Erika Engle

Friday, August 12, 2005

Big Island radio deal
wins approval after
2-year wait

Two years after making a deal to sell eight radio stations, Maui-based Pacific Radio Group Inc. and Honolulu-based Big Island Radio received Federal Communications Commission approval yesterday to complete their transaction.

It's a good thing nobody was holding their breath.

Pacific Radio agreed to buy eight stations from Big Island Radio in August 2003 for $2.9 million. Because the number of stations involved would put Pacific Radio in violation of ownership limits, three of the stations were sold to separate parties.

Delays included a temporary FCC freeze on processing radio station purchases. The main issue, however, was a complaint filed with the commission by a competitor who also happens to be a 17 percent owner of the company selling the stations.

Complainant Buddy Gordon alleged in October 2003 that the deal violated federal ownership limits and he accused Pacific Radio of taking unauthorized control of the stations. Gordon once worked for the seller, Big Island Radio, but was fired three years ago and he later sued the company. Gordon remains a minority owner of Big Island Radio.

The FCC said in an eight-page notice that it disagreed with Gordon's arguments. However, it admonished Pacific Radio for failing to file timely paperwork for a programming agreement with Big Island Radio.

Gordon said he is studying the ruling. He owns Big Island-based Hilo Broadcasting LLC, operator of KHBC-AM 1060.

Yesterday's ruling allows Pacific Radio to take possession of Kona's KKON-AM 790 and KLUA-FM 93.9, KPVS-FM 95.9 and KAPA-FM 100.3 in Hilo and KAGB-FM 99.1 in Waimea.

Glenn Yee, chief executive of Big Island Radio and Gordon's former employer, said he is relieved. "It's been a long haul. We've always kind of said that Buddy's claims are baseless and this just proves that." Yee estimates the money part of the deal will take about 30 days to close.

The soon-to-be-transferred Big Island Radio stations employ up to six people, including Yee. "We would welcome them all to apply ... but we won't be keeping Glenn," laughed Pacific Radio's president and CEO, Chuck Bergson.

Yee is now vice president of finance for Hawaiian Dredging Construction Co.

Last October, Gordon sued Big Island Radio, a company founded by his late father in the 1940s, alleging wrongful termination. The case is pending.

See the Columnists section for some past articles.

Erika Engle is a reporter with the Star-Bulletin. Call 529-4302, fax 529-4750 or write to Erika Engle, Honolulu Star-Bulletin, 500 Ala Moana Blvd., No. 7-210, Honolulu, HI 96813. She can also be reached at: eengle@starbulletin.com

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