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Decision
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Ottawa, 31 August 1988
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Decision CRTC 88-572
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Seacoast Communications Group Inc. (formerly C-FAX Radio 1070 Ltd., on behalf of a company to be incorporated)
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Kelowna, British Columbia -880077300 -880078100
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Following a Public Hearing in Calgary on 1 June 1988, the Commission approves the applications for authority to acquire the assets of CKOV and CHIM-FM Kelowna from Okanagan Broadcasters Limited and Okanagan FM Broadcasters Ltd. respectively, and for broadcasting licences to continue the operation of these stations on the same terms and conditions as the current licences.
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The Commission will issue licences to Seacoast Communications Group Inc. (Seacoast) upon surrender of the current licences. The licences will expire 31 August 1989, which is the expiry date of the current licences, and will be subject to the conditions specified in this decision and in the licences to be issued.
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This authority will only be effective at such time as the Commission receives documentation establishing that Seacoast has been incorporated in accordance with the application in all material respects.
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The Commission notes that Seacoast and C-FAX Radio 1070 Ltd., licensee of CFAX Victoria, British Columbia, are ultimately controlled by Mr. G. Neldon Cooper.
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Seacoast proposes to acquire the assets of both Kelowna radio stations for a total purchase price of $4,100,000, with funding for the acquisition to be provided by way of a $3 million loan agreement from a financial institution and the remaining $1.1 million in the form of notes from the vendors. Based on the evidence filed with Seacoast's applications, the Commission has no concerns with respect to the ability of Seacoast to meet the financial obligations associated with this transaction.
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As stated in a number of decisions relating to applications for authority to transfer 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.
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With respect to those benefits which cannot be quantified in monetary terms, the Commission notes that through access to the news facilities and resources of CFAX, Seacoast undertook to enhance the quality of news programming on both CKOV and CHIM-FM, particularly with regard to news from the provincial capital that is of specific interest to listeners in the Okanagan Valley. Further, the applicant indicated that access to CFAX's production staff and to its 16-track recording studios in Victoria will enable the Kelowna stations to improve their technical sound quality and, in this respect, to provide better support for local and regional musical talent.
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In terms of tangible benefits to be derived from the transfer of CKOV, the Commission notes that Seacoast has undertaken to spend $85,250 over a five-year period for news and public affairs programming, including a computer service linking Victoria and Kelowna. The applicant has committed to spend a further $9,750 for the organization and broadcast of an awards luncheon to honour outstanding community members.
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With regard to Canadian talent initiatives, the applicant has also committed to spend $5,000 on behalf of CKOV for "Okanagan Discovery", a song writers' competition featuring original Canadian songs with a regional perspective, with the winner to receive a professional recording of the composition.
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With respect to tangible benefits accruing from the acquisition of CHIM-FM, Seacoast undertook to spend on behalf of the FM station, $45,500 over the next five years toward new programming initiatives, as well as $197,800 for news and public affairs programming. The applicant has also committed $4,750 for CHIM-FM's participation in the organization and broadcast of the community awards presentation described above.
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Seacoast has also committed to spend $22,300 over a five-year period with respect to CHIM-FM's support for Canadian musical talent, including $21,300 for the production of five "Live at the Regatta" music albums, featuring Canadian talent appearing at the annual Kelowna regatta, and a $1,000 contribution in support of the "Okanagan Discovery" music competition. CHIM-FM will also spend $3,500 on the production of a theme song for the regatta.
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In addition to their promotional air-time commitments, CKOV and CHIM-FM will each spend $1,300 towards a 1988 Canadian talent showcase in association with CHBC-TV Kelowna, "B.C. Music Project"; $4,000 each over the next five years to sponsor a local stage band competition; and $5,000 each over the next five years for the stations' "Instant Expert" computerized music system which provides to on-air personnel, background information on Canadian artists. The licensee plans to make this reference software available to other radio stations in the future.
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In light of the foregoing and having examined the applications as submitted, the Commission has concluded that Seacoast has adequately demonstrated that the approval of the proposed acquisition of assets is in the public interest and that the benefits to the communities in question are commensurate with the size and nature of the transaction, the viability of the stations, the responsibilities to be assumed and the resources available to the applicant.
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In assessing this application, the Commission has taken into account the intervention from the Canadian Independent Record Production Association (CIRPA) requesting that CHIM-FM be required to achieve, on a daily basis, a minimum 30% Canadian content level in its musical selections. The Commission notes, however, that CIRPA did not provide evidence demonstrating that the licensee's current commitment in this regard is not being achieved or that it is inadequate. The Commission notes that CHIM-FM's own commitment to maintain a 20% Canadian content level is in line with the Commission's minimum guidelines for FM stations operating in the Group III musical format.
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The Commission acknowledges the interventions received from the Kelowna Triathlon Society, the Sunshine Theatre of Kelowna, B.C. Tree Fruits Limited and Jennifer Hindle of Kelowna in support of these applications.
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It is a condition of licence that the applicant adhere to the CAB's self-regulatory guidelines on sex-role stereotyping, as amended from time to time and approved by the Commission.
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Fernand Bélisle
Secretary General
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