Originally published in Current, June 12, 2006
By Steve Behrens
By selling pubTV station KOCE to its present licensee three years ago instead of a religious broadcaster, the Coast Community College District ran afoul of several major points of bidding law, a California state appeals court ruled May 25 .
The court reheard the case this winter and agreed with its own decision a year ago to invalidate the Coast Community College District’s sale of the channel to the KOCE Foundation.
The college district “is in a world of trouble,” Daystar Television Network attorney Richard Sherman said in the Los Angeles Times.
What are the college district’s options? Its attorney, Milford Dahl Jr., mentions several:
The appeals court pointed to one option that could help retain KOCE as a pubTV station. CPB had threatened to demand reimbursement of past grants if the station did not remain a public broadcaster, and Daystar had refused to indemnify the college district against that risk. The seller could consider that factor in choosing a buyer, the court observed.
Whatever happens, “unwinding” the sale will be horrendous, including retransferring the FCC license, Dahl predicts. Such decisions may still be pending in November when a further complication arises: Three of the five seats on the college district board will be up for election, Dahl notes.
Adding to the pressure is Daystar’s separate multimillion-dollar religious-discrimination suit filed in federal court last July. It charges that the district trustees conspired to “prevent KOCE-TV from falling into the hands of a faith-based broadcasting company.”
What decided the case, the court said, was that the district violated state bidding law by materially lowering the price after picking the buyer. Though the foundation had bid $32 million, the district okayed a reduced price in fall 2003 of between $19.5 million and $23.5 million, mostly on a zero-interest loan. Daystar had bid $25.1 million in cash. In addition, state law and the college district’s bidding terms require that bids be cash, not credit, the court said.
KOCE Foundation Chairman Bob Brown contends the sale terms were changed because the buyer had raised millions for KOCE’s assets and because it had agreed to broadcast telecourses for the college.
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