From Luz to Lorena
El Paso’s KBNA-FM and two silent AMs go to Audiorama family member to resolve $2.4 million debt
Luz María Rygaard, sole owner of the licensee of KBNA-FM, KAMA, and KQBU in El Paso, Texas, has filed to sell her interest in 97.5 Licensee TX LLC to Lorena Margarita Pérez Toscano, one of three sisters who with their father own Grupo Audiorama Comunicaciones with its stations in Ciudad Juárez. The Federal Communications Commission will have to approve the 100 percent foreign ownership of the stations.
Rygaard and Pérez, in an application seeking a waiver of the 25 percent soft cap, contend the transaction is in the public interest because
97.5 Licensee is, and will remain, a minority-owned broadcaster of Spanish-language radio programming to the Latino community in the El Paso, Texas region. 97.5 Licensee’s stations broadcast Spanish-language programming that is produced both internationally in Mexico and locally at its studios in Texas. Transferee’s capital contributions and extensive experience in Spanish-language broadcasting will allow 97.5 Licensee to continue operation of the Stations and enhance its provision of locally produced, Spanish-language programming to its local, Latino audience.
It turns out that the licensee is also heavily indebted to the Pérez family to the tune of $2.45 million, a fact recited on the first page of the stock purchase agreement.
Not much will likely change at the stations. Audiorama is already listed as running social media for KBNA-FM. And the other two stations are currently not broadcasting.
Conflict of Attributable Interest?
These are Pérez Toscano’s first US stations, but EF readers know she owns multiple stations on the Mexico side, invariably in roughly the same share as her sisters Jacqueline and Rebeca Elizabeth:
- 20 percent of Grupo Impulsor de Medios, S.A. de C.V. (XEJCC-AM); the sisters own 60 percent and Trigio Javier Pérez de Anda 40 percent
- One third of Radiofónica del Norte, S.A. (XEJ-AM)
- One third of Radiorama de Juárez, S.A. (XEPZ-AM)
- One third of Fronteradio, S.A. (XHEM-FM)
- 16.6 percent of XHEPR de Ciudad Juárez, S.A.; the sisters own 50 percent and Trigio Javier Pérez de Anda the rest
- One third of Frecuencia Modulada de Ciudad Juárez, S.A. (XHTO-FM)
The multiple ownership report, relying on data from BIA Advisory Services, only contains “Radiorama” and “Radio Centro” labels.
While Mexico has no limits on attributable station ownership, the United States does, and it’s unclear how the FCC could act because the combination of nine stations would be greater than allowed under US law alone. In markets with 45 or more stations, one company can own up to eight stations with as many as five on one band (AM or FM). The question becomes: do these 16 to 33-percent stakes in six Juárez radio stations mark attributable interests under US law?
The combination of KBNA-FM, KQBU, and KAMA with XHEPR-FM, XHEM-FM, XHTO-FM, XEJCC-AM, XEJ-AM, and XEPZ-AM would, if the FCC were to determine that the six Juárez stations count against US ownership limits, require one station to be divested on either side of the border. This happened in reverse when the FCC forced Clear Channel to cease supplying programming to stations in Mexico because the Mexican stations, programmed under joint sales agreements, pushed the company over the US-side limit.
It’s also worth noting that the AMs are silent. KAMA left the air on April 4, with 97.5 Licensee TX telling the FCC,
[KAMA] has been off the air since April 4, 2023, as a result of extensive damage sustained by its studio building due to unstable and sinking soil beneath its foundations. The existing studio building is being demolished and the land beneath compacted and leveled in order to build a new stable station building. Licensee respectfully requests six months of authority to remain silent in order to make the necessary repairs and complete the new studio building.
KQBU has been out of service for nearly nine months. The FCC granted a second six-month special temporary authority to not broadcast on April 19. The KQBU application cited a change in tower site and acknowledged that they have until September 20 to put the station back in service:
97.5 Licensee TX, LLC, Licensee of Station KQBU (AM) (Facility ID № 67065) took the station KQBU silent as of September 19, 2022. Operation of the station is not currently possible as Licensee is currently in the process of moving the tower to a new location. Licensee is aware of its responsibility to return to the air by September 20, 2023 and will notify the Commission when operations resume.
If the FCC learns of the ownership situation on the Mexico side, it could be a reasonable idea to end up conditioning the transaction on the divestiture or shutdown of one of the AM stations.
Enter Team Telecom
Before the FCC will entertain this application, however, it must consider the foreign ownership proposal.
When the proposed foreign ownership in a broadcast station exceeds 25 percent, a separate process is triggered by which the application is referred outside of the FCC to a working group commonly known as Team Telecom but formally as the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector. Team Telecom reviews proposed deals for potential national security and law enforcement concerns in the United States.
So far, most proposed foreign ownership deals in broadcasting have been recommended for approval by Team Telecom, though a disproportionate share have involved things like Bermuda- and Cayman Islands-domiciled hedge funds. Multimedios is familiar with this process, as its Leading Media Group received Team Telecom approval to buy other Texas stations. (There have been a few deals disapproved of: last year, it recommended against a submarine telecommunications cable to Cuba because of the involvement of state-owned ETECSA, plus the fact that Cuba is designated as a state sponsor of terrorism in the United States and has good diplomatic relations with China and Russia.)
