KOCE Foundation reworks terms

Marisa O’Neil Lolita Harper Lolita Harper and Marisa O’Neil

KOCE-TV Foundation officials announced Saturday morning they removed

a portion of the purchase contract with the Coast Community College

District that could have cost the district its broadcasting rights,

in an effort to make their bid more likely to be accepted.

At 9 a.m. Saturday, Milford W. Dahl, the attorney representing the

Coast Community College District, which owns the public broadcasting

station KOCE, said he received news that the KOCE-TV Foundation would

drop the “subordination clause” in the purchase agreement.

The now defunct clause called for the district to sign off on a

subordinate, or secondary, loan for the foundation to secure

financing. Under such a deal, if the foundation defaulted on its

loan, the bank would have first claim to the station’s assets,

including its broadcast license. The district would get whatever, if

anything, was left.

The new language would require the board to find a loan, without

having the district sign off on a secondary loan as a default option,

Dahl said. The foundation previously contended it could not secure

the loan for the $8-million down payment unless the district agreed

to sign, but has obviously changed its tune.

“They think they can get one without it,” Dahl said.

That clause was just one more glitch in a lengthy process --

complete with public protests, spirited debates, number crunching,

multimillion dollar bids, missed deadlines and lawsuits -- to keep

the station a part of the Public Broadcasting System and lessen the

college district’s financial burdens, in regard to the station.

That one clause was a “deal-breaker,” according to Trustee George

Brown. But now that it is said to be removed from the purchase

agreement, Brown said he is optimistic.

“We’ve been trying to figure out how to make it available to the

foundation,” Brown said. “Now, they have fiddled with it and its

looks like they are still the highest bidder.”

In August, the Coast College District announced it would sell KOCE

and received a number of generous offers from various interests,

including several religious broadcasters. Daystar, the nation’s

largest Christian Broadcaster, offered $25.1 million in cash.

The KOCE-TV Foundation, who tapped high-powered executives such as

Broadcom Chairman Henry Samueli and former baseball commissioner

Peter Ueberroth, made a bid of $32 million -- $8 million cash and $24

million on a long-term note.

The agreement also solidifies a programming agreement in which the

foundation agrees to provide the district with 40 hours of airtime to

broadcast its telecourses and 600 minutes of promotional time for the

district’s three colleges in exchange for $2.5 million worth of the

promissory note, according to contract.

The station must also bring in 10% more than it spends on

operation, documents state.

After missing two previous deadlines, the KOCE-TV Foundation made

its March 10 deadline and now has tweaked some contentious language

to make it more appealing for the final vote at a district board

meeting Wednesday night.

Dahl said it is much more likely that the bid will be accepted

when the college district board meets Wednesday night.

“I don’t know of any other issues but I don’t know -- anything

else might come up,” Dahl said. “But that was the only bone of

contention.”

Brown, who has consistently expressed a desire to keep the station

for public broadcasting, said the board is interested in going ahead

with the foundation’s bid.

“But we won’t know that until Wednesday night,” Brown said.

“That’s when we will find out if what we are hearing verbally is what

they have in writing, and if so, then we may have a deal. But we

won’t know until we cross all the Ts and dot the Is on Wednesday.”

* LOLITA HARPER is the community forum editor. She also writes

columns Wednesdays and Fridays. She may be reached at (949) 574-4275.

MARISA O’NEIL covers education. She may be reached at (949) 574-4268.