Unfortunately, this isn’t a trip down memory lane for our readers.
On the contrary, it is an opportunity to address the narrative that has been disseminated to the Black community concerning the sale of KCOH Radio 1430 AM and whether any African-American business people stepped up to purchase the station. As a small business that has thrived in the city of Houston for over 52 years, The Houston Forward Times is totally supportive of any business owners making business decisions that are in their best interest, which includes making money.
However, when various African-American business people reached out to us to inform us that the narrative being sold to the Black community, namely that there were no African-Americans that stepped up to the plate to buy KCOH Radio wasn’t true, we knew that there had to be more to the story.
Equally confusing, is that this narrative has been consistently communicated over the KCOH radio airwaves by long time KCOH morning talk show host Michael Harris and several others. As the saying goes; where there is smoke, there is fire.
KCOH Owners: Travis Gardner, Tom Petrizzo & Judson Robinson
There has been a lot of back and forth conversation concerning the negotiated sale of KCOH Radio to La Promesa Foundation. La Promesa Foundation is the not-for-profit organization, based in Midland, Texas, that operates the Catholic Guadalupe Radio Network. They are slated to take over the station and change its format in February 2013.
KCOH Radio has been a staple in the Houston community, located in the heart of Houston’s Third Ward, beginning its broadcasting activities in 1953. KCOH Radio is the oldest black radio station in Texas as well as the southern portion of the United States. The Houston station has been recognized as a forerunner in black radio stations and was the first in the field to include talk show programming, gospel, blues and many other types of shows with their urban listeners in mind.
The ultimate value of the deal will be $2.766M. The asset portion amounts to $2.141M of that, including a $100K escrow deposit, $1.4M in cash at closing and a note for $641K.
KCOH Radio owners will donate the license, which carries an appraised value of $625K. KCOH owners will receive a gift letter provided by La Promesa to make up the difference in the sales price of $3.2 million to write off on their taxes. La Promesa is slated to receive the station’s three tower array, calls and other assets, but will receive only a lease on the other real estate, with an option to purchase.
The Estate of Michael Petrizzo, the force behind KCOH Inc., is the primary catalyst behind selling KCOH Radio and Thomas (Tom) F. Petrizzo, his son, is the executor signing off on the deal for the sale of the station.
John W. Saunders represented KCOH Radio and was the exclusive broker.
HOW COULD THIS HAPPEN?
We reached out to Saunders to ask him questions, but did not hear back from him.
We were, however, able to speak to Petrizzo to inquire about the details surrounding the sale of the station and to find out if members of the Black community were given a chance to buy it.
According to Petrizzo, KCOH Radio has long-been on the market. Mike Petrizzo, who passed away in January of this year, attempted to sell KCOH for $8.75 million in a deal filed in April 2009 to religious broadcaster Beyond Broadcasting, but that deal eventually fell through.
Tom Petrizzo states that all the owners wanted to inform the Black community that the station was still up for sale after his father passed away in January and that he made every effort to do so. According to Petrizzo, the other owners are Travis Gardner, who works at station and has a 22% stake and the Estate of Margarette Robinson, which has a 20% stake. The Estate of Dr. John B. Coleman had a previous stake in the station, but those shares were sold at an auction years ago and were purchased by Michael Petrizzo, who had first right of refusal. The ownership stake of Michael Petrizzo passed on to his wife, but Tom is the executor of the estate. Judson Robinson III serves as the executor of the estate of his mother, former Houston City Councilwoman Margarette Robinson, who passed away in June of this year.
“It is sad that no African-Americans stepped up to buy the station,” said Robinson. “A true voice in the Black community is going to be silenced.”
Judson indicated that he was never a part of the negotiations, and that Saunders handled all of the critical details of brokering the deal.
Petrizzo shared similar sentiments.
“I would have wanted it to stay in Black community,” said Petrizzo. “We would have entertained any offers if they were close to our requested sales price, and we would have definitely considered the same offer from a member of the African-American community had they proposed it.”
Petrizzo stated that he flew into Houston and personally met with two African-American leaders from the religious community to let them know about the sale, but met with no one else. He said that the primary responsibility for the sale and negotiations of the station were handled by John W. Saunders, the broker.
Petrizzo also stated that Saunders did not personally meet with any perspective African-American buyers, but sent out letters instead to select individuals, along with a document that they requested be sent in to submit a viable offer. Petrizzo states that Saunders generated a list of approximately 25 potential buyers, who expressed interest in purchasing the station after the community was notified about the sale over KCOH radio airwaves.
WHERE THINGS GET TRICKY
When asked, Petrizzo was unable to tell us when the announcement to sell KCOH was made on the radio. Nor was he able to tell us who made the announcement and how many times the announcement was made. It appears that all owners of the station were not directly involved with the outreach or negotiations and that Saunders was the sole individual, responsible for getting a deal brokered.
Based on information from Saunders, Petrizzo states that over one-half of the individuals who responded to the announcement were African-Americans and that there was only one written offer submitted and only two verbal offers given.
“Jesse Dunn was the only one who responded back with a written offer,” said Petrizzo. “Everyone else that gave us a verbal offer, were seeking to pay less than one-half of our original asking price of $3.2 million. There was only one written offer submitted by Jesse Dunn and he was seeking to get financing for the entire sales price and didn’t offer any of his own cash.”
