ARCHIVED -  Decision CRTC 89-676

Decision

Ottawa, 7 September 1989

Decision CRTC 89-676

Radio Chicoutimi Inc.

Chicoutimi, Quebec - 882850100

Following a Public Hearing in the National Capital Region on 27 June 1989, the Commission approves the application for authority to transfer effective control of Radio Chicoutimi Inc., licensee of CJMT Chicoutimi, through the transfer of 30,000 common voting shares from Pierre Tremblay and Georges Abraham (33 1/3% each), Nicol Poitras (25%), and Lise Bergeron (8 1/3%) to Télémédia Communications Inc. (Télémédia).

Télémédia, which is controlled by Mr. Philippe de Gaspé Beaubien and his family, holds 60% of the voting shares in CFIX-FM, a radio station serving Chicoutimi. It is also the licensee of a number of radio stations in Quebec and Ontario and operates several networks, particularly of news and sports programming. In addition, Télémédia has an interest in "Le Réseau des Sports", the French-language specialty sports service which commenced operation on 1 September 1989.

The Commission notes that as a result of this transaction, the two Chicoutimi radio stations will both be controlled by Télémédia. Accordingly, when it files the application for the renewal of the licence for the FM station, the licensee will be required to submit a revised Promise of Performance in line with the Commission's guidelines for joint stations.

The purchase price of the shares is more than $1,000,000. Based on the documentation accompanying the application, the Commission has no concerns with respect to the availability or adequacy of the required financing.

As stated in a number of decisions relating to applications for authority to transfer ownership or effective control of broadcasting undertakings, and because the Commission does not solicit such applications, the onus is on the applicant to demonstrate to the Commission that the application filed is the best possible proposal under the circumstances, taking into account the Commission's general concerns with respect to transactions of this nature.

In assessing the intangible benefits relating to this application, the Commission has taken into account the resources available to the purchaser in the areas of music programming, finance, engineering, accounting, advertising and promotion, and computers. The Commission has also noted the applicant's undertaking that it will not reduce the number of employees and that it will retain the present management personnel in order to ensure stability and continuity of service. The purchaser also pointed out that it has a good knowledge of the Saguenay market, and that CJMT will benefit from the synergy that will result from its association with a group of AM stations serving other markets of this size in the province of Quebec. With regard to those benefits which are quantifiable in terms of their dollar value, the Commission has accepted expenditures totalling $200,000 which the purchaser has committed to make on behalf of CJMT over the next five years.

The purchaser has allocated $50,000 for capital expenditures to upgrade the newsroom and studios. It has also allocated $50,000 over the next five years in operating expenditures for additional weekend news staff, and a further $75,000 to cover the extended working hours of the journalist responsible for covering regional news in the Lac Saint-Jean area. Nevertheless, the Commission has noted that the licensee will cease broadcasting its 45-minute weekday local public affairs program. The Commission expects the licensee to resume broadcasting a program of this type as soon as possible.

With respect to Canadian talent development, the purchaser plans to increase its current level of direct expenditures by $25,000 over five years. A portion of this amount will be used to increase by $10,000 the value of its broadcasting and journalism scholarships, and the purchaser has committed to make annual contributions of $2,000 to the Métabéchouan Music Camp and of $3,000 to MusicAction. The Commission notes that the sum of $3,000 which will be allocated for salaried apprenticeship programs cannot be considered as a direct expense.

The Commission notes that henceforth CJMT will spend a total of $8,000 per year for Canadian talent development. In view of the revenues and resources available to the licensee, the Commission considers this amount to be inadequate. Accordingly, the Commission requires the licensee to report within three months of the date of this decision outlining its precise plans to increase its commitment for the support, development and on-air exposure of local and regional talent.

In Decision CRTC 88-483 in which the Commission renewed the licence for CJMT for a 21-month term, it required the licensee to submit weekly self-assessment reports on the level of French-language vocal music being broadcast and daily calculations of the Canadian content of its Category 5 musical selections. As the reports that have been submitted by the licensee indicate its compliance with the Commission's requirements, the Commission hereby advises the licensee that it is no longer required to submit such reports.

The Commission received an intervention from the Syndicat Général des Travailleurs en Communications de CJMT (CSN) which, while expressing support for this application, asked the Commission to ensure that the proposals attached to the application benefit the station's listeners and that the purchaser respect the commitments contained in the Promise of Performance. The intervenor noted that the technical facilities and news service are to be improved, but expressed concern about the possible impact of these changes on existing jobs. In reply, the licensee addressed the intervener's concerns and explained that it would not be in a position to assess how these improvements would come about nor evaluate their effect until the proposed transaction is approved. The licensee added that the station's orientation would remain the same and that it has no plans to increase the amount of network programming.

The Conseil des usagers des médias de la Sagamie also filed an intervention asking that the Commission ensure that CJMT continues to reflect the needs and concerns of its listeners, and that the licensee endeavour to improve the quality of CJMT's broadcast signal. In reply, the licensee confirmed that it had no plans to make programming changes and that the transaction will yield tangible benefits in terms of news. The licensee added that it would assess the station's transmission facilities and develop a plan to improve these installations as a means of enhancing reception quality in the area of Lac Saint-Jean Est.

Based on the quantifiable and non-quantifiable benefits it has accepted as accruing from this transaction, the Commission has concluded that the benefits are commensurate with the scale of the transaction, the viability of the undertaking, the responsibilities to be assumed and the resources available to the purchaser. In light of all of the foregoing, the Commission is satisfied that the proposed transfer will yield benefits for the residents of Chicoutimi and the Lac Saint-Jean area, and that approval of this application is in the public interest.

The Commission expects the licensee to honour all of the commitments set out in this decision, and it will review the licensee's compliance with these expectations when it next considers the renewal of CJMT's licence, which expires 30 September 1990.

Fernand Bélisle
Secretary General