<PAGE>   1
 
================================================================================
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                           -------------------------
 
                                   FORM 10-K
                           -------------------------
 
<TABLE>
<CAPTION>
   (MARK ONE)
<C>              <C>
      [X]            ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
                        FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 OR
      [ ]          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                      SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
                FOR THE TRANSITION PERIOD FROM             TO
                        COMMISSION FILE NUMBER 1-9329
</TABLE>
 
                           -------------------------
                          PULITZER PUBLISHING COMPANY
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
                           -------------------------
 
<TABLE>
<S>                                            <C>
                   DELAWARE                                      430496290
       (State or other jurisdiction of                        (I.R.S. Employer
        incorporation or organization)                     Identification Number)
</TABLE>
 
                           900 NORTH TUCKER BOULEVARD
                           ST. LOUIS, MISSOURI 63101
                    (Address of principal executive offices)
 
                                 (314) 340-8000
              (Registrant's telephone number, including area code)
 
                           -------------------------
 
   Securities registered pursuant to Section 12(b) of the Act: Common Stock,
              par value $.01 per share -- New York Stock Exchange
 
        Securities registered pursuant to Section 12(g) of the Act: None
                           -------------------------
 
     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  ____
 
     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [ ]
 
     The aggregate market value of the voting stock held by non-affiliates of
the registrant was approximately $288,170,252 as of the close of business on
March 20, 1997.
 
     The number of shares of Common Stock, $.01 par value, outstanding as of
March 20, 1997 was 6,548,546.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
     Portions of the registrant's definitive Proxy Statement to be used in
connection with its Annual Meeting of Stockholders to be held on April 24, 1997
are incorporated by reference into Part III of this Report.
 
     The registrant's fiscal year ends on the last Sunday of December in each
year. For ease of presentation, the registrant has used December 31 as the
fiscal year-end in this Annual Report. Except as otherwise stated, the
information in this Report on Form 10-K is as of December 31, 1996.
================================================================================
<PAGE>   2
 
                                     PART I
 
ITEM 1. BUSINESS
 
GENERAL
 
     The Company is engaged in newspaper publishing and television and radio
broadcasting. Its newspaper operations consist of two major metropolitan
dailies: the St. Louis Post-Dispatch (the "Post-Dispatch"), the only major daily
newspaper serving the St. Louis metropolitan area; and The Arizona Daily Star
(the "Star"), serving the Tucson metropolitan area, and a group of community
newspapers acquired on July 1, 1996. The Company's broadcasting operations
consist of nine network-affiliated television stations located in Greenville,
South Carolina; New Orleans, Louisiana; Lancaster, Pennsylvania; Winston-Salem,
North Carolina; Albuquerque, New Mexico; Louisville, Kentucky; Omaha, Nebraska;
Daytona Beach/Orlando, Florida and Des Moines, Iowa; and three radio stations
located in Phoenix, Arizona.
 
     The Pulitzer Publishing Company was founded by the first Joseph Pulitzer in
1878 to publish the original St. Louis Post-Dispatch and has operated
continuously since that time under the direction of the Pulitzer family. Michael
E. Pulitzer, a grandson of the founder, currently serves as Chairman of the
Board, President and Chief Executive Officer of the Company.
 
     On July 1, 1996, the Company acquired for approximately $216 million
(including approximately $6 million in working capital) all the stock of Scripps
League Newspapers, Inc. ("Scripps League"), a privately owned company that
published a group of community newspapers, including 14 dailies, which serve
smaller markets, primarily in the West and Midwest. The largest newspaper in the
group is the Provo, Utah property with daily circulation of approximately
33,000. The Company financed the acquisition of Scripps League with a
combination of cash ($81 million), variable rate credit agreement borrowings
($50 million) and fixed rate senior notes ($85 million). The operating results
of Scripps League (subsequently renamed Pulitzer Community Newspapers, Inc.
("PCN")) are included in the Company's financial statements from the date of
acquisition. (See "-- Publishing -- Pulitzer Community Newspapers, Inc.")
 
     The following table sets forth certain historical financial information
regarding the Company's two business segments, publishing and broadcasting, for
the periods and at the dates indicated. Comparability of publishing segment
amounts is affected by the acquisition of Scripps League on July 1, 1996 (See
"-- Publishing -- Pulitzer Community Newspapers, Inc.") and the sale of a
Chicago publishing subsidiary on December 22, 1994. (See "-- Publishing --
Chicago Publications.") Comparability of broadcasting segment amounts is
affected by the acquisitions of WESH-TV and KCCI-TV on June 30, 1993 and
September 9, 1993, respectively.
 
                                        1
<PAGE>   3
 
ITEM 1. BUSINESS -- CONTINUED
 
<TABLE>
<CAPTION>
                                                             YEARS ENDED DECEMBER 31,
                                             --------------------------------------------------------
                                               1996        1995        1994        1993        1992
                                               ----        ----        ----        ----        ----
                                                                  (IN THOUSANDS)
<S>                                          <C>         <C>         <C>         <C>         <C>
Operating revenues -- net:
  Publishing...............................  $309,096    $269,388    $304,779    $290,146    $285,004
  Broadcasting.............................   224,992     202,939     180,800     136,839     113,369
                                             --------    --------    --------    --------    --------
  Total....................................  $534,088    $472,327    $485,579    $426,985    $398,373
                                             ========    ========    ========    ========    ========
Operating income (loss):
  Publishing...............................  $ 32,577    $ 25,393    $ 30,486    $ 23,702    $ 18,179
  Broadcasting.............................    83,246      65,939      47,963      27,947      23,311
  Corporate................................    (5,532)     (4,666)     (3,871)     (3,692)     (4,856)
                                             --------    --------    --------    --------    --------
  Total....................................  $110,291    $ 86,666    $ 74,578    $ 47,957    $ 36,634
                                             ========    ========    ========    ========    ========
Depreciation and amortization:
  Publishing...............................  $  8,660    $  4,307    $  6,128    $  6,938    $  8,174
  Broadcasting.............................    22,442      22,843      24,358      16,854      10,695
                                             --------    --------    --------    --------    --------
  Total....................................  $ 31,102    $ 27,150    $ 30,486    $ 23,792    $ 18,869
                                             ========    ========    ========    ========    ========
 
Operating margins (operating income to
  revenues):
  Publishing(1)............................     15.1%       14.1%       14.8%       11.8%       10.5%
  Broadcasting.............................     37.0%       32.5%       26.5%       20.4%       20.6%
Assets:
  Publishing...............................  $351,685    $141,441    $136,818    $156,398    $139,694
  Broadcasting.............................   259,114     253,252     254,410     270,250     120,380
  Corporate................................    73,052     100,380      77,084      34,970      29,914
                                             --------    --------    --------    --------    --------
  Total....................................  $683,851    $495,073    $468,312    $461,618    $289,988
                                             ========    ========    ========    ========    ========
</TABLE>
 
-------------------------
(1) Operating margins for publishing are stated with St. Louis Agency adjustment
    (which is recorded as an operating expense for financial reporting purposes)
    added back to publishing operating income. See "-- Publishing -- Agency
    Agreements."
 
OPERATING STRATEGY
 
     Pulitzer's long-term operating strategy for its media assets is to maximize
each property's growth and profitability through maintenance of editorial
excellence, leadership in locally-responsive news, and tight control of costs.
Management believes that editorial excellence and leadership in
locally-responsive news will, over the long-term, allow Pulitzer to maximize its
revenue share in each of its respective markets. Experienced local managers
implement the Company's strategy in each media market, with centralized Pulitzer
management providing oversight and guidance in all areas of planning and
operations.
 
     In addition to internal growth, Pulitzer selectively acquires media
properties which the Company believes are consistent with its operating strategy
and present attractive investment opportunities. Although the Company has no
significant agreements to acquire additional properties, management believes
that the Company's strong cash flow and conservative capital structure, among
other factors, will enable the Company to pursue additional acquisitions as
opportunities arise.
 
     Pulitzer believes that cost controls are an important tool in the
management of media properties which are subject to significant fluctuations in
advertising volume. The Company believes that tight control of costs permits it
to respond quickly when positive operating conditions offer opportunities to
expand market share and profitability and, alternatively, when deteriorating
operating conditions require cost reductions to protect profitability. The
Company aggressively employs production technology in all of its media
operations in order to minimize production costs and produce the most attractive
and timely news product for its readers, viewers and listeners.
 
                                        2
<PAGE>   4
 
ITEM 1. BUSINESS -- CONTINUED
     Pulitzer's media operations are geographically diverse, placing the Company
in the Midwest, Southwest, West, Southeast, and Northeast regions of the United
States. Due to the close relationship between economic activity and advertising
volume, the Company believes that geographic diversity provides the Company with
valuable protection from regional economic variances.
 
PUBLISHING
 
     The Company intends to continue the tradition of reporting and editorial
excellence that has resulted in 17 Pulitzer Prizes* over the years. In addition,
management continues to seek ways to leverage its newspaper assets, such as
electronic publishing, voice services delivered by phone, electronic
dissemination of information and alternative newspaper delivery systems to
provide advertisers with either targeted or total market coverage.
 
     The Company publishes two major metropolitan daily newspapers, the St.
Louis Post-Dispatch and The Arizona Daily Star. Both daily newspapers have
weekly total market coverage sections to provide advertisers with market
saturation. In addition, both newspapers also offer an electronic news,
information and communication web site on the Internet. Full access to these
"electronic publication" web sites, as well as full Internet access, is provided
on a subscription basis. The Star's service, StarNet (www.azstarnet.com), began
operations in May, 1995 and had grown to approximately 8,700 subscribers by
December 31, 1996. The service provided by the Post-Dispatch, POSTnet
(www.stlnet.com), started in January 1996 and had approximately 4,200
subscribers as of December 31, 1996.
 
     The acquisition of Scripps League on July 1, 1996 added 14 daily community
newspapers to the Company's publishing segment with a combined average daily
circulation of approximately 168,000. The smaller markets served by these
newspapers and their locations provide the Company with further diversification
and new participation in several higher growth areas of the western United
States. Although smaller in size than the Company's two metropolitan dailies, a
strong focus on local reporting and editorial excellence is also considered the
key to long-term success in these new markets.
 
     The Company's publishing revenues are derived primarily from advertising
and circulation, averaging approximately 87 percent of total publishing revenue
over the last five years. Advertising rates and rate structures and resulting
revenues vary among publications based, among other things, on circulation, type
of advertising, local market conditions and competition. The following table
provides a breakdown of the Company's publishing revenues for the past five
years. Comparability is affected by the acquisition of Scripps League on July 1,
1996 (See "-- Publishing -- Pulitzer Community Newspapers, Inc.") and the sale
of a Chicago publishing subsidiary on December 22, 1994. (See "-- Publishing --
Chicago Publications.")
 
<TABLE>
<CAPTION>
                                                          YEARS ENDED DECEMBER 31,
                                            ----------------------------------------------------
                                              1996       1995       1994       1993       1992
                                              ----       ----       ----       ----       ----
                                                               (IN THOUSANDS)
<S>                                         <C>        <C>        <C>        <C>        <C>
Advertising:
  Retail..................................  $ 91,373   $ 78,362   $ 88,450   $ 85,860   $ 86,846
  General.................................    10,123      7,645      7,830      7,154      9,476
  Classified..............................    90,443     75,925     84,738     75,670     73,692
                                            --------   --------   --------   --------   --------
     Total................................   191,939    161,932    181,018    168,684    170,014
  Circulation.............................    81,434     76,349     77,941     78,661     77,713
  Other...................................    35,723     31,107     45,820     42,801     37,277
                                            --------   --------   --------   --------   --------
     Total................................  $309,096   $269,388   $304,779   $290,146   $285,004
                                            ========   ========   ========   ========   ========
</TABLE>
 
-------------------------
 
* Pulitzer Prizes are awarded annually at Columbia University by the Pulitzer
  Prize Board, an independent entity affiliated with the Columbia University
  School of Journalism, founded by the first Joseph Pulitzer.
 
                                        3
<PAGE>   5
 
ITEM 1. BUSINESS -- CONTINUED

ST. LOUIS POST-DISPATCH
 
     Founded in 1878 by the first Joseph Pulitzer, the Post-Dispatch has a long
history of reporting and editorial excellence and innovation in newspaper
publishing under the direction of the Pulitzer family. The Post-Dispatch is a
morning daily and Sunday newspaper serving primarily the greater St. Louis
metropolitan area. St. Louis is the 17th largest metropolitan statistical area
in the United States (Source: Claritas, Inc.). Based on Audit Bureau of
Circulations ("ABC") Publisher's Statement and reports for the six-month period
ended September 30, 1996, the market penetration (i.e., percentage of households
reached) of the Post-Dispatch's daily and Sunday editions is 8th and 6th,
respectively, in the United States among major metropolitan newspapers. The
newsstand price is $0.50 for the daily paper and $1.25 for the Sunday edition.
 
     The Post-Dispatch operates under an Agency Agreement between the Company
and The Herald Company, Inc. (the "Herald Company") pursuant to which the
Company performs all activities relating to the day-to-day operations of the
newspaper, but pursuant to which it must share one-half of the Agency's
operating income or one-half of the Agency's operating loss with the Herald
Company. The following table sets forth for the past five years certain
circulation and advertising information for the Post-Dispatch and operating
revenues for the St. Louis Agency, all of which are included in the Company's
consolidated financial statements. See "-- Publishing -- Agency Agreements."
 
<TABLE>
<CAPTION>
                                                          YEARS ENDED DECEMBER 31,
                                            ----------------------------------------------------
                                              1996       1995       1994       1993       1992
                                              ----       ----       ----       ----       ----
<S>                                         <C>        <C>        <C>        <C>        <C>
Post-Dispatch:
  Circulation(1):
     Daily (including Saturday)...........   324,180    323,137    335,819    341,797    341,855
     Sunday...............................   542,997    545,882    555,488    564,761    566,095
  Advertising lineage (in thousands of
     inches):
     Retail...............................       819        880        912        913        873
     General..............................       101         75         75         62         87
     Classified...........................     1,007      1,057      1,039        977        921
                                            --------   --------   --------   --------   --------
       Total..............................     1,927      2,012      2,026      1,952      1,881
     Part run.............................       792        594        591        481        313
                                            --------   --------   --------   --------   --------
       Total inches.......................     2,719      2,606      2,617      2,433      2,194
                                            ========   ========   ========   ========   ========
  Operating revenues (in thousands):
     Advertising..........................  $137,054   $130,600   $125,704   $116,951   $115,206
     Circulation..........................    63,858     64,862     61,207     62,345     61,371
     Other(2).............................    23,231     24,404     23,490     22,387     20,754
                                            --------   --------   --------   --------   --------
       Total..............................  $224,143   $219,866   $210,401   $201,683   $197,331
                                            ========   ========   ========   ========   ========
</TABLE>
 
-------------------------
(1)  Amounts for 1996 based on Company records for the twelve-month period ended
     September 30, 1996. All other years based on ABC Publisher's Statement for
     the twelve-month period ended September 30.
 
(2)  Primarily revenues from preprinted inserts.
 
     The Post-Dispatch has consistently been a leader in technological
innovation in the newspaper industry. It was the first major metropolitan
newspaper in the United States to be printed by the offset process. Currently,
sophisticated computer systems are used for writing, editing, composing and
producing the printing plates used in each edition. In the preparation of news
and color sections, the Post-Dispatch utilizes a Scitex graphics system which
automates the processing of film and color separations. This system is part of
an ongoing project intended to give the Post-Dispatch the capability of
full-page pagination. At presstime, a fiber optic link allows the Post-Dispatch
to send full-page images and then print newspapers simultaneously in its
downtown and suburban plants, thereby allowing it to deliver newspapers to
suburban readers earlier in the morning. In the distribution process, certain
sections of the newspaper as well as advertising supplements are handled using a
sophisticated palletized inserting operation. This allows the Post-Dispatch to
efficiently distribute into selected geographic areas as necessary. The
Company's commitment to the ongoing enhancement of its operating systems has
enabled the Post-Dispatch to offer a continually improving product to both
readers and advertisers
 
                                        4
<PAGE>   6
 
ITEM 1. BUSINESS -- CONTINUED

while also realizing substantial savings in labor cost. The Company believes the
Post-Dispatch has adequate facilities to sustain up to at least a 35 percent
increase in daily circulation without incurring significant capital
expenditures.
 
     The Post-Dispatch is distributed primarily through independent home
delivery carriers and single copy dealers. Home delivery accounted for
approximately 76 percent of circulation for the daily Post-Dispatch and
approximately 54 percent of circulation for the Sunday edition during 1996.
 
THE ARIZONA DAILY STAR
 
     Founded in 1877, the Star is published in Tucson, Arizona, by the Company's
wholly-owned subsidiary, Star Publishing Company. The Star, a morning and Sunday
newspaper, and the Tucson Citizen (the "Citizen"), an afternoon newspaper owned
by Gannett Co., Inc. ("Gannett"), are southern Arizona's leading dailies. The
Star and the Citizen are published through an agency operation (the "Tucson
Agency") and have a combined weekday circulation of approximately 142,000.
Tucson is currently the 68th largest metropolitan statistical area in the
country with a population of approximately 758,500 (Source: Claritas, Inc.).
 
     The Tucson Agency operates through TNI Partners, an agency partnership
which is owned half by the Company and half by Gannett. TNI Partners is
responsible for all aspects of the business of the two newspapers other than
editorial opinion and gathering and reporting news. Revenues and expenses are
generally shared equally by the Star and the Citizen. Unlike the St. Louis
Agency, the Company's consolidated financial statements include only its share
of the combined operating revenues and operating expenses of the two newspapers.
See "-- Publishing -- Agency Agreements."
 
     As a result of the Tucson Agency, the financial performance of the
Company's Star Publishing Company subsidiary is directly affected by the
operations and performance of both the Star and the Citizen. The following table
sets forth certain information concerning circulation and combined advertising
linage of the Star and the Citizen and the Company's share of the operating
revenues of the Star and the Citizen for the past five years.
 
<TABLE>
<CAPTION>
                                                            YEARS ENDED DECEMBER 31,
                                                 -----------------------------------------------
                                                  1996      1995      1994      1993      1992
                                                  ----      ----      ----      ----      ----
<S>                                              <C>       <C>       <C>       <C>       <C>
Circulation (1):
     Star daily................................   96,196    97,134    98,050    96,926    94,496
     Citizen daily.............................   45,996    47,240    48,272    49,560    50,146
     Star Sunday...............................  182,249   180,170   179,652   175,321   170,500
Combined advertising (in thousands of inches):
  Full run (all zones)
     Retail....................................    1,499     1,565     1,565     1,675     1,750
     General...................................       45        49        50        45        42
     Classified................................    1,684     1,682     1,608     1,462     1,362
                                                 -------   -------   -------   -------   -------
       Total...................................    3,228     3,296     3,223     3,182     3,154
     Part run..................................      201       171       116        98       157
                                                 -------   -------   -------   -------   -------
       Total inches............................    3,429     3,467     3,339     3,280     3,311
                                                 =======   =======   =======   =======   =======
Operating revenues (in thousands):
     Advertising...............................  $31,765   $31,332   $28,459   $25,562   $24,202
     Circulation...............................   11,194    11,487    11,434    11,065    10,757
     Other(2)..................................    7,139     6,703     5,833     5,298     4,582
                                                 -------   -------   -------   -------   -------
       Total...................................  $50,098   $49,522   $45,726   $41,925   $39,541
                                                 =======   =======   =======   =======   =======
</TABLE>
 
-------------------------
(1) Amounts for 1996 based on Company records for the 52 week period ended
    December 31. Amounts for 1995 based on ABC Publisher's Statement for the 53
    week period ended December 31. All other years based on ABC Publisher's
    Statement for the 52 week period ended December 31.
 
(2) Primarily revenues from preprinted inserts.
 
                                        5
<PAGE>   7
 
ITEM 1. BUSINESS -- CONTINUED
     In 1996, the Star's daily edition accounted for approximately 68 percent of
the combined daily circulation of the Tucson Agency publications. The Star's
daily and Sunday editions accounted for approximately 60 percent of the agency's
total advertising linage.
 
     The Star and the Citizen are printed at TNI Partners' modern, computerized
facility equipped with two, eight-unit Metro offset presses. Present inserter
equipment enables the significant portion of daily home delivery supplements to
be inserted on line at press speeds. In addition, the writing, editing and
composing functions have been computerized, increasing efficiency and reducing
workforce requirements.
 
     The newsstand prices of the daily editions of the Star and the Citizen are
$0.50 and $0.35, respectively, and the newsstand price of the Sunday edition of
the Star is $1.50. The Star and the Citizen are distributed by independent
contractors.
 
PULITZER COMMUNITY NEWSPAPERS, INC.
 
