purchased $13,500,000 face amount of its 9-3/8%
Notes at a discount. As a result of these transactions, the Company recognized
an extraordinary gain, after the write-off of a portion of related deferred
financing fees, of $618,902 during the second quarter of 1996.

In September 1996, the Company amended and restated its existing credit
agreement to increase the total amount of revolving credit borrowings available
thereunder from $60,000,000 to $200,000,000.  The bank facility can be used to
fund future acquisitions of broadcast stations and for general corporate
purposes.  As of October 31, 1996, the Company had $184,500,000 of the revolving
credit facility under the credit agreement available for acquisitions and
working capital purposes.

Note 3 -  Net loss per common share
-----------------------------------

Net loss per common share for the three and nine month periods ended September
30, 1996 and 1995 is calculated by dividing net loss attributable to common
stockholders by the weighted average number of shares of common stock
outstanding. The inclusion of additional shares assuming the exercise of
outstanding stock options and the conversion of certain preferred stock into
Common Stock (Nonvoting) would have been antidilutive for all periods presented.



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

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

The consolidated financial statements of the Company reflect significant
increases between the nine month periods ended September 30, 1996 and 1995 in
substantially all line items.  The principal reasons for such increases are the
acquisition of WWMT-TV on June 1, 1995, the acquisition of WKBW-TV on June 29,
1995 and improvements in the Company's operations.  It is anticipated that the
Company's consolidated financial statements for the year ended December 31, 1996
will reflect significant increases in substantially all line items compared to
the prior year due to the acquisitions of WWMT-TV and WKBW-TV.  The Company may
recognize significant taxable income as a result of the acquisition of WKBW-TV.
Such taxable income could potentially eliminate substantially all the Company's
net operating losses for federal income tax purposes available for future
utilization, and could result in the Company being in a taxable position in
present and future years.  For financial reporting purposes, any taxes paid
arising from the consummation of the acquisition of WKBW-TV has been considered
additional purchase price and allocated to goodwill.

The Company's revenues are derived principally from local and national
advertising and, to a lesser extent, from network compensation for the broadcast
of programming and revenues from studio rental and commercial production
activities.  The primary operating expenses involved in owning and operating
television stations are employee salaries, depreciation and amortization,
programming and advertising and promotion expenses.  Numbers referred to in the
following discussion have been rounded to the nearest thousand.

The following table sets forth certain operating data for the three month and
nine month periods ended September 30, 1996 and 1995:

<TABLE>
<CAPTION>
 
 
                                     Three Months Ended        Nine Months Ended
                                  ------------------------  ------------------------
                                       September 30,             September 30,
                                  ------------------------  ------------------------
                                     1996         1995         1996         1995
                                  -----------  -----------  -----------  -----------
<S>                               <C>          <C>          <C>          <C>
 
Operating income                  $ 6,109,000  $ 7,092,000  $23,094,000  $17,387,000
Add:
 Depreciation and amortization      4,556,000    4,459,000   13,394,000    9,416,000
 Corporate expense                  1,235,000      732,000    3,247,000    2,196,000
 Non-cash compensation                127,000       93,000      356,000      254,000
                                  -----------  -----------  -----------  -----------
 
Broadcast cash flow               $12,027,000  $12,376,000  $40,091,000  $29,253,000
                                  ===========  ===========  ===========  ===========
 
</TABLE>

"Broadcast cash flow" means operating income plus 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.

The Company has chosen not to adopt Statement of Financial Accounting Standards
No. 123 (Accounting for Stock Based Compensation) and will continue to report
under Accounting Principles Board Opinion No. 25.

Three months ended September 30, 1996 and 1995
----------------------------------------------

Net revenues for the three months ended September 30, 1996 totaled $29,468,000,
an increase of $1,281,000 or 4.5% compared to $28,187,000 for the three months
ended September 30, 1995.  The increase was primarily due to increased local
advertising, political spending and network compensation, offset, in part, by a
decline in national  advertising.

Station operating expenses for the three months ended September 30, 1996 totaled
$17,440,000, an increase of $1,628,000 or 10.3% compared to station operating
expenses of $15,812,000 for the same period a year earlier.  The increase was
primarily due to increased expenses for programming and local news.


                                      -6-
<PAGE>
 
Broadcast cash flow totaled $12,027,000 during the three months ended September
30, 1996 compared to $12,376,000 during the same period a year earlier, a
decrease of $349,000 or 2.8%.

Depreciation and amortization increased by $97,000 or 2.2% during the three
months ended September 30, 1996 compared to the same period a year earlier.
Corporate expense increased $503,000 or 68.7% during the three months ended
September 30, 1996 compared to the same period a year earlier, primarily due to
higher administrative costs associated with the expansion of the Company's
corporate office to manage its expanded station group. Non-cash compensation
expense increased $34,000 or 36.6% during the three months ended September 30,
1996 compared to the same period a year earlier due to the granting of
additional awards payable in Common Stock (Nonvoting) to certain executive
employees of the Company under the Management Stock Plan.

