Battle for UPN-48 heats upWritten by Michael Brooks | | firstname.lastname@example.org
Toledo’s Cornerstone Church inched closer in early September to gaining control of local TV station WNGT (UPN-48), when a court-appointed receiver approved a plan to give control of the station to the church.
Marty Miller, the station’s founder and owner, is not giving up hope in his bid to keep the station he and his wife Linda built.
”This is just another battle in a bigger war,” said the 28-year TV veteran, who worked for stations in Detroit and o =n the East Coast before buying his way into the Toledo market in 1996. ”We are not out of options yet.”
Miller said his family began attending Cornerstone Church in 1990, when he was working for WDIV in Detroit. Miller, originally from Toledo, moved back that year to be closer to his roots.
”I also wanted to pursue my dream of owning a local TV station,” he said. ”Cable was just beginning to boom, and I thought that there were unique opportunities here.”
As Miller began to make friends in his new church, he said many of them wanted to participate in the idea of a minority-owned TV station in Toledo.
”People kept telling me: ’there is no voice on local TV for African Americans,’ ” he said. ”Church members began to offer to invest in the project.”
Rev. Robert Pitts of Cornerstone said he disagrees.
”Marty Miller was never a member of Cornerstone,” he said. ”I saw him possibly two times at services over the years.”
In 1996, with his own money, plus money from small investors, Miller purchased W48-AP, a low-power UHF station. Changing the call sign to WNGT, Miller’s investment began to pay off when he landed an affiliation with the then-new UPN network.
What should have been a time of celebration, Miller said, became an eight-year period of lawsuits, duplicity and hard life lessons for Miller and his wife.
”I have been perhaps a bit na”ve and too trusting,” he said. ”When there is big money involved, sometimes people you think are your friends turn around and stab you in the back.”
From its beginnings as a small storefront church, pastors Michael Pitts and Robert Pitts have built their ministry into a multi-million dollar network of churches with the Cornerstone name in Lima, Detroit and Angola, Ind.
The Cornerstone Web site offers a new twist to broadcasted sermons: live online services throughout the week. Visitors to the site can link to live Webcasts of services featuring Cornerstone ministers.
Pitts said the church has found the Internet to be a much more efficient way to broadcast its services.
”For a minimal cost we can literally reach the entire planet,” he said. ”It is much less expensive than television.”
In addition to its Web-based ministry, Cornerstone owns two radio stations and has produced its own TV shows. Pitts said the church’s awareness of changing technology is only part of the reason for its success.
”We offer Christians a church that has meaning for them,” he said, noting the explosive growth in non-denominational and evangelical churches. ”Traditional churches are not connecting with people in a way that has meaning in their everyday lives, and Cornerstone does.”
The church, however, has never owned a TV station; that could change, after the court decides on the recommendations of the receiver.
Pitts said the church has not made any decisions on what it might do with the station.
”We are just as likely to sell the license and recoup our investment as we are to take on the day-to-day operation of a television station,” he said. ”At this point, we have made no plans on the future of the station, since we are waiting for the court to make its decision.”
A Struggling Station
Miller said his informal network of small investors, mostly from Cornerstone Church, was a convenient way for him to raise capital.
”People would tell me: ’It’s about time there was a minority-owned TV station in Toledo,’ he said. ”There was tremendous enthusiasm for my project.”
Pitts took issue with this assessment.
”Most of Marty’s investors were from the Detroit area,” he said. ”Out of dozens of investors there were only two who were Cornerstone members.”
There also existed the potential for profit, as his low-power UHF station became a much hotter property with its new UPN affiliation.
Miller said the value of the station also caught the eyes of Robert Pitts and Michael Pitts, who orchestrated a drive to buy shares of the station’s stock.
”Things began to get uncomfortable, and I left the church when it became apparent that Cornerstone wanted a majority control of the station,” said Miller, adding Cornerstone was only able to purchase 37 percent of the outstanding shares of stock.
