El Paso Steal
By: Raymie Humbert
Tags: Mexico, Radio Centro, Texas, Radio, El Paso

El Paso Steal

Grupo Radio Centro pulls out of the United States on the cheap — and the buyer might be tied to NRM Raymie Humbert Dec 22, 2021·4 min read

$10,000? For 100 percent ownership in three El Paso radio stations? It’s more likely than you might think.

On Monday, 97.5 Licensee TX, LLC, a company 25 percent owned by a direct subsidiary of Grupo Radio Centro and 75 percent by U.S. citizen Rafael Márquez Aguirre, filed with the US Federal Communications Commission to sell GRC’s three radio stations in El Paso, Texas, to Luz María Rygaard for $10,000. For that sum, Rygaard will acquire KAMA (750 AM), KQBU (920 AM), and KBNA-FM 97.5.

One of the Strangest Deals Ever

From the moment one reads the asset purchase agreement, it is very clear that this is not the typical transaction that goes before the FCC.

The entire stock purchase agreement by which Rygaard becomes the sole owner of 97.5 Holdings TX, LLC, is bilingual. The legal contact address for notices to Radio Centro is Artículo 123 No. 90 — and a second copy goes to García Herrera y Asociados at Montes Urales 425. Notices to the buyer go to Rygaard, who lists an address in Austin, and to Emilio Raúl Sandoval Navarrete, the chief lawyer for NRM Comunicaciones.

A search for information on Rygaard did not turn up any past connections to the broadcasting business. She is originally from San Juan de los Lagos, Jalisco, and holds an accounting degree from the ITESO in Guadalajara. She was previously connected to 512 In Style, a business in Austin that sold colored contact lenses and closed its physical store at the start of 2020. No other mention is made of NRM in this document.

If something goes wrong, the venue clause specifies Mexico City’s court system.

A Big Loss

The other noteworthy aspect of this deal is the price. $10,000 is one half of one percent of what GRC paid Univision for these stations ($2 million) five years ago.

If there is not a separate acquisition of physical assets such as equipment, this makes no sense and raises serious concerns as to the integrity of the proposed application.

There has not been a sale of another full-service El Paso license since the GRC acquisition in 2016. However, in March 2021, two translators were sold for $95,000. These are not even full FMs, and the buyer and seller were both Christian organizations.

Radio Centro selling its El Paso holdings should have been expected in parallel with the company’s efforts of the last year-plus to divest itself of noncore Mexican stations (so far, six of the ten stations identified in that push have either been sold, had a sale announced, or hinted at a sale). However, the sale price is eyebrow-raising unless it is not the only transaction taking place and the stock price reflects the value of the licenses.

Southern Radio’s Finances Go South

This may be the case because of the structure of GRC’s El Paso and Juárez operations.

At 2100 Trawood Drive on the city’s east side is the Southern Radio building. Southern Radio Inc., a company wholly owned by GRC, provides many of the operating services for KAMA, KQBU, and KBNA-FM, plus XHTO-FM and even New Radio System-owned KXPL. (New Radio System is minority-owned by Radiorama.)

Southern Radio’s accounting department evidently has not had a good time lately. Since New Year’s Day 2021, three federal tax lien notices have been issued by the IRS for a combined total of $271,271.71, primarily in quarterly employer income tax, per notices of federal tax lien on file with El Paso County. The quarterly form is used in the United States to pay employers’ contributions to Social Security and Medicare and report withheld federal income tax from paychecks. (For the last two quarters out of seven covered, Q2 and Q3 of 2020, Southern owes far less than it does for the others.) Southern Radio owes $39,113.25 of that total in corporate income tax for 2018. No certificate of release of the federal liens was on file, though one was for a recent state lien.