Larry Morton and Greg Fess both worked at ill-fated Equity Communications, which fell into bankruptcy and saw its television holdings dispersed to numerous buyers. Now a full-power television and three low powers in the Little Rock AR area will give the duo a chance to return to their old corporate headquarters.
The stations in the cluster include KMYA-DT Camden AR; KKYK-CD Little Rock AR; KMYA-LP Sheridan AR; and KTVV-LP Hot Springs AR. In case anybody is wondering, there are no local ownership cap considerations because low powers do not figure into that calculation.
The seller is Hallmark National Mortgage Corporation, with Eugene Maris signing off on the deal.
The license company being used by Morton and Fess to make the acquisition is Ellis-Wilson LLC.
The price tag of $1M is heavily back-loaded. The buyers only have to come up with $10K cash by closing, and 120 days later they have to pay another $90K in cash. The remaining $900K will be covered via a promissory note with a 15-year life span.
Hallmark also has a chance to enjoy one more payday – if Ellis-Wilson is able to sell the stations at any time within seven years, Hallmark is entitled to the lesser of 10% of any profit realize in the sale, or $100K. In the contract, the share in resale value is labeled a “success fee.”
Hallmark also has some remaining liability, however. Before closing, it is required to complete construction of master control at the cluster’s Little Rock headquarters, which is the former location of Equity; and it must convert KTVV to digital operation. Hallmark’s required expenditures are capped at $35K.