As a result of the factors discussed above, operating income decreased $983,000
or 13.9% during the three months ended September 30, 1996 compared to the same
period a year earlier.

Net interest expense totaled $9,172,000 during the three months ended September
30, 1996, an increase of $191,000 or 2.1% compared to net interest expense of
$8,981,000 during the same period a year earlier, primarily due to slightly
higher interest rates.

Net loss totaled $3,506,000 during the three months ended September 30, 1996
compared to net loss of $2,245,000 during the same period a year earlier, an
increase of $1,261,000.  This change is primarily due to the changes in the line
items discussed above.

Nine months ended September 30, 1996 and 1995
---------------------------------------------

Net revenues for the nine months ended September 30, 1996 totaled $92,059,000,
an increase of $24,747,000 or 36.8% compared to net revenue of $67,312,000 for
the nine months ended September 30, 1995.  Of this increase, $21,262,000
resulted from the inclusion of one additional month of operations of KEYE-TV,
five additional months of operations of WWMT-TV and six additional months of
operations of WKBW-TV in 1996.  The remaining increase was primarily a result of
increased local advertising, political spending and increased network
compensation, partially offset by lower national advertising.  Net revenues at
the Company's nine stations (including revenues derived by KEYE-TV, WKBW-TV and
WWMT-TV prior to their acquisition by the Company) increased $3,709,000 or 4.2
percent during the nine months ended September 30, 1996 as compared to the same
period in 1995.

Station operating expenses for the nine months ended September 30, 1996 totaled
$51,968,000, an increase of $13,909,000 or 36.6% compared to station operating
expenses of $38,059,000 for the same period a year earlier.  Of this increase,
$10,648,000 was due to the inclusion of one additional month of operating
expenses of KEYE-TV, five additional months of operating expenses of WWMT-TV and
six additional months of operating expenses of WKBW-TV. The remaining increase
was primarily due to higher programming expenses and increased news expenses
associated with the launch of a news operation at KEYE-TV.  Station operating
expenses at the Company's nine stations (including operating expenses derived by
KEYE-TV, WKBW-TV and WWMT-TV prior to their acquisition by the Company)
increased $2,298,000 or 4.6 percent during the nine months ended September 30,
1996 as compared to the same period in 1995.

Broadcast cash flow totaled $40,091,000 during the nine months ended September
30, 1996 compared to $29,253,000 during the same period a year earlier, an
increase of $10,838,000 or 37%. Of the increase, $10,614,000 was due to the
inclusion of one additional month of operations of KEYE-TV, five additional
months of operations of WWMT-TV and six additional months of operations of WKBW-
TV.  Broadcast cash flow at the Company's nine stations (including broadcast
cash flow derived by KEYE-TV, WKBW-TV and WWMT-TV prior to their acquisition by
the Company) increased $1,411,000 or 3.7 percent during the nine months ended
September 30, 1996 as compared to the same period in 1995.

Depreciation and amortization increased by $3,978,000 or 42.2% during the nine
months ended September 30, 1996 compared to the same period a year earlier
primarily due to the inclusion of one additional  month of operations of KEYE-
TV, five additional months of operations of WWMT-TV and six additional months of
operations of WKBW-TV.  Corporate expense increased $1,051,000 or 47.9% during
the nine months ended September 30, 1996 compared to the same period a year
earlier, primarily due to higher administrative costs associated with the
expansion of the Company's corporate office to manage its expanded station
group.  Non-cash compensation expense increased $102,000 during the nine months
ended September 30, 1996 compared to the same period a year earlier due to the
granting of additional awards payable in Common Stock (Nonvoting) to certain
executive employees under the Company's Management Stock Plan.

                                      -7-
<PAGE>
 
As a result of the factors discussed above, operating income increased
$5,707,000 or 33% during the nine months ended September 30, 1996 compared to
the same period a year earlier.

The equity in net income of investee of $439,000 for the nine months ended
September 30, 1995 resulted from the Company recognizing its pro rata share of
the earnings of Queen City III Limited Partnership, the ultimate parent of WKBW-
TV, under the equity method of accounting.  On June 29, 1995, the Company
acquired the remaining interest in Queen City III Limited Partnership.

Net interest expense totaled $27,220,000 during the nine months ended September
30, 1996, an increase of $9,756,000, or 55.9% compared to net interest expense
of $17,464,000 during the same period a year earlier, primarily due to higher
levels of outstanding indebtedness as a result of the acquisitions of WWMT-TV
and WKBW-TV in June of 1995.

