Some six years after acquiring its first television station, The Meruelo Group has just agreed to purchase its second broadcast property. And, it’s a bit of a bargain, as it’s paying just $10 million for assets tied to a station within the Los Angeles DMA. What’s perhaps most notable about this deal is that it’s the first to involve a post-spectrum auction transfer of control of a channel-sharing agreement. Here are the details in how Bob Behar‘s Miami-based Hero Licenseco is exiting Southern California, pocketing millions with the decision.
As RBR + TVBR reported on April 18, the Behar-controlled Hero will be collecting exactly $146,627,980 for giving up KBEH-63, which broadcasts on digital Channel 24, in Oxnard, Calif. The station has long reached viewers across much of the Los Angeles DMA, and from 1988-2004 was the market’s KADY-63; from 1995-2002 KADY was the DMA’s secondary UPN affiliate, primarily targeting Ventura County, Calif.
Spanish-language programming came in 2004, and from 2006 through 2013 was the over-the-air signal for Viacom International Media Networks’ now-defunct U.S.-based MTV Tr3s music network.
Since then, KBEH has also served as the test station for the short-lived CNN Latino network.
Thanks to Charter Spectrum, KBEH effectively reaches the entire Los Angeles DMA. However, demand for spectrum from wireless services companies — and the payday anticipated from participating in the spectrum auction — outweighed the benefit of having a full-market TV station. This means digital Channel 24 will soon disappear. But, programming will live on thanks to a Channel-Sharing Agreement forged by Hero.
Hero won’t be involved, however, thanks to an asset purchase agreement filed with the FCC on Monday (5/1).
In perhaps the first deal of its kind, this post-auction arrangement sees the transfer of Hero’s KBEH channel-sharing agreement to Meruelo, for $10 million.
Meruelo also did quite well in the spectrum auction, as it is giving up its KWHY-22 — acquired in 2011 — and will use its own channel-sharing agreement to move KWHY to a low-VHF channel. Meruelo pocketed $123,474,177 for giving up the spectrum of KWHY.
Terms of the deal call for Meruelo to immediately pay Hero the full amount of the purchase price via wire transfer, at closing.
Hero’s broker in this transaction is Jose A. Rodriguez, of Rodriguez Advisors.
Hero’s legal counsel in this transaction is Paul Feldman, of Fletcher, Heald & Hildreth.
Meruelo’s plans for KBEH are not yet publicly known; the station is presently independently owned and largely airs long-form paid programming. KBEH is largely expected to serve Hispanic viewers, and serve as an in-language sibling to KWHY, the oldest unaffiliated Spanish-language TV station in the U.S.
Meruelo also owns Classic Rhythmic KDEY-FM in Ontario, Calif., Classic Hip-Hop KDAY-FM in Redondo Beach, Calif., and two low-power TV facilities in Santa Maria and San Luis Obispo, Calif., respectively.