     On July 1, 1996, the Company acquired in a purchase transaction all the
stock of Scripps League Newspapers, Inc. (subsequently renamed Pulitzer
Community Newspapers, Inc. ("PCN")), a privately owned company that published a
group of community newspapers which serve smaller markets, primarily in the West
and Midwest. The group includes 14 daily newspapers which publish afternoon
editions during the week and, generally, morning editions on the weekend. Home
delivery through independent contract carriers accounts for the significant
portion of each newspaper's circulation. With circulations ranging from
approximately 7,000 to 33,000, the ten largest daily circulation newspapers in
the PCN group are:
 
<TABLE>
<S>                                                     <C>
The Daily Herald......................................  Provo, Utah
The Arizona Daily Sun.................................  Flagstaff, Arizona
The Daily Chronicle...................................  DeKalb, Illinois
Santa Maria Times.....................................  Santa Maria, California
The Napa Valley Register..............................  Napa, California
The Hanford Sentinel..................................  Hanford, California
The Garden Island.....................................  Lihue, Hawaii
The World.............................................  Coos Bay, Oregon
The Daily Journal.....................................  Park Hills, Missouri
The Haverhill Gazette.................................  Haverhill, Massachusetts
</TABLE>
 
     For the six-month period ended December 31, 1996, PCN had consolidated
operating revenues of approximately $34.9 million, of which advertising,
preprints and circulation accounted for approximately 67 percent, 11 percent and
18 percent, respectively.
 
CHICAGO PUBLICATIONS
 
     On December 22, 1994, the Company sold its wholly-owned publishing
subsidiary located in the Chicago area. Since 1986, the subsidiary's primary
operations consisted of the publication of a daily suburban newspaper, the Daily
Southtown, and commercial printing services for several national and local
newspapers. The sale completed the Company's exit from the Chicago area after
having closed down and partially sold its weekly community newspaper business in
October 1992.
 
     The Company's 1994 consolidated and publishing segment operating results
included substantially a full year of the subsidiary's operations. During 1994,
advertising, preprints, circulation and contract printing accounted for
approximately 55 percent, 4 percent, 11 percent and 28 percent, respectively, of
the subsidiary's total operating revenues of $48,652,000. The sale did not have
a significant impact on the Company's 1995 earnings results.
 
                                        6
<PAGE>   8
 
ITEM 1. BUSINESS -- CONTINUED
AGENCY AGREEMENTS
 
     Newspapers in approximately 18 cities operate under joint operating or
agency agreements. Agency agreements generally provide for newspapers servicing
the same market to share certain printing and other facilities and to pool
certain revenues and expenses in order to decrease aggregate expenses and
thereby allow the continuing operation of multiple newspapers serving the same
market. The Newspaper Preservation Act of 1970 permits joint operating
agreements between newspapers under certain circumstances without violation of
the Federal antitrust laws.
 
     St. Louis Agency. An agency operation between the Company and the Herald
Company is conducted under the provisions of an Agency Agreement, dated March 1,
1961, as amended. For many years, the Post-Dispatch was the afternoon and Sunday
newspaper serving St. Louis, and the Globe-Democrat was the morning paper and
also published a weekend edition. Although separately owned, from 1961 through
February 1984, the publication of both the Post-Dispatch and the Globe-Democrat
was governed by the St. Louis Agency Agreement. From 1961 to 1979, the two
newspapers controlled their own news, editorial, advertising, circulation,
accounting and promotion departments and Pulitzer managed the production and
printing of both newspapers. In 1979, Pulitzer assumed full responsibility for
advertising, circulation, accounting and promotion for both newspapers. In
February 1984, after a number of years of unfavorable financial results at the
St. Louis Agency, the Globe-Democrat was sold by the Herald Company and the St.
Louis Agency Agreement was revised to eliminate any continuing relationship
between the two newspapers and to permit the repositioning of the daily
Post-Dispatch as a morning newspaper.
 
     Following the renegotiation of the St. Louis Agency Agreement at the time
of the sale of the Globe-Democrat, the Herald Company retained the contractual
right to half the profits or losses (as defined) of the operations of the St.
Louis Agency, which from February 1984 forward consisted solely of the
publication of the Post-Dispatch. The St. Louis Agency Agreement provides for
the Herald Company to share half the cost of, and to share in a portion of the
proceeds from the sale of, capital assets used in the production of the Post-
Dispatch. Under the St. Louis Agency Agreement, Pulitzer supervises, manages and
performs all activities relating to the day-to-day publication of the
Post-Dispatch and is solely responsible for the news and editorial policies of
the newspaper.
 
     The consolidated financial statements of the Company include all the
operating revenues and expenses of the St. Louis Agency. An agency adjustment is
provided as an operating expense which reflects that portion of the operating
income of the St. Louis Agency allocated to the Herald Company. Under the St.
Louis Agency Agreement, for fiscal 1996, 1995, 1994, 1993 and 1992, the Company
paid the Herald Company $13,972,000, $12,502,000, $14,706,000, $10,660,000 and
$11,690,000, respectively, in respect of the Herald Company's share of the
operating income of the St. Louis Agency. As a result of such agency adjustment,
the Company is, and during the term of the St. Louis Agency will continue to be,
entitled to half the profits (as defined) from the operations of the St. Louis
Agency, the amount of which cannot be determined until the end of each fiscal
year.
 
     The current term of the St. Louis Agency Agreement runs through December
31, 2034, following which either party may elect to renew the agreement for
successive periods of 30 years each.
 
     Tucson Agency. The Tucson Agency Agreement has, since 1940, governed the
joint operations of the Star and Citizen. For financial reporting purposes the
operations of the Tucson Agency are reflected in the Company's consolidated
financial statements differently from the operations of the St. Louis Agency.
The consolidated financial statements of the Company include only the Company's
share of the combined revenues, operating expenses and income of the Star and
Citizen. TNI Partners, as agent for the Company and Gannett, is responsible for
advertising and circulation, printing and delivery and collection of all
revenues of the Star and the Citizen. The Board of Directors of TNI Partners
presently consists of three directors chosen by the Company and three chosen by
Gannett. Budgetary, personnel and other non-news and editorial policy matters,
such as advertising and circulation policies and rates or prices, are determined
by the Board of Directors of TNI Partners. Each newspaper is responsible for its
own news and editorial content. Revenues
 
                                        7
<PAGE>   9
 
ITEM 1. BUSINESS -- CONTINUED
and expenses are recorded by TNI Partners, and the resulting profit is split
50-50 between Pulitzer and Gannett. Both partners have certain administrative
costs which are borne separately. As a result of the Tucson Agency, the Star and
the Citizen benefit from increases and can be adversely affected by decreases in
each other's circulation.
 
     The Tucson Agency Agreement runs through June 1, 2015, and contains renewal
provisions for successive periods of 25 years each.
 
COMPETITION
 
     The Company's publications compete for readership and advertising revenues
in varying degrees with other metropolitan, suburban, neighborhood and national
newspapers and other publications as well as with television, radio, cable,
Internet, direct mail and other news and advertising media. Competition for
advertising is based upon circulation levels, readership demographics, price and
advertiser results, while competition for circulation is generally based upon
the content, journalistic quality and price of the publication. In St. Louis and
its surrounding suburban communities, the Post-Dispatch's closest competition
for circulation and advertising revenues includes paid suburban daily newspapers
as well as a chain of community newspapers and shoppers. These community
newspapers and shoppers target selected geographic markets throughout the St.
Louis metropolitan area.
 
     Due to the agency relationship existing in Tucson, the Star and the Citizen
cannot be viewed as competitors for advertising or circulation revenues. The
Star and the Citizen compete primarily against other media and against
Phoenix-area and suburban, neighborhood and national newspapers and other
publications.
 
EMPLOYEE RELATIONS
 
     The Company has contracts with substantially all of its production unions
related to the Post-Dispatch, with expiration dates ranging from February 1999
through February 2010. In addition, the Company has a multi-year contract with
the St. Louis Newspaper Guild which expires in January 2003. All of the Post-
Dispatch labor contracts contain no strike provisions.
 
     TNI Partners has a one-year contract, expiring December 31, 1997, with
Tucson Graphic Communications Union Local No. 212, covering certain pressroom
employees.
 
RAW MATERIALS
 
     The publishing segment's results are significantly impacted by the cost of
newsprint which accounted for approximately 22 percent of the segment's total
1996 operating expenses. During 1996, the Company used approximately 90,300
metric tons of newsprint in its production process at a total cost of
approximately $58,300,000. Consumption at the Post-Dispatch represented
approximately 72,200 metric tons of the Company's total newsprint usage in 1996.
In the last five years, the Company's average cost per ton of newsprint has
varied from a low of $445 per metric ton in 1992 to a high of $675 per metric
ton in 1995. During 1996, the Company benefited from a decline in newsprint
prices from their five-year peak in 1995. During the first quarter of 1997, the
Company's average cost per metric ton for newsprint has been in the range of
$510. Newsprint suppliers increased the price to $575 per metric ton on March 1,
1997 which will begin to impact the Company's newsprint expense in the second
quarter of 1997.
 
     The Post-Dispatch obtains the newsprint necessary for its operations from
five separate mills, two of which are located in Canada and three in the United
States. The Post-Dispatch has guaranteed the future supply of certain volume
levels through long-term agreements with two of its newsprint suppliers. The
Company believes that the absence of long-term agreements with the remaining
three newsprint suppliers will not affect the Company's ability to obtain
newsprint at competitive prices.
 
     The Company acquired five newsprint contracts with the purchase of Scripps
League in 1996. Combined with the tonnage purchased for the Post-Dispatch, the
Company has been able to leverage its pricing power to
 
                                        8
<PAGE>   10
 
ITEM 1. BUSINESS -- CONTINUED
obtain the best price available for its new community newspaper group, and to
assure adequate supplies for all locations.
 
     TNI Partners obtains the newsprint necessary for the Tucson Agency's
operations pursuant to an arrangement with Gannett, the owner of the Citizen.
Gannett purchases newsprint on behalf of TNI Partners under various contractual
arrangements and agreements. Newsprint is also purchased on the spot market.
 
BROADCASTING
 
     The Company's broadcasting operations currently consist of the ownership
and operation of eight network-affiliated VHF television stations, one
network-affiliated UHF television station, two satellite network television
stations rebroadcasting KOAT, two AM radio stations and one FM radio station.
The Company has diversified its revenues by purchasing properties in different
geographic regions of the United States, thus insulating itself, somewhat, from
regional economic downturns. The local management of each of the Company's
broadcasting properties is partially compensated based on the cash flow
performance of its respective station. Senior management believes that the
success of a local television station is driven by strong local news
programming, and that the Company has developed a particular strength in local
news programming. As is the case with all Company operations, there is major
emphasis on cost control in the broadcasting segment.
 
TELEVISION
 
     The following table sets forth certain information concerning the
television stations which the Company owns and the markets in which they
operate.
 
<TABLE>
<CAPTION>
                                                                                     COMMERCIAL
                                                     DMA-TV                           STATIONS               EXPIRATION
                                                   HOUSEHOLDS     DMA       LOCAL    OPERATING                DATE OF
                            CALL       NETWORK         IN       NATIONAL   MARKET        IN         DATE        FCC
   STATION AND MARKET      LETTERS   AFFILIATION   MARKET(1)    RANK(2)    RANK(3)   MARKET(3)    ACQUIRED    LICENSE
   ------------------      -------   -----------   ----------   --------   -------   ----------   --------   ----------
<S>                        <C>       <C>           <C>          <C>        <C>       <C>          <C>        <C>
VHF STATIONS(4):
Greenville/Spartanburg/
  Asheville, SC/NC......   WYFF      NBC             700,470       35         2           7        2/28/83    12/01/01
New Orleans, LA.........   WDSU      NBC             620,760       41         2           8       12/14/89     6/01/97
Harrisburg/Lancaster/
  Lebanon/York, PA......   WGAL      NBC             584,080       45         1           7        8/13/79     8/01/99
Greensboro/
  Winston-Salem/
  High Point, NC........   WXII      NBC             567,740       46         2           8        2/28/83    12/01/01
Daytona Beach/Orlando/
  Melbourne, FL.........   WESH      NBC           1,021,970       22         2          11        6/30/93     2/01/05
Albuquerque, NM(5)......   KOAT      ABC             554,290       48         1          12         6/1/69    10/01/98
Omaha, NE...............   KETV      ABC             364,960       75         1           5        4/15/76     6/01/98
Des Moines, IA..........   KCCI      CBS             373,630       72         1           4         9/9/93     2/01/98
UHF STATIONS(4):
Louisville, KY..........   WLKY      CBS             550,390       50         2           6        6/23/83     8/01/97
</TABLE>
 
-------------------------
(1) Based upon the Designated Market Area ("DMA") for the station as reported in
    the November, 1996 Nielsen Station Index ("NSI"). DMA is a geographic area
    defined as all counties in which the local stations receive a preponderance
    of total viewing hours. DMA data is a primary factor in determining
    television advertising rates.
 
(2) National DMA rank for each market as reported in the November, 1996 NSI.
 
                                        9
<PAGE>   11
 
ITEM 1. BUSINESS -- CONTINUED
(3) Based on November, 1996 NSI audience estimates, 7:00am-1:00am,
    Sunday-Saturday. The number of commercial stations operating in market does
    not include public broadcasting stations, satellite stations or translators
    which rebroadcast signals from distant stations.
 
(4) VHF (very high frequency) stations transmit on channels 2 through 13, and
    UHF (ultra high frequency) stations transmit on channels 14 through 69.
    Technical factors, such as station power, antenna location and height and
    topography of the area served, determine geographic market served by a
    television station. In general, a UHF station requires greater power or
    antenna height to cover the same area as a VHF station.
 
(5) The Company is also the licensee of KOVT, a satellite TV station licensed to
    Silver City, New Mexico and the holder of a construction permit to build a
    satellite TV station, KOFT, in Gallup, New Mexico. On February 1, 1996, the
    FCC granted a Petition for Rule Making filed by Pulitzer requesting that the
    community of license of KOFT be changed from Gallup to Farmington, New
    Mexico. In 1993, the Company purchased the operating assets of KVIO, a
    satellite TV station licensed to Carlsbad, New Mexico. The call letters of
    KVIO were subsequently changed to KOCT.
 
     Average audience share, number of stations serving the market and market
rank for each television station which the Company currently owns for the past
five years are shown in the following table.
 
<TABLE>
<CAPTION>
                                                                YEARS ENDED DECEMBER 31,
                       -----------------------------------------------------------------------------------------------------------
                              1996                  1995                  1994                  1993                  1992
                       -------------------   -------------------   -------------------   -------------------   -------------------
                                  STATIONS              STATIONS              STATIONS              STATIONS              STATIONS
                                  SERVING               SERVING               SERVING               SERVING               SERVING
                                  MARKET/               MARKET/               MARKET/               MARKET/               MARKET/
                       AVERAGE     LOCAL     AVERAGE     LOCAL     AVERAGE     LOCAL     AVERAGE     LOCAL     AVERAGE     LOCAL
                       AUDIENCE    MARKET    AUDIENCE    MARKET    AUDIENCE    MARKET    AUDIENCE    MARKET    AUDIENCE    MARKET
       STATION         SHARE(1)   RANK(2)    SHARE(1)   RANK(2)    SHARE(1)   RANK(2)    SHARE(1)   RANK(2)    SHARE(1)   RANK(2)
       -------         --------   --------   --------   --------   --------   --------   --------   --------   --------   --------
<S>                    <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
WYFF.................     28%        7/2        26%        7/1        27%        6/1        29%        6/2        30%        6/2
WDSU.................     25         8/2        21         8/2        20         6/2        21         5/2        23         5/2
WGAL.................     38         7/1        37         7/1        36         7/1        36         7/1        35         6/1
WXII.................     24         8/2        25         7/2        23         7/3        26         7/3        25         7/3
WESH(3)..............     24        11/2        23        10/2        21        10/2        23         9/2        25         7/2
KOAT.................     29        12/1        32        12/1        30        11/1        32        10/1        33        10/1
KETV.................     27         5/1        31         5/1        27         4/1        29         4/1        29         4/1
KCCI(4)..............     38         4/1        37         4/1        41         4/1        35         4/1        35         4/1
WLKY.................     25         6/2        24         6/3        28         6/3        29         5/1        28         5/1
</TABLE>
 
-------------------------
(1) Represents the number of television households tuned to a specific station
    9:00am-Midnight, Sunday-Saturday, as a percentage of Station Total
    Households. Source: 1994-1996 data from February, May and November Nielsen
    Station Index ("NSI"). Schedules for 1992-1993 include both NSI and Arbitron
    Ratings Audience Estimates information. NOTE: The Arbitron Company ceased to
    provide local television market reports in 1994.
 
(2) Stations serving market and local market rank data for 1994-1996 based on
    November NSI. Schedules for 1992-1993 include both NSI and Arbitron Ratings
    Audience Estimates information.
 
(3) Acquired June 30, 1993.
 
(4) Acquired September 9, 1993.
 
     The Company's television stations are affiliated with national television
networks under ten-year contracts which are automatically renewed for successive
five-year terms unless the Company or network exercises its right to cancel.
Prior to executing new contracts in early 1995, the stations' old network
affiliation agreements were for two year periods with automatic renewal
provisions.
 
                                       10
<PAGE>   12
 
ITEM 1. BUSINESS -- CONTINUED
     The ratings of the Company's television stations are affected by
fluctuations in the national ratings of its affiliated networks. The Company
believes that such network rating fluctuations are normal for the broadcasting
industry and in the past has not sought to change its network affiliations based
on the decline of the national ratings of an affiliated network.
 
ADVERTISING REVENUES
 
     The principal source of broadcasting revenues for the Company is the sale
of time to advertisers. The Company derives television broadcasting revenues
from local and national spot advertising and network compensation. Local
advertising consists of short announcements and sponsored programs on behalf of
advertisers in the immediate area served by the station. National spot
advertising generally consists of short announcements and sponsored programs on
behalf of national and regional advertisers. Network revenue is based upon a
contractual agreement with a network and is dependent upon the network programs
broadcast by the stations. The following table sets forth the television
broadcasting revenues received by the Company from each of these types of
advertising during the past five years.
 
<TABLE>
<CAPTION>
                                                              YEARS ENDED DECEMBER 31,
                                              --------------------------------------------------------
                                                1996        1995        1994      1993(1)       1992
                                                ----        ----        ----      -------       ----
                                                                   (IN THOUSANDS)
<S>                                           <C>         <C>         <C>         <C>         <C>
Local.....................................    $ 99,465    $ 88,419    $ 82,463    $ 63,565    $ 49,670
National spot.............................      91,395      80,760      76,925      52,869      44,594
Network...................................      16,788      17,096       6,557       5,840       5,210
Other.....................................       1,691       1,779       1,832       1,665       1,575
                                              --------    --------    --------    --------    --------
     Total(2).............................    $209,339    $188,054    $167,777    $123,939    $101,049
                                              ========    ========    ========    ========    ========
</TABLE>
 
------------------------
(1) The Company acquired television stations WESH and KCCI on June 30, 1993 and
    September 9, 1993, respectively.
 
(2) Automotive advertising is significant and historically has represented
    approximately 22 to 25 percent of total broadcast revenues.
 
     The Company believes that its stations are particularly strong in local
news programming, an important revenue source for network-affiliated stations.
Local news programs generate approximately a quarter of each station's revenues.
 
     Local time spots are sold by the Company's sales personnel at each
broadcast station. Company sales departments make extensive use of computers to
track and schedule all commercial spots sold, to maintain the broadcast station
operating schedule, to determine time spot availability and to record accounts
receivable. National spots are sold by the Company's three national sales
representative firms.
 
     Advertising rates are based primarily on audience size, audience share,
demographics and time availability. The Company's ability to maximize
advertising revenues is dependent upon, among other things, its management of
the inventory of advertising time available for sale.
 
PROGRAMMING
 
     The national television networks with which the Company's stations are
affiliated offer a variety of sponsored and unsponsored programs to affiliated
stations. The affiliated stations have the right of first refusal before the
programs may be offered to any other television station in the same city.
 
     When not broadcasting network programs, the Company's stations broadcast
local news programs, movies, syndicated programs acquired from independent
sources and public service programs. Movies and syndicated programs have
frequently been shown previously on network or cable television. Syndicated
programs are programs that are licensed to individual stations for one or more
showings in a particular market as distinguished from programs licensed for
national distribution through one of the major networks.
 
                                       11
<PAGE>   13
 
ITEM 1. BUSINESS -- CONTINUED
     The Company's stations make programming decisions on the basis of a number
of factors, including program popularity and cost. On occasion, the Company has
not renewed a popular program when syndication costs exceeded the level the
Company believed appropriate compared to the potential advertising revenues to
be derived from the program.
 
