I was in grade school in Phoenix, 7th grade to be exact when that happened. As a kid, KRIZ was my favorite. The last song they played at midnight was "Goodnight Sweetheart" by Sha Na Na.
If they were still #1, were they sold because Doubleday knew FM would take over, and get out while on top?
I'm surprised at how little there is online in the R&R and Billboard archives about this.
First, from what I can tell looking at the ratings summaries, KRIZ was #1 in teens, but #11 with a 3.0 12+ in its final book (April/May 1978). However, that was after the announcement had been made that the station was being sold and was going religion.
While the legend was that they changed while they were #1, the Oct/Nov '77 book shows KRIZ with a 3.9 12+ and being beaten in teens by KUPD AM/FM. KRIZ's best book that I can find was April/May '77, with a 6.1, but that was only good enough to make #5 12+ (behind Beautiful KRFM, AC KOY, Rock KUPD-FM, and Beautiful KMEO)---and they were still #2 in teens behind KUPD AM/FM.
So, I was wrong. I repeated what I'd been told decades ago. Sorry.
As to Doubleday's motives, I believe Doubleday did not own an FM in the market, which made KRIZ a bit of an odd fit. Gary Stevens, Doubleday's president, was a big believer in FM. And KRIZ, although it had dominated the market for a long time, was a 1kw daytime/250 watt nighttime AM at 1230 on the dial. A logical one to ditch.