A bidding war has broken out over the broadcast license of community radio station KDHX.
Two days before a bankruptcy court hearing in which KDHX’s leaders planned to ask a judge to approve the sale of the station to syndicated Christian radio network K-LOVE, a different Christian radio broadcaster filed an objection to the sale coupled with an offer of $5.5 million for KDHX’s assets.
Gateway Creative Broadcasting, a nonprofit that operates JOY FM 99.1 and BOOST Radio in St. Louis, will ask a judge on Wednesday to set up a bidding process to determine a new owner for KDHX.
KDHX’s board of directors has already struck a deal to sell the station to K-LOVE for at least $4.35 million, with the total rising to $4.8 million if the sale goes through quickly. A judge must approve any sale. KDHX filed for Chapter 11 bankruptcy protection in March and holds $2 million in debt.
Hundreds of former KDHX DJs, volunteers, St. Louis musicians and local businesspeople have signed public letters in recent years criticizing KDHX’s management. The board of Double Helix, the nonprofit corporation that runs KDHX, has largely responded through written statements downplaying the public complaints and blaming critics of leadership for a steep downturn in fundraising.
Some KDHX supporters have said they’re raising money to make a competing purchase offer for the station, with plans to keep it intact as a volunteer-run source of many varieties of music.
In a court filing, Gateway says it began talking with KDHX about a sale last year and entered into a letter of intent in December. Gateway’s offer included a $400,000 loan. While continuing to negotiate the deal in January, Gateway representatives were surprised to learn that KDHX’s board filed a bankruptcy petition and requested to appoint K-LOVE as its debtor-in-possession creditor, according to the filing. The terms of the loan waive interest payments and other fees if KDHX sells to K-LOVE.
KDHX’s bylaws require approval from two-thirds of associate members participating in the vote to sell the station’s broadcast license. KDHX leaders said in court filings that they voted to sell the station on March 3 at a meeting of “the board and associate members” who had been unknown to the public. Board President Gary Pierson declined to provide minutes from the meeting or any details about the vote to sell.
Gateway Creative Broadcasting lists business addresses in Des Peres and Virginia. JOY FM 99.1 and BOOST Radio are its flagship stations. The organization has an annual budget of just under $9 million, according to tax filings. K-LOVE largely offers the same programming across its stations, which compose one of the largest Christian radio networks in the U.S.
