HONOLULU -- The parent company of KHNL/KFVE, Raycom Media, announced on Tuesday that it has a new operating agreement to operate the NBC affiliate and KGMB, Hawaii's CBS affiliate.

Raycom owns KHNL and KFVE. MCG Capital owns KGMB. Raycom Media owns 46 TV stations nationwide.

"The economic reality is that this market cannot support five traditionally separated television stations," Raycom Media President and CEO Paul McTear said.

KGMB employees were all given envelopes with their layoff notices.

KGMB will merge with KHNL and KFVE. Station officials held a joint news conference on Tuesday to announce all three stations will be run out of KHNL's new facility in Kalihi, although it will not be called a merger.

"To do what we're doing there's a couple of things that are going to take place. We do not need any regulatory approvals," McTear said.

They are calling it a "shared services agreement." Viewers will see no difference in programming, but the news operations will be combined and some employees from both operations will be let go.

"'Joint services agreement' is to avoid saying what it is, which is essentially a merger of operations because once you use that 'm' word it becomes a duopoly, which would be illegal under (Federal Communications Commission) rules," University of Hawaii journalism professor Gerald Kato said.

There are 198 full-time employees at the three stations. KGMB employees were told 130 will be kept, and about 68 from either KHNL or KGMB will lose their jobs.

All the employees at both stations will be interviewed to determine who stays.

Kato said it will affect the quality of news.

"You'll have a lot of news, but it'll be the same news put out by the same news operation and I think that does a disservice to the public here," Kato said.

The iconic tower on Kapiolani Boulevard will be torn down soon as KGMB vacates the location. KGMB will move its operations into KHNL's building. KGMB had a deadline late this year to move out of its current Kapiolani Boulevard station, which MCG Capital sold and was leasing back.

The stations will combine their news departments and simulcast some of the newscasts, sources said.

KGMB General Manager Rick Blangiardi will continue to manage the CBS affiliate and KHNL, sources said. Current KHNL/KFVE General Manager John Fink will head KFVE, sources said.