RADIO
 
     The Company owns three radio stations serving the Phoenix, Arizona market:
KTAR (AM), KMVP (AM) and KKLT (FM). KMVP was acquired in a purchase transaction
for approximately $5 million in December 1996. Phoenix is the 18th largest Metro
Market in the United States, and the Phoenix Radio Metro Area is served by
thirteen AM and twenty FM radio stations. KTAR (AM) ranks first in the Phoenix
market and KKLT (FM) ranks fifteenth, with 7.1 percent and 3 percent average
quarter hour market shares, respectively (source: Arbitron Radio Ratings
Summary-Fall 1996). KTAR (AM) operates as a news/talk/sports radio station while
KKLT (FM) has an adult contemporary music format. KMVP (AM) began airing an "all
sports" information format in February 1997. The FCC licenses for KTAR (AM),
KMVP (AM) and KKLT (FM) expire on October 1, 1997.
 
     The Company has entered into agreements to acquire the assets of WETR (AM),
Eden, North Carolina, and WAVG (AM), Louisville, Kentucky, and has filed
applications with the Federal Communications Commission on December 20, 1996,
and January 10, 1997, requesting FCC approval of the transactions.
 
     Advertising rates charged by a radio station are based primarily upon the
number of homes in the station's primary market, the number of persons using
radio in the area and the number of persons listening to the station.
Advertising is sold by a national sales representative and by the stations'
advertising sales personnel. The Company's radio stations manage their inventory
of available advertising time in much the same manner as the television
stations. Radio broadcasting net revenues during each of the past five years
were as follows: 1996 -- $15,653,000, 1995 -- $14,885,000; 1994 -- $13,023,000;
1993 -- $12,900,000 and 1992 -- $12,320,000.
 
COMPETITION
 
     Competition for television and radio audiences is based primarily on
programming content. Programming content for the Company's television stations
is significantly affected by network affiliation and by local programming
activities. Competition for advertising is based on audience size, audience
share, audience demographics, time availability and price. The Company's
television stations compete for audience and advertising with other television
stations and with radio stations, cable television and other news, advertising
and entertainment media serving the same markets. In addition, the Company's
television stations compete for audience and, to a lesser extent, advertising,
with other forms of home entertainment such as home video recorders and direct
broadcast satellite service. Cable systems, which operate generally on a
subscriber payment basis, compete by carrying television signals from outside
the broadcast market and by distributing signals from outside the broadcast
market and by distributing programming that is originated exclusively for cable
systems. The Company's television stations are also affected by local
competitive conditions, including the number of stations serving a particular
area and the programming content of those stations.
 
     The Company believes that the competitive position of its radio and
television properties is enhanced by the Company's policy of operating its
broadcasting properties with a view to long-term growth. Strong local news
programming is an important factor for the competitive position of the Company's
television stations. The Company's system for managing advertising inventory of
its television and radio stations is also an important factor in its ability to
compete effectively for advertising revenues.
 
     The Company's radio stations compete for audience and advertising with
other radio and television stations in the Phoenix area and with other print,
advertising and entertainment media. The Company's radio stations compete for
audience primarily on the basis of their broadcasting format.
 
                                       12
<PAGE>   14
 
ITEM 1. BUSINESS -- CONTINUED
FEDERAL REGULATION OF BROADCASTING
 
     Television and radio broadcasting are subject to the jurisdiction of the
Federal Communications Commission ("FCC") pursuant to the Communications Act of
1934, as amended (the "Communications Act"). The Communications Act prohibits
the public dissemination of radio and television broadcasts except in accordance
with a license issued by the FCC and empowers the FCC to issue, revoke, modify
and renew broadcasting licenses and adopt such regulations as may be necessary
to carry out the provisions of the Communication Act. The recently enacted
Telecommunications Act of 1996 ("Telecommunications Act") effected sweeping
changes in the Communications Act, many of which will influence the Company's
broadcasting operations.
 
BROADCAST LICENSES
 
     Under the amendments to the Communications Act provided for in the new
legislation, broadcasting licenses for both radio and television stations will
now be granted for a maximum period of eight years. Such licenses are renewable
upon application, and the Telecommunications Act fundamentally changed the
manner in which the FCC processes renewal applications. Petitions to deny
license renewals may still be filed against licensees by interested parties,
including members of the public. However, competing applicants no longer may
file for the frequency being used by the renewal applicant during the period
when a renewal application is pending. In addition, the new law provides that
the FCC must grant renewal if it finds that the station has served the public
interest during its previous license term and has not otherwise engaged in
serious violations (or a pattern of lesser violations) of the Communications Act
or the FCC's Rules.
 
     These changes in renewal procedures apply to renewal applications filed
after May 1, 1995. The Company will file applications to renew the licenses of
stations KTAR (AM), KMVP (AM) and KKLT (FM), Phoenix, Arizona on June 1, 1997.
The renewal application for the license for Station KCCI, Des Moines, Iowa, will
be filed on October 1, 1997. There is currently pending before the FCC
application to renew the licenses of WDSU, New Orleans, Louisiana, and WLKY,
Louisville, Kentucky.
 
MULTIPLE OWNERSHIP
 
     While requiring FCC review every two years, the Telecommunications Act
substantially liberalized the FCC's regulations governing the multiple, common
and cross ownership of broadcast stations. The new law lifts the numerical
restrictions on the number of radio stations a licensee may own nationwide;
however, it restricts the number of stations a licensee may own in any
individual market based upon the total number of stations in the market; the mix
of stations in different services (e.g., AM or FM) that a licensee owns; and, in
the smallest communities, a limitation that a licensee may not own more than 50
percent of all stations in the market.
 
     The Telecommunications Act also eliminates the cap on the number of TV
stations a party may own nationwide, provided that the total number of
households reached by any individual owner's stations does not exceed 35 percent
of the national household audience. For this purpose, only 50 percent of the
television households in a market are counted toward the 35 percent national
audience reach limitation if the owned station is a UHF station. With respect to
the local market, the new law requires the FCC to conduct a proceeding to
determine whether to preserve or eliminate its present rule forbidding the
common ownership of two television stations in the same market. Moreover, the
law permits the use of so-called Local Marketing Agreements (or "LMAs") between
television stations in the same market to the extent they are allowed by the
FCC's rules. The agreements permit one station in a market to lease and program
the broadcast time and sell the advertising time of another station in the
market. Proposals currently pending before the FCC could substantially alter
these standards.
 
     The AM-FM radio ownership rules prohibit granting a license to operate an
AM or FM radio station or television station to an applicant who already owns,
operates or controls or has an interest in a daily newspaper in the community in
which the broadcast license is requested. In addition, they generally prohibit
ownership of a VHF television station and either an AM or FM radio station in
the same market. While the Telecommunications Act left the first restriction in
place, it expanded considerably the FCC's authority to grant waivers of
 
                                       13
<PAGE>   15
 
ITEM 1. BUSINESS -- CONTINUED
the television/radio cross-ownership rule in the top 50 markets. The FCC has
instituted a rulemaking proceeding requesting comments on liberalizing its
application of the newspaper/radio cross-ownership rule.
 
     Further, the Telecommunications Act repeals the law which prohibited a
cable television system from carrying the signal of a television broadcast
station if such system owns, operates, controls or has an interest in a
broadcast television station which serves substantially the same area that the
cable television system is serving. Although the FCC rule prohibiting such
cross-ownership remains in place, it is expected that the FCC will undertake a
proceeding to eliminate the rule.
 
CABLE CARRIAGE
 
     A controversy exists among television broadcasters, cable companies and
program producers relating to rules requiring cable television systems ("cable
systems") to carry the signals of local television stations. On March 11, 1993,
the FCC adopted rules concerning the mandatory signal carriage ("must carry")
rights of commercial and noncommercial television stations that are local to the
area serviced by a cable system and the requirement prohibiting cable operators
and other multichannel video programming providers from carrying television
stations without obtaining their consent in some circumstances ("retransmission
consent"). That same year, a three-judge panel of the United States District
Court found that the FCC rules governing must carry and retransmission consent
are constitutional. On appeal, the United States Supreme Court vacated the
District Court decision and remanded the case back to the three-judge panel for
further proceedings. On December 12, 1995, the three-judge district court panel
(one judge dissenting) upheld the must-carry rules against the cable industry's
First Amendment challenge. Following those proceedings, the Supreme Court on
February 20, 1996, announced that it would hear the cable industry's challenge
to the district court's ruling. The Supreme Court heard oral argument in October
1996. A final decision on the constitutionality of must carry is expected by
June 1997. While the case is pending, the must-carry provisions of the 1992
Cable Act remain in effect, as do the Commission's must-carry rules and
retransmission consent requirements.
 
OTHER RECENTLY ADOPTED RULE CHANGES
 
     It has been the policy of the FCC to rely increasingly upon the interplay
of marketplace forces in lieu of direct government regulation and to encourage
increasing competition among different electronic communication media. This
policy was ratified by the Telecommunications Act which effected other changes
that may affect the competitive environment in the local markets served by the
Company's broadcast stations.
 
     One such change authorizes local telephone companies to provide video
programming to subscribers in their local telephone service areas either as
cable operators or over their own networks known as "open video systems." The
new law provides that a telephone company offering video programming will be
regulated according to the method of delivering programming. However, under the
law, whether the telephone company operates as a cable operator or an open video
system operator, it will be subject to must carry and retransmission consent
obligations and the Commission's rules on sports exclusivity, network
nonduplication, and syndicated exclusivity. In addition, the Telecommunications
Act requires the FCC to adopt certain additional safeguards for broadcasters
which forbid a telephone company that provides video programming from
discriminating against broadcasters in favor of an affiliated programmer in
subscriber communications and placement on any on-screen program guide or menu.
In addition, a telephone company video provider must ensure that broadcasters
and other copyright holders are able to identify their programming, and if such
identifying information is carried as part of the programming signal, the
telephone company must transmit it without alteration.
 
     The FCC has granted several applications to establish direct broadcast
satellite systems ("DBS"). Several other new technologies are in their
developmental stages, such as Digital Television capable of transmitting
television pictures with higher resolution, truer color and wider aspect ratios,
and Digital Audio Broadcasting capable of transmitting radio signals on a
terrestrial basis and by space satellites. The potential impact of these
technologies on the Company's business cannot be predicted.
 
     The Telecommunications Act provides that if the FCC issues licenses for
Digital Television (DTV) services, only incumbent broadcast licensees and
construction permit holders will be eligible initially for these licenses. The
new law requires the Commission to adopt regulations that permit broadcasters to
use such
 
                                       14
<PAGE>   16
 
ITEM 1. BUSINESS -- CONTINUED
digital DTV spectrum for ancillary or supplementary services, provided that such
secondary services may not impair the quality of the DTV signal.
 
     This spectrum flexibility scheme would be highly advantageous for incumbent
television station owners such as the Company. It ensures that the Company will
not face competing applications from the general public as it applies for its
DTV licenses in the future. However, licenses for DTV services issued to
incumbent broadcast licensees or permittees must be preconditioned with a
requirement that either the new DTV channel or the original broadcast channel be
surrendered to the FCC for reallocation or reassignment at the end of a
transition period.
 
     The advantages of this new law could be limited by proposals currently
pending in Congress to require broadcasters to bid for the new authorizations
for DTV spectrum at auction and use their payments to help to reduce the federal
government's budget deficit, or to require broadcasters to make the transition
to digital spectrum more quickly in order to recapture broadcasters' current
spectrum for auction. If implemented, such a proposal would substantially
increase the costs incurred by broadcasters to make the transition to the new
technology.
 
     In connection with the Senate's passage of the Telecommunications Act, the
Republican leadership and Committee chairmen responsible for the measure in both
chambers sent a letter to the Chairman of the FCC requesting that the Commission
take no action on the licensing of new DTV spectrum until Congress has addressed
the spectrum auction proposal. The FCC responded that it would forbear from
issuing any licenses pending further legislation from Congress and that it may
be in a position to issue DTV authorizations in 1997. The broadcast industry has
vigorously opposed the auction proposal. On August 14, 1996, the FCC released a
Sixth Further Notice of Proposed Rulemaking that proposed a Table of Allotments
to allow broadcasters to make the transition to DTV. The FCC proposed policies
for developing the initial DTV allotments, procedures for assigning DTV
frequencies, and a plan for spectrum recovery. This rulemaking proceeding is
expected to be completed by the end of 1997.
 
LIMITATIONS ON OWNERSHIP OF THE COMPANY'S STOCK
 
     The Communications Act prohibits the assignment or transfer of broadcasting
licenses, including the transfer of control of any corporation holding such
licenses, without the prior approval of the FCC. The Communications Act would
prohibit the Company from continuing to control broadcast licenses if, in the
absence of FCC approval, more than one-fourth of the Company's capital stock
were acquired or voted directly or indirectly by alien individuals,
corporations, or governments, or if it otherwise fell under alien influence or
control in a manner determined by the FCC to be contrary to the public interest.
 
     Because of the multiple, common and cross ownership rules, if a holder of
the Company's common stock or Class B common stock acquired an attributable
interest in the Company and had an attributable interest in other broadcast
stations, a cable television operation or a daily newspaper, there could be a
violation of FCC regulations depending upon the number and location of the other
broadcasting stations, cable television operations or daily newspapers
attributable to such holder.
 
     The information contained under this heading does not purport to be
complete summary of all the provisions of the Communications Act and the rules
and regulations of the FCC thereunder or of pending proposals for the other
regulation of broadcasting and related activities. For a complete statement of
such provisions, reference is made to the Communications Act, to such rules and
regulations and to such pending proposals.
 
EMPLOYEES
 
     At December 31, 1996, the Company had approximately 3,300 full-time
employees, of whom approximately 2,100 were engaged in publishing and 1,200 in
broadcasting. In St. Louis, a majority of the approximately 1,100 full-time
employees engaged in publishing are represented by unions. In addition, certain
employees of the broadcasting segment, PCN and TNI Partners are represented by
unions. The Company considers its relationship with its employees to be good.
 
                                       15
<PAGE>   17
 
ITEM 2. PROPERTIES
 
     The corporate headquarters of the Company is located at 900 North Tucker
Boulevard, Saint Louis, Missouri. The general character, location and
approximate size of the principal physical properties used by the Company at
December 31, 1996, are set forth below. Leases on the properties indicated as
leased by the Company expire at various dates through July 2012.
 
     The Company believes that all of its owned and leased properties are in
good condition, well maintained and adequate for its current and immediately
foreseeable operating needs. The Company, however, currently has building
projects planned to address the long-term operating requirements of its
Flagstaff publishing property and Louisville broadcasting property.
 
<TABLE>
<CAPTION>
                                                                APPROXIMATE AREA IN
                                                                    SQUARE FEET
                     GENERAL CHARACTER                          --------------------
                        OF PROPERTY                              OWNED       LEASED
                     -----------------                           -----       ------
<S>                                                             <C>         <C>
Publishing:
  Printing plants, business and editorial offices, and
     warehouse space located in:
     St. Louis, Missouri(1).................................     536,100     117,100
     St. Louis, Missouri....................................                   5,600
     Tucson, Arizona(2).....................................     265,000      32,700
     Washington, D.C........................................                   2,250
     Provo, Utah............................................      22,900
     Flagstaff, Arizona.....................................       9,100      15,300
     DeKalb, Illinois.......................................      15,900
     Santa Maria, California................................      20,800
     Napa, California.......................................      21,000
     Hanford, California....................................      16,500       2,100
     Lihue, Hawaii..........................................       8,500      23,600
     Coos Bay, Oregon.......................................      15,200
     Park Hills, Missouri...................................       9,100
     Haverhill, Massachusetts...............................      24,500
     Rhinelander, Wisconsin.................................       6,400
     Hamilton, Montana......................................       2,900
     Newport, Vermont.......................................       6,700
     Taft, California.......................................       5,000
     Petaluma, California...................................       9,000
     Hazard, Kentucky.......................................                   2,100
Broadcasting:
  Business offices, studios, garages and transmitters
     located in:
     St. Louis, Missouri....................................                   5,300
     Albuquerque, New Mexico................................      39,700       8,400
     Omaha, Nebraska........................................      37,900         600
     Lancaster, Pennsylvania................................      55,200       2,200
     Winston-Salem, North Carolina..........................      41,100         800
     Greenville, South Carolina.............................      53,600       2,300
     Louisville, Kentucky...................................      20,800
     New Orleans, Louisiana.................................      50,500
     Phoenix, Arizona.......................................      23,500
     Orlando, Florida.......................................      61,300       1,300
     Daytona Beach, Florida.................................      28,100
     Des Moines, Iowa.......................................      53,350
</TABLE>
 
-------------------------
(1) Property is subject to the provisions of the St. Louis Agency Agreement.
 
(2) The 265,000 square foot facility in Tucson, Arizona, is used in the
    production of the Star and the Citizen and is jointly owned with Gannett
    pursuant to the Tucson Agency. Approximately 900 square feet of the leased
    properties in Tucson, Arizona, are leased by the Company for use as a bureau
    office for the Star. The remaining leased facilities are leased by TNI
    Partners pursuant to the Tucson Agency.
 
                                       16
<PAGE>   18
 
ITEM 3. LITIGATION
 
     Subsequent to the Scripps League acquisition, Barry H. Scripps commenced an
action against Edward W. Scripps, Betty Knight Scripps and Pulitzer Community
Newspapers, Inc. Barry H. Scripps is the child of Edward W. Scripps and Betty
Knight Scripps. Barry Scripps alleges that as a former minority shareholder and
executive employee of Scripps League, the defendant Betty Knight Scripps formed
and implemented a wrongful scheme to transfer the ownership of Scripps League
outside the Scripps family in violation of the Scripps League corporate mission
by (1) inducing the defendant Edward W. Scripps to breach their life-long
promises to Barry Scripps to retain the ownership of Scripps League Newspapers
in the family and ultimately turn over its management and control to Barry
Scripps; (2) engineering an unlawful freeze-out of Barry Scripps as a minority
shareholder from Scripps League and its subsidiaries; and (3) tortiously causing
Scripps League to breach its promise to Barry Scripps of permanent employment.
The claims asserted are for breach of promise against Edward W. Scripps and
Betty Knight Scripps, breach of employment contract against Pulitzer Community
Newspapers, Inc. as successor to Scripps League, interference with contract
against Betty Knight Scripps, breach of fiduciary duty against Betty Knight
Scripps, and promissory estoppel against Edward W. and Betty Knight Scripps.
Barry Scripps seeks (1) money damages, together with interest and counsel fees
in the amount to be proven at trial against Edward and Betty Scripps; (2)
judgment rescinding each of the actions that Betty Knight Scripps caused to be
taken that allegedly froze out Barry Scripps as a stockholder in Scripps League;
and (3) against Pulitzer Community Newspapers, Inc., damages for loss of income
plus interest and counsel fees in an amount to be proven at trial for breach of
the purported employment agreement. The Sellers agreed to indemnify the Company
and its affiliates, officers, directors, stockholders, employees, agents,
successors and assigns at all times after the closing for any and all losses
arising from Barry Scripps' claims. On January 8, 1997, the defendants filed
their answers to the complaint in the Action. On January 11, 1997, the Court
entered an order for entry of a Judgment Nisi dismissing the complaint for want
of jurisdictional amount. The Court's judgment noted that the facts on which
Barry Scripps relies to determine money damages present no reasonable likelihood
that recovery will exceed $25,000.00, the Court's minimum jurisdictional amount,
and that a final judgment of dismissal would be entered fourteen days from the
entry of the Judgment Nisi, subject to the right of the parties to file written
responses and request a further hearing. On January 29 1997, Barry Scripps filed
a written response opposing the Judgment Nisi and requested a hearing on the
issues presented. On February 4, 1997, defendants filed their response in
support of the entry of the Judgment Nisi. To date, no hearing has been held.
 
     The Company becomes involved from time to time in various claims and
lawsuits incidental to the ordinary course of its business, including such
matters as libel, slander and defamation actions and complaints alleging
discrimination. In addition, the Company is involved from time to time in
various governmental and administrative proceedings relating, among other
things, to renewal of broadcast licenses.
 
     While the results of litigation cannot be predicted, management believes
the ultimate outcome of such litigation will not have a material adverse effect
on the consolidated financial statements of the Company and its subsidiaries.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
     Not Applicable.
 
                                       17
<PAGE>   19
 
                                    PART II
 
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
 
     The Company's common stock is listed and traded on the New York Stock
Exchange under the symbol "PTZ."
 
     At March 20, 1997, there were approximately 413 record holders of the
Company's common stock and 2 record holders of its Class B common stock.
 
