ARCHIVED -  Decision CRTC 89-143

Decision

Ottawa, 6 April 1989

Decision CRTC 89-143

CFCF Inc.

Montreal, Quebec -881059000

Following a Public Hearing in Montreal commencing on 22 November 1988, the Commission renews the broadcasting licence for CFCF-TV Montreal from 1 September 1989 to 31 August 1994, subject to the conditions specified in the appendix to this decision and in the licence to be issued.

CFCF Inc., a publicly-traded company effectively controlled by members of the J.A. Pouliot family of Montreal, is also the licensee of CFJP-TV Montreal, CFAP-TV Quebec City and CJPC-TV Rimouski, and of the French-language independent television network Quatre Saisons, consisting of these and a number of other French-language television stations in the province. Further, CFCF Inc. holds a licence for the cable television undertaking serving part of Montreal and part of Laval. Until recently, CFCF Inc. was also the licensee of radio stations CFCF, CFQR-FM and CFCX (SW) Montreal; applications for authority to transfer the assets of these three stations to a new licensee, Mount Royal Broadcasting Inc., were approved in Decision CRTC 88-583 dated 6 September 1988.

CFCF-TV, first licensed in 1961, operates profitably in one of the most complex and challenging markets in Canada. It has been a CTV affiliate since the network's inception in the early 1960s, and is the only such affiliate in Quebec. According to the licensee, 290,000 of Montreal's population of 2.9 million speak English only. Another 1.4 million residents speak both English and French. Although Montreal's bilingual francophone population continues to make up a significant portion of CFCF-TV's audience, this portion has been shrinking in recent years.

The licensee stated that its programming strategy is, and will continue to be, aimed at serving as the "home" station for all English-speaking Montrealers, while striving to stem the erosion of its bilingual francophone audience. It seeks to accomplish this by providing a strong local presence in its news and other information programming as a means of positioning the station against U.S. competitors. The licensee also relies upon the entertainment and other programming presented within the CTV network schedule to ensure that the station competes effectively against CBMT, the other English-language television service in the Montreal market.

The Commission has reviewed the licensee's performance during the current licence term and is generally satisfied with its performance. The Commission notes that the licensee has generally exceeded its commitments with respect to the provision of local Canadian programs. It also notes the high standard achieved in the licensee's local news production. CFCF-TV's "Pulse" news accounts for approximately 12 hours per week of local production, including early and late evening newscasts throughout the week, and a mid-day report and three-minute mid-afternoon update Monday through Friday. The station's Montreal news staff is supplemented by other staff assigned to news bureaus in Ottawa and Quebec City, and by a seven-member investigative journalism team.

According to the licensee, the quality of CFCF-TV's local news programming has been enhanced in recent years through expenditures of $1,300,000 on a new control room and newsroom, and a further $550,000 for the purchase of a self-contained satellite news gathering vehicle, capable of gathering and transmitting news back to the station from anywhere in the city or province.

At the hearing, the licensee underscored the importance it places on the ability of the station and its staff to respond to events occuring in the Montreal area, not only in its news coverage, but also through its production of specials. CFCF Inc. listed a number of specials produced during the current term as examples of "... this corporate value [of] responsiveness". According to the licensee, its production of specials amounts to "almost 30 minutes per week, averaged over 52 weeks". The Commission notes the licensee's confirmation that it will maintain this level of production, at a minimum.

In addition to its production of local news and specials, CFCF Inc. currently produces various regularly-scheduled local programs, including "Travel Travel", a widely-syndicated weekly program featuring segments on various tourist destinations generally filmed on location; "Park Avenue Metro", a weekly magazine program on local public affairs; and "Dick Irvin's Hockey Magazine", also aired in other markets. The licensee emphasized that all of these local programs are broadcast at times when they can be expected to attract large audiences: the travel program at 6:30 p.m. on Sunday; the public affairs magazine at 7:30 p.m. on Wednesday; and the sports program at 6:30 p.m. on Saturday.

CFCF Inc. also recognizes an obligation to add to the diversity of the programming it broadcasts "... by purchasing quality programs from different regions and stations in Canada". At the hearing, the licensee noted its acquisition of programs from sources such as independent stations CKVU-TV Vancouver and CFAC-TV Calgary, as well as from other CTV affiliates.

