With Wealth Aboard, Why a Strain to Buy KOCE?

Sitting around the table were some of the richest men in Orange County: drug company chief David Pyott, former baseball commissioner Peter Ueberroth; high-tech execs Henry Samueli, John Tu and Dwight Decker.

Millionaires -- in some cases billionaires -- all, men with enough money and clout to do whatever they wanted.

They had gathered at a news conference in October 2003 to show their support for a foundation that was trying to buy KOCE-TV. With the support of these businessmen, raising funds for Orange County’s PBS station seemed a cinch.

But nearly a year later, the KOCE-TV Foundation still does not have the $7.9 million it needs to buy the station from the Coast Community College District. Three times it has been forced to ask for extensions of its deadline to complete the deal. With tentative approval from the Federal Communications Commission in place, time is running out.

Though foundation officials say they now have pledges for the necessary cash, some are getting impatient.

“It’s time the well-heeled of Orange County put their money where their mouth is,” said Kevin Parker, an English professor and president of the Academic Senate at Orange Coast College, one of three campuses in the district.

So what’s the problem?

“I wish I knew the answer to that,” said Bob Brown, chairman of the foundation and retired president of Toshiba America. “It hasn’t been easy, believe me.”

To begin with, the executives who supported the foundation did not -- for the most part -- simply pull out their checkbooks.

The Samueli Foundation has pledged $1 million over five years, said Michael Schulman, a board member of the Broadcom founder’s charitable arm. But it’s unclear how many others among the executives have contributed.

The KOCE sale has been fraught with delays, complications and enough drama for “Masterpiece Theatre.”

The foundation had bid $28 million for KOCE, which is on the district’s Golden West College campus in Huntington Beach. After paying a $100,000 deposit, it still needs to make the $7.9-million down payment. The remainder will be paid over 30 years at no interest, with no payments for five years. Experts set the deal’s value in current dollars at $12.5 million to $19.5 million.

Daystar Television Network, the second-largest Christian broadcaster in the world, offered $40 million in cash, but the district turned it down, saying the bid came a day after the deadline.

Daystar sued, but a Superior Court judge ruled in favor of the district. An appeal is pending.

Meanwhile, the down payment deadline was extended three times because the foundation didn’t have the funds. Each time, college and foundation officials said there was no hurry, because the foundation couldn’t take over the station until the FCC granted approval for the sale.

George Brown, president of the district Board of Trustees, said this time the foundation must come up with the $7.9 million by Oct. 24, when final FCC approval is expected, or the deal will be dead.

“If it’s anything below that, it’s sayonara, Charlie,” he said.

The foundation is trying to borrow the money from National Cooperative Bank. To qualify for the loan, the district must raise as collateral the same amount in pledges of donations to be made over five years. Documents refer to a $7.9-million loan, but foundation Chairman Bob Brown said his group is trying for one closer to $10 million, to help with operating expenses.

He said he has been trying to raise the money by meeting individually with about 100 potential donors and making phone calls to get the necessary pledges. “We felt the fastest way in the time allowed was to focus more on larger donors than on trying to do 10,000 donors,” he said.

He said the Daystar lawsuit and other controversies have hurt the effort. “We had several donors who wouldn’t meet with us until they were comfortable the deal was going to happen,” he said.

Other issues have discouraged potential donors. Sources said some backed out because they didn’t want to provide the financial documentation the bank requires to ensure that they have the wherewithal to make their pledges. Others have declined after learning that if the station goes into foreclosure, the remainder of their pledge will be owed to the bank.

College district attorney Milton Dahl said he thought foundation officials were surprisingly naive in their fund drive. “I think they just thought you go out and get pledges and the bank would write them a loan,” he said.

In a deposition for the Daystar suit this spring, foundation Chairman Brown was asked if it were realistic that anyone would guarantee a $10-million loan for the foundation. “Yes,” he answered. “There are several people in Orange County who have the capability to do that.”

Donating money to public television is not an easy sell anyway, fundraisers said. Giving money to the arts, culture and humanities -- where KOCE would fall -- ranks behind religion, education and human services in terms of donor priorities, said Timothy Seiler, director of public service at Indiana University’s Fund Raising School at the Center on Philanthropy.

Since making the deal for the station, the foundation has often been too optimistic about its fundraising goals and has at least once misstated the amount pledged. Dahl said the foundation reported in December that it had raised $6 million, though documents showed that months later, it had pledges for barely $5 million.

Ardelle St. George, the foundation’s attorney, said the difference was that some pledges did not meet the bank’s qualifications. The figures also reflect the money-raising difficulty the foundation was having.

Today, the foundation says it has surpassed its goal -- but the deal is still not done. Chairman Brown said last week the foundation had collected pledges for about $8.8 million to be given over five years, with the largest being $2 million. He would not say who made the pledges.