Bankrupt Black News Channel Gets $1.6 Million Infusion From Jaguars Owner Khan

(Bloomberg) -- Black News Channel has won a federal judge’s permission to borrow desperately needed funds from its owner so the troubled media outlet can keep operating while it searches for a buyer.

U.S. Bankruptcy Judge Karen Specie said in a hearing Tuesday she’d let the television network borrow about $1.6 million from an entity affiliated with Shahid Khan, the billionaire who has been financing BNC since 2018. The cash will let BNC keep paying vendors and its few remaining employees while it tries to quickly line up a buyer for the operations.  

BNC, a television outlet catering to people of color, was on the precipice of shutting down entirely and selling itself in pieces late last month after running desperately low on funds. The outfit shrank its operations and fired almost all of its employees, many of whom still haven’t been paid for work done just before the bankruptcy, court papers show.   

Instead of liquidating, the company filed for Chapter 11 bankruptcy and has since worked to keep operating on a much smaller scale. Just 17 employees remained when it filed for bankruptcy, a fraction of the more than 300 people working for the Tallahassee-based broadcaster six months ago, but BNC in the last week moved to rehire seven employees that’ll help the channel stay on the air, according to court papers. 

BNC had about $500,000 of cash on hand at the end of last month compared with debts of more than $25 million, court papers show. Despite valuable distribution deals with cable and Internet television providers, the company has struggled to turn a profit in light of higher-than-expected costs and disappointing revenues since it started broadcasting in 2020, Vice President of Finance Maureen Brown said in a sworn declaration.

Still, potential bidders have contacted the company in recent weeks about buying the operations and keeping it afloat, according to court papers. Lawyers for the company and its creditors agree that a sale of the whole business would best maximize value for everyone involved, attorney Gregory Werkheiser said on behalf of BNC in the bankruptcy hearing Tuesday. But its access to cash is limited and a deal would need to take place quickly. 

“We think this case is going to rise and fall within the next sixty days,” Christopher Schreiber, a lawyer for Khan’s investment entity, said in the hearing. “Hopefully within that time we’re going to have a sale.”

The case is Black News Channel LLC, 22-40087-KKS, U.S. Bankruptcy Court for the Northern District of Florida (Tallahassee).

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