Judge Kathy Surratt-States approved the sale of KDHX 88.1’s broadcast license and other assets for $8.75 million to Gateway Creative Media, an evangelical Christian nonprofit that operates JOY FM 99.1 and BOOST Radio in St. Louis.
Lawyers representing a group of community members and organizations opposing the sale said after the decision that an appeal is not out of the question but would be long and costly.
Surratt-States made her Monday evening ruling in U.S. Bankruptcy Court after a hearing that stretched for more than eight hours.
Gateway Creative Broadcasting will move into the spot on the FM dial that KDHX occupied for 40 years, but will make an adjacent HD radio signal available for KDHX’s use for as long as it holds the broadcast license. Listeners can access digital radio stations on computers, smartphones, smart speakers and the radios in many newer automobile models.
The Christian broadcaster will also lend KDHX an additional $250,000 for immediate expenses.
“The sale is in [KDHX’s] best interest, the sale is in good faith, it maximizes value,” Surratt-States said, “and it allows [KDHX] to continue to broadcast and continue to serve the community of St. Louis and the region.”
KDHX 88.1 FM offered a distinctive mix of music — including the blues, Italian folk music and reggae — unavailable elsewhere on the radio dial in the St. Louis market. Other Christian stations heard in the region include KGNN 90.3 FM, KSIV-FM 91.5 FM, KGNV 89.9 FM, KTBJ 89.3 FM, KHZR 97.7 FM and KNLN 90.9 FM.
KDHX leaders filed for Chapter 11 bankruptcy protection in March, after halting live broadcasts in favor of recorded content at the end of January. KDHX has a total debt of about $2 million. Gateway Media Foundation, a small network of Christian stations that owns JOY 99.1 FM locally, entered the high bid of $8.75 million for the station in a public auction last week. K-LOVE, another Christian broadcaster, bid $8.5 million.
Station leaders said its financial woes date back years and can only be remedied with a sale of its assets. KDHX leaders weathered accusations in 2019 of racism and sexual harassment, which the board said it investigated and found to be unsubstantiated.
Before recent years, KDHX also had served a vital role in the St. Louis arts ecosystem, boosting local musicians and venues and offering services including a Folk School and regular performances from its Grand Center studios.
The group of KDHX officials who secured the sale in the face of widespread criticism of their leadership will remain in control of KDHX 2.0. — after hundreds of St. Louis musicians and business owners signed open letters calling for leadership changes, and dozens of DJs submitted a 2023 statement of no-confidence in the months before mass firings and resignations changed the sound of the station.
Statements attributed to the board of Double Helix Corp., the nonprofit entity that operates KDHX, dismissed critics as a small group that had launched a “disparagement campaign and senseless lawsuits.”
Sale opponents had detailed in court what they called KDHX leaders’ improper actions to pave the way for the sale, including dismissing all of the volunteers who had voting rights over any proposed sale — other than members of the board of directors and the spouse of Executive Director Kelly Wells.
After the board voted privately to sell the station on March 3, the same eight people, plus Ryan Spearman — acting not as the board but as the station’s remaining associate members — voted by email the next day.
The vote came three days after the expiration of a St. Louis Circuit Court judge’s order that prevented KDHX from altering the membership status of 15 former members who contested their blanket dismissal — and hours before the judge renewed the order. The 15 former members had enough voting power to block the sale if allowed to participate.
But Surratt-States said KDHX leaders followed the law throughout the process, acted in good faith and only used powers that were granted to them by station bylaws. She also said KDHX’s impending reinvention as a digital-only station is a fulfillment of its mission.
KDHX leaders said the station would bank about $6 million after paying off its creditors and emergency loans secured during the bankruptcy process. The sum would be enough to sustain the digital-only KDHX for six years, Wells said.
“Doors are going to open for KDHX like never before. This is more money than the humble organization has ever seen,” said attorney Tyler Schaeffer, who co-represented KDHX.
Lawyers opposing the sale did not introduce any direct evidence pertaining to efforts by the Coalition for KDHX to raise funds and develop a reorganization plan, saving references to that effort for a closing argument.
“The entire civic mind of the community of this city is trying to preserve KDHX in its recent form. Longtime donors have lost faith in station management, but not in the station,” said Tom DeWoskin, an attorney for opponents of the sale.