     The following table sets forth the range of high and low sales prices and
dividends paid for each quarterly period in the past two years:
<TABLE>
<CAPTION>
                      1995(2)                           HIGH      LOW      DIVIDEND(1)
                      -------                           ----      ---      -----------
<S>                                                    <C>       <C>       <C>
First Quarter......................................    $27.56    $23.06     $0.10125
Second Quarter.....................................     33.94     27.38      0.10125
Third Quarter......................................     39.75     30.47      0.10125
Fourth Quarter.....................................     39.19     32.91      0.10125
 
<CAPTION>
                      1996(2)                           HIGH      LOW      DIVIDEND(1)
---------------------------------------------------    ------    ------     --------
<S>                                                    <C>       <C>       <C>
First Quarter......................................    $39.00    $33.38     $ 0.1125
Second Quarter.....................................     45.19     39.00       0.1125
Third Quarter......................................     45.56     38.72       0.1125
Fourth Quarter.....................................     49.63     42.75       0.1200
</TABLE>
 
-------------------------
(1) In 1996 and 1995, the Company paid cash dividends of $0.4575 and $0.4050
    respectively, per share of common stock and Class B common stock (see Note 5
    of Notes to Consolidated Financial Statements for restrictions on
    dividends).
 
(2) The high and low sales prices and dividends per share have been restated for
    1996 and 1995 to reflect the impact of a four-for-three stock split,
    effected in the form of a 33 1/3 percent common and Class B common stock
    dividend, declared by the Company's Board of Directors on September 12,
    1996.
 
                                       18
<PAGE>   20
 
ITEM 6. SELECTED FINANCIAL DATA
 
<TABLE>
<CAPTION>
                                                          YEARS ENDED DECEMBER 31,
                                            ----------------------------------------------------
                                              1996       1995       1994       1993       1992
                                              ----       ----       ----       ----       ----
                                                  (IN THOUSANDS, EXCEPT PER SHARE AMOUNT)
<S>                                         <C>        <C>        <C>        <C>        <C>
OPERATING RESULTS
Operating Revenues -- net.................  $534,088   $472,327   $485,579   $426,985   $398,373
                                            --------   --------   --------   --------   --------
Operating Expenses
  Operations..............................   205,885    190,013    191,570    180,998    170,307
  Selling, general and administrative.....   172,838    155,996    174,239    163,578    160,873
  St. Louis Agency adjustment.............    13,972     12,502     14,706     10,660     11,690
  Depreciation and amortization...........    31,102     27,150     30,486     23,792     18,869
                                            --------   --------   --------   --------   --------
     Total operating expenses.............   423,797    385,661    411,001    379,028    361,739
                                            --------   --------   --------   --------   --------
Operating income..........................   110,291     86,666     74,578     47,957     36,634
Interest income...........................     4,522      5,203      1,971      1,090      1,156
Interest expense..........................   (13,592)   (10,171)   (12,009)    (9,823)    (7,801)
Gain on sale of publishing property.......                           2,791
Net other expense.........................    (5,449)    (2,330)    (1,461)    (1,011)      (756)
                                            --------   --------   --------   --------   --------
Income before provision for income taxes
  and cumulative effects of changes in
  accounting principles...................    95,772     79,368     65,870     38,213     29,233
Provision for income taxes................    38,272     30,046     25,960     15,260      5,331
                                            --------   --------   --------   --------   --------
Income before cumulative effects of
  changes in accounting principles........    57,500     49,322     39,910     22,953     23,902
Cumulative effects of changes in
  accounting principles, net of applicable
  income taxes............................                            (719)       360    (25,147)
                                            --------   --------   --------   --------   --------
Net income (loss).........................  $ 57,500   $ 49,322   $ 39,191   $ 23,313   ($ 1,245)
                                            ========   ========   ========   ========   ========
Earnings (loss) per share of stock (common
  and Class B common):(1)
Income before cumulative effects of
  changes in accounting principles........  $   2.62   $   2.26   $   1.84   $   1.13   $   1.24
Cumulative effects of changes in
  accounting principles...................                           (0.03)      0.02      (1.31)
                                            --------   --------   --------   --------   --------
Earnings (loss) per share.................  $   2.62   $   2.26   $   1.81   $   1.15   ($  0.07)
                                            ========   ========   ========   ========   ========
Dividends per share of common and Class B
  common stock(1).........................  $   0.46   $   0.41   $   0.35   $   0.32   $   0.29
                                            ========   ========   ========   ========   ========
Weighted average number of shares (common
  and Class B common stock)
  outstanding(1)..........................    21,926     21,800     21,655     20,371     19,232
                                            ========   ========   ========   ========   ========
OTHER DATA
Working capital...........................  $ 95,330   $128,853   $ 96,729   $ 60,688   $ 45,989
Total assets(2)...........................   683,851    495,073    468,312    461,618    289,988
Long-term debt, less current
  maturities(3)...........................   235,410    114,500    128,750    161,920     57,661
Stockholders' equity(4)...................   249,937    198,771    155,019    122,143     67,074
</TABLE>
 
-------------------------
(1) Shares outstanding, dividends per share and earnings per share have been
    adjusted for the Company's four-for-three stock split, on September 12,
    1996, five-for-four stock split, on January 4, 1995 and 10 percent stock
    dividend on January 4, 1993.
 
(2) On July 1, 1996, the Company acquired Scripps League Newspapers, Inc.
    ("Scripps League") for approximately $216 million. During 1993 the Company
    acquired television stations WESH and KCCI for approximately $164.7 million.
 
                                       19
<PAGE>   21
 
ITEM 6. SELECTED FINANCIAL DATA -- CONTINUED
(3) As of December 31, 1996, approximately $135 million of new long-term debt
    financing was outstanding related to the acquisition of Scripps League on
    July 1, 1996. As of December 31, 1993, approximately $118.6 million of new
    long-term debt financing was outstanding related to the acquisition of WESH
    and KCCI.
 
(4) On July 9, 1993, the Company sold 1.35 million shares of common stock in a
    public offering. The $37 million in net proceeds from the offering was used
    to partially finance the acquisition of WESH and KCCI in 1993.
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS
 
     Statements in this Annual Report on Form 10-K concerning the Company's
business outlook or future economic performance; anticipated profitability,
revenues, expenses or other financial items, together with other statements that
are not historical facts, are "forward-looking statements" as that term is
defined under the Federal Securities Laws. Forward-looking statements are
subject to risks, uncertainties and other factors which could cause actual
results to differ materially from those stated in such statements. Such risks,
uncertainties and factors include, but are not limited to industry cyclicality,
the seasonal nature of the business, changes in pricing or other actions by
competitors, and general economic conditions, as well as other risks detailed in
the Company's filings with the Securities and Exchange Commission including this
Annual Report on Form 10-K.
 
GENERAL
 
     The Company's operating revenues are significantly influenced by a number
of factors, including overall advertising expenditures, the appeal of
newspapers, television and radio in comparison to other forms of advertising,
the performance of the Company in comparison to its competitors in specific
markets, the strength of the national economy and general economic conditions
and population growth in the markets served by the Company.
 
     The Company's business tends to be seasonal, with peak revenues and profits
generally occurring in the fourth and, to a lesser extent, second quarters of
each year as a result of increased advertising activity during the Christmas and
spring holiday periods. The first quarter is historically the weakest quarter
for revenues and profits.
 
RECENT EVENTS
 
     On July 1, 1996, the Company acquired in a purchase transaction all of the
stock of Scripps League Newspapers, Inc. ("Scripps League"), a privately owned
company that publishes a group of community newspapers, including 14 dailies,
which serve smaller markets, primarily in the West and Midwest. The significant
portion of the approximately $216 million purchase price (including
approximately $6 million in working capital) has been allocated to fixed and
intangible assets whose depreciation and amortization, in large part, is not tax
deductible. Dilution from the acquisition (excluding non-recurring costs) was
not significant for the second half of 1996 and the Company's after tax cash
flow was favorably impacted. After tax cash flow is defined as net income plus
depreciation and amortization. See Note 3 of Notes to Consolidated Financial
Statements for pro forma information regarding the acquisition.
 
1996 COMPARED WITH 1995
 
CONSOLIDATED
 
     Operating revenues for the year ended December 31, 1996 increased 13.1
percent to $534.1 million from $472.3 million in 1995. The revenue comparison
was affected by the acquisition of Scripps League Newspapers, Inc. ("Scripps
League" which was subsequently renamed Pulitzer Community Newspapers, Inc.
("PCN")) on July 1, 1996. In addition, the revenue comparison was affected by an
extra week of operations in 1995; fiscal 1995 contained 53 weeks, versus 52
weeks in fiscal 1996. On a comparable basis (i.e., excluding
 
                                       20
<PAGE>   22
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS -- CONTINUED
PCN from 1996 and the extra week from 1995), consolidated revenues increased 7.6
percent. The increase reflected gains in both broadcasting and publishing
revenues.
 
     Operating expenses, excluding the St. Louis Agency adjustment, were $409.8
million compared to $373.2 million in 1995, an increase of 9.8 percent. On a
comparable basis, excluding PCN from 1996 and the extra week from 1995,
operating expenses increased 3.2 percent. Major increases in comparable expenses
were overall personnel costs of $5.2 million, promotion expenses of $1.2
million, national advertising commissions of $951,000 and circulation
distribution expenses of $611,000. Partially offsetting these increases were
declines in newsprint expense of $1.1 million and inducement costs of $798,000.
 
     Operating income for fiscal 1996 increased 27.3 percent to $110.3 million
from $86.7 million in 1995. On a comparable basis, excluding PCN from 1996 and
the extra week from 1995, operating income increased 25.9 percent. The 1996
increase reflected improvements in both the broadcasting and publishing
segments, resulting from increased revenues.
 
     Interest expense increased $3.4 million in 1996 compared to 1995 due to
higher debt levels in the second half of 1996. New long-term borrowings related
to the acquisition of Scripps League added approximately $4.8 million to 1996
interest expense. The Company's average debt level for 1996 increased to $186.9
million from $133.2 million in the prior year. The Company's average interest
rate for 1996 decreased slightly to 7.3 percent from 7.5 percent in the prior
year. Interest income for the year decreased $681,000, due to both lower average
balances of invested funds and lower interest rates in 1996.
 
     The effective income tax rate for 1996 increased to 40 percent from 37.9
percent in the prior year, due to approximately $2.1 million of nondeductible
goodwill amortization related to the Scripps League acquisition. The prior year
rate was affected by the settlement of a state tax examination which reduced
income tax expense by $911,000 in 1995. Excluding the non-recurring tax
settlement from the prior year, the effective income tax rate for 1995 would
have been 39 percent. The Company expects the estimated tax rate for 1997 will
be in the 41 percent range.
 
     The Company's 1996 nonoperating expenses included a non-recurring charge of
approximately $2.7 million ($1.6 million after-tax) for the write-down in value
of a joint venture investment.
 
     For the year ended December 31, 1996, the Company reported net income of
$57.5 million, or $2.62 per share, compared with net income of $49.3 million, or
$2.26 per share, in the prior year. Comparability of the earnings results was
affected by the joint venture write-off in 1996, non-recurring costs related to
the Scripps League acquisition ($1.1 million after tax) in 1996, and the
positive income tax adjustment in 1995. Excluding the non-recurring items from
both years, 1996 net income would have increased to $60.3 million, or $2.74 per
share, from $48.4 million, or $2.22 per share, for the prior year. The gain in
net income reflected a significant increase in the broadcasting segment's
operating profits.
 
PUBLISHING
 
     Operating revenues from the Company's publishing segment for 1996 increased
14.7 percent to $309.1 million from $269.4 million in 1995. On a comparable
basis, excluding PCN from 1996 and the extra week from 1995, publishing revenues
increased 3.5 percent. The comparable increase reflected higher advertising
revenues in 1996.
 
     Newspaper advertising revenues, on a comparable basis, excluding PCN from
1996 and the extra week from 1995, increased $9.5 million, or 6 percent, in
1996. The significant portion of the current year increase resulted from higher
classified advertising revenue at the St. Louis Post-Dispatch ("Post-Dispatch").
Increases in advertising rates for most categories and higher volume for zoned
advertising were the primary factors in the 1996 revenue increase. In the fourth
quarter of 1996 and the first quarter of 1997, varying rate increases were
implemented at the Post-Dispatch, The Arizona Daily Star ("Star") and most of
the Company's new community newspaper properties.
 
                                       21
<PAGE>   23
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS -- CONTINUED
     Circulation revenues, on a comparable basis, excluding PCN from 1996 and
the extra week from 1995, increased approximately $100,000, or 0.2 percent, in
1996. The Post-Dispatch and Star experienced only slight fluctuations in paid
circulation and average rates in 1996 compared to the prior year.
 
     Operating expenses (including selling, general and administrative expenses
and depreciation and amortization) for the publishing segment, excluding the St.
Louis Agency adjustment, increased to $262.5 million in 1996 from $231.5 million
in 1995, an increase of 13.4 percent. On a comparable basis, excluding PCN from
1996 and the extra week from 1995, operating expenses increased 2.1 percent.
Major increases in comparable expenses were promotion expense of $1.5 million,
circulation distribution expenses of $611,000 and overall personnel costs of
$574,000. Partially offsetting these increases were declines in newsprint
expense of $1.1 million and inducement costs of $798,000.
 
     Operating income from the Company's publishing activities increased 28.3
percent to $32.6 million in 1996 from $25.4 million in 1995. On a comparable
basis, excluding PCN from 1996 and the extra week from 1995, operating income
from the publishing segment increased 12 percent. The increase resulted from
higher advertising revenues on a comparable basis.
 
     On a comparable basis, excluding PCN from 1996 and the extra week from
1995, lower newsprint prices resulted in a $1.1 million decline in 1996
newsprint expense ($862,000 after giving effect to the St. Louis Agency
adjustment). During the first quarter of 1997, the Company's average cost per
metric ton for newsprint has been in the range of $510. Newsprint suppliers
increased the price to $575 per metric ton on March 1, 1997 which will begin to
impact the Company's newsprint expense in the second quarter of 1997. The
Company's 1996 newsprint cost and metric tons consumed, after giving effect to
the St. Louis Agency adjustment and excluding PCN, were approximately $30.7
million and 47,751 tons, respectively.
 
BROADCASTING
 
     Broadcasting operating revenues for 1996 increased 10.9 percent to $225
million from $202.9 million in 1995. On a comparable basis, excluding the extra
week from 1995, operating revenues increased 12.9 percent. Local spot
advertising increased 14.2 percent and national spot advertising increased 14.7
percent. The current year increases reflected strong Olympic-related advertising
at the Company's five NBC affiliated stations and significant political
advertising of $13.2 million, an increase of $10.3 million.
 
     Broadcasting operating expenses (including selling, general and
administrative expenses and depreciation and amortization) increased 3.5 percent
to $141.7 million in 1996 from $137 million in 1995. On a comparable basis,
excluding the extra week from 1995, operating expenses increased 4.5 percent.
This increase was primarily attributable to higher overall personnel costs of
$4.2 million and higher national advertising commissions of $951,000.
 
     Operating income from the broadcasting segment in 1996 increased 26.2
percent to $83.2 million from $65.9 million in the prior year. On a comparable
basis, excluding the extra week from 1995, operating income from the
broadcasting segment increased 30.9 percent. The 1996 gain resulted from the
significant increases in both local and national advertising revenues.
 
1995 COMPARED WITH 1994
 
CONSOLIDATED
 
     Operating revenues for the year ended December 31, 1995 decreased 2.7
percent to $472.3 million from $485.6 million in 1994. The revenue comparison
was affected by the sale of the Company's Chicago publishing subsidiary,
Pulitzer Community Newspapers, Inc. ("PCN"), on December 22, 1994. The Company's
1994 results included substantially a full year of PCN operations while no
amounts for PCN were included in the 1995 results. In addition, the revenue
comparison was favorably affected by an extra week of operations in 1995; fiscal
1995 contained 53 weeks, versus 52 weeks in fiscal 1994. On a comparable basis
(i.e., excluding
 
                                       22
<PAGE>   24
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS -- CONTINUED
the extra week from 1995 and PCN from 1994), consolidated revenues increased 6.2
percent. The increase reflected gains in both broadcasting and publishing
revenues.
 
     Operating expenses, excluding the St. Louis Agency adjustment, were $373.2
million compared to $396.3 million in 1994, a decrease of 5.8 percent. On a
comparable basis, excluding the extra week from 1995 and PCN from 1994,
operating expenses increased 5.2 percent. This increase was primarily
attributable to increased newsprint costs of $15.1 million, higher overall
personnel costs of $2.1 million, increased promotion expense of $934,000,
increased purchased supplement costs of $783,000, and the reversal in the prior
year of an accrual due to the settlement of a sales tax issue ($437,000).
Expense increases were partially offset by lower depreciation and amortization
of $1.4 million and lower programming rights expense of $1.2 million.
 
     Operating income for fiscal 1995 increased 16.2 percent to $86.7 million
from $74.6 million in 1994. On a comparable basis, excluding the extra week from
1995 and PCN from 1994, operating income increased 15.7 percent. The 1995
increase reflected improvements in the broadcasting segment's operating income,
resulting from increased revenues.
 
     Interest expense decreased $1.8 million in 1995 compared to 1994, due to
lower debt levels. The Company's average debt level for 1995 decreased to $133.2
million from $160.1 million in the prior year. The Company's average interest
rate for 1995 was unchanged from the prior year at 7.5 percent. Interest income
for the year increased $3.2 million, due to both a higher average balance of
invested funds and higher short-term interest rates.
 
     The effective income tax rate for 1995 decreased to 37.9 percent from 39.4
percent in the prior year. The rates in both 1995 and 1994 were affected by
non-recurring items. Income tax expense for 1995 was reduced by a $911,000
positive adjustment related to the fourth-quarter settlement of a state tax
examination. The 1994 rate included the effect of approximately $1.8 million in
tax expense related to the gain on the sale of Pulitzer Community Newspapers,
Inc. In addition, 1994 income tax expense was reduced by a $500,000 positive
adjustment related to the fourth-quarter settlement of the 1992 federal tax
examination. Excluding these non-recurring items from both years, the effective
income tax rates for 1995 and 1994 would have been 39 percent and 39.2 percent,
respectively.
 
     As discussed in Note 9 to the Consolidated Financial Statements, effective
January 1, 1994 the Company adopted the provisions of Statement of Financial
Accounting Standards No. 112 ("SFAS 112"), Employers' Accounting for
Postemployment Benefits, and recorded its initial liability thereunder,
resulting in a one-time after-tax charge of $719,000. After recording the
one-time charge, the Company's ongoing expense under SFAS 112 does not differ
significantly from the prior pay-as-you-go basis.
 
     On December 22, 1994, the Company sold its Chicago publishing subsidiary,
PCN, for approximately $33.7 million. The gain on the sale of PCN added
approximately $1 million ($2.8 million less income taxes of $1.8 million), or
$0.05 per share, to 1994 net income. Other than the net gain of $1 million, the
sale of PCN had no effect on the net income comparisons because earnings
provided by PCN in 1994 were offset in 1995 by the after-tax investment income
generated by the sale proceeds.
 
     For the year ended December 31, 1995, the Company reported net income of
$49.3 million, or $2.26 per share, compared with net income of $39.2 million, or
$1.81 per share, in the prior year. Comparability of the earnings results was
affected by several non-recurring items which included the positive income tax
adjustments in both years, the SFAS 112 adjustment in 1994 and the PCN gain in
1994. Excluding the non-recurring items from both years, 1995 net income
increased to $48.4 million, or $2.22 per share, from $38.4 million, or $1.77 per
share, for the prior year. The gain in net income reflected an improvement in
the broadcasting segment's operating profits and a reduction in interest
expense.
 
                                       23
<PAGE>   25
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS -- CONTINUED
PUBLISHING
 
     Operating revenues from the Company's publishing segment for 1995 decreased
11.6 percent to $269.4 million from $304.8 million in 1994. On a comparable
basis, excluding the extra week from 1995 and PCN from 1994, publishing revenues
increased 3.4 percent. This increase reflected both higher advertising revenues,
particularly classified, at both newspaper properties and higher circulation
revenues.
 
     Newspaper advertising revenues, on a comparable basis, excluding the extra
week from 1995 and PCN from 1994, increased $5.2 million, or 3.4 percent, in
1995. The current year increase was generated by higher average rates which
contributed $7.2 million but which was partially offset by a decline in
advertising volume totaling $2 million. In the first quarter of 1995, both the
Post-Dispatch and Star implemented rate increases for most advertising
categories, ranging from 4 percent to 6 percent and 6 percent to 8 percent,
respectively. In November 1995, additional rate increases, ranging from 7.5
percent to 9.5 percent, were implemented at the Star.
 
     Circulation revenues, on a comparable basis, excluding the extra week from
1995 and PCN from 1994, increased $2.3 million, or 3.1 percent, in 1995. The
current year increase resulted from circulation price increases which
contributed $4.3 million but which was partially offset by average circulation
decreases of $2 million. Effective February 5, 1995, the home-delivered price of
the Sunday Post-Dispatch was increased $1.00 per month. In addition, the
home-delivered price of the daily Star was increased $0.80 per month, effective
March 27, 1995.
 
