You'd think in Markets #4 and #36, there's room for a Classic Hits station. Especially since the format performs so well in NYC (WCBS-FM), LA (KRTH), Dallas (KLUV), Philadelphia (WOGL), etc. Chicago even has competing Classic Hits stations, owned by Cumulus (WLS-FM) and CBS (WJMK). On the other hand, there are no Classic Hits stations in some large markets, such as Washington or Atlanta. In Boston, WROR usually leads the market. It is identified as Classic Hits. But it's really a pop-oriented Classic Rock station, playing AC/DC and Zeppelin but not Michael Jackson or Madonna.
In the last few years, several owners have tried Classic Hits in SF and gave up, CBS 106.9 KFRC and iHeart 103.7 KOSF. I suppose the theory is make KBAY a Classic Hits station, and if it can do a bit better in the San Francisco market, it will make more money. That might be better than keeping KBAY as an AC station serving San Jose, but not getting many listeners in SF, since those listeners can hear KOIT and KISQ better than KBAY.