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Decision
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Ottawa, 19 July 1984
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Decision CRTC 84-602
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CKCY 920 Ltd.
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Sault Ste. Marie and Wawa, Ontario - 840167100 840169700 - 840168900
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At a Public Hearing in Hull, Quebec on 5 June 1984, the Commission considered applications by CKCY 920 Ltd. to acquire the assets of CKCY, CJQM-FM Sault Ste. Marie and CJWA Wawa, and for broadcasting licences to continue the operation of these stations, upon surrender of the current licences issued to Huron Broadcasting Limited.
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The Commission notes that these stations have experienced financial difficulties for some time. In its application, CKCY 920 Ltd. projected that it would be able to bring the stations into a position of overall profitability within a year of assuming control of their operation. The applicant based these projections on its plans to follow "a modest, cost-effective and gradual approach" to the company's development. Among other things, the applicant indicated that it would rationalize the administration and operation of the radio stations, implement an agressive marketing strategy to generate additional advertising revenue, and effect a substantial reduction in the proportion of station revenues allocated to programming.
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With specific reference to the applicant's proposal to reduce the proportion of the stations' revenues to be devoted to programming, in the Commission's view, this could constrain the applicant's ability to maintain or improve the quality of service provided by the three stations, and thus to attract the larger audiences necessary to achieve the significantly greater advertising revenues that have been projected. Further, the Commission is not convinced that the applicant's projections are realistically attainable, particularly in light of the history of financial difficulties experienced by the current licensee Huron Broadcasting Limited, which company is also the licensee of CJIC-TV and CKCY-TV Sault Ste. Marie and of the cable television undertaking serving that community. While CKCY 920 Ltd. demonstrated that it would be able to borrow sufficient funds to purchase the assets of the three stations, the Commission is concerned by the applicant's failure to provide adequate evidence of its ability to meet its assumed debt obligations in the event of an unexpected shortfall in its projected revenues without this having an impact on its overall viability and performance.
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In the absence of any clear benefits to be obtained by approval of these applications, either in terms of enhanced service to the public or improved viability in the operation of the stations, the applications are denied.
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In two other applications considered at the same hearing (840516900 and 840515100), CKCY 920 Ltd. requested that CJWA no longer be required to operate as an affiliate of the CBC AM radio network. It also proposed the deletion of all locally-originated programming on CJWA in favour of 10 hours per week of Wawa-oriented programming originated live from the Sault Ste. Marie studios of CKCY, and a change in the Promise of Performance of CJQM-FM which would have altered the station's format from a middle-of-the-road to a country format. In light of its decision not to issue broadcasting licences to CKCY 920 Ltd., the Commission notes that any further action with respect to these applications is unnecessary.
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The Commission acknowledges the intervention by the Algoma Steel Corporation, Limited in support of these applications.
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Fernand Bélisle Secretary General
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