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Media Gateway Emerges From Soul of the South

6 min read

Matthew Davidge was a client of SSN Media Gateway when he first visited the west Little Rock operation. Now he’s an owner.

“I was very impressed by the facility,” said Davidge, a Brit by birth who calls New York home. “Wow, you could create something amazing here: the possibilities of all the space and all the technical capabilities.”

The 30,800-SF broadcast center at 1 Shackleford Drive dropped SSN from its name four months ago and is doing business simply as Media Gateway.

While the reference to Soul of the South Network is gone, creditors of the financially drained network hope to recoup some of their investment through Davidge.

His goal for “a boring, profitable television operation” offers hope to creditors like the state of Arkansas who are now looking to him and his ability to deliver.

Media Gateway currently supports 12 television stations, three TV networks and a radio network around the country. A complement of 37 full- and part-time staffers operates the master control facility 24/7, distributing programs, commercials and newscasts.

“We could handle up to about 100 television stations or networks or a combination of the two,” said Jeff Lyle, chief technical officer and partner with Davidge. “We’re the backroom for a television station. They outsource to us to save money.”

The new corporate name reflects a change of ownership that occurred in February. Davidge bought out Dr. Sev Hrywnak of Chicago, an entrepreneurial podiatrist; Edwin Avent of Baltimore, who helped launch Soul of the South Network; and two Little Rock businessman long-associated with the property, Larry Morton and Greg Fess.

Of the SSN Media Gateway stakeholders, only Jeff Lyle remains.

“Jeff is the principal operator,” Davidge said. “He’s been doing TV over IP for 15 years. He’s a pioneer.”

Lyle’s work to deliver television content via internet protocol includes the Independent News Network, which had business ties to the Shackleford property.

Davidge bought the building and real estate in a separate transaction with Soul of the South investors in connection with the SSN Media Gateway deal.

Once known as Equity Plaza, the building was the headquarters of Equity Broadcasting Corp., which morphed into Equity Media Holdings Corp.

During its heyday, Equity acquired more than 100 television stations across the nation under the leadership of Larry Morton while losing $133 million between 2001 and 2008.

“If you wade into the water, whatever is in that water is on your leg,” Davidge said. “I know a lot from Feb. 6 onward, but the building has a long and complicated history. The building has a storied history under Larry. (See “Complicated History” below.)

“We are a very straightforward business. I think we’ll be less exciting than what’s happened in the past. We want to have more cars in the parking lot with more and more people working there and more broadcast activity.

“I like to live in a world where people work and get paid. I want to grow a boring, profitable television operation. For all of those reasons, I look past the past and look to the future.”

The Arkansas Economic Development Commission and others are looking to Davidge to salvage their investment in the Soul of the South Network.

He negotiated concessions on the original grant reimbursement agreement that was part of the Soul of the South funding, which encumbered the property. The $500,000 grant awarded by AEDC will be considered repaid in full if Davidge creates 70 full-time positions with an average salary of $15.50 per hour at the west Little Rock facility by March 1, 2018.

As defined in this agreement, full time means an employee who works an average of at least 30 hours per week.

The original agreement with SSN Funding Ltd., representing Soul of the South investors, called for the creation of 111 jobs with an average hourly salary of $27.11 by Dec. 17, 2017.

“As the business expands, employment in the building will expand,” Davidge said. “We hope to put on a second studio to cope with and handle that demand for more live newscasts and some live-to-tape newscasts. We will probably build a weather studio.”


When buying the building, he assumed a $1.2 million mortgage held by Arkansas Capital Corp., debt that Soul of the South could no longer service. While the building is a needful thing, its supporting array of 22 satellite dishes and internet pipeline are what provide the sex appeal.

“The facility has very, very good fast internet connectivity,” Davidge said. “It’s a great place to grow from. We can take everything down from the sky and broadcast out over IP-only. We could uplink, but we distribute via IP. We can originate more and more programming. We feel very good about that.”

The media businessman first became acquainted with Lyle and the Little Rock gateway operation after he bought a TV station in Delaware (WRDE in Rehoboth Beach) two years ago.

“We were a customer of the facility for a year,” Davidge said. “That customer is still a customer. I was just impressed with what you can do there and the price you could do it for.”

The big cost savings is the result of sending the programming out through fiber optic cable over the internet instead of beaming it out via satellite.

Lyle said a monthly satellite bill of $250,000 was common at the center when 30 different channels of standard definition signal were sent through the heavens and back to ground stations.

“We’re now all-high definition and spending 5 percent of that to make this work,” Lyle said. “That’s how competitive IP providers are and how the game has changed with satellite.

“There are about 2.1 gigs of data going out every second. There’s a lot of information moving throughout.”

The hub setup is an improved version of what Lyle was doing at Regional News Network Co. in Davenport, Iowa, which had its own trip to bankruptcy court in 2008.

“What we did in Davenport is basically the same except this is a completely updated property,” Lyle said. “In a sense, every piece of cable was replaced in a digital upgrade.”

The improvements included adding more fiber optics to upgrade capacity, remodeling the building to update accommodations and installing a new air-conditioning system to meet the cooling demands of the ramped-up digital equipment.

Lyle declined to provide a revenue figure for the business. “We’re still a small business, but we’re growing,” he said.

Complicated History

The 30,800-SF broadcast facility at 1 Shackleford Drive in west Little Rock has hosted a half-dozen owners along with bankruptcy and foreclosure during the past seven years.

Once the headquarters of Equity Media Holdings Corp., the property became bankruptcy flotsam among the corporation’s Chapter 11 assets of $103 million and liabilities of $112 million in December 2008.

That financial reorganization was converted to Chapter 7 liquidation in June 2010. The on-again, off-again purchase by a sketchy Los Angeles outfit called United Assurance Co. Ltd. finally closed in November 2010.

Five months later, the $1.7 million acquisition of the building was falling apart. Enter: One Bank & Trust.

The Little Rock lender recovered the facility at a $1.2 million foreclosure auction in June 2011. The 2.66-acre development remained in the bank’s OREO portfolio until December 2013.

That’s when a familiar face entered the picture in a $1.6 million transaction that allowed One Bank to recoup its United Assurance loss. Led by Equity Media’s former president, Larry Morton, SSN Funding Ltd. acquired the building as part of the ill-fated Soul of the South Network venture.

Ownership shifted in a May 2014 transaction valued at $1.2 million from the limited partnership to Rock City Media LLC.

Formed as a funding vehicle to support Soul of the South’s tax-credit financial package, Rock City lasted until February 2016.

The exodus of the cash-depleted Rock City brought in the current ownership: Matthew Davidge and his Media Gateway Facility LLC. The deal amounted to a $1.2 million loan assumption that dispelled a looming foreclosure by Arkansas Capital Corp.

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