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Daystar TV, whose bid for KOCE-TV (Ch. 50) Huntington Beach, Cal....

Daystar TV, whose bid for KOCE-TV (Ch. 50) Huntington Beach, Cal., was rejected in favor of the KOCE Foundation, filed suit Wed. to halt the sale (CD Oct 20 p12). The religious broadcaster accused the station’s licensee, the Coast…

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Community College Dist. (CCCD), of failing to comply with state law and sell the station to the highest bidder. Daystar said in its lawsuit filed in Orange County Superior Court it had first offered $25.1 million ($1 million cash down and $24 million at closing) for the station Oct. 8, vs. the KOCE Foundation offer of $32 million ($8 million down from borrowed funds and $24 million financed over 10 years). Daystar said it had submitted a revised bid the next day for $40 million ($2 million cash down and $38 million at closing), but the board chose the foundation offer over its higher offer in Dec. KOCE sources told us the higher offer was disqualified because it was submitted after the deadline. Later, without re-noticing the sale or giving bidders an opportunity to resubmit a purchase proposal, the board and the foundation agreed to reduce the foundation’s purchase offer to $28 million ($25.5 million in cash over time and $2.5 million in programming). Under the revised offer, the foundation was required to pay only $7.9 million at closing and a $17.5 million promissory note payable over 30 years. Daystar attorney Richard Sherman said his “client was and is the highest responsible bidder for KOCE.” The foundation offer with a 30-year payment schedule doesn’t meet CCCD’s immediate cash needs, and, “in today dollars, is only worth $23 million at a conservative 4% discount rate. Calculated at an 8% discount rate, the foundation’s bid is worth only $19.2 million.” The presence of as many as 4 religious broadcasters in the bidding aroused strong passions among public broadcasters last Oct., with the Assn. of Public TV Stations (APTS) and the CPB intervening to ensure that KOCE remained in the public domain. APTS and CPB had warned that the sale to any entity other than a public broadcaster would have adverse consequences in Congress and at the FCC. CPB had written to the licensee that it would have to return federal funds invested by Congress through the CPB amounting to $22 million as well as Public Telecom Facilities Fund grants made by the NTIA over the years.