CFCF-TV currently broadcasts "Time of Your Life", an independently-produced drama series aimed at a teenage audience and scheduled at 4:00 p.m. Monday through Friday. The licensee is currently involved with other CTV affiliates in the co-operatively produced programs "Second Chance" and "Canada In View", and with a mixed consortium of CTV and CBC affiliates and Canadian independent stations in the production of a contemporary Canadian drama series entitled "Chestnut Avenue". The Commission encourages the licensee to continue to develop co-operative programs.

CFCF Inc., working through its subsidiary Champlain Productions, has also been successful during the current licence term in producing programs for the CTV network, including the situation comedies, "Excuse My French" and "Snow Job". Currently the licensee produces the children's program series entitled "Extra Extra" for broadcast on the CTV network. Such production is in keeping with the licensee's commitment, noted in renewal Decision CRTC 81-645 dated 8 September 1981, "to undertake major productions, including certain dramatic works, for the CTV network". CFCF Inc. stated that it is working on the development of a new pilot to present to the network, and confirmed that it would strengthen its efforts to develop and sell programs to CTV. The Commission continues to encourage the licensee to develop programs suitable for the CTV network, particularly programs in the under-represented category of drama.

With regard to the licensee's local programming plans for the new licence term, Schedule I of the Promise of Performance submitted with the renewal application contains a commitment to produce 19 hours per week of original local programs. At the hearing the licensee increased its commitment to 19 hours 30 minutes per week. CFCF Inc. indicated that the additional 30 minutes was in respect of local programs entitled "Interlude" and "Pulse Update" which are currently in the broadcast schedule, although they were not so indicated in the written application.

At the hearing, the Commission raised as a concern with the licensee the fact that the proposed 19 hours 30 minutes per week is 2 hours 16 minutes less than the commitment contained in the current Promise of Performance, and contains no provision for regularly-scheduled programs in the under-represented categories of drama, variety or music and dance. According to the licensee, its commitment to a lower level of local production reflects a number of factors, including the expansion over the course of the last few years in the amount of CTV network programming. It claimed further that portions of certain ethnic programs, which had been produced by the station at one time, are now independently produced and cannot be counted as local programming despite the fact that CFCF-TV facilities continue to be used for some elements of their production. The licensee, however, confirmed that it would continue to broadcast the Italian-language program "Teledomenica" and the Greek-language "Hellenic Program".

CFCF Inc. also emphasized that the 19 hours 30 minutes of original local programming does not take into account the numerous specials it produces each year, including several in the categories of variety or music and dance. At the hearing, the licensee set forth plans for future projects, including the production of specials with such titles as "Bravo", featuring the Montreal Symphony Orchestra; "The Players", which will profile Montreal's National Theatre School; and "The Centaur Gala", celebrating the 20th anniversary of Montreal's English-language Centaur Theatre. Other specials will mark the 30th anniversary of CFCF-TV and the 350th anniversary of Montreal. CFCF Inc. also stated that it was looking into the possibility of simulcasting with CHOM-FM Montreal coverage of the finale of the annual festival "L'Empire des futures stars". The licensee indicated that it was investigating, as well, the possibility of producing, in co-operation with other television licensees, notably Allarcom Limited (CITV-TV Edmonton), a series of programs encompassing a nationwide search for young, undiscovered talent. As specific commitments, CFCF Inc. stated that it will produce three one-hour concert specials, presenting Quebec and Canadian artists, for broadcast in the evening during each year of the new licence term.

Taking into account the substantial resources available to CFCF Inc., the size and unique nature of the market it serves, the licensee's past performance in producing variety and music and dance programming, and the absence of plans for the production of any regularly-scheduled programs in these categories during the new licence term, the Commission expects CFCF Inc. to produce, by itself or in co-operation with other television licensees, or to co-produce with the independent production sector, and to broadcast in each year of the new licence term, a minimum of six one-hour specials in the under-represented categories of variety or music and dance.

With respect to drama, the licensee submitted that any regularly-scheduled local programs in this category would be prohibitively expensive to produce by itself. Nevertheless, the Commission expects the licensee to produce, on its own or in co-operation with other broadcasters, or to co-produce with the independent production sector, and to broadcast on CFCF-TV, new drama programs in each year of the new licence term. The Commission notes in this context the licensee's confirmation at the hearing that it is actively pursuing a number of drama projects, including the development of a situation comedy. It stated that it was negotiating for the television rights to "Lady Day at The Emerson Bar and Grill", a musical drama based on the life and music of Billie Holiday, and was also planning to acquire the rights to produce the winning one-act play at the annual Quebec Drama Festival. Further, the licensee noted its present involvement with other television broadcasters in the "Chestnut Avenue" drama series, and stated that it has commissioned a script and intends to seek out the financial participation of other broadcasters in the production of a four-hour miniseries entitled "Stepping Stones", based on a trilogy of short stories written by Montreal resident Jamie Brown.