     Operating expenses (including selling, general and administrative expenses
and depreciation and amortization) for the publishing segment, excluding the St.
Louis Agency adjustment, decreased to $231.5 million in 1995 from $259.6 million
in 1994, a decrease of 10.8 percent. On a comparable basis, excluding the extra
week from 1995 and PCN from 1994, operating expenses increased 6.9 percent. The
higher expenses, on a comparable basis, resulted primarily from increased
newsprint cost of $15.1 million, reflecting the impact of significant newsprint
price increases, and increased purchased supplement costs of $783,000.
 
     Operating income from the Company's publishing activities decreased 16.7
percent to $25.4 million in 1995 from $30.5 million in 1994. On a comparable
basis, excluding the extra week from 1995 and PCN from 1994, operating income
from the publishing segment decreased 12.3 percent. The decline resulted from
the significant increase in newsprint costs which exceeded revenue gains on a
comparable basis.
 
BROADCASTING
 
     Broadcasting operating revenues for 1995 increased 12.2 percent to $202.9
million from $180.8 million in 1994. On a comparable basis, excluding the extra
week from 1995, operating revenues increased 10.2 percent. Local spot
advertising increased 5.9 percent and national spot advertising increased 3.4
percent. In addition, network compensation revenue increased $10.2 million due
to new ten-year network affiliation agreements executed in early 1995. During
1995, approximately $2 million of this network revenue increase was invested
back into the Company's stations to strengthen their local news operations.
These costs were reflected in the ongoing annual expenses of the broadcasting
operations.
 
     Reported broadcasting operating revenues included political advertising of
$2.9 million and $8.5 million in 1995 and 1994, respectively.
 
     Broadcasting operating expenses (including selling, general and
administrative expenses and depreciation and amortization) increased 3.1 percent
to $137 million in 1995 from $132.8 million in 1994. On a comparable basis,
excluding the extra week from 1995, operating expenses increased 2.1 percent.
Major increases in comparable expenses were overall personnel costs of $3
million and promotion expense of $805,000. Also contributing to the current year
expense increase was the prior year reversal of an accrual due to the
 
                                       24
<PAGE>   26
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS -- CONTINUED
settlement of a sales tax issue ($437,000). Partially offsetting these increases
were declines in depreciation and amortization of $1.5 million and programming
rights expense of $1.2 million.
 
     Operating income from the broadcasting segment in 1995 increased 37.5
percent to $65.9 million from $48 million in the prior year. On a comparable
basis, excluding the extra week from 1995, operating income from the
broadcasting segment increased 32.6 percent. The 1995 increase resulted from a
combination of increased advertising revenues and higher network compensation.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     Outstanding debt, inclusive of the short-term portion of long-term debt, as
of December 31, 1996, was $250.1 million, compared with $128.8 million at
December 31, 1995, reflecting the new debt financing incurred for the Scripps
League acquisition on July 1, 1996. During 1996, the Company made a scheduled
repayment of $14.3 million under its Senior Note Agreement which matures in
1997.
 
     On July 1, 1996, in connection with the acquisition of Scripps League, the
Company issued $85 million of fixed rate senior notes to Prudential Insurance
Company of America ("Prudential") and entered into a $50 million credit
agreement with The First National Bank of Chicago, as Agent, for a group of
lenders ("FNBC"). The Company immediately borrowed the full amount under the
FNBC Credit Agreement to partially finance the Scripps League acquisition. See
Notes 3 and 5 of Notes to Consolidated Financial Statements for additional
information regarding the acquisition and long-term borrowings.
 
     The Company's Senior Note Agreements with Prudential and FNBC Credit
Agreement require it to maintain certain financial ratios, place restrictions on
the payment of dividends and prohibit new borrowings, except as permitted
thereunder.
 
     As of December 31, 1996, commitments for capital expenditures were
approximately $5.3 million, relating to normal capital equipment replacements.
Commitments for film contracts and license fees as of December 31, 1996 were
approximately $22.9 million. In addition, as of December 31, 1996, the Company
had capital contribution commitments of approximately $3.4 million related to
investments in two limited partnerships.
 
     At December 31, 1996, the Company had working capital of $95.3 million and
a current ratio of 2.24 to 1. This compares to working capital of $128.9 million
and a current ratio of 3.22 to 1 at December 31, 1995.
 
     The Company from time to time considers acquisitions of broadcasting,
newspaper and other properties when favorable investment opportunities are
identified. Other than agreements to acquire two small radio stations, the
Company has no agreements to acquire additional properties. In the event an
investment opportunity is identified, management expects that it would be able
to arrange financing on terms and conditions satisfactory to the Company.
 
     The Company generally expects to generate sufficient cash from operations
to cover ordinary capital expenditures, film contract and license fees, working
capital requirements, debt installments and dividend payments.
 
                                       25
<PAGE>   27
 
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
     The following consolidated financial statements of Pulitzer Publishing
Company and Subsidiaries are filed as part of this report. Supplementary
unaudited data with respect to the quarterly results of operations of the
Company are set forth in the Notes to Consolidated Financial Statements.
 
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
     Independent Auditors' Report
 
     Statements of Consolidated Income for each of the Three Years in the Period
        Ended December 31, 1996
 
     Statements of Consolidated Financial Position at December 31, 1996 and 1995
 
     Statements of Consolidated Stockholders' Equity for each of the Three Years
        in the Period Ended December 31, 1996
 
     Statements of Consolidated Cash Flows for each of the Three Years in the
        Period Ended December 31, 1996
 
     Notes to Consolidated Financial Statements for the Three Years in the
        Period Ended December 31, 1996
 
                                       26
<PAGE>   28
 
                          INDEPENDENT AUDITORS' REPORT
 
To the Board of Directors and Stockholders of
Pulitzer Publishing Company:
 
     We have audited the accompanying statements of consolidated financial
position of Pulitzer Publishing Company and subsidiaries as of December 31, 1996
and 1995, and the related consolidated statements of income, stockholders'
equity, and cash flows for each of the three years in the period ended December
31, 1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
 
     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the companies at December 31, 1996
and 1995, and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 1996 in conformity with
generally accepted accounting principles.
 
     As discussed in Note 9 to the consolidated financial statements, in 1994
the Company changed its method of accounting for postemployment benefits to
conform with Statement of Financial Accounting Standards No. 112, Employers'
Accounting for Postemployment Benefits.
 
DELOITTE & TOUCHE LLP
 
Saint Louis, Missouri
February 7, 1997
 
                                       27
<PAGE>   29
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                       STATEMENTS OF CONSOLIDATED INCOME
 
<TABLE>
<CAPTION>
                                                                     YEARS ENDED DECEMBER 31,
                                                              ---------------------------------------
                                                                 1996          1995          1994
                                                                 ----          ----          ----
                                                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                           <C>           <C>           <C>
OPERATING REVENUES -- NET:
  Publishing:
     Advertising............................................     $191,939      $161,932      $181,018
     Circulation............................................       81,434        76,349        77,941
     Other..................................................       35,723        31,107        45,820
  Broadcasting..............................................      224,992       202,939       180,800
                                                                 --------      --------      --------
          Total operating revenues..........................      534,088       472,327       485,579
                                                                 --------      --------      --------
OPERATING EXPENSES:
  Publishing operations.....................................      139,259       125,811       130,219
  Broadcasting operations...................................       66,626        64,202        61,351
  Selling, general and administrative.......................      172,838       155,996       174,239
  St. Louis Agency adjustment (Note 2)......................       13,972        12,502        14,706
  Depreciation and amortization.............................       31,102        27,150        30,486
                                                                 --------      --------      --------
          Total operating expenses..........................      423,797       385,661       411,001
                                                                 --------      --------      --------
  Operating income..........................................      110,291        86,666        74,578
  Interest income...........................................        4,522         5,203         1,971
  Interest expense..........................................      (13,592)      (10,171)      (12,009)
  Gain on sale of publishing property (Note 3)..............                                    2,791
  Net other expense.........................................       (5,449)       (2,330)       (1,461)
                                                                 --------      --------      --------
INCOME BEFORE PROVISION FOR INCOME TAXES AND CUMULATIVE
  EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE..................       95,772        79,368        65,870
PROVISION FOR INCOME TAXES (Note 10)........................       38,272        30,046        25,960
                                                                 --------      --------      --------
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
  PRINCIPLE.................................................       57,500        49,322        39,910
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET OF
  APPLICABLE INCOME TAXES (Note 9)..........................                                     (719)
                                                                 --------      --------      --------
NET INCOME..................................................     $ 57,500      $ 49,322      $ 39,191
                                                                 ========      ========      ========
EARNINGS PER SHARE OF STOCK (COMMON AND CLASS B COMMON):
  Income before cumulative effect of change in accounting
     principle..............................................        $2.62         $2.26         $1.84
  Cumulative effect of change in accounting principle.......                                    (0.03)
                                                                 --------      --------      --------
          Total.............................................        $2.62         $2.26         $1.81
                                                                 ========      ========      ========
WEIGHTED AVERAGE NUMBER OF SHARES (COMMON AND CLASS B COMMON
  STOCK OUTSTANDING) (Note 7)...............................       21,926        21,800        21,655
                                                                 ========      ========      ========
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                       28
<PAGE>   30
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                 STATEMENTS OF CONSOLIDATED FINANCIAL POSITION
 
<TABLE>
<CAPTION>
                                                                  DECEMBER 31,
                                                              ---------------------
                                                                1996        1995
                                                                ----        ----
                                                                 (IN THOUSANDS)
<S>                                                           <C>         <C>
                           ASSETS
CURRENT ASSETS:
  Cash and cash equivalents.................................  $  73,052   $ 100,380
  Trade accounts receivable (less allowance for doubtful
    accounts of $2,576 and $2,009)..........................     80,010      64,524
  Inventory.................................................      4,976       6,190
  Prepaid expenses and other................................      5,650       7,041
  Program rights............................................      8,452       8,824
                                                              ---------   ---------
      Total current assets..................................    172,140     186,959
                                                              ---------   ---------
PROPERTIES:
  Land......................................................     14,692      11,779
  Buildings.................................................     78,733      60,794
  Machinery and equipment...................................    209,854     173,165
  Construction in progress..................................      2,071       8,745
                                                              ---------   ---------
      Total.................................................    305,350     254,483
  Less accumulated depreciation.............................    149,418     135,296
                                                              ---------   ---------
      Properties -- net.....................................    155,932     119,187
                                                              ---------   ---------
INTANGIBLE AND OTHER ASSETS:
  Intangible assets -- net of applicable amortization (Notes
    3 and 4)................................................    298,305     117,470
  Receivable from The Herald Company (Notes 2 and 9)........     39,955      43,696
  Other.....................................................     17,519      27,761
                                                              ---------   ---------
      Total intangible and other assets.....................    355,779     188,927
                                                              ---------   ---------
         TOTAL..............................................  $ 683,851   $ 495,073
                                                              =========   =========
            LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Trade accounts payable....................................  $  13,355   $  14,145
  Current portion of long-term debt (Note 5)................     14,705      14,250
  Salaries, wages and commissions...........................     14,897      11,757
  Income taxes payable......................................      1,267       2,618
  Program contracts payable.................................      8,916       8,664
  Interest payable..........................................      7,177       3,415
  Pension obligations (Note 8)..............................      2,123       1,023
  Acquisition payable.......................................      9,804
  Other.....................................................      4,566       2,234
                                                              ---------   ---------
      Total current liabilities.............................     76,810      58,106
                                                              ---------   ---------
LONG-TERM DEBT (Note 5).....................................    235,410     114,500
                                                              ---------   ---------
PENSION OBLIGATIONS (Note 8)................................     23,415      24,631
                                                              ---------   ---------
POSTRETIREMENT AND POSTEMPLOYMENT BENEFIT OBLIGATIONS (Note
  9)........................................................     92,252      92,856
                                                              ---------   ---------
OTHER LONG-TERM LIABILITIES.................................      6,027       6,209
                                                              ---------   ---------
COMMITMENTS AND CONTINGENCIES (Note 6)......................
STOCKHOLDERS' EQUITY (Note 7):
  Preferred stock, $.01 par value; 25,000,000 shares
    authorized; issued and outstanding -- none..............
  Common stock, $.01 par value; 100,000,000 shares
    authorized; issued -- 6,498,215 in 1996 and 4,704,268 in
    1995....................................................         65          47
  Class B common stock, convertible, $.01 par value;
    50,000,000 shares authorized; issued -- 27,214,842 in
    1996 and 20,474,050 in 1995.............................        272         205
  Additional paid-in capital................................    129,173     125,539
  Retained earnings.........................................    308,283     260,816
                                                              ---------   ---------
      Total.................................................    437,793     386,607
  Treasury stock -- at cost; 22,811 and 16,712 shares of
    common stock in 1996 and 1995, respectively, and
    11,700,850 shares in 1996 and 8,775,638 in 1995 of Class
    B common stock..........................................   (187,856)   (187,836)
                                                              ---------   ---------
      Total stockholders' equity............................    249,937     198,771
                                                              ---------   ---------
         TOTAL..............................................  $ 683,851   $ 495,073
                                                              =========   =========
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                       29
<PAGE>   31
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                       STATEMENTS OF STOCKHOLDERS' EQUITY
 
<TABLE>
<CAPTION>
                                                         CLASS B   ADDITIONAL                              TOTAL
                                                COMMON   COMMON     PAID-IN     RETAINED   TREASURY    STOCKHOLDERS'
                                                STOCK     STOCK     CAPITAL     EARNINGS     STOCK        EQUITY
                                                ------   -------   ----------   --------   --------    -------------
                                                                           (IN THOUSANDS)
<S>                                             <C>      <C>       <C>          <C>        <C>         <C>
BALANCES AT JANUARY 1, 1994..................    $35       $165     $120,901    $188,665   $(187,623)    $122,143
  Issuance of common stock grants............                            101                                  101
  Common stock options exercised.............                            898                                  898
  Conversion of Class B common stock to
    common stock.............................
  Tax benefit from stock options exercised...                            220                                  220
  Net income.................................                                     39,191                   39,191
  Cash dividends declared and paid $.35 per
    share of common and Class B common.......                                     (7,534)                  (7,534)
  Five-for-four stock split in the form of a
    25 percent stock dividend (Note 7).......      9         41          (50)
                                                 ---       ----     --------    --------   ---------     --------
BALANCES AT DECEMBER 31, 1994................     44        206      122,070     220,322    (187,623)     155,019
  Issuance of common stock grants............                            218                                  218
  Common stock options exercised.............      2                   2,327                                2,329
  Conversion of Class B common stock to
    common stock.............................      1         (1)
  Tax benefit from stock options exercised...                            924                                  924
  Net income.................................                                     49,322                   49,322
  Cash dividends declared and paid $.41 per
    share of common and Class B common.......                                     (8,828)                  (8,828)
  Purchase of treasury stock.................                                                   (213)        (213)
                                                 ---       ----     --------    --------   ---------     --------
BALANCES AT DECEMBER 31, 1995................     47        205      125,539     260,816    (187,836)     198,771
  Issuance of common stock grants............                             76                                   76
  Common stock options exercised.............      1                   2,166                                2,167
  Conversion of Class B common stock to
    common stock.............................      1         (1)
  Tax benefit from stock options exercised...                          1,476                                1,476
  Net income.................................                                     57,500                   57,500
  Cash dividends declared and paid $.46 per
    share of common and Class B common.......                                    (10,033)                 (10,033)
  Purchase of treasury stock.................                                                    (20)         (20)
  Four for three stock split in the form of a
    33.3 percent stock dividend (Note 7).....     16         68          (84)
                                                 ---       ----     --------    --------   ---------     --------
BALANCES AT DECEMBER 31, 1996................    $65       $272     $129,173    $308,283   $(187,856)    $249,937
                                                 ===       ====     ========    ========   =========     ========
</TABLE>
 
<TABLE>
<CAPTION>
                                                                 COMMON STOCK                CLASS B COMMON STOCK
                                                            -----------------------         -----------------------
                                                                           HELD IN                         HELD IN
                                                            ISSUED         TREASURY         ISSUED         TREASURY
                                                            ------         --------         ------         --------
                                                                                (IN THOUSANDS)
<S>                                                         <C>            <C>              <C>            <C>
SHARE ACTIVITY:
BALANCES AT JANUARY 1, 1994...............................  3,512             (9)           16,488          (7,021)
  Issuance of common stock grants.........................      3
  Common stock options exercised..........................     40
  Conversion of Class B common stock to common stock......      1                               (1)
  Five-for-four stock split in the form of a 25 percent
    stock dividend (Note 7)...............................    888             (2)            4,122          (1,755)
                                                            -----            ---            ------         -------
BALANCES AT DECEMBER 31, 1994.............................  4,444            (11)           20,609          (8,776)
  Issuance of common stock grants.........................      6
  Common stock options exercised..........................    119
  Conversion of Class B common stock to common stock......    135                             (135)
  Purchase of treasury stock..............................                    (6)
                                                            -----            ---            ------         -------
BALANCES AT DECEMBER 31, 1995.............................  4,704            (17)           20,474          (8,776)
  Issuance of common stock grants.........................      2
  Common stock options exercised..........................    140
  Conversion of Class B common stock to common stock......     84                              (84)
  Four for three split in the form of a 33.3 percent stock
    dividend (Note 7).....................................  1,568             (6)            6,825          (2,925)
                                                            -----            ---            ------         -------
BALANCES AT DECEMBER 31, 1996.............................  6,498            (23)           27,215         (11,701)
                                                            =====            ===            ======         =======
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                       30
<PAGE>   32
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                     STATEMENTS OF CONSOLIDATED CASH FLOWS
 
<TABLE>
<CAPTION>
                                                                 YEARS ENDED DECEMBER 31,
                                                              -------------------------------
                                                                1996        1995       1994
                                                                ----        ----       ----
                                                                      (IN THOUSANDS)
<S>                                                           <C>         <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income................................................  $  57,500   $ 49,322   $ 39,191
  Adjustments to reconcile net income to net cash provided
    by operating activities:
    Cumulative effect of change in accounting principle, net
     of applicable income taxes.............................                              719
    Depreciation............................................     20,434     19,281     20,466
    Amortization of intangibles.............................     10,668      7,869     10,020
    Increase (decrease) in postretirement and postemployment
     benefit obligations....................................       (604)       890       (496)
    Deferred income taxes...................................     (1,943)    (1,847)    (4,617)
    Gain on sale of assets..................................       (421)               (2,791)
    Changes in assets and liabilities (net of the effects of
     the purchase and sale of properties) (Note 3) which
     provided (used) cash:
      Trade accounts receivable.............................     (9,737)    (1,581)    (8,269)
      Inventory.............................................      3,017     (3,121)     1,540
      Other assets..........................................      7,842      1,150      3,567
      Trade accounts payable and other liabilities..........      4,263        704      8,660
      Income taxes payable..................................       (239)    (3,713)     2,059
                                                              ---------   --------   --------
NET CASH PROVIDED BY OPERATING ACTIVITIES...................     90,780     68,954     70,049
                                                              ---------   --------   --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures......................................    (17,787)   (22,934)   (13,313)
  Purchase of publishing properties, net of cash acquired...   (203,306)
  Purchase of broadcast assets..............................     (5,187)
  Investment in joint ventures and limited partnerships.....     (2,983)    (3,637)    (5,593)
  Sale of assets, net of cash sold..........................      4,150                30,486
  (Increase) decrease in notes receivable...................     (4,904)     1,875         18
                                                              ---------   --------   --------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES.........   (230,017)   (24,696)    11,598
                                                              ---------   --------   --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of long-term debt..................    135,000
  Repayments on long-term debt..............................    (15,205)   (14,250)   (32,897)
  Dividends paid............................................    (10,033)    (8,828)    (7,534)
  Proceeds from exercise of stock options...................      2,167      2,329        898
  Purchase of treasury stock................................        (20)      (213)
                                                              ---------   --------   --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES.........    111,909    (20,962)   (39,533)
                                                              ---------   --------   --------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS........    (27,328)    23,296     42,114
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR..............    100,380     77,084     34,970
                                                              ---------   --------   --------
CASH AND CASH EQUIVALENTS AT END OF YEAR....................  $  73,052   $100,380   $ 77,084
                                                              =========   ========   ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid (received) during the year for:
    Interest paid...........................................  $   9,716   $ 10,147   $ 13,067
    Interest received.......................................     (4,872)    (4,805)    (1,834)
    Income taxes............................................     38,530     35,862     28,369
    Income tax refunds......................................       (195)    (1,280)       (70)
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING
  ACTIVITY:
  Decrease in minimum pension liability and related
    intangible asset
    (Notes 4 and 8).........................................  $  (1,059)  $   (227)  $ (1,629)
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                       31
<PAGE>   33
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
 
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
     Basis of Consolidation -- The consolidated financial statements include the
accounts of Pulitzer Publishing Company (the "Company") and its subsidiary
companies, all of which are wholly-owned. All significant intercompany
transactions have been eliminated from the consolidated financial statements.
 
