The Collins Family Trust is giving its KLFF-AM Arroyo Grande CA to IHR Educational Broadcasting free of charge – well, the license and other assets. Certain other items will cost IHR some cash, over time.
The station is part of the San Luis Obispo market. It’s a Class B on 890 kHz with 5 kW-U, DA2.
Jerry and Catherine Collins are the trustees of the seller. The buyer is headed by Douglas M. Sherman.
While the transaction is being couched as a donation, it turns out that IHR will be paying $676K for the goodwill built up over time by the sellers. It will be in the form of a 20-year promissory note with accelerating payments that start out at $1.5K monthly and reach the level of $4K per month.
If both of the trustees happen to pass away before the term is up, no more payments will be required and all obligations of IHR to the Trust will be considered to be forgiven.
Additionally, there is a $30K non-compete attached to the transaction that will pay each of the trustees $500 monthly until the total is reached.
That puts the total value of the transaction at $706K above and beyond the value of the donated assets, which were not detailed.
An LMA will kick off 1/1/13 under terms of which IHR will pay the Trust $2K per month plus reasonable expenses.
IHR stated it will apply to switch the station to a noncommercial license.