Lawsuit Filed Over Sale of KOCE-TV

A Christian broadcaster, rebuffed in its bid to buy Orange County’s public broadcasting station from a community college district, filed a lawsuit Wednesday to block the sale and asked a judge to award it ownership of KOCE-TV.

Daystar Television Network says in its suit that its $25.1-million bid was worth more than the winning offer from the KOCE-TV Foundation, the only bidder that had guaranteed Channel 50 would remain a Public Broadcasting Service affiliate.

Daystar says Coast Community College District should have sold the televangelism firm the station because it was the “highest responsible bidder,” as the law requires.

The foundation’s $32-million offer, to be paid over 30 years, may be worth only half that in today’s dollars, the suit says.

The college district “did not follow California law,” said Richard Lloyd Sherman, Daystar’s attorney. “They discriminated against us to the detriment of the school system.”

The foundation was selected because the trustees did not want a religious organization to own KOCE, he said.

“The fact that my client is a religious group shouldn’t be a factor in its ability to buy the station,” he added.

Meg Waters, a spokeswoman for Daystar, said the broadcaster would retain some of KOCE’s programming, although details were unclear.

A hearing on the lawsuit is expected to be held by Santa Ana Superior Court Judge David A. Thompson on March 26.

George Brown, president of the district board of trustees, denied that any law was broken. He said the sale was made “with the best interest of the district, its students and the community in mind.”

“The decision was based on the belief that the most responsible bidder was the one that would retain the license for public broadcasting and educational purposes for the citizens of Orange County and preserve the district’s ability to use KOCE to educate its students,” Brown said in a statement.

Foundation Chairman Bob Brown declined to comment.

Dallas-based Daystar, the nation’s second-largest religious broadcaster, has been threatening to sue since Feb. 4, when Sherman wrote the district a letter demanding his client be awarded the station.

The five trustees decided to sell the station and use the money in the classroom at a time when the state budget deficit is leading to cutbacks.

The state community college chancellor’s office recently placed the district on its fiscal watch list.

After coming under tremendous community pressure to preserve KOCE’s PBS affiliation, the district voted in October to sell it to the foundation, which has been transformed from the station’s fundraising arm into a group controlled by some of Orange County’s most influential business executives.

The station was sold for what was billed as $32 million, with $8 million down and the rest to be paid over time with interest.

But the deal changed substantially when the final financial terms were announced. The district reduced the price by $4 million, saying that was the amount it would have had to pay if the station were sold to a non-PBS bidder.

The deal still includes the down payment, with the remainder to be paid over 30 years with no interest.

Experts told The Times the deal was worth $12.5 million to $19.5 million in today’s dollars.

Daystar had offered $25.1 million cash for the station. Trustees rejected an increased offer of $40 million, saying it arrived a day after the deadline.

Frustrated trustees last week set a March 10 deadline to complete the deal, a month later than the original target date.

According to district officials, the trustees have discussed keeping the station.