By Stephen Young
By Stephen Young
By Stephen Young
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
The Belo gang trouped back to Dallas with little to go on. It was after the Salt Lake City meeting, according to Dunbar's court pleadings, that Belo moved to cut Dunbar out of the deal and Decherd began chasing the acquisition on his own.
"We went back to Dallas and, using Mr. Dunbar's presented numbers, speculated about the television station and the market and making an offer," Decherd said.
Decherd and the Belo executives decided to make quite an offer--$150 million initially for just one station. Decherd's pitch for KIRO was substantially higher than the offer Dunbar had proposed. Decherd attached some conditions to the offer, namely that KIRO would remain a CBS affiliate, and that Belo would retain first rights to buy KSL for the next two years, should Bonneville decide to sell it.
Like a peacock with tail feathers spread, Decherd and his generous offer turned Bonneville's head. Those heretofore hard-to-get Mormons could not refuse him.
"The general premise was that we were going to make an offer which would attract the attention of Bonneville," Decherd said in his deposition.
The strategy worked. Belo and Bonneville negotiated furiously between August 5 and 26, ultimately arriving at a sales price for KIRO of $160 million, plus some miscellaneous real estate costs that were involved. The final acquisition price came to $162.5 million.
On August 26, Decherd and Brady signed a letter of intent sealing the deal. Decherd had paid more than he originally offered, and got less for the money. Belo, for instance, ended up waiving its one hard-and-fast requirement that KIRO remain affiliated with CBS, and by January 1995, the Seattle station was hitched to UPN. The clause allowing Belo later to purchase Salt Lake City's KSL was also dropped--a move that held no surprise for those who monitor Bonneville's interests. KSL, though extremely valuable as the consistently highest-rated local station in the market, is also the mouthpiece for the Mormon Church, carrying live broadcasts of its semi-annual conferences, inspirational programs, and other official public meetings.
"The Mormon Church has a huge sentimental interest in holding on to KSL. It would be a real shock to hear they even contemplated selling it," says Vern Anderson, a news editor for the Associated Press in Salt Lake City who regularly reports on the church's business dealings.
And indeed, Robert Johnson, current executive vice president for Bonneville, says KSL was never for sale. "KSL was not then, nor has it ever been for sale to Belo or anyone else. We get offers almost monthly. It is not for sale," Johnson says.
Tillotson, Dunbar's attorney, believes Decherd came out of the KIRO deal stinging. Though the final deal was all of Decherd's making, Decherd reacted by deciding to cut Dunbar's commission.
"Belo went out and cut their own deal and paid more than they expected. Now they want Mr. Dunbar to suffer for it by cutting the fee they owe him," Tillotson says.
"Dear Chuck: "We are on the 50-yard-line and driving, and we would not even be on the field except for your idea of approaching Bonneville. All of us at Belo are very grateful for the role you have played in this prospective transaction."
Decherd's sports metaphor-laced letter reached Dunbar by fax on August 31, 1994. It had an eerie, Jekyll-and-Hyde quality--seeming at first to be complimentary of Dunbar's skills, only to switch tone almost immediately.
"I thought through our agency agreement again over the weekend," the letter continued. "Our agreement contemplated a closing on a transaction involving both KIRO and KSL but did not specifically anticipate a single-station acquisition. Since the value of KSL would clearly exceed $40 million under any scenario, the proposed $160 million price for KIRO puts the brokerage fee at 1/2 percent, or $800,000. The agency agreement would continue to cover KSL at the same 1/2 percent level.
"Chuck, if this analysis is consistent with your understanding of our discussions, please sign below and return a copy of this letter to me by facsimile."
Beneath Decherd's signature was a blank for Dunbar to sign, underneath the words "understood and agreed."
A handwritten cover letter from Decherd put a finer point on Decherd's desire to cut the fee Belo would pay Dunbar.
"Chuck," Decherd wrote, "...I still feel this is the appropriate approach, especially given the dynamics that have evolved in this particular transaction. Our (Belo's) understanding was always predicated on the notion of a higher brokerage percent being paid for both stations being delivered at a very attractive (low) total price. Also, the 1/2 percent rate would apply to any purchase price adjustment vis-a-vis the real estate provision in the letter of intent.
Dunbar, reading the fax in his Florida office, shuddered. This, he says in his deposition, was his first clue that Decherd planned to substantially alter their arrangement. Until he received the fax, Dunbar testified, he had not spoken to Decherd or any other Belo representative about the negotiations with Bonneville.
"So you're telling me this was a bolt out of the blue?" Belo attorney Paul Watler asked Dunbar in a later deposition.
"Yes sir," Dunbar replied.
Watler: "Did it anger you?"
Watler: "Why did it anger you?"