     Fiscal Year -- The Company's fiscal year ends on the last Sunday of the
calendar year, which in 1995 resulted in a 14-week fourth quarter and a 53-week
year. In 1996 and 1994, the fourth quarter was 13 weeks and the year was 52
weeks. For ease of presentation, the Company has used December 31 as the
year-end.
 
     Cash Equivalents -- For purposes of reporting cash flows, the Company
considers all highly liquid investments purchased with an original maturity of
three months or less to be cash equivalents.
 
     Inventory Valuation -- Inventory, which consists primarily of newsprint, is
stated at the lower of cost (determined primarily using the last-in, first-out
method) or market. If the first-in, first-out cost method had been used,
inventory would have been $874,000 and $2,064,000 higher than reported at
December 31, 1996 and 1995, respectively. Ink and other miscellaneous supplies
are expensed as purchased.
 
     Program Rights -- Program rights represent license agreements for the right
to broadcast programs over license periods which generally run from one to five
years. The total cost of each agreement is recorded as an asset and liability
when the license period begins and the program is available for broadcast.
Program rights covering periods greater than one year are amortized over the
license period using an accelerated method as the programs are broadcast. In the
event that a determination is made that programs will not be used prior to the
expiration of the license agreement, unamortized amounts are then charged to
operations. Payments are made in installments as provided for in the license
agreements. Program rights expected to be amortized in the succeeding year and
payments due within one year are classified as current assets and current
liabilities, respectively.
 
     Property and Depreciation -- Property is recorded at cost. Depreciation is
computed using the straight-line method over the estimated useful lives of the
individual assets. Buildings are depreciated over 20 to 50 years and all other
property over lives ranging from 3 to 15 years.
 
     Intangible Assets -- Intangibles consisting of goodwill, FCC licenses and
network affiliations acquired subsequent to the effective date of Accounting
Principles Board Opinion No. 17 ("Opinion No. 17") are being amortized over
lives of either 15 or 40 years while all other intangible assets are being
amortized over lives ranging from 4 to 23 years. Management periodically
evaluates the recoverability of intangible assets by reviewing the current and
projected cash flows of each of its properties. Intangibles in the amount of
$1,520,000, related to acquisitions prior to the effective date of Opinion No.
17, are not being amortized because, in the opinion of management, their value
is of undeterminable duration. In addition, the intangible asset relating to the
Company's additional minimum pension liability under Statement of Financial
Accounting Standards No. 87 is adjusted annually, as necessary, when a new
determination of the amount of the additional minimum pension liability is made
annually.
 
     Long-Lived Assets -- The Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, in
March 1995. This statement became effective for the Company's 1996 fiscal year.
The general requirements of this statement are applicable to the properties and
intangible assets of the Company and require impairment to be considered
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Adoption of this standard on its effective date
of January 1, 1996 had no impact on the Company's financial position or results
of operations.
 
     Income Taxes -- Deferred tax assets and liabilities are recorded for the
expected future tax consequences of events that have been included in either the
financial statements or tax returns of the Company. Under this
 
                                       32
<PAGE>   34
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 -- CONTINUED
 
asset and liability approach, deferred tax assets and liabilities are determined
based on temporary differences between the financial statement and tax bases of
assets and liabilities by applying enacted statutory tax rates applicable to
future years in which the differences are expected to reverse.
 
     Earnings Per Share of Stock -- Earnings per share of stock is computed
using the weighted average number of Common and Class B shares outstanding
during the applicable period, adjusted for the stock splits described in Note 7.
 
     Employee Benefit Plans -- The Company and its subsidiaries have several
noncontributory pension plans covering substantially all of their employees.
Benefits under the plans are generally based on salary and years of service. The
Company's liability and related expense for benefits under the plans are
recorded over the service period of active employees based upon annual actuarial
calculations. Plan funding strategies are influenced by tax regulations. Plan
assets consist primarily of government bonds and corporate equity securities.
 
     The Company provides retiree medical and life insurance benefits under
varying postretirement plans at several of its operating locations. In addition,
the Company provides postemployment disability benefits to certain former
employee groups prior to retirement. The significant portion of these benefits
results from plans at the St. Louis Post-Dispatch. The Company's liability and
related expense for benefits under the postretirement plans are recorded over
the service period of active employees based upon annual actuarial calculations.
The Company accrues postemployment disability benefits when it becomes probable
that such benefits will be paid and when sufficient information exists to make
reasonable estimates of the amounts to be paid. All of the Company's
postretirement and postemployment benefits are funded on a pay-as-you-go basis.
 
     Stock-Based Compensation Plans -- Effective January 1, 1996, the Company
adopted the disclosure requirements of Statement of Financial Accounting
Standards No. 123 ("SFAS 123"), Accounting for Stock-Based Compensation. The new
standard defines a fair value method of accounting for stock options and similar
equity instruments. Under the fair value method, compensation cost is measured
at the grant date based on the fair value of the award and is recognized over
the service period, which is usually the vesting period. Pursuant to the new
standard, companies are encouraged, but not required, to adopt the fair value
method of accounting for employee stock-based transactions. Companies are also
permitted to continue to account for such transactions under Accounting
Principles Board Opinion No. 25 ("APB 25"), Accounting for Stock Issued to
Employees, but are required to disclose pro forma net income and, if presented,
earnings per share as if the company had applied the new method of accounting.
The accounting requirements of the new method are effective for all employee
awards granted after the beginning of the fiscal year of adoption, whereas the
disclosure requirements apply to all awards granted subsequent to December 31,
1994. The Company has adopted the disclosure requirements of SFAS 123 in fiscal
year 1996 but will continue to recognize and measure compensation for its
restricted stock and stock option plans in accordance with the existing
provisions of APB 25.
 
     Use of Management Estimates -- The preparation of financial statements in
conformity with generally accepted accounting principles requires that
management make certain estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements. The reported amounts of
revenues and expenses during the reporting period may also be affected by the
estimates and assumptions management is required to make. Actual results may
differ from those estimates.
 
     Reclassifications -- Certain reclassifications have been made to the 1995
and 1994 consolidated financial statements to conform with the 1996
presentation.
 
                                       33
<PAGE>   35
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 -- CONTINUED
 
2. AGENCY AGREEMENTS
 
     An agency operation between the Company and The Herald Company is conducted
under the provisions of an Agency Agreement, dated March 1, 1961, as amended.
For many years, the Post-Dispatch (owned by the Company) was the afternoon and
Sunday newspaper serving St. Louis, and the Globe-Democrat (formerly owned by
The Herald Company) was the morning paper and also published a weekend edition.
Although separately owned, from 1961 through February 1984, the publication of
both the Post-Dispatch and the Globe-Democrat was governed by the St. Louis
Agency Agreement. From 1961 to 1979, the two newspapers controlled their own
news, editorial, advertising, circulation, accounting and promotion departments
and Pulitzer managed the production and printing of both newspapers. In 1979,
Pulitzer assumed full responsibility for advertising, circulation, accounting
and promotion for both newspapers. In February 1984, after a number of years of
unfavorable financial results at the St. Louis Agency, the Globe-Democrat was
sold by The Herald Company and the St. Louis Agency Agreement was revised to
eliminate any continuing relationship between the two newspapers and to permit
the repositioning of the daily Post-Dispatch as a morning newspaper. Following
the renegotiation of the St. Louis Agency Agreement at the time of the sale of
the Globe-Democrat, The Herald Company retained the contractual right to receive
one-half the profits (as defined), and the obligation to share one-half the
losses (as defined), of the operations of the St. Louis Agency, which from
February 1984 forward consisted solely of the publication of the Post-Dispatch.
The St. Louis Agency Agreement also provides for The Herald Company to share
one-half the cost of, and to share in a portion of the proceeds from the sale
of, capital assets used in the production of the Post-Dispatch. Under the St.
Louis Agency Agreement, Pulitzer supervises, manages and performs all activities
relating to the day-to-day publication of the Post-Dispatch and is solely
responsible for the news and editorial policies of the newspaper. The
consolidated financial statements of the Company include all the operating
revenues and expenses of the St. Louis Agency relating to the Post-Dispatch.
 
     In Tucson, Arizona, a separate partnership, TNI Partners, ("TNI"), acting
as agent for the Star (a newspaper owned by the Company) and the Citizen (a
newspaper owned by Gannett Co., Inc.), is responsible for printing, delivery,
advertising, and circulation of the Star and the Citizen. TNI collects all of
the receipts and income relating to the Star and the Citizen and pays all
operating expenses incident to the partnership's operations and publication of
the newspapers. Each newspaper is solely responsible for its own news and
editorial content. Net income or net loss of TNI is generally allocated equally
to the Star and the Citizen. The Company's consolidated financial statements
include its share of TNI's revenues and expenses.
 
3. ACQUISITION AND DISPOSITION OF PROPERTIES
 
     During 1996, the Company acquired in a purchase transaction all of the
stock of Scripps League Newspapers, Inc. ("Scripps League"), a privately owned
company that publishes a group of community newspapers, including 14 dailies,
which serve smaller markets, primarily in the West and Midwest. The purchase
price of approximately $216 million (including acquisition costs) includes all
of the operating assets of the newspapers, working capital of approximately $6
million and intangibles. The December 31, 1996 consolidated balance sheet
reflects a preliminary purchase price allocation subject to certain adjustments
based upon final working capital balances and final appraisals at June 30, 1996.
The acquisition was financed by long-term borrowings of $135 million (see Note
5) and cash of approximately $81 million (approximately $69 million net of cash
acquired). The results of the operations of Scripps League for the period
subsequent to June 30, 1996 are included in the Company's 1996 Statement of
Consolidated Income.
 
     The following supplemental unaudited pro forma information shows the
results of operations of the Company for the years ended December 31, 1996 and
1995 adjusted for the acquisition of Scripps League, assuming such transaction
and the related debt financing had been consummated at the beginning of each
year presented. The unaudited pro forma financial information is not necessarily
indicative either of results of
 
                                       34
<PAGE>   36
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 -- CONTINUED
 
operations that would have occurred had the transaction occurred at the
beginning of each year presented or of future results of operations.
 
<TABLE>
<CAPTION>
                                                                  DECEMBER 31,
                                                             ----------------------
                                                               1996         1995
                                                               ----         ----
                                                                  (UNAUDITED)
                                                             (IN THOUSANDS, EXCEPT
                                                                PER SHARE DATA)
<S>                                                          <C>          <C>
Operating Revenues -- net................................     $566,915     $536,803
Operating income.........................................     $113,660     $ 93,896
Net income...............................................     $ 54,519     $ 44,203
Earnings per share of stock (common and Class B
  common)................................................     $   2.49     $   2.03
Weighted average number of shares (common and Class B
  common) outstanding....................................       21,926       21,800
</TABLE>
 
     In December 1996, the Company acquired in a purchase transaction the assets
of an AM radio station in Phoenix, Arizona for approximately $5,187,000.
 
     On December 22, 1994, the Company sold its wholly-owned publishing
subsidiary in Chicago, Illinois, for approximately $33,746,000. A gain of
$2,791,000 ($1,051,000 after taxes or $0.05 per share) was recognized on this
transaction. The Company's 1994 statement of consolidated income includes
substantially a full year of operating results for this subsidiary.
 
4. INTANGIBLE ASSETS
 
     Intangible assets consist of:
 
<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                             --------------------
                                                               1996        1995
                                                               ----        ----
                                                                (IN THOUSANDS)
<S>                                                          <C>         <C>
FCC licenses and network affiliations....................    $112,161    $107,115
Goodwill.................................................     178,327      12,393
Intangible pension asset (Note 8)........................       1,918       2,977
Other....................................................      63,914      42,491
                                                             --------    --------
       Total.............................................     356,320     164,976
Less accumulated amortization............................      58,015      47,506
                                                             --------    --------
Total intangible assets -- net...........................    $298,305    $117,470
                                                             ========    ========
</TABLE>
 
5. FINANCING ARRANGEMENTS
 
     Long-term debt consists of:
 
<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                             --------------------
                                                               1996        1995
                                                               ----        ----
                                                                (IN THOUSANDS)
<S>                                                          <C>         <C>
Credit Agreement.........................................    $ 50,000    $     --
Senior notes maturing in substantially equal annual
  installments:
  8.8% due through 1997..................................      14,500      28,750
  6.76% due 1998-2001....................................      50,000      50,000
  7.22% due 2002-2005....................................      50,000      50,000
  7.86% due 2001-2008....................................      85,000
  Other..................................................         615
                                                             --------    --------
       Total.............................................     250,115     128,750
Less current portion.....................................      14,705      14,250
                                                             --------    --------
Total long-term debt.....................................    $235,410    $114,500
                                                             ========    ========
</TABLE>
 
                                       35
<PAGE>   37
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 -- CONTINUED
 
     On July 1, 1996, in connection with the acquisition of Scripps League (see
Note 3), the Company issued to The Prudential Insurance Company of America
$85,000,000 principal amount of 7.86 percent Senior Notes due 2008 ("Notes"). In
addition, on July 1, 1996, the Company entered into a credit agreement with The
First National Bank of Chicago, as Agent, for a group of lenders ("FNBC"),
providing for a $50,000,000 five year variable rate revolving credit facility
("Credit Agreement"). The Company immediately borrowed the full amount under the
Credit Agreement and used the proceeds, together with the proceeds from the
Notes, to partially finance the Scripps League acquisition.
 
     The Notes mature in equal annual installments beginning July 25, 2001. All
borrowings under the Credit Agreement are due on July 2, 2001, the termination
date of the facility. Prior to the credit facility's termination, loans may be
borrowed, repaid and reborrowed by the Company. In addition, the Company has the
option to repay any borrowings and terminate the credit facility prior to its
scheduled maturity.
 
     The Credit Agreement allows the Company to elect an interest rate with
respect to each borrowing under the facility equal to a daily floating rate or
the Eurodollar rate plus 0.225 percent. As of December 31, 1996, the interest
rate on the Credit Agreement borrowings with FNBC was 5.875 percent.
 
     The terms of the various senior note agreements contain certain covenants
and conditions including the maintenance of cash flow and various other
financial ratios, limitations on the incurrence of other debt and limitations on
the amount of restricted payments (which generally includes dividends, stock
purchases and redemptions).
 
     Under the terms of the most restrictive borrowing covenants, in general,
the Company may pay annual dividends not to exceed the sum of $10,000,000, plus
75% of consolidated net earnings commencing January 1, 1993, less the sum of all
dividends paid or declared and redemptions in excess of sales of Company stock
after December 31, 1992. Pursuant to this calculation, approximately
$103,150,000 is available for distribution as dividends at December 31, 1996.
 
     Approximate annual maturities of long-term debt for the five years
subsequent to December 31, 1996 are as follows:
 
<TABLE>
<CAPTION>
                        FISCAL YEAR
                        -----------
                       (IN THOUSANDS)
<S>                                                             <C>
1997........................................................    $ 14,705
1998........................................................      12,705
1999........................................................      12,705
2000........................................................      12,500
2001........................................................      73,125
Thereafter..................................................     124,375
                                                                --------
       Total................................................    $250,115
                                                                ========
</TABLE>
 
6. COMMITMENTS AND CONTINGENCIES
 
     At December 31, 1996, the Company and its subsidiaries had construction and
equipment commitments of approximately $5,263,000 and commitments for program
contracts payable and license fees of approximately $22,883,000.
 
     The Company is an investor in two limited partnerships requiring future
capital contributions. As of December 31, 1996, the Company's unfunded capital
contribution commitment related to these investments was approximately
$3,405,000.
 
     The Company and its subsidiaries are defendants in a number of lawsuits,
some of which claim substantial amounts. While the results of litigation cannot
be predicted, management believes the ultimate
 
                                       36
<PAGE>   38
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 -- CONTINUED
 
outcome of such litigation will not have a material adverse effect on the
consolidated financial statements of the Company and its subsidiaries.
 
     In connection with the September 1986 purchase of the Company's Class B
common stock, the Company agreed to make an additional payment to the selling
stockholders in the event that prior to May 13, 2001, the stockholders receive
dividends or distributions in excess of specified amounts in connection with the
sale of more than 85% of the voting securities or equity of the Company, a
merger, or a complete or partial liquidation or similar corporate transaction.
Any payment pursuant to this requirement would be based upon a percentage of the
dividend or distribution per share in excess of $15.72 increased by 15%
compounded annually beginning May 12, 1986.
 
7. STOCKHOLDERS' EQUITY
 
     Each share of the Company's common stock is entitled to one vote and each
share of Class B common stock is entitled to ten votes on all matters. Holders
of substantially all outstanding shares of Class B common stock, which
represents 95.7% of the combined voting power of the Company, have deposited
their shares in a voting trust (the "Voting Trust").
 
     During 1995, the Voting Trust Agreement dated January 17, 1991 was
terminated and a new Voting Trust Agreement with similar terms was entered into.
 
     The trustees generally hold all voting rights with respect to the shares of
Class B common stock subject to the Voting Trust; however, in connection with
certain matters, including any proposal for a merger, consolidation,
recapitalization or dissolution of the Company or disposition of all or
substantially all its assets, the calling of a special meeting of stockholders
and the removal of directors, the Trustees may not vote the shares deposited in
the Voting Trust except in accordance with written instructions from the holders
of the Voting Trust Certificates. The Voting Trust may be terminated with the
written consent of holders of two-thirds in interest of all outstanding Voting
Trust Certificates. Unless extended or terminated by the parties thereto, the
Voting Trust expires on January 16, 2001.
 
     On May 11, 1994, the Company's stockholders adopted the Pulitzer Publishing
Company 1994 Stock Option Plan (the "1994 Plan"), replacing the Pulitzer
Publishing Company 1986 Employee Stock Option Plan (the "1986 Plan"). The 1994
Plan provides for the issuance to key employees and outside directors of
incentive stock options to purchase up to a maximum of 2,500,000 shares of
common stock. Under the 1994 Plan, options to purchase 1,667 shares of common
stock will be automatically granted to outside directors on the date following
each annual meeting of the Company's stockholders and will vest on the date of
the next annual meeting of the Company's stockholders. Total shares available
for issue to outside directors under this automatic grant feature are limited to
a maximum of 166,667. The issuance of all other options will be administered by
the Compensation Committee of the Board of Directors, subject to the 1994 Plan's
terms and conditions. Specifically, the exercise price per share may not be less
than the fair market value of a share of common stock at the date of grant. In
addition, exercise periods may not exceed ten years and the minimum vesting
period is established at six months from the date of grant. Option awards to an
individual employee may not exceed 250,000 shares in a calendar year.
 
     Prior to 1994, the Company issued incentive stock options to key employees
under the 1986 Plan. As provided by the 1986 Plan, certain option awards were
granted with tandem stock appreciation rights which allow the employee to elect
an alternative payment equal to the appreciation of the stock value instead of
exercising the option. Outstanding options issued under the 1986 Plan have an
exercise term of ten years from the date of grant and vest in equal installments
over a three-year period.
 
                                       37
<PAGE>   39
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 -- CONTINUED
 
     Stock option transactions are summarized as follows:
 
<TABLE>
<CAPTION>
                                                                              WEIGHTED
                                                                              AVERAGE
                                                 SHARES       PRICE RANGE      PRICE
                                                 ------       -----------     --------
<S>                                             <C>          <C>              <C>
Common Stock Options:
  Outstanding, January 1, 1994..............    1,063,661    $ 9.27-$21.98     $15.51
  Granted...................................      231,650    $21.53-$21.75     $21.53
  Cancelled.................................      (30,495)   $11.73-$21.98     $19.54
  Exercised.................................      (66,445)   $ 9.27-$18.55     $13.52
                                                ---------
Outstanding, December 31, 1994..............    1,198,371    $ 9.27-$21.98     $16.69
  Granted...................................      192,853    $30.47-$34.41     $34.31
  Cancelled.................................      (39,632)   $11.73-$21.98     $16.69
  Exercised.................................     (158,304)   $ 9.27-$21.98     $14.71
                                                ---------
Outstanding, December 31, 1995..............    1,193,288    $ 9.27-$34.41     $19.80
                                                ---------
  Granted...................................      179,809    $41.91-$46.25     $46.03
  Cancelled.................................       (2,146)   $21.53-$34.41     $28.77
  Exercised.................................     (140,096)   $ 9.27-$21.98     $15.47
                                                ---------
  Outstanding, December 31, 1996............    1,230,855    $ 9.27-$46.25     $24.11
                                                =========
Exercisable at:
  December 31, 1995.........................      807,011    $ 9.27-$21.98     $15.89
                                                =========
  December 31, 1996.........................      855,445    $ 9.27-$34.41     $18.19
                                                =========
  Shares Available for Grant at December 31,
     1996...................................    1,909,000
                                                =========
</TABLE>
 
     Stock appreciation right transactions are summarized as follows:
 
<TABLE>
<CAPTION>
                                                                SHARES     PRICE
                                                                ------     -----
<S>                                                             <C>        <C>
Common Stock Appreciation Rights:
  Outstanding, January 1, 1994 and December 31, 1994........     37,584    $14.87
  Cancelled.................................................    (10,183)   $14.87
  Exercised.................................................    (27,401)   $14.87
                                                                =======
  Outstanding, December 31, 1995 and 1996...................         --
                                                                =======
</TABLE>
 
     On May 11, 1994, the Company's stockholders adopted the Pulitzer Publishing
Company 1994 Key Employees' Restricted stock Purchase Plan (the "1994 stock
Plan") which replaced the Pulitzer Publishing Company 1986 Key Employees'
Restricted stock Purchase Plan ("1986 stock Plan"). The 1994 stock Plan provides
that an employee may receive, at the discretion of the Compensation Committee, a
grant or right to purchase at a particular price, shares of common stock subject
to restrictions on transferability. A maximum of 416,667 shares of common stock
may be granted or purchased by employees. In addition, no more than 83,333
shares of common stock may be issued to an employee in any calendar year.
 
