An agreement to sell an Hispanic formatted AM station serving the Fayetteville AR market appears not only to have been proceeding in the slow lane per the actions of the buyer and seller, it appears to have raised some eyebrows somewhere along the way.
The station is KLTK Centerton AR, a Class D on 1140 kHz with throws 5 well-centered kilowatts of power over Fayetteville while the sun shines and tucks itself in for the night once the sun goes down.
It was sold in a slow-motion deal that was initiated 11/7/12, according to seller La Max Mexicana, headed by Genero Salas, and buyer Radio Las Americas Arkansas, headed by Antonio Perez.
The price of the station is $400K, and as of now, most of that money has already changed hands. The contract provided for a $200K down payment followed by monthly payments of $10K beginning in December 2012 and continuing until the station is completely paid for.
Here is the eyebrow-raising statement in the original contract: “Buyer shall take possession of the radio station property upon the execution of the agreement.”
This can be read as an unauthorized transfer of control.
A check of the FCC database did not reveal a contract filed with the FCC in 2012. And the contract we looked at, published by the FCC 8/25/14, included an amendment which strives to clear up any confusion. They attested that their intention was to enter into an LMA, a common practice which allows the incoming owner to become familiar with the station while awaiting regulatory approval.
In the amendment, they wrote, “Sellers and Buyer agree that the Buyer’s taking possession of the Station was intended to allow Buyer to broker the air time, including selling advertising and retaining the revenue from its sales. and to provide programming for broadcast the Station, with periodic payments to be credited toward the purchase price until payment of the full amount of the purchase price had been made. Sellers, through Las Mas Mexicana, LLC, have retained ownership of the FCC license and ultimate control of the Station in accordance with the applicable statutes and FCC requirements, including control of Station finances, Licensee’s personnel, and programming.”
The parties stated that the transaction is expected to close before year’s end.
Buyer Perez also owns a radio station and an LPTV serving the Tulsa market: KMUS-AM Sperry OK and KXAP-LD Tulsa.
RBR-TVBR observation: We think this will come under the heading no harm, no foul when the FCC goes to review the deal, as long as it is clear that seller Salas did not completely abandon the station. The deal, filed later than one might think, is still making it to the FCC before the parties closed on it. The real life question is whether or not the public interest is being served, and providing special programming to a minority ethnic group usually fits the bill on that count.