Pitts disagreed, and said the church’s involvement with the station began as an act of goodwill.
”Marty came to me just before Christmas in 1997 asking for $20,000 to meet payroll,” he said. ”From that point on, we were in a situation where we had to keep putting in new money to protect the earlier loans.”
Pitts also took issue with Miller’s characterization of the church’s intentions in stock
”We bought stock shares from the small investors to help out Marty. He said the small investors were difficult to work with, and that UPN-48 could not succeed with this large number of hostile investors,” he said. ”Also, for Marty to claim that we were after control is absurd, since he owns the other 63 percent.”
Pitts said it became clear to him the church needed to improve the station’s financial outlook if it were to see any of the monies it forwarded to UPN-48.
”This is a case of the expression ’good money chasing after bad,’ ” he said. ”We bought out small investors, paid vendors and cleared up IRS liens to protect our interests.”
Miller said Cornerstone’s position was strong enough to force the station into receivership in 2003.
”This made it even more difficult to operate the business,” Miller said. ”Imagine trying to sell advertising when everyone knows your business is struggling.”
Pitts said he sees the receivership much differently.
”Marty failed to tell us about two very large judgments totaling almost a half-million dollars,” he said. ”Our church did not have that kind of money, and we were forced to take a position as a secured creditor when the other large creditors forced the station into receivership.”
Pitts said if the church had a hidden agenda to control the station, there would have been many times where this would have made better financial sense.
”We could have just waited for the IRS to foreclose, and then we could have jumped in at the IRS auction,” he said. ”What Marty also conveniently ignores is Cornerstone Church has continued to fund the station to the tune of thousands of dollars a month during the receivership.”
2003 also proved to be a year in which Miller learned some hard lessons about trust. He said he learned his attorney, Jeffery Nelson, had been simultaneously working for Cornerstone Church.
”I was completely blown away by this discovery,” he said, adding that he is considering filing a complaint to the Ohio Bar. ”He sent me a letter trying to say that he was never working for me, but I have all kinds of documentation to show otherwise.”
Miller provided Toledo Free Press with copies of cancelled checks, letters and e-mails between UPN-48 and Nelson that date back to 1998.
Nelson, citing ongoing litigation, declined to comment at length, but said he immediately removed himself from the case when he learned of a possible conflict of interest.
Miller said he believes the period of receivership has hurt the station.
”How can you attract employees and advertisers when everyone thinks that you are in danger of folding?” he asked. ”I have been forced to be the station’s ’everything’ – sales manager, engineer and handyman – since the receivership started.”
The court-appointed receiver, local attorney Ralph DeNune, is responsible for the financial viability of the station. He said Cornerstone’s financial support is the reason that the station is still operational.
”The church has consistently provided the funding to cover shortfalls in revenue,” he said.
Pitts said the relationship between Cornerstone and Miller changed in August.
”We reached a point where we could no longer continue to fund the station like we did for 16 months,” he said. ”Without a source of revenue, the receiver recommended that the court find a buyer.”
DeNune said Miller has talked of bringing outside financing groups in, but has failed to secure legitimate financing.
”The latest was in July, but the court-imposed deadlines have since passed,” he said. ”The court was forced to entertain offers to buy the station.”
The winning – and only – bid came from Cornerstone Church. Pitts said, however, owning the station is not the church’s goal.
”If Marty Miller came in today with a legitimate offer, we would gladly let him operate the station,” he said, adding that Cornerstone would be a ”reluctant” owner.
”Despite his promises, interested parties never seem to actually materialize with financing.”
The problem, according to Pitts, is the heavy debt load the station is under.
”Potential investors are interested until they see the magnitude of the station’s debts,” he said. ”That’s the point where investors seem to disappear.”
Pitts said despite the rancor, he still hopes Miller will succeed.
”I have always believed in Marty’s dream in a local, minority-owned station,” he said. ”Even today, there is a part of me that is still pulling for Marty to be successful.”