BY EMILY MIBACH
Daily Post Staff Writer
The San Mateo County Community College District will receive $10 million to settle a series of lawsuits over the botched sale of its KCSM-TV that cost the district $140 million.
The district will get $5.5 million from the accounting firm PricewatershouseCoopers, which was hired to make sure the sale of Channel 60 in an FCC auction went through smoothly. The sale didn’t go through at all, which resulted in PWC being on the hook.
The district will also get $4.5 million from the investment firm LocusPoint Networks, which kept the station alive financially until the auction and hired PWC.
LocusPoint was expecting a 36.5% cut of the sale proceeds in return for paying to keep the station on the air.
The Post obtained the settlement information from the district through a public information request. The settlement agreement includes non-disparagement and confidentiality clauses for all three parties.
The story began on Nov. 15, 2016, when the district was trying to sell the station’s bandwidth in an FCC auction. College Vice President Jan Roecks was supposed to enter a bid on the FCC website that would have sold the station for $140 million. For reasons that remain unknown to the public, she didn’t click on the right button, even though she had an expert from PWC at her side to ensure a slip-up didn’t happen.
College officials tried to keep the mistake secret, not even informing their own board for months.
But in the spring of 2017, an investment firm that had provided financing to keep the station running until the FCC auction discovered the station hadn’t been sold at the auction, and they wouldn’t be receiving their 36.5% cut of the $140 million. The investment firm, LocusPoint Networks, began preparing a lawsuit against the district.
But the district apparently got wind of the lawsuit on April 7, 2017, and filed its own suit against LocusPoint and PricewatershouseCoopers first.
The twist, however, was that the text of the lawsuit was almost blacked out, preventing the public to see what the dispute was about. Apparently, a non-redacted copy would be given to the judge and defendants.
Three days later, LocusPoint sued the district with a complaint that wasn’t blacked out, and it revealed the details of how the district botched the FCC sale.
The case never went to trial. Instead, the three parties reached a deal behind closed doors.
LocusPoint must pay the district $4.5 million, and $386,419 to PricewaterhouseCoopers.
PricewaterhouseCoopers must pay the district $5.5 million.
The district will not have to pay anything to either PricewaterhouseCoopers or LocusPoint.
The district, unsuccessful in the FCC auction, eventually sold Channel 60 KCSM-TV to Santa Rosa public broadcaster KRCB for $12 million.
With the $10 million settlement, the district will collect a total of $22 million.
Put another way, $22 million is about 16% of the $140 million if the station had been sold at the FCC auction.