The high cost of pulling out


The Word of God Fellowship won CPs for two television stations in Auction No. 64 – one near Spokane WA and the other on the Florida panhandle, east of Panama City and southwest of Tallahassee. It decided to abandon them, but that doesn’t mean the FCC doesn’t want some cash. The cities of license are Medical Lake WA and Appalachicola FL.

The FCC describes WOGF’s financial moves in Auction No. 64: “Prior to the start of Auction 64, WOGF submitted $1,795,000 as an upfront payment to participate in the auction. At the conclusion of the auction, WOGF’s net winning bids for the two Auction 64 Permits totaled $2,979,000. The Commission applied part of WOGF’s upfront payment to satisfy WOGF’s down payment of $595,800. WOGF was required to pay the final 80% of its net winning bids (minus the left-over funds on deposit with the Commission) by July 29, 2008 (or by August 12, 2008, with the five percent late fee).”

But instead of settling its account, WOGF elected to default, and has made no further payments.
That automatically resulted in the dismissal of WOGF’s claim to the licenses. But it still has to pay a default penalty. That will amount to the difference between WOGF’s bid and the bid of the subsequent winner of the CP the next time it is offered, if the new bid is for a lower amount; and a 3% default payment based on WOGF’s bid or the subsequent winning bid, whichever is lower.

In the absence of a new winning bid, the FCC may hold from 3% to 20% of WOGF’s bid to make sure money is in hand to cover WOGF’s penalty once it is finally determined. The FCC is holding the maximum 20%, which is also the amount of the down payment, pending ultimate granting of the CPs to a new licensee.
Word of God Fellowship is headed by Marcus Lamb and operates the Daystar Television Network.

RBR/TVBR observation: We’re not lawyers, but if we have this rights, if a new bidder comes along and puts up the same amount or more than WOGF, that’ll take its liability right down to 3%. That will be a much easier pill to swallow for this kind of change in plans, but at $89,370 will still take a nasty bite out of the organizational wallet.