Jesse Dunn is the individual who made the failed initial offer of $8.5 million to Mike Petrizzo in 2009, causing the station to get tied up in litigation after Mike Petrizzo sued Dunn.
According to Tom Petrizzo, La Promesa Foundation initiated the offer in its current form and presented it to Saunders, who brought it to the KCOH owners, who then agreed to sell it.
After the sale was announced, Petrizzo came on Michael Harris’ morning show on KCOH and said that he really wanted to see the Black community acquire a radio dial and be able to keep the KCOH format, but said that Saunders would have to be the person to help make that happen.
“I believe that 1230 AM - KCEV is up for sale or for lease,” said Petrizzo. “If that is true, whoever is interested would need to be prepared to purchase or lease the station and keep the format.”
WAS THERE A BLACK BUYER ALL ALONG?
Petrizzo was adamant that Jesse Dunn was the only African-American that put forth a concerted effort to buy the station, further stating that Dunn tried to get a loan for the entire amount but didn’t qualify.
A couple of African-American businessmen, Michael McCall and Dr. John Stanford, have stepped up to refute that claim.
McCall, a business developer and Stanford, a business investor, state that they have been working with the Petrizzo family on a deal to purchase KCOH since 2009 and have made two offers since that time.
“To say that there were no serious offers made for the station by any African-Americans is completely not true,” said McCall. “We made an offer in writing to John Saunders prior to this sale and it was rejected.”
Both McCall and Stanford state that as African-Americans, they were committed to keeping KCOH in the African-American community and wanted to keep the legacy of the station and its format for years to come.
“I attended Mike Petrizzo’s funeral in January of this year and was introduced to Tom Petrizzo and he and I discussed sitting down to discuss the potential sale of the station,” said McCall.
“I followed up with Tom about two weeks after the funeral, because I was giving him and his family respect due to the loss of their father,” said McCall. “I called Tom and left him a message and he called me back and we talked on the telephone and he told me that he was in the process of engaging a broker and that all the owners were interested in selling the station. He told me that after they finalized the broker relationship, then he wanted us to deal with the broker. I was in communication with Travis Gardner and Ms. Robinson before she passed away to discuss the station sale.”
McCall said he was disappointed that they didn’t receive any written or verbal notification about the imminent sale and that the deal Petrizzo cut with La Promesa was totally different than what he told him.
John Stanford says that they received a non-disclosure document, to not share any information with anyone, but nothing more than that.
“He (Petrizzo) made it clear to us that he wasn’t interested in anything but cash, but that isn’t the deal that he provided to this Hispanic station,” says Stanford. “We made two aggressive offers. We offered them $6 million in 2010 and that was rejected. Then the lawsuit against Jesse Dunn shut down any opportunity to negotiate for months because there was a cloud over the station. Everything was on hiatus until after the lawsuit and then Mike Petrizzo got ill and eventually passed away. Our second offer was submitted in April of this year and that offer was rejected also by John Saunders and the station owners.”
McCall and Stanford state that they had a verbal agreement in place and that they engaged legal counsel to secure a deal. They state that Saunders agreed verbally that he would notify them if another offer was made or if a letter of intent was submitted.
“We were caught by surprise that Saunders didn’t keep his word or notify us,” said McCall. “We never received a call or anything in writing from John Saunders.”
McCall and Stanford say they are still interested in the station, after having spent thousands of dollars on legal fees and other expenditures.
“We paid for the first market analysis appraisal on KCOH on December 31, 2009, out of our own pockets,” said McCall. “We spent roughly $5k to hire BIA/Kelsey, the biggest firm that does market analysis on media outlets in the nation and it came back at $4.2 million.”
Stanford states that they purchased the first market analysis appraisal in order to find out how much the station was worth, and to determine how much to make an offer for. He says that after Mike Petrizzo’s passing this year, they contacted BIA/Kelsey again, to which they were informed that all they needed to do was pay for an update that cost roughly $2k. That is when they knew that the market analysis appraisal price was $3.2 million.
Out of it all, they are disappointed that they spent so much time, effort and money to show their good faith since 2009 and feel duped.
“I refuse to sit back and be quiet,” says Stanford. “I don’t have an ax to grind, but I just don’t believe that the Black community has been properly informed or that the proper outreach was done. They (KCOH owners) didn’t try hard enough to sell it to African-American businesspeople. We have shown good faith since 2009 and if they really wanted to keep it in the Black community, as they claim, they would have done so with us. We were ready and prepared and still are ready.”
The sale has not been finalized through the Federal Communications Commission (FCC) yet and people can protest the sale if they believe there is a valid reason that the station shouldn’t be sold.
Anyone interested in protesting the sale, should contact the FCC at 1-888-CALL-FCC (1-888-225-5322). You can also call KCOH radio at 713.522.1001 to express your views and get more information concerning the sale. As always, you can write to us at the Houston Forward Times and share your thoughts. Our address is 4411 Almeda Rd., Houston, Texas 77004.
Black people have always been a strong and resilient people. The Houston Forward Times will continue to keep you posted on the outcome of this situation.