                                       38
<PAGE>   40
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 -- CONTINUED
 
     Prior to 1994, the Company granted stock awards under the 1986 Stock Plan.
For grants awarded under both the 1994 and 1986 Stock Plans, compensation
expense is recognized over the vesting period of the grants. Stock Purchase Plan
transactions are summarized as follows:
 
<TABLE>
<CAPTION>
                                                                         WEIGHTED
                                                                         AVERAGE
                                               SHARES     PRICE RANGE     PRICE
                                               ------     -----------    --------
<S>                                            <C>       <C>             <C>
Common Stock Grant:
  Outstanding, January 1, 1994...............       --
  Granted....................................    4,843   $20.25-$21.38    $20.81
  Vested.....................................     (607)  $20.25           $20.25
                                               -------
  Outstanding, December 31, 1994.............    4,236   $20.25-$21.38    $20.89
  Granted....................................    8,880   $24.53           $24.53
  Vested.....................................   (7,460)  $20.25-$24.53    $23.93
                                               -------
  Outstanding, December 31, 1995.............    5,656   $20.25-$24.53    $22.60
  Granted....................................    2,093   $36.70           $36.70
  Vested.....................................   (1,864)  $20.25-$24.53    $22.12
                                               -------
  Outstanding, December 31, 1996.............    5,885   $20.25-$36.70    $27.78
                                               =======
Shares Available for Grant at December 31,
  1996.......................................  400,851
                                               =======
</TABLE>
 
     As required by SFAS 123, the Company has estimated the fair value of its
option grants since December 31, 1994 by utilizing the binomial options pricing
model. The fair value calculation was made with estimated values for the risk
free rate of 6%, volatility rate of 21%, dividend rate of 1.25% and average
lives of 7 years. The pro forma compensation effects of this calculation were
insignificant and therefore have not been disclosed.
 
     On September 12, 1996, the Board of Directors declared a four-for-three
stock split of the Company's common and Class B common stock payable in the form
of a 33.3% stock dividend. The dividend was distributed on November 1, 1996 to
stockholders of record on October 10, 1996. The Company's capital balances and
share amounts have been adjusted in 1996 to reflect the split.
 
     On January 4, 1995, the Board of Directors declared a five-for-four stock
split of the Company's common and Class B common stock payable in the form of a
25% stock dividend. The dividend was distributed on January 24, 1995 to
stockholders of record on January 13, 1995. Even though this stock split was
declared subsequent to December 31, 1994, the Company's capital balances and
share amounts have been adjusted in 1994 to reflect the split.
 
     On January 28, 1997, the Company's Board of Directors unanimously adopted
the Pulitzer Publishing Company 1997 Employee Stock Purchase Plan (the "Plan"),
subject to stockholder approval. The Plan allows eligible employees to authorize
payroll deductions for the periodic purchase of the Company's Common Stock
("Common Stock") at a price generally equal to 85% of the Common Stock's fair
market value.
 
     In general, all employees of the Company and its subsidiaries are eligible
to participate in the Plan after completing at least one year of employment.
Subject to appropriate adjustment for stock splits and other capital changes,
the Company may sell a total of 500,000 shares of its common stock under the
Plan. Shares sold under the Plan may be authorized and unissued or held by the
Company in its treasury. The Company may purchase shares for resale under the
Plan.
 
                                       39
<PAGE>   41
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 -- CONTINUED
 
8. PENSION PLANS
 
     The pension cost components were as follows:
 
<TABLE>
<CAPTION>
                                                                    YEARS ENDED DECEMBER 31,
                                                                --------------------------------
                                                                  1996        1995        1994
                                                                  ----        ----        ----
                                                                         (IN THOUSANDS)
<S>                                                             <C>         <C>         <C>
Service cost for benefits earned during the year............    $  4,154    $  3,834    $  4,463
Interest cost on projected benefit obligation...............       8,185       8,057       7,515
Actual loss (return) on plan assets.........................     (12,507)    (17,541)      1,437
Net amortization and deferrals..............................       4,833      11,365      (7,779)
                                                                --------    --------    --------
Net periodic pension cost...................................    $  4,665    $  5,715    $  5,636
                                                                ========    ========    ========
</TABLE>
 
     The funded status of the Company's pension plans was as follows:
 
<TABLE>
<CAPTION>
                                                                    DECEMBER 31,
                                                                --------------------
                                                                  1996        1995
                                                                  ----        ----
                                                                   (IN THOUSANDS)
<S>                                                             <C>         <C>
Actuarial present value of:
  Vested benefit obligation.................................    $107,637    $106,552
                                                                ========    ========
  Accumulated benefit obligation............................    $108,380    $107,441
                                                                ========    ========
Projected benefit obligation................................    $118,414    $116,331
Plan assets at fair value...................................     104,046      94,032
                                                                --------    --------
Plan assets less than projected benefit obligation..........      14,368      22,299
Unrecognized transition obligation, net.....................      (1,539)     (1,760)
Unrecognized net gain.......................................      10,557       1,881
Unrecognized prior service cost.............................         234         257
Additional minimum liability................................       1,918       2,977
                                                                --------    --------
Pension obligations.........................................    $ 25,538    $ 25,654
                                                                ========    ========
</TABLE>
 
     The projected benefit obligation was determined using assumed discount
rates of 7.5% and 7.25% at December 31, 1996 and 1995, respectively. The
expected long-term rate of return on plan assets was 8.5% for both 1996 and
1995. For those plans that pay benefits based on final compensation levels, the
actuarial assumptions for overall annual rate of increase in future salary
levels was 5% for both December 31, 1996 and 1995.
 
     Certain of the Company's employees participate in multi-employer retirement
plans sponsored by their respective unions. Amounts charged to operations,
representing the Company's required contributions to these plans in 1996, 1995
and 1994, were approximately $781,000, $731,000 and $715,000, respectively.
 
     The Company also sponsors an employee savings plan under Section 401(k) of
the Internal Revenue Code. This plan covers substantially all employees.
Contributions by the Company amounted to approximately $1,668,000, $1,494,000
and $1,735,000 for 1996, 1995 and 1994, respectively.
 
                                       40
<PAGE>   42
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 -- CONTINUED
 
9. POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS
 
     The net periodic postretirement benefit cost components were as follows:
 
<TABLE>
<CAPTION>
                                                       YEARS ENDED DECEMBER 31,
                                                      --------------------------
                                                       1996      1995      1994
                                                       ----      ----      ----
                                                            (IN THOUSANDS)
<S>                                                   <C>       <C>       <C>
Service cost (for benefits earned during the
  year).............................................  $   926   $   933   $1,462
Interest cost on accumulated postretirement benefit
  obligation........................................    4,683     5,799    5,898
Net amortization, deferrals and other components....   (2,308)   (1,787)      13
                                                      -------   -------   ------
Net periodic postretirement benefit cost............  $ 3,301   $ 4,945   $7,373
                                                      =======   =======   ======
</TABLE>
 
     The Company funds its postretirement benefit obligation on a pay-as-you-go
basis, and, for 1996, 1995 and 1994 made payments of $4,207,000, $4,071,000 and
$3,484,000, respectively.
 
     The status of the Company's postretirement benefit plans was as follows:
 
<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                                             -----------------
                                                              1996      1995
                                                              ----      ----
                                                              (IN THOUSANDS)
<S>                                                          <C>       <C>
Retirees and surviving beneficiaries.......................  $37,734   $45,400
Actives eligible to retire.................................   13,516    18,917
Other actives..............................................   11,142    12,893
                                                             -------   -------
Accumulated postretirement benefit obligation..............   62,392    77,210
Unrecognized prior service gain............................    7,990     8,563
Unrecognized net gain......................................   19,404     4,918
                                                             -------   -------
Accrued postretirement benefit cost........................  $89,786   $90,691
                                                             =======   =======
</TABLE>
 
     The preceding amounts for the December 31, 1996 and 1995 accrued
postretirement benefit cost and the 1996, 1995 and 1994 net periodic
postretirement benefit expense have not been reduced for The Herald Company's
share of the respective amounts. However, pursuant to the St. Louis Agency
Agreement (see Note 2), the Company has recorded a receivable for The Herald
Company's share of the accrued postretirement benefit cost as of December 31,
1996 and 1995.
 
     For 1996 measurement purposes, health care cost trend rates of 9%, 7% and
5% were assumed for indemnity plans, PPO plans and HMO plans, respectively; the
indemnity and PPO rates were assumed to decrease gradually to 5.5% through the
year 2010 and remain at that level thereafter. For 1995 measurement purposes,
health care cost trend rates of 11%, 10% and 9% were assumed for indemnity
plans, PPO plans and HMO plans, respectively; these rates were assumed to
decrease gradually to 6% through the year 2008 and remain at that level
thereafter. The health care cost trend rate assumptions have a significant
effect on the amount of obligation and expense reported. A 1% increase in these
annual trend rates would have increased the accrued postretirement benefit cost
at December 31, 1996 by approximately $718,000 and the 1996 annual net periodic
postretirement benefit cost by approximately $680,000.
 
     Administrative costs related to indemnity plans were assumed to increase at
a constant annual rate of 6% for both 1996 and 1995. The assumed discount rate
used in estimating the accumulated postretirement benefit obligation was 7.5%
and 8% for 1996 and 1995, respectively.
 
                                       41
<PAGE>   43
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 -- CONTINUED
 
     Effective January 1, 1994, the Company adopted the provisions of Statement
of Financial Accounting Standards No. 112, Employers' Accounting for
Postemployment Benefits ("SFAS 112"), to account for certain disability benefits
at the St. Louis Post-Dispatch. SFAS 112 requires that the cost of these
benefits provided to former employees prior to retirement be recognized on the
accrual basis of accounting. Previously, the Company recognized its
postemployment benefit costs when paid. The cumulative effect of adopting SFAS
112 was a reduction of 1994 net income by approximately $719,000 or $0.03 per
share. After recording the cumulative effect adjustment, the Company's on-going
expense under the new standard does not differ significantly from the prior
pay-as-you-go basis.
 
     The Company's postemployment benefit obligation was $2,466,000 and
$2,165,000 at December 31, 1996 and 1995, respectively.
 
10. INCOME TAXES
 
     Provisions for income taxes (benefits) consist of the following:
 
<TABLE>
<CAPTION>
                                                      YEARS ENDED DECEMBER 31,
                                                     ---------------------------
                                                      1996      1995      1994
                                                      ----      ----      ----
                                                           (IN THOUSANDS)
<S>                                                  <C>       <C>       <C>
Current:
  Federal..........................................  $33,465   $28,352   $25,156
  State and local..................................    5,750   $ 3,541     3,372
Deferred:
  Federal..........................................     (805)   (1,641)   (2,264)
  State and local..................................     (138)     (206)     (304)
                                                     -------   -------   -------
     Total.........................................  $38,272   $30,046   $25,960
                                                     =======   =======   =======
</TABLE>
 
     Factors causing the effective tax rate to differ from the statutory Federal
income tax rate were:
 
<TABLE>
<CAPTION>
                                                           YEARS ENDED DECEMBER 31,
                                                          --------------------------
                                                          1996       1995       1994
                                                          ----       ----       ----
<S>                                                       <C>        <C>        <C>
Statutory rate..........................................   35%        35%        35%
Favorable resolution of prior year federal and state tax
  issues................................................             (1)        (1)
Amortization of intangibles.............................    1                     1
State and local income taxes, net of U.S. Federal income
  tax benefit...........................................    4          3          3
Other-net...............................................               1          1
                                                           --         --         --
     Effective rate.....................................   40%        38%        39%
                                                           ==         ==         ==
</TABLE>
 
                                       42
<PAGE>   44
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 -- CONTINUED
 
     The Company's deferred tax assets and liabilities, net, which have been
included in other assets in the statements of consolidated financial position
consisted of the following:
 
<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                                             -----------------
                                                              1996      1995
                                                              ----      ----
                                                               (IN THOUSAND)
<S>                                                          <C>       <C>
Deferred tax assets:
  Pensions and employee benefits...........................  $ 9,575   $ 8,960
  Postretirement benefit costs.............................   19,284    19,367
  Other....................................................    2,110       795
                                                             -------   -------
     Total.................................................   30,969    29,122
                                                             -------   -------
Deferred tax liabilities:
  Depreciation.............................................   19,590     9,042
  Amortization.............................................    9,882     2,235
                                                             -------   -------
     Total.................................................   29,472    11,277
                                                             -------   -------
Net deferred tax asset.....................................  $ 1,497   $17,845
                                                             =======   =======
</TABLE>
 
     The change in the Company's net deferred tax asset during 1996 includes the
initial recording of a net deferred tax liability of $18.3 million in connection
with the acquisition of Scripps League on July 1, 1996 (see Note 3). During
1994, the Company settled federal tax examinations for 1990 through 1992 and
paid additional taxes of approximately $2,048,000. This payment represented an
extension of the tax amortization period for certain prior year acquisition
intangibles. Accordingly, a deferred tax asset for the amount of the payment was
recorded during 1994.
 
     The Company had no valuation allowance for deferred tax assets as of
December 31, 1996, 1995 and 1994.
 
11. FAIR VALUE OF FINANCIAL INSTRUMENTS
 
     The Company has estimated the following fair value amounts for its
financial instruments using available market information and appropriate
valuation methodologies. However, considerable judgment is required in
interpreting market data to develop the estimates of fair value. Accordingly,
the estimates presented herein are not necessarily indicative of the amounts
that the Company could realize in a current market exchange. The use of
different market assumptions and/or estimation methodologies may have a material
effect on the estimated fair value amounts.
 
     Cash and Cash Equivalents, Accounts Receivable, Accounts Payable and
Program Contracts Payable -- The carrying amounts of these items are a
reasonable estimate of their fair value.
 
     Long-Term Debt -- Interest rates that are currently available to the
Company for issuance of debt with similar terms and remaining maturities are
used to estimate fair value. The fair value estimates of the Company's long-term
debt as of December 31, 1996 and 1995 were $259,958,000 and $132,833,000,
respectively.
 
     The fair value estimates presented herein are based on pertinent
information available to management as of December 31, 1996 and 1995. Although
management is not aware of any facts that would significantly affect the
estimated fair value amounts, such amounts have not been comprehensively
revalued for purposes of these financial statements since that date, and current
estimates of fair value may differ from the amounts presented herein.
 
                                       43
<PAGE>   45
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 -- CONTINUED
 
12. BUSINESS SEGMENTS
 
     The Company's operations are divided into two business segments, publishing
and broadcasting. The following is a summary of operations, assets and other
data.
 
<TABLE>
<CAPTION>
                                                              AS OF AND FOR THE YEARS ENDED
                                                                       DECEMBER 31,
                                                              ------------------------------
                                                                1996       1995       1994
                                                                ----       ----       ----
                                                                      (IN THOUSANDS)
<S>                                                           <C>        <C>        <C>
OPERATING REVENUES:
  Publishing(a).............................................  $309,096   $269,388   $304,779
  Broadcasting..............................................   224,992    202,939    180,800
                                                              --------   --------   --------
       Total................................................  $534,088   $472,327   $485,579
                                                              ========   ========   ========
OPERATING INCOME (LOSS):
  Publishing(a).............................................  $ 32,577   $ 25,393   $ 30,486
  Broadcasting..............................................    83,246     65,939     47,963
  Corporate.................................................    (5,532)    (4,666)    (3,871)
                                                              --------   --------   --------
       Total................................................  $110,291   $ 86,666   $ 74,578
                                                              ========   ========   ========
TOTAL ASSETS:
  Publishing................................................  $351,685   $141,441   $136,818
  Broadcasting..............................................   259,114    253,252    254,410
  Corporate.................................................    73,052    100,380     77,084
                                                              --------   --------   --------
       Total................................................  $683,851   $495,073   $468,312
                                                              ========   ========   ========
CAPITAL EXPENDITURES:
  Publishing................................................  $  6,433   $  6,627   $  6,097
  Broadcasting..............................................    11,354     16,307      7,216
                                                              --------   --------   --------
       Total................................................  $ 17,787   $ 22,934   $ 13,313
                                                              ========   ========   ========
DEPRECIATION & AMORTIZATION:
  Publishing(a).............................................  $  8,660   $  4,307   $  6,128
  Broadcasting..............................................    22,442     22,843     24,358
                                                              --------   --------   --------
       Total................................................  $ 31,102   $ 27,150   $ 30,486
                                                              ========   ========   ========
OPERATING MARGINS
  (Operating income to revenues):
  Publishing(a)(b)..........................................     15.1%      14.1%      14.8%
  Broadcasting..............................................     37.0%      32.5%      26.5%
</TABLE>
 
-------------------------
(a) Publishing operations for 1996 include the results of Scripps League
    Newspapers, Inc. (subsequently renamed Pulitzer Community Newspapers, Inc.),
    which was acquired on July 1, 1996. Publishing operations for 1994 include
    the results of the Company's former Chicago publishing subsidiary which was
    sold on December 22, 1994. (See Note 3)
 
(b) Operating margins for publishing stated with St. Louis Agency adjustment
    (which is recorded as an operating expense in the accompanying consolidated
    financial statements) added back to publishing operating income.
 
                                       44
<PAGE>   46
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 -- CONTINUED
 
13. QUARTERLY FINANCIAL DATA (UNAUDITED)
 
     Operating results for the years ended December 31, 1996 and 1995 by
quarters are as follows:
 
<TABLE>
<CAPTION>
                                               1ST QUARTER   2ND QUARTER   3RD QUARTER   4TH QUARTER    TOTAL
                                               -----------   -----------   -----------   -----------    -----
                                                            (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                            <C>           <C>           <C>           <C>           <C>
1996
OPERATING REVENUES -- NET:...................   $115,706      $127,574      $138,865      $151,943     $534,088
                                                ========      ========      ========      ========     ========
NET INCOME...................................   $ 10,241      $ 16,185      $ 12,964      $ 18,110     $ 57,500
                                                ========      ========      ========      ========     ========
EARNINGS PER SHARE OF STOCK (Common and Class
  B Common)..................................   $   0.47      $   0.74      $   0.59      $   0.82     $   2.62
                                                ========      ========      ========      ========     ========
WEIGHTED AVERAGE NUMBER OF SHARES (Common and
  Class B Common Stock Outstanding)..........     21,864        21,912        21,949        21,978       21,926
                                                ========      ========      ========      ========     ========
</TABLE>
 
<TABLE>
<CAPTION>
                                               1ST QUARTER   2ND QUARTER   3RD QUARTER   4TH QUARTER    TOTAL
                                               -----------   -----------   -----------   -----------    -----
                                                            (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                            <C>           <C>           <C>           <C>           <C>
1995
OPERATING REVENUES -- NET:...................   $108,523      $120,626      $111,607      $131,571     $472,327
                                                ========      ========      ========      ========     ========
NET INCOME...................................   $  8,853      $ 14,316      $  9,697      $ 16,456     $ 49,322
                                                ========      ========      ========      ========     ========
EARNINGS PER SHARE OF STOCK (Common and Class
  B Common)..................................   $   0.41      $   0.66      $   0.44      $   0.75     $   2.26
                                                ========      ========      ========      ========     ========
WEIGHTED AVERAGE NUMBER OF SHARES (Common and
  Class B Common Stock Outstanding)..........     21,720        21,817        21,838        21,845       21,800
                                                ========      ========      ========      ========     ========
</TABLE>
 
     In the fourth quarter of 1996, the Company determined that the carrying
value of one of its joint venture investments had been impaired. Accordingly,
the investment was reduced by a $2.7 million adjustment resulting in an
after-tax charge of $1.6 million or $0.07 per share. In the fourth quarter of
1995, a state tax examination was settled favorably resulting in a reduction of
income tax expense of approximately $900,000, or $0.04 per share for the
quarter.
 
