It’s not new – most all who were following the story of Dan Frishberg “The Money Man” and BizRadio knew that the station was to be sold… the question however is now – TO WHOM?
My most recent blog entry on BizRadio centered around a recently filed lawsuit against Salem Communications, Daniel Frishberg, Elisea Frishberg and a host of other entities and folks related to the contract for purchase between Salem Communications and Daniel Frishberg for BizRadio. The entry can be see here: https://chuckgallagher.wordpress.com/2010/07/13/bizradio-to-salem-communications-business-1110-frishbergs-fraud-follies/
Now…I see that application has been filed with the FCC for the transfer of the station from BizRadio Houston Licensee, LLC to Thomas Taylor SEC Receiver. The application can be seen here: https://licensing.fcc.gov/cgi-bin/ws.exe/prod/cdbs/forms/prod/cdbsmenu.hts?context=25&appn=101390286&formid=316&fac_num=10827
As previously reported, the assets of BizRadio are under the direction and control of Mr. Taylor (SEC Receiver) and as such this filing is appropriate as it clarifies the transfer of asset under the courts direction to the person authorized to act as it’s agent and effect the transfer of the station. Perhaps simply stated – this action is a formality.
Well…eventually the station will be sold. As many of you know, Salem made the following offer to Daniel Frishberg and which Daniel Frishberg accepted.
(1) Payment of $800,000 to Frishberg (this payment would be made at closing and that has not taken place – hence Daniel Frishberg has received no funds from this offer to date – to the best of my knowledge)
(2) Forgiveness of $1,260,000 of debt to Salem from their initial sale to Frishberg (in other words he had not yet paid them for his purchase in the first place). Again, it appears that something blocks Salem from “foreclosing” and just taking the station back. What? I don’t know, but I keep asking…
(3) An agreement of $1,640,000 in air time for Frishberg to keep his program on the air. Through this legal mess Dan has continued to broadcast his show on this station, so it could easily be assumed that he is drawing down on this free air time according to the original contract.
The BIG QUESTION is who will own the station and for what price? On March 2, 2010 Rehan Siddiqi made an offer to exercise his option to purchase for $3.5 million cash. Several days later Salem executed the agreement with Dan Frishberg to purchase the station for much less in cash and other terms listed above. Then enter the Courts with Tom Taylor as Receiver whose role is to protect those who have “invested” or have a vested interest in BizRadio. Mr. Taylor’s responsibility is liquidate the assets and provide the best outcome for those who have been harmed.
So…Mr. Taylor could (with Court approval): (1) accept the Salem offer as is; (2) renegotiate the offer with Salem (perhaps by increasing the cash and removing the “free airtime”); (3) see if the Siddiqi offer is still valid which provides substantially more cash; or (4) open it to public bid and let the highest bidder win. Either way…I suspect that the folks whom Mr. Taylor is charged with protecting will find that the sale will provide a greater benefit than the original agreement between Salem and Frishberg.
The only fly in the ointment – so to speak – is that the broadcast towers owned by the station (BizRadio) are physically located on real estate owned by Salem. That – single fact – complicats the value to an outside buyer as Salem could demand an unreasonable rent requirement for the use of the land… Bummer!
Likewise, the Siddiqi lawsuit against Frishberg and (more importantly) Salem claims tortuous interference which does not go away with the sale of the station by the SEC Receiver. Perhaps, (and I’m not an attorney) but should Siddiqi reactivate his offer and that offer be accepted, it would minimize the damages claimed?
A QUESTION OF COMPATABILITY:
What I really don’t get is why Salem would want this (relatively insignificant) station? Salem is known as a Christian Broadcaster and an organization of high moral standards…so why would they want to buy this back and get in bed with Daniel Frishberg. By his actions, it would appear that Frishberg is almost the anthesis of what Salem stands for. So free airtime as part of the purchase offer? Go figure?
THE WEB OF FUNDS:
Now not being a radio guy…you follow me on this (an I’m REALLY open to comments and help here)…
- BizRadio still owns the station (seemingly currently under purchase contract with Salem)
- BizRadio or Business 1110 is still on the air and currently selling airtime to other programs (other than Dan Frishberg “The Money Man”)
- QUESTION: Who is getting the money for the airtime: (1) The SEC Receiver; (2) Salem Communications; or (3) Daniel Frishberg?
- QUESTION: Is Salem leasing the station from Daniel Frishberg currently? If so for how much and who is receiving those funds? I would appear until the transfer to the SEC Receiver that Daniel Frishberg (BizRadio Houston Licensee, LLC) was – is still the owner. In fact, the transfer documents would validate my assumption.
- Industry sources tell me that the station should be worth (leased air time) approximately $50,000 per month…so since approximately 5 months have passed who got the $250,000?
- Again, I am told that the weekend airtime was brokered for some agreed upon price – who is receiving the broker revenue?
WHERE FROM HERE?
Steve Miller’s song says – “Time keeps on ticking…ticking…ticking into the future” well in this case it is a bit of a ticking time bomb that I sense is soon set to explode! Outcome prediction: (1) the station will be sold (and likely not for the original Salem agreement unless that’s the only offer on the table); (2) Daniel Frishberg will lose his license as part of an SEC finding and civil action; and (3) eventually both Al Kaleta and Daniel Frishberg will find themselves the subject of criminal indictment (although I don’t think that will be in 2010). But…time will tell…!
YOUR COMMENTS WELCOME!