Colleges May Keep TV Station

Times Staff Writer

Because of growing complications surrounding the sale of KOCE-TV -- a threatened lawsuit by a rejected bidder and the need of the contested buyer to borrow money for the down payment -- trustees of the Coast Community College District may reverse course and keep the PBS affiliate.

“Some [trustees] are thinking they would like to hang on to the station at least for a while,” Milford Dahl, the Orange County college district’s attorney, said Friday.

Pulling Channel 50 off the sales block would be the latest twist in a story line that is looking more like a soap opera than a Ken Burns documentary.


Among the plot turns was Friday’s revelation that the KOCE-TV Foundation, a group controlled by some of Orange County’s most influential business executives that has agreed to buy the station, is seeking a bank loan to cover the $8-million down payment and a $2-million operating fund, said Bob Brown, chairman of the foundation.

Frustrated trustees, spurred by the threat of a lawsuit from the Daystar Television Network, Wednesday set a deadline of March 10 to complete the sale of the station. If the deadline is not met, trustees will decide whether to reopen the bidding, sell to another buyer or keep the station, Dahl said.

But the prospect of a lawsuit by Christian broadcaster Daystar, which contends it has made the best offer to buy KOCE-TV, is further muddying the station’s future. The attorney for the Dallas-based televangelist organization, the second-largest in the world, said he will file suit next week to block the sale and ask a judge to declare his client’s $25.1-million cash bid the winning offer.

Trustees, facing strong community lobbying, voted in October to sell the station to the foundation, which was the station’s fundraising auxiliary and the only bidder that guaranteed KOCE would remain a PBS affiliate. The deal was originally announced at $32 million, with the foundation putting $8 million down and paying the rest over time with interest.

But the deal changed substantially during negotiations. The district lowered the price by $4 million, money it said it would have to pay if the station had been sold to a non-PBS bidder. The deal still includes the down payment, with the balance to be paid over 30 years, with no interest. No payments are due for five years.

The trustees rejected Daystar’s enriched bid of $40 million in cash, saying it was submitted a day late.


Daystar says that its $25.1-million offer is far more valuable in today’s dollars than the foundation’s and the rejection of its bid was “motivated by a desire to prevent a religious organization from owning and controlling KOCE.”

Experts interviewed by The Times said the foundation’s offer was worth $12.5 million to $19.5 million.

George Brown, president of the district trustees, said a lawsuit that ties up the sale in court would crimp the district’s finances.

Brown said the district would be forced to run a much leaner operation at KOCE, which loses $2 million to $3 million annually.

“That deficit has to be zero,” he said.

He fears that gifts to the nonprofit station would dry up if donors thought a judge could force a sale to Daystar. “We’re at a crossroads,” he said. “We don’t know what plans to make.”

Although the station is based in Huntington Beach, its signal is carried in most cable systems in the Los Angeles area.


The district, which runs Golden West, Orange Coast and Coastline community colleges, wanted to cash in the station to help fund classroom expenses. The state’s budget problems have tightened the district’s budget even further, and it recently was placed on the state community college chancellor’s office fiscal watch list.

The foundation’s Bob Brown said he wouldn’t be surprised if the trustees backed off from the sale. “There’s always been a faction [of the trustees] that’s wanted to keep it,” he said. “It frustrates me, especially after all this time.”

Keeping the station in district hands would satisfy public sentiment that appeared overwhelmingly in favor of preserving KOCE’s PBS affiliation.

Dahl, the district’s lawyer, blamed the foundation for the drawn-out negotiations, which were scheduled to be wrapped up Feb. 8. While the two sides have agreed on the financial portion of the sale, technical questions remain.

Dahl said foundation officials are volunteers working part time and that too many must be consulted to make a decision.

Brown, the retired president of Toshiba America, took issue with Dahl’s comments, saying he had been working full time on the deal.


“Nobody is not doing their job,” he said. “If they’re frustrated, how do you think I am?”

Brown said most of the money pledged to the foundation has come from a few large donors, most of whom want to spread their donations over time. The largest is $1 million. A few others approach that level, Brown said. He would not disclose the donors’ names.

He said several banks have expressed interest in making the loan.

In addition to pledges of money, he said the foundation is seeking benefactors to guarantee portions of the loan.

The station’s sale has been mired in controversy almost from the start. Chapman University in Orange, with an expanding film and television program and a president with a show on the station, bid for KOCE, then withdrew.

“It was very difficult working with the Coast Community College board trying to put a deal together,” Chapman President James L. Doti said Friday.

The KOCE-TV Foundation had joined a partnership with KCET, its PBS big sister in Los Angeles, to buy Channel 50, but that plan dissolved.

Brown confirmed that the foundation has discussed moving the station to Chapman University.