The Company completed an offering of $110,000,000 principal amount of its 9-3/8%
Notes during the first quarter of 1996. The proceeds from this offering were
used to repay all outstanding term loan and revolving credit borrowings under
the Company's existing bank credit agreement and for general working capital
purposes. In connection with the repayment of the term loan (which is not
subject to being reborrowed), the Company incurred an extraordinary loss on the
early extinguishment of debt of $3,510,000 related to the write-off of deferred
financing fees. During the second quarter, the Company purchased $2,000,000 face
amount of its 10-3/8% Notes and $13,500,000 face amount of its 9-3/8% Notes at a
discount. As a result of these transactions, the Company recognized an
extraordinary gain during the second quarter of $619,000 and a net extraordinary
loss for the nine months ended September 30, 1996 of $2,891,000.

Net loss totaled $8,041,000 during the nine months ended September 30, 1996
compared to net loss of $356,000 during the same period a year earlier, an
increase of $7,685,000. This change is primarily due to the changes in the line
items discussed above.

Liquidity and capital resources
-------------------------------

On February 22, 1996, the Company completed an offering of $110,000,000
principal amount of its 9 3/8% Notes. The proceeds from this offering were used
to repay all outstanding term loan and revolving credit borrowings under the
Company's then existing bank credit agreement and for general working capital
purposes.

In September 1996, the Company amended and restated its existing credit
agreement to increase the total amount of revolving credit borrowings available
thereunder from $60,000,000 to $200,000,000.  The bank facility can be used to
fund future acquisitions of broadcast stations and for general corporate
purposes.  As of October 31, 1996, the Company had $184,500,000 of the revolving
credit facility under the credit agreement available for acquisitions and
working capital purposes.

Cash flows provided by operating activities were $12,808,000 during the nine
months ended September 30, 1996 compared to cash flows provided by operating
activities of $11,142,000 during the nine months ended September 30, 1995, an
increase of $1,666,000 or 15 percent.  The increase was primarily due to higher
broadcast cash flow offset, in part by higher cash interest expense.

Cash flows used in investing activities were $5,062,000 during the nine months
ended September 30, 1996, compared to $233,600,000 during the nine months ended
September 30, 1995.  Cash flows used in investing activities during the nine
months ended September 30, 1995 related primarily to the acquisitions of KEYE-
TV, WWMT-TV and WKBW-TV while cash flows used in investing activities during the
nine months ended September 30, 1996 were related entirely to capital
expenditures.

Cash flows used in financing activities were $4,581,000 during the nine months
ended September 30, 1996 compared to cash flows provided by financing activities
of $224,630,000 during the nine months ended September 30, 1995.  The decrease
resulted primarily from a decrease in net borrowings offset in part by a
decrease in payments for deferred financing fees.

The Company believes that internally generated funds from operations, and
borrowings under its revolving working capital facility, if necessary, 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.



                                      -8-
<PAGE>
 
                                    PART II
                                    -------

                               OTHER INFORMATION
                               -----------------



ITEM 1.  Legal Proceedings
         -----------------

         Not applicable

ITEM 2.  Changes in Securities
         ---------------------

         Not applicable

ITEM 3.  Defaults upon Senior Securities
         -------------------------------

         Not applicable

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

         On July 24, 1996, the holders of all of the Company's Voting Common
         Stock, par value  $.01 per share, adopted resolutions by written
         consent in lieu of a special meeting amending the Granite Broadcasting
         Corporation Stock Option Plan and the Granite Broadcasting Corporation
         Management Stock Plan (a copy of the Stock Option Plan and the
         Management Stock Plan were filed as exhibits 10.1 and 10.15,
         respectively, to the Company's quarterly report on Form 10-Q filed with
         the Securities and Exchange Commission on August 14, 1996).

ITEM 5.  Other Information
         -----------------

         Not applicable

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

         a.  Exhibits
             --------

              4.35  Third Amended and Restated Credit Agreement dated as of
                  September 4, 1996 among Granite Broadcasting Corporation, as
                  borrower, the lenders party thereto, Bankers Trust Company, as
                  agent and The Bank of New York, First Union National Bank of
                  North Carolina, Goldman Sachs Credit Partners L.P. and Union
                  Bank of California, N. A., as co-agents.

              11. Statement of Computation of Per Share Earnings

              27. Financial Data Schedule
               
                                      -9-
<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 November 8, 1996
     ----------------
                                 /s/  W. DON CORNWELL
                                ------------------------------------
                                       (W. Don Cornwell)
                                     Chief Executive Officer


Date November 8, 1996
     ----------------
                                 /s/ LAWRENCE I. WILLS
                                ------------------------------------
                                       (Lawrence I. Wills)
                                 Vice President, Finance and Controller
                                     (Principal Accounting Officer)