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 Gateway holds the 88.1 FM 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 and almost obsessively eclectic mix of music — including the blues, Italian folk songs and reggae from around the world — programmed by volunteer DJs with decades of experience studying their favorite localities within the broader music world.
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.
Before recent years, KDHX also served a vital role in the St. Louis arts ecosystem — boosting local musicians and venues, offering services including a Folk School and regular live performances and maintaining the most thorough arts event calendar around.
KDHX leaders filed for Chapter 11 bankruptcy protection in March, after halting live broadcasts in favor of recorded content at the end of January.
The nonprofit has a total debt of about $2 million. Gateway Media Foundation entered the high bid of $8.75 million for the station's FCC license, broadcast tower and other assets in an active public auction on May 30. K-LOVE, another Christian broadcaster, bid $8.5 million.
Years of trouble
KDHX leaders said the station's financial woes date back years and can only be remedied with a sale of its assets. They weathered accusations in 2019 of racism and sexual harassment, which the board said it investigated and found to be unsubstantiated.
The station has maintained a degree of continuity at top levels throughout its most turbulent era, during which it moved to splashy new studios in Grand Center and endured years of public acrimony between the station's leaders and its DJs and other volunteers.
Gary Pierson, a St. Louis lawyer with specialties in intellectual property and entertainment law, has been on the station's board since 2014 and its president since 2023. Last year, he cited unsatisfactory fundraising for the station's move to Grand Center as a root of KDHX's financial woes.
Vice President Paul Dever joined the station's board in 2000 and served as president for a nine-year span. KDHX Executive Director Kelly Wells has served in her role since 2016, after joining the station as its full-time education director in 2012.
The group of KDHX officials who secured the sale of the station's FCC license and assets will remain in control of KDHX 2.0 — after arts leaders and longtime donors opposed the sale, hundreds of St. Louis musicians and business owners signed open letters calling for leadership changes in 2024, and dozens of DJs submitted a 2023 statement of no confidence in Wells, months before mass firings and resignations changed the sound of the station and its place in the community.
Past statements attributed to the board of Double Helix Corp., the nonprofit entity that operates KDHX, dismissed critics as a small group harboring grudges that had launched a “disparagement campaign and senseless lawsuits.”
March toward an unpopular sale
Sale opponents 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 Wells' spouse.
The board made an unpublicized change to station bylaws in January, removing the requirement that at least 17 associate members must participate in any vote to sell the license.
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 again to sell, via an email vote that was called a few minutes after 9:00 a.m., with responses due by 11 a.m.
KDHX represented the votes in court as tallies held by two categories of station stakeholders.
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 original order stated that the plaintiffs must be allowed to participate in a much-anticipated annual meeting, at which many volunteers expected to field a proposal from the board to sell the station's license and equipment. The 15 former members could have blocked the sale if allowed to vote.
But the Zoom meeting consisted only of board president Gary Pierson and vice president Paul Dever making statements about the station's history of financial problems, with no opportunity for station members to interact with them.
Pierson and Dever did not broach the topic of a vote to sell the station that was two weeks away — and which they wouldn't announce until March 25. Pierson testified Monday that the sale agreement was confidential until the later date.
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.
Wells testified that 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, she 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.
