Raycom kicked in $22 million as part of its deal to run KGMB in Honolulu, reports the Honolulu Star-Bulletin. Pesky reporter Erika Engle went over the SEC filing and said it appears that $22 million went from Raycom to KGMB owner MCG Capital.
Does that make it a sale, or, as Raycom boss Paul McTear has said, an asset exchange?
A sale would require regulatory approval and would certainly give ammunition to the local watchdog groups who’ve been looking to put the kibosh on the deal, saying it decreases the number of voices in the Honolulu media.
Engle writes:MCG’s SEC filing said it completed an asset-exchange transaction with Raycom on Oct. 26.As part of a deal dated Oct. 16, MCG exchanged with Raycom certain assets used in the operation of MCG’s KGMB-TV “in return for a $22.0 million note, with current pay interest,” as well as programming assets used in the operation of K5.Also on Oct. 26, it entered into a shared services agreement with Raycom in which Raycom is providing services to K5, the Wednesday filing said.And then:The $22 million was not mentioned by Raycom President and Chief Executive Officer Paul McTear during an Aug. 18 news conference announcing the TV stations’ deal.Rather, he said, “there’s no cash being exchanged. Assets are being exchanged.”At a Star-Bulletin editorial board meeting later that day, he said, “I’m not paying anybody. There is no money changing hands at closing.”