WMEX is Gone

[Dan.Strassberg]

In the absence of other information, we have to assume that the
interest due on the notes that cover the acquisitions are at market
rates at the time of the sales. (However, this may not be the case;
read on!) Although market rates have been low (but are now likely to
rise), they have never reached zero in the US. The payments on the
installment purchases ought to appear on K-Love's tax returns. I have
to assume that the business model involves paying as little as
possible in taxes and the debt-heavy balance sheet probably assures
this. However, the debt-heavy balance sheet would also result in a
highly leveraged entity and, in these days of ultra-cautious lenders,
a high cost of money on the more recent purchases. OTOH, as a
religious organization, K-Love probably has sources of money that will
lend to them at below-market rates because a) the lenders feel that
they are doing God's work and b) the lenders may be able to write off
as charitable contributions forgiven payments of interest nominally
due to them from K-Love.

I doubt that there is anything illegal about all of this but it does
provide an example of  how the tax laws may have been written to give
religious organizations a competitive advantage over for-profit
companies. Do the K-Love stations support political candidates? One
would think that doing so would compromise K-Love's tax-exempt status.
However, the K-Love stations must be required by the FCC to sell time
to candidates, just as commercial stations must. (Although don't
commercial stations have the option of refusing ALL political
advertising--as long as they don't play favorites?)

-----
Dan Strassberg (dan.strassberg@att.net)
eFax 1-707-215-6367

----- Original Message ----- 
From: "Scott Fybush" <scott@fybush.com>
To: "Garrett Wollman" <wollman@bimajority.org>
Cc: <boston-radio-interest@bostonradio.org>
Sent: Wednesday, June 04, 2008 1:33 AM
Subject: Re: WMEX is Gone


> Garrett Wollman wrote:
>> <<On Wed, 04 Jun 2008 00:54:02 -0400, Scott Fybush
>> <scott@fybush.com> said:
>>
>>> (I'm not privy to EMF's internal financials, so this is at best
>>> informed speculation, mind you.)
>>
>> However, as a 501(c)(3) charity, they are required to file an
>> annual
>> return on IRS form 990, and to send you[1] a copy of this form if
>> you ask
>> them nicely.
>>
>> -GAWollman
>>
>> [1] Or anyone else.
>>
>
> Well, yeah, and there are websites out there that will even spare me
> (or anyone else) the "ask them nicely" portion of the work. I'm
> neither blessed with the accounting skills needed, nor the time
> needed, to match up their income from the form 990 with the debts
> they're accumulating based on all the purchases they keep
> making...but if anyone else wants to try, have at it!
>
> s