     Earnings per share are computed independently for each of the quarters
presented. Therefore, the sum of the quarterly earnings per share may not equal
the total for the year.
 
                                       45
<PAGE>   47
 
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE
 
     Not applicable.
 
                                    PART III
 
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
     The information set forth under the caption "Management" in the Company's
definitive Proxy Statement to be used in connection with the 1997 Annual Meeting
of Stockholders is incorporated herein by reference.
 
ITEM 11. EXECUTIVE COMPENSATION
 
     The information set forth under the caption "Executive Compensation" in the
Company's definitive Proxy Statement to be used in connection with the 1997
Annual Meeting of Stockholders is incorporated herein by reference.
 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     The information set forth under the caption "Principal Stockholders" in the
Company's definitive Proxy Statement to be used in connection with the 1997
Annual Meeting of Stockholders is incorporated herein by reference.
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
     The information set forth under the caption "Compensation Committee
Interlocks and Insider Participation" in the Company's definitive Proxy
Statement to be used in connection with the 1997 Annual Meeting of Stockholders
is incorporated herein by reference.
 
                                       46
<PAGE>   48
 
                                    PART IV
 
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
 
(a) DOCUMENT LIST
 
     1. Financial Statements
 
          The following financial statements are set forth in Part II, Item 8 of
     this report.
 
     PULITZER PUBLISHING COMPANY AND SUBSIDIARIES:
 
          (i) Independent Auditors' Report.
 
          (ii) Statements of Consolidated Income for each of the Three Years in
     the Period Ended December 31, 1996.
 
          (iii) Statements of Consolidated Financial Position at December 31,
     1996 and 1995.
 
          (iv) Statements of Consolidated Stockholders' Equity for each of the
     Three Years in the Period Ended December 31, 1996.
 
          (v) Statements of Consolidated Cash Flows for each of the Three Years
     in the Period Ended December 31, 1996.
 
          (vi) Notes to Consolidated Financial Statements for the Three Years in
     the Period Ended December 31, 1996.
 
     2. Supplementary Data and Financial Statement Schedules
 
          (i) Supplementary unaudited data with respect to quarterly results of
     operations is set forth in Part II, Item 8 of this Report.
 
          (ii) The following financial statement schedule and opinion thereon
     are filed as a part of this Report:
 
<TABLE>
<CAPTION>
                                                              SEQUENTIAL PAGE
                                                              ---------------
<S>                                                           <C>
Independent Auditors' Report................................        51
Schedule II -- Valuation and Qualifying Accounts and
  Reserves..................................................        52
</TABLE>
 
     All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and, therefore have
been omitted.
 
     3. Exhibits Required by Securities and Exchange Commission Regulation SK
 
     (a) The following exhibits are filed as part of this report:
 
<TABLE>
<CAPTION>
EXHIBIT NO.
-----------
<S>            <C>
10.8.1         Amendment, dated January 28, 1997, to Pulitzer Retirement
               Savings Plan
10.8.2         Amendment, dated October 30, 1996, to Pulitzer Retirement
               Savings Plan
10.8.3         Amendment, dated July 31, 1996, to Pulitzer Retirement
               Savings Plan
10.8.4         Amendment, dated October 25, 1995, to Pulitzer Retirement
               Savings Plan
10.10.1        Amendment, dated October 25, 1995, to Pulitzer Publishing
               Company Pension Plan
10.28          Split Dollar Life Insurance Agreement, dated December 27,
               1996, between Pulitzer Publishing Company and Richard A.
               Palmer, Trustee of the Michael E. Pulitzer 1996 Life
               Insurance Trust
10.29          Split Dollar Life Insurance Agreement, dated December 31,
               1996, between Pulitzer Publishing Company and Rose M.
               Elkins, Trustee of the Kennie J. Elkins Insurance Trust
</TABLE>
 
                                       47
<PAGE>   49
 
<TABLE>
<S>          <C>
10.30        Split Dollar Life Insurance Agreement, dated December 30, 1996, between Pulitzer Publishing Company
             and Rebecca H. Penniman and Nicholas G. Penniman V, Trustees of the Nicholas G. Penniman IV
             Irrevocable 1996 Trust
10.31        Split Dollar Life Insurance Agreement, dated December 30, 1996, between Pulitzer Publishing Company
             and Doris D. Ridgway and Boatmen's Trust Company, Trustees of The Ronald H. Ridgway Insurance Trust
10.32        Consulting Agreement, dated May 1, 1996, between Pulitzer Publishing Company and Glenn A. Christopher
21           Subsidiaries of Registrant
23           Independent Auditors' Consent
24           Power of Attorney
27           Financial Data Schedule
</TABLE>
 
     (b) The following exhibits are incorporated herein by reference:
 
<TABLE>
<S>      <C>  <C>
 3.1     --   Restated Certificate of Incorporation of the Company.(iii)
 3.2     --   By-Laws of the Company restated as of June 23, 1993.(ix)
 4.1     --   Form of Certificate for Common Stock.(iii)
 9.1     --   Voting Trust Agreement, dated June 19, 1995 between the
              holders of voting trust certificates and Michael E.
              Pulitzer, Emily Rauh Pulitzer, Ronald H. Ridgway, Nicholas
              G. Penniman IV, Ken J. Elkins, Cole C. Campbell and David
              Moore.(xiii)
 9.2     --   Termination Agreement, dated June 19, 1995 between the
              holders of voting trust certificates and Michael E.
              Pulitzer, Emily Rauh Pulitzer, Ronald H. Ridgway, Nicholas
              G. Penniman IV, Ken J. Elkins, Cole C. Campbell and David
              Moore.(xiii)
10.1     --   Agreement, dated January 1, 1961, between the Pulitzer
              Publishing Company, a Missouri corporation, and the
              Globe-Democrat Publishing Company, as amended on September
              4, 1975, April 12, 1979 and December 22, 1983.(i)
10.2.1   --   Amended and Restated Joint Operating Agreement, dated
              December 30, 1988 between Star Publishing Company and
              Citizen Publishing Company.(v)
10.2.2   --   Partnership Agreement, dated December 30, 1988 between Star
              Publishing Company and Citizen Publishing Company.(v)
10.3     --   Agreement, dated as of May 12, 1986, among the Pulitzer
              Publishing Company, Clement C. Moore, II, Gordon C. Weir,
              William E. Weir, James R. Weir, Kenward G. Elmslie, Stephen
              E. Nash and Manufacturers Hanover Trust Company, as Trustees
              and Christopher Mayer.(i)
10.4     --   Letter Agreement, dated September 29, 1986, among the
              Pulitzer Publishing Company, Trust Under Agreement Made by
              David E. Moore, Frederick D. Pulitzer, Michael E. Pulitzer,
              Jr., Robert S. Pulitzer, Joseph Pulitzer, IV, Joseph
              Pulitzer, Jr., Michael E. Pulitzer, Stephen E. Nash and
              Manufacturers Hanover Trust Company, as Trustees, Kenward G.
              Elmslie, Gordon C. Weir, William E. Weir, James R. Weir,
              Peter W. Quesada, T. Ricardo Quesada, Elinor P. Hempelmann,
              The Moore Foundation, Inc., Mariemont Corporation, Z Press
              Inc. and Clement C. Moore, II.(ii)
10.5     --   Letter Agreement, dated May 12, 1986, among the Pulitzer
              Publishing Company, Peter W. Quesada, T. Ricardo Quesada,
              Kate Davis Pulitzer Quesada and Elinor P. Hempelmann.(i)
10.6     --   Agreement, dated as of September 29, 1986, among the
              Pulitzer Publishing Company, Peter W. Quesada, T. Ricardo
              Quesada, Kate Davis Pulitzer Quesada and Elinor
              Hempelmann.(ii)
10.7.1   --   Amendment, dated March 9, 1992, to the Pulitzer Publishing
              Annual Incentive Plan.(vi)
</TABLE>
 
                                       48
<PAGE>   50
 
<TABLE>
<S>      <C>  <C>
10.7.2   --   Annual Incentive Compensation Plan.(iii)
10.8.5   --   Amendment, dated October 25, 1995, to Pulitzer Retirement
              Savings Plan.(xiii)
10.8.6   --   Amendment, dated January 24, 1995, to Pulitzer Retirement
              Savings Plan.(xi)
10.8.7   --   Amended and restated Pulitzer Retirement Savings Plan.(xi)
10.9     --   Amended and restated Joseph Pulitzer Pension Plan.(xi)
10.10.2  --   Amended and restated Pulitzer Publishing Company Pension
              Plan.(xi)
10.11    --   Restated Supplemental Executive Benefit Pension Plan.(vii)
10.12    --   Employment Agreement, dated October 1, 1986, between the
              Pulitzer Publishing Company and Joseph Pulitzer, Jr.(i)
10.13    --   Employment Agreement, dated January 2, 1986, between the
              Pulitzer Publishing Company and Michael E. Pulitzer.(i)
10.14    --   Pulitzer Publishing Company Senior Executive Deferred
              Compensation Plan.(xiii)
10.15    --   Consulting Agreement, dated May 1, 1993, between Pulitzer
              Publishing Company and Glenn A. Christopher.(ix)
10.16    --   Supplemental Executive Retirement Pay Agreement dated June
              5, 1984, between the Pulitzer Publishing Company and Glenn
              A. Christopher.(i)
10.17    --   Letter Agreement, dated October 26, 1984, between the
              Pulitzer Publishing Company and Glenn A. Christopher.(i)
10.18    --   Letter Agreement, dated October 21, 1986, between the
              Pulitzer Publishing Company and David E. Moore.(i)
10.19    --   Pulitzer Publishing Company 1994 Key Employees' Restricted
              Stock Purchase Plan.(x)
10.20.1  --   Amendment, dated April 24, 1996, to Pulitzer Publishing
              Company 1994 Stock Option Plan.(xiv)
10.20.2  --   Amendment, dated April 20, 1995, to Pulitzer Publishing
              Company 1994 Stock Option Plan.(xii)
10.20.3  --   Pulitzer Publishing Company 1994 Stock Option Plan.(x)
10.21    --   Registration Rights Agreement.(i)
10.22    --   Note Agreement, dated April 22, 1987, between the Pulitzer
              Publishing Company and The Prudential Insurance Company of
              America.(iv)
10.23    --   Employment Agreement, dated May 10, 1955, between the
              Pulitzer Publishing Company and Joseph Pulitzer, Jr.(ii)
10.24    --   Note Agreement, dated June 30, 1993, between Pulitzer
              Publishing Company and The Prudential Insurance Company of
              America.(viii)
10.25    --   Stock Purchase Agreement by and among Pulitzer Publishing
              Company and Mr. Edward W. Scripps, Mrs. Betty Knight
              Scripps, and the Edward W. Scripps and Betty Knight Scripps
              Charitable Remainder Unitrust dated as of May 4, 1996.(xv)
10.26    --   Note Agreement, dated July 1, 1996, between Pulitzer
              Publishing Company and The Prudential Insurance Company of
              America.(xvi)
10.27    --   Credit Agreement among Pulitzer Publishing Company, The
              Lending Institutions Party Hereto, as Lenders, and The First
              National Bank of Chicago, as Agent, dated as of July 1,
              1996.(xvi)
</TABLE>
 
-------------------------
(i)   Incorporated by reference to Registration Statement on Form S-1 (No.
      33-9953) filed with the Securities and Exchange Commission on November 4,
      1986.
 
(ii)  Incorporated by reference to Amendment No. 1 to Registration Statement on
      Form S-1 (No. 33-9953) filed with the Securities and Exchange Commission
      on December 9, 1986.
 
                                       49
<PAGE>   51
 
(iii) Incorporated by reference to Amendment No. 2 to Registration Statement on
      Form S-1 (no. 33-9953) filed with the Securities and Exchange Commission
      on December 11, 1986.
 
(iv) Incorporated by reference to Current Report on Form 8-K dated May 4, 1987.
 
(v)  Incorporated by reference to Annual Report on Form 10-K for the fiscal year
     ended December 31, 1988.
 
(vi) Incorporated by reference to Annual Report on Form 10-K for the fiscal year
     ended December 31, 1991.
 
(vii) Incorporated by reference to Annual Report on Form 10-K for the fiscal
      year ended December 31, 1992.
 
(viii) Incorporated by reference to Quarterly Report on Form 10-Q for the
       quarterly period ended June 30, 1993.
 
(ix) Incorporated by reference to Annual Report on Form 10-K for the fiscal year
     ended December 31, 1993.
 
(x)  Incorporated by reference to the Company's definitive Proxy Statement used
     in connection with the 1994 Annual Meeting of Stockholders.
 
(xi) Incorporated by reference to Annual Report on Form 10-K for the fiscal year
     ended December 31, 1994.
 
(xii) Incorporated by reference to the Company's definitive Proxy Statement used
      in connection with the 1995 Annual Meeting of Stockholders.
 
(xiii) Incorporated by reference to Annual Report on Form 10-K for the fiscal
       year ended December 31, 1995.
 
(xiv) Incorporated by reference to the Company's definitive Proxy Statement used
      in connection with the 1996 Annual Meeting of Stockholders.
 
(xv) Incorporated by reference to Quarterly Report on Form 10-Q for the
     quarterly period ended March 31, 1996.
 
(xvi) Incorporated by reference to Quarterly Report on Form 10-Q for the
      quarterly period ended June 30, 1996.
 
     (c) Reports on Form 8-K.
 
          The Company did not file any reports on Form 8-K during the fourth
     quarter of fiscal year 1996.
 
                                       50
<PAGE>   52
 
                          INDEPENDENT AUDITORS' REPORT
 
To the Board of Directors and Stockholders
 of Pulitzer Publishing Company:
 
We have audited the consolidated financial statements of Pulitzer Publishing
Company and its subsidiaries as of December 31, 1996 and 1995, and for each of
the three years in the period ended December 31, 1996, and have issued our
report thereon dated February 7, 1997; such report is included elsewhere in this
Form 10-K. Our audits also included the consolidated financial statement
schedule of Pulitzer Publishing Company and its subsidiaries, listed in the
accompanying index at Item 14(a)2.(ii). This financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such consolidated financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.
 
DELOITTE & TOUCHE LLP
 
Saint Louis, Missouri
February 7, 1997
 
                                       51
<PAGE>   53
 
                                                                     SCHEDULE II
 
                  PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
 
           SCHEDULE II -- VALUATION & QUALIFYING ACCOUNTS & RESERVES
               FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 & 1994
 
<TABLE>
<CAPTION>
                                          BALANCE AT   CHARGED TO   CHARGED TO                       BALANCE
                                          BEGINNING     COSTS &       OTHER                         AT END OF
              DESCRIPTION                 OF PERIOD     EXPENSES     ACCOUNTS       DEDUCTIONS       PERIOD
              -----------                 ----------   ----------   ----------      ----------      ---------
                                                                    (IN THOUSANDS)
<S>                                       <C>          <C>          <C>             <C>             <C>
YEAR ENDED DECEMBER 31, 1996
Valuation Accounts:
  Allowance for Doubtful Accounts.......    $2,009       $2,131        $321(a)        $1,885(b)      $2,576
Reserves:
  Accrued Medical Plan..................       561        4,198           0            4,370(c)         389
  Workers Compensation..................     2,005        1,478           0            1,357          2,126
YEAR ENDED DECEMBER 31, 1995
Valuation Accounts:
  Allowance for Doubtful Accounts.......    $2,135       $1,538        $247(a)        $1,911(b)      $2,009
Reserves:
  Accrued Medical Plan..................       789        4,907           0            5,135(c)         561
  Workers Compensation..................     2,327        1,192           0            1,514          2,005
YEAR ENDED DECEMBER 31, 1994
Valuation Accounts:
  Allowance for Doubtful Accounts.......    $2,575       $2,010        $159(a)        $2,609(b)      $2,135
Reserves:
  Accrued Medical Plan..................       526        6,070           0            5,807(c)         789
  Workers Compensation..................     1,765        2,023           0            1,461          2,327
</TABLE>
 
-------------------------
(a) -- Accounts reinstated, cash recoveries, etc.
 
(b) -- Accounts written off, except 1994 which also includes $761 related to
sale of a publishing subsidiary.
 
(c) -- Amounts represents:
 
<TABLE>
<CAPTION>
                                              1996     1995     1994
                                              ----     ----     ----
                <S>                          <C>      <C>      <C>
                Claims paid................  $3,830   $4,660   $5,383
                Service fees...............     579      548      460
                Cash refunds...............     (39)     (73)     (36)
                                             ------   ------   ------
                                             $4,370   $5,135   $5,807
                                             ======   ======   ======
</TABLE>
 
                                       52
<PAGE>   54
 
                                   SIGNATURES
 
     Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the Registrant has duly caused this Report to be signed on its behalf
by the undersigned, thereunto duly authorized, on the 26th day of March, 1997.
 
                                                     PULITZER PUBLISHING COMPANY
 
                                          By:     /s/ Michael E. Pulitzer
                                            ------------------------------------
                                                   Michael E. Pulitzer,
                                                    Chairman, President and
                                                    Chief Executive Officer
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed by the following persons on behalf of the Registrant in
the capacities indicated on the dates indicated.
 
<TABLE>
<CAPTION>
                  SIGNATURE                                       TITLE                          DATE
                  ---------                                       -----                          ----
<C>                                                 <C>                                     <S>
 
           /s/ Michael E. Pulitzer                  Director; Chairman, President and       March 26, 1997
---------------------------------------------            Chief Executive Officer
            (Michael E. Pulitzer)                     (Principal Executive Officer)
 
            /s/ Ronald H. Ridgway                    Director; Senior Vice President        March 26, 1997
---------------------------------------------        -- Finance (Principal Financial
             (Ronald H. Ridgway)                         and Accounting Officer)
 
               Ken J. Elkins*                        Director; Senior Vice President        March 26, 1997
---------------------------------------------           --Broadcasting Operations
               (Ken J. Elkins)
 
               David E. Moore*                                  Director                    March 26, 1997
---------------------------------------------
              (David E. Moore)
 
          Nicholas G. Penniman IV*                   Director; Senior Vice President        March 26, 1997
---------------------------------------------            --Newspaper Operations
          (Nicholas G. Penniman IV)
 
             Peter J. Repetti *                                 Director                    March 26, 1997
---------------------------------------------
             (Peter J. Repetti)
 
            Emily Rauh Pulitzer*                                Director                    March 26, 1997
---------------------------------------------
            (Emily Rauh Pulitzer)
 
               Alice B. Hayes*                                  Director                    March 26, 1997
---------------------------------------------
              (Alice B. Hayes)
 
           James M. Snowden, Jr.*                               Director                    March 26, 1997
---------------------------------------------
           (James M. Snowden, Jr.)
</TABLE>
 
                                          By:      /s/ Ronald H. Ridgway
                                            ------------------------------------
                                                    Ronald H. Ridgway*
                                                    attorney-in-fact
 
                                       53
<PAGE>   55
 
                          PULITZER PUBLISHING COMPANY
 
                 REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
                               DECEMBER 31, 1996
 
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
EXHIBIT NO.
-----------
<S>          <C>
10.8.1       Amendment, dated January 28, 1997, to Pulitzer Retirement
             Savings Plan
10.8.2       Amendment, dated October 30, 1996, to Pulitzer Retirement
             Savings Plan
10.8.3       Amendment, dated July 31, 1996, to Pulitzer Retirement
             Savings Plan
10.8.4       Amendment, dated October 25, 1995, to Pulitzer Retirement
             Savings Plan
10.10.1      Amendment, dated October 25, 1995, to Pulitzer Publishing
             Company Pension Plan
10.28        Split Dollar Life Insurance Agreement, dated December 27,
             1996, between Pulitzer Publishing Company and Richard A.
             Palmer, Trustee of the Michael E. Pulitzer 1996 Life
             Insurance Trust
10.29        Split Dollar Life Insurance Agreement, dated December 31,
             1996, between Pulitzer Publishing Company and Rose M.
             Elkins, Trustee of the Kennie J. Elkins Insurance Trust
10.30        Split Dollar Life Insurance Agreement, dated December 30,
             1996, between Pulitzer Publishing Company and Rebecca H.
             Penniman and Nicholas G. Penniman V, Trustees of the
             Nicholas G. Penniman IV Irrevocable 1996 Trust
10.31        Split Dollar Life Insurance Agreement, dated December 30,
             1996, between Pulitzer Publishing Company and Doris D.
             Ridgway and Boatmen's Trust Company, Trustees of The Ronald
             H. Ridgway InsuranceTrust
10.32        Consulting Agreement, dated May 1, 1996, between Pulitzer
             Publishing Company and Glenn A. Christopher
21           Subsidiaries of Registrant
23           Independent Auditors' Consent
24           Power of Attorney
27           Financial Data Schedule
</TABLE>
 
                                       54