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Decision
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Ottawa, 14 November 1985
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Decision CRTC 85-1147
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Westcom Radio Group Ltd.
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DOC. #: DEC85-1146Richmond Hill and Toronto, Ontario - 851705400 - 851706200
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Following a Public Hearing in Hull on 17 September 1985, the Commission approves the applications by Westcom Radio Group Ltd. (Westcom) for authority to acquire the assets of CFGM Richmond Hill and CILQ-FM Toronto from Slaight Communications Inc. (Slaight), and for the issuance of broadcasting licences to continue the operation of these two radio stations.
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The Commission has examined the commitments given by the applicant with respect to various new initiatives, including its proposed extension of the Western Information Network. It has taken note of Westcom's proposals to upgrade the technical facilities of the two stations, and of the other improvements it will introduce to the services provided by CFGM and CILQ-FM. Further, it has considered the financial resources available to Westcom, a successful radio broadcaster based primarily in Western Canada, and the benefits to be derived from the expansion of its operations in Eastern Canada.
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Based on its assessment of these applications, and given the substantial commitments by Westcom to improve the operation of CFGM and CILQ-FM, the Commission is satisfied that approval of the transaction will yield significant benefits to the broadcasting stations involved, the communities they serve and to the Canadian broadcasting system as a whole, and that it is in the public interest.
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Accordingly, the Commission will issue licences to Westcom to continue the operation of CILQ-FM and CFGM upon surrender of the current licences. The licence for CILQ-FM will expire 30 September 1987, in line with the expiry date of the current licence; the licence for CFGM will expire 30 September 1989. The licences will be subject to the conditions specified in the licences to be issued.
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Background
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Slaight, the vendor, is owned and effectively controlled by well-known Toronto broadcaster Allan Slaight. This transaction is related to Mr. Slaight's purchase of an indirect controlling interest in Standard Broadcasting Corporation Limited (Standard) and its subsidiary broadcasting licensees in Ontario and Quebec, including CFRB and CKFM-FM Toronto. This transfer of control of Standard is approved by the Commission in Decision CRTC 85-1146 of today's date.
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Westcom, the purchaser, is the licensee of CHML and CKDS-FM Hamilton. It is also the licensee of five radio stations located in Western Canada, including two in New Westminster, British Columbia, two in Winnipeg and one in Calgary. Westcom is 100% owned by WIC Western International Communications Ltd. (WIC) which, in turn, is ultimately controlled through a voting trust agreement by Frank A. Griffiths of Vancouver. Through WIC and other holding companies, Mr. Griffiths also holds an indirect controlling interest in British Columbia Television Broadcasting System Ltd. (BCTV) and other licensee companies which provide the CTV television network service in Vancouver, Victoria, and other communities in British Columbia. Through BCTV, Mr. Griffiths holds a further indirect interest in Canadian Satellite Communications Inc. (CANCOM) (46.2%) and in the CTV Television Network Ltd. (8.3%).
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Considerations
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In the Commission's view, the broadcasting and management expertise present in Westcom has been amply demonstrated by that company's successful operation of its broadcasting undertakings in Hamilton and in Western Canada. The resources available to Westcom through its parent company are more than adequate to finance the proposed purchase of assets.
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In approving this transaction, the Commission has taken into consideration the unanimous support of the applications expressed in the interventions received. It has also taken note of Westcom's statement that approximately one-third of WIC's shareholders are already Toronto-area residents; four of the seven directors of Westcom's proposed CFGM/CILQ-FM division are also residents of the Toronto area, thus ensuring a high degree of local participation in the ownership and direction of these stations. Moreover, continuity of direction will be assured by the retention of current management.
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In its applications, Westcom stated that it did not intend to alter the sound or format of CFGM and CILQ-FM; rather, it proposes to increase the quality of the sound and the service of both stations, within the existing Promises of Performance, and to bring "significant public advantages" to creative artists, to the station's audiences, and to the viewers and listeners of WIC's stations elsewhere in Canada. The commitments given by Westcom, designed to bring about these benefits, are highlighted below.
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Commitments in Respect of CFGM
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Westcom pledged an annual expenditure of $160,000 to provide for the development and exposure of Canadian talent on CFGM. Specifically, the applicant gave its firm commitment to continue the production and syndication of the successful "Opry North" program, and to give further exposure for Canadian country artists through the production of an Opry North album on an annual basis. Westcom will also organize and sponsor competitions in the area served by CFGM, and across the country, for unrecorded country songwriters. Further, it will ensure the opportunity for the Production of an annual, hour-long television special featuring the best of Canadian country music. This program will be broadcast by BCTV and promoted for further broadcast by the CTV network and its affiliates.
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Westcom also made a commitment to introduce more immediacy to the news coverage provided by CFGM by purchasing and equipping a "Community Service Coach" at an estimated cost of $75,000. This new mobile facility will enable the station to provide listeners in the York Region with live coverage of community events.
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News coverage will he further enhanced by the assignment of a political reporter, shared with CILQ-FM, to cover events at Queen's Park and Toronto City Hall. The applicant indicated that the first year cost of this initiative to the two stations would be approximately $50,000.
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Westcom described plans to assist economic development within the York Region, by permitting newly established small businesses in the area to place advertisements on CFGM free of charge, representing up to $100,000 per year of commercial air time. The applicant also stated that it would increase the station's involvement in charitable activities through special community projects and promotions to be undertaken on an annual basis.
