Judge Upholds $1 Million Endowment Deal That Shuts Out Community Media

By Hap Freund, Newsmakers

In a blow to venerable community media center TVSB, a Superior Court judge has rejected its legal challenge to an agreement that divides a disputed $1 million endowment between Cox Communications and the County of Santa Barbara.

All but lost amid the storms of the Covid-19 pandemic and the surge in anti-racism actions and awareness, a May 26 ruling by Judge Colleen Sterne quietly ended the legal effort by non-profit TVSB to secure financial support from the contested fund.

The Cox-County-TVSB litigation, while not quite as impenetrable as Jarndyce v. Jarndyce, was knotty enough; those who wish to wade deep into the weeds on the matter may find Newsmakers’ previous full explainer useful for that purpose.

Our story to date

Loyal readers (and viewers) will recall that Cox Communications created the $1 million endowment when they spun off our local public and educational access channels to a new nonprofit in 2003; at the time, the interest was earmarked to benefit the long-term capital needs of the new station.

The money was entrusted to the County to manage.

However, the documents creating the endowment and the franchise agreement did not specify if, or under what conditions, the endowment would terminate, nor did it have a termination date.

Late last year, the county and Cox agreed to re-appropriate the $1 million for several other projects that benefitted both organizations – and left TVSB out in the cold.

County officials believed they no longer had a legal obligation to TVSB, because they had not renewed the franchise agreement with TVSB in 2017, even though the station continued to serve South Coast residents and non-profits.

To terminate the endowment the county had to notify and receive the probate court ‘s approval and notify any possible beneficiaries — which is how the matter ended up in court.

Community media’s claim

TVSB, believing it had a claim to this money because the endowment language said that the $1 million dollars was for its long-term capital needs, intervened and asked the court to determine how the endowment should be used.

The city of Santa Barbara filed a ‘joinder” to TVSB’s objection, essentially supporting TVSB’s position, but did not file a brief or provide witnesses.

The case was heard in early March.

In her May 26th written decision, Judge Sterne relied primarily on the witnesses Cox provided in deciding that a reasonable interpretation would be that the endowment terminated when the franchise agreement ended; she ruled that Cox and the county could use the $1 million as they proposed:

• ·$500,000 to the County related to government and emergency communications, which includes some ‘co-branding’ with Cox;

• $250,000 to the County to construct a fiber link to County facilities at La Cumbre Peak, with the work to be contracted out to Cox:

• $250,000 to Cox to build a fiber-optic network to 400 homes in underserved communities adjacent to CA-154.

The County pays nothing, but collects a comparable amount in franchise fees.

TVSB continues to offer its services to all residents and nonprofits in the South Coast region and has produced content for the American Heart Association, Hospice of Santa Barbara, Tri County Living Resource Center, the League of Women Voters, the UCSB Economic Forecast Project, and many others.

In addition to supporting over 250 local nonprofits, TVSB remains a strong vehicle for freedom of speech and provides video training for youth and media literacy education.

Prior to the pandemic, TVSB was home to “Newsmakers TV.”