A non-profit Hispanic religious organization is expanding its collection of radio stations with KCKN-AM in Roswell NM. The station is coming from James Hilliard’s JCE License LLC, and a significant portion of the compensation package will go in the books as a charitable donation.
The group receiving the station is Radio Vision Cristiana Management, headed by Hector A. Chiesa. It is no stranger to the radio business, with stations in New York NY, Mount Kisco NY, Fort Myers-Naples FL, and Columbia PA.
Seller JCE retains one Texas station and four in Florida.
The price of the station is $500K. RCV will plunk $10K into escrow and pay $190K at closing. It will also strike a promissory note to the tune of $150K.
The final $150K will be the charitable contribution. RVC will write a letter to the IRS letting them in on JCE’s benevolent gesture for tax purposes.
Editor’s note: Corrected numerical typo 9/11/13, cash at closing changed from $90K to $190K
Hello Mr Seyler,
Thank you for writing the above article. I was doing a little research into how radio ministries work, and I found this information. It’s a little difficult for me to follow, though…sooo, they RVC did not pay 500k, right? only 100k? And so why would the seller want to lose money. If you could shed some light on this, I thank you.
Niko D.
Thanks, Niko — as it turns out, you discovered a long-dormant typo — the actual cash at closing was $200K. The seller also was scheduled to receive payments under terms of a promissory note for $150K. The remaining $150K is a charitable donation, eligible for a tax write-off, which is a form of value. As for the seller losing money, who’s to say it did? The value of a radio station is very much subject to fluctuation based on cash flow, competition and any number of other factors.
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