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Commitments in Respect of CILQ-FM
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Westcom made a commitment to increase the budget allocated by CILQ-FM for the development of Canadian talent from $40,000 to a minimum of $135,000 per year. Much of this increase would be devoted to expanding the focus of the Toronto-based "Homegrown" project to give it a national scope. This proposal will ultimately involve the participation of CHAN-TV Vancouver and CJOH-TV Ottawa in the production of an annual, hour-long television special which will be promoted for broadcast by the CTV network. Westcom will also honour Slaight's existing commitment with respect to the promotion of Canadian talent through the recording for broadcast of live concerts and the production of a "Homegrown" music album. It will also introduce annual playwriting and comedy competitions.
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Westcom made a further commitment to invest $75,000 in a new, state-of-the-art production studio at CILQ-FM. The applicant indicated that the new facilities will be used to produce a new Children's Hour radio show, and will also enable the station to improve the quality of its foreground programs, community access programs and public service announcements. As noted earlier, the news programming of CILQ-FM will be enhanced by the addition of a special political reporter in Toronto, shared with CFGM.
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The Commission notes that CILQ-FM will be operated in the "Group II" music format, defined in Public Notice CRTC 1984-151 on the Review of Radio which encompasses its current Progressive music format.
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At the September 1985 hearing in Hull, the applicant advised that a proposal to amend the Promise of Performance of CILQ-FM by decreasing the amount of Traditional/Special Interest Music (category 6) to 30 minutes weekly had been filed in error. Westcom confirmed that the amount of Category 6 music would be maintained at the currently authorized level of 54 minutes per week. As a condition of licence, the Commission requires the level to be maintained at 54 minutes per week, with a commensurate reduction in the amount of category 5 music.
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Further Benefits and Commitments
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Westcom emphasized that its acquisition of CFGM and CILQ-FM will bring a new and important national dimension to the company's broadcasting activities, particularly through the expansion of the Western Information Network, and that it will increase the exposure of Canadian talent by providing all stations connected to Westcom and its parent company with access to the locally-produced music and special event tapes produced by CFGM and CILQ-FM.
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The Western Information Network currently provides regional, national and international news and other program features to some 33 affiliated radio stations located primarily in British Columbia. Westcom made a commitment to increase significantly the exchange of news and information programming across the country by expanding the network to encompass all of its stations in Central and Western Canada. WIC, through Westcom, also made a commitment to place a reporter in Ottawa to cover the federal scene for affiliates of the Western Information Network, at an estimated annual cost of $50,000.
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The Commission expects the applicant to ensure the early implementation of all of the commitments outlined in this decision, including its plans for the sharing of news and other programming between the various stations in the WIC group.
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Signal Overlap
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The Commission has examined the degree of overlap between the signals of Westcom's Hamilton stations and the signals of the Toronto and Richmond Hill stations that it is now acquiring. According to the 1985 Spring BBM figures submitted by the applicant, those who listen to one or both of CILQ-FM and CFGM, and to one or both of the Hamilton stations, total 34,000. This represents 8% of those reached by the Hamilton stations, 3% of those reached by CILQ-FM and CFGM, and less than 1% of the total population resident in the area where the signals of these stations overlap. Moreover, the Commission notes that the highest concentration of this "duplicated" audience resides in the area between Hamilton and Toronto.
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Thus, although the signals of Westcom's stations in Hamilton partly overlap with the signals of the Toronto and Richmond Hill stations, only a small segment of the audience in either market is reached by the stations in the other. On balance, given this small duplication, the Commission has determined that any potential concern relating to this issue is outweighed by the significant benefits which the Commission expects will result from its approval of these applications. The Commission also considers that any such concern is further mitigated by Westcom's commitment to ensure that the orientation of the Hamilton stations remains focussed on Hamilton, and that the service provided by the Toronto and Richmond Hill stations remains oriented to the markets they are licensed to serve.
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Other Matters
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At the hearing, Westcom stated its intention to apply to the Commission for placement of the stereo signal of CILQ-FM on the CANCOM service, and for changes to the technical parameters of CFGM. Westcom advised that the proposed change in technical parameters of CFGM would not alter the current degree of overlap between this station and CHML Hamilton.
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The Commission emphasizes that the merits of these proposals have not been considered in the context of the current applications, and notes that their implementation would require the prior approval of the Commission.
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Finally, the Commission notes that, given its approval of these application by Westcom to acquire the assets of CFGM and CILQ-FM, and assuming the surrender by Slaight of its current licence for CFGM before the date of its expiry on 30 December 1985, further action on the application for renewal of the licence for CFGM (850313800) will be unnecessary. The application for the licence renewal of CFGM was heard at a Public Hearing in Toronto on 17 june 1985. At that hearing, the Commission discussed with Slaight the need to improve the performance of CFGM by ensuring that the station's programming more adequately reflects the diversity of the interests and concerns of listeners in the Regional Municipality of York, and by ensuring that the Canadian content requirements specified in Section 12 of the Radio (A.M.) Broadcasting Regulations are adhered to at all times.
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On the basis of Westcom's commitments at the hearing, the Commission is satisfied that improvements in those areas will be made. The Commission expects Westcom to submit reports in each of the next two years with respect to the fulfillment of all of the commitments and expectations outlined in this decision.
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Fernand Bélisle
Secretary General
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