Díaz cited continued low ratings, but the straw that broke the camel's back was a humorous news report read on the station that stated a German anthropologist had discovered a tribe of "mole people" living in the sewers of Mexico City. When the report was read in late June, it caught the attention of Mexican authorities, who were outraged over the secondhand account they had heard, which implied that Mexicans were so poor they lived in sewers. In 1986, Díaz sold the American marketing rights for XHITZ again, this time to Broadcasting, Marketing and Management, Ltd. BMM ceased operation of the station on June 30, 1988 as it assigned the rights to another company, Consolidated Radio Sales, which was also bankrupt. The result was that Díaz and the head of Consolidated Radio Sales, Jack McCoy, clashed. In mid-July, McCoy fired all the employees in the US and had all the locks changed, with several employees instead showing up to work in Tijuana. Later that day, however, a bankruptcy judge ruled that Díaz owned the US operation of the stations. In 1989, XHITZ flipped from adult contemporary to a rock-oriented hits format known as "Pirate Radio," based on the success of KQLZ in Los Angeles. On April 5, 1990, however, XHITZ switched formats to Rhythmic Top 40 under Program Director Rick Thomas, with a Dance-leaning direction. "Z90" competed against Q106, which was the powerhouse of Top 40 in the market. With Z90's debut, however, it took only a few books for XHITZ to beat Q106, and thanks to its success, it also forced the market's only Urban Contemporary outlet, future sister station XHRM-FM, out of that format by 1993. As Z90 remained on top, Q106 shifted towards a more Mainstream Top 40 format, and it wasn't until September 1996 that XHITZ would have another direct competitor against KHTS, which had a Dance lean, much like XHITZ. Even though XHITZ served as the official callsign, it was marketed unofficially as "XHTZ" also due to the fact most TV & radio callsigns carry four letters. However by August 1998, XHITZ would move away from its Dance approach to begin focusing more on R&B/Hip-Hop. The station also rebranded as "Jammin' Z90" before reverting to "Z90.3".