In light of the ongoing efforts of CFCF Inc. to produce programs for the CTV network, the high quality of the licensee's news and other information programming, its contributions to diversity through the acquisition of programs from other producers, and the Commission's expectations stated above regarding the licensee's involvement, over and above its specific commitments, in the production of programs in the categories of drama, variety and music and dance, the Commission accepts the licensee's undertaking to produce and broadcast 19 hours 30 minutes per week of original local programs and expects CFCF Inc. to achieve this weekly level, at a minimum, throughout the new licence term.

According to the financial projections included with its application, CFCF Inc. will expend $17,474,000 on Canadian programming in the first year of the new licence term. As stated in the Public Notice introducing this and other television renewal decisions issued today, the Commission has decided to impose conditions of licence requiring licensees of each television station that earned more than $10 million in total advertising revenues in 1987/88, to adhere to their forecasts for first-year expenditures on Canadian programming, at a minimum, and to adjust such expenditures in subsequent years in accordance with a formula linked to station advertising revenues. The Commission is satisfied that this approach offers a reasonable and fair means of ensuring the Canadian program expenditures of each station will keep pace with changes in its revenue. The condition of licence pertaining to CFCF-TV in this regard is set out in the appendix to this decision.

In renewal Decision CRTC 81-645 the Commission noted the licensee's commitment to establish a five-year $1 million fund for the development of new programs. The program development commitment contained in the current renewal application amounts to $1,161,000 over five years.

According to the licensee at the Montreal hearing, over the six years ending 31 August 1988, expenditures amounting to $1,370,000 were made in respect of program development. It advised, however, that almost $800,000 of that amount took the form of payments to its subsidiary Champlain Productions, while a further $435,000 was invested as equity in various films. CFCF Inc., noting that Decision CRTC 81-645 contained no restrictions on how the development fund should be disbursed, indicated that the fund has been used for a variety of purposes:

It has been used to put in equity for movies... to help the development of pilots [by] our own staff.... It could be to pay production costs, it could be to pay talent. What we really have done is... use it as broadly as we can without any real specific constraints.

The Commission considers that the uses to which the licensee has put its program development fund have not always accorded with the Commission's view of how such funds ought to be disbursed. The Commission's concerns on this issue were discussed at some length with the licensee at the hearing, and CFCF Inc. was asked to file guidelines governing the future disbursement of development funds, taking these concerns into account.

The licensee's guidelines, submitted under cover of a letter dated 6 December 1988, have been reviewed by the Commission. While they respond to certain concerns, others remain. In the introductory Public Notice the Commission has set out its own guidelines with respect to program development funding by television broadcasters. Among other things, the guidelines state that emphasis should be given to providing "seed" money to less experienced writers, directors, performers and producers. Moreover, script and development expenses "... should be restricted to expenses incurred prior to the commencement of pre-production before the financing of the project is in place".

Under the guidelines submitted by CFCF Inc., the licensee would not have used the fund to make direct payments to Champlain Productions. The licensee's guidelines contained no restrictions on indirect payments to its subsidiary, whether in the form of subsidies to Champlain Productions for its use of CFCF-TV's production facilities for the purpose of making pilots, or in the form of payments to its subsidiary for the supply of goods and services used in the production of such pilots. Moreover, while the licensee's guidelines appeared to place a 35% ceiling on the proportion of fund monies that might be invested in equity participation, this restriction would not have applied where the equity participation stemmed from the conversion to equity of monies allocated for the development of synopsis, treatments or scripts or for the payment of production costs for pilots.

In view of the concerns that persist with respect to the guidelines prepared by CFCF Inc., the Commission expects the licensee to adhere to the program development funding guidelines set out in the introductory Public Notice. The Commission also expects the licensee to ensure that no fund monies are allocated, directly or indirectly, to Champlain Productions or to any other subsidiary of CFCF Inc. or to any full-time employee of CFCF-TV.

Moreover, the Commission expects the licensee to adhere to its commitment to expend $1,161,000 during the new licence term on program development, and to file a statement with the Commission, at the end of each broadcast year, summarizing its utilization of the fund.

At the hearing, the licensee stated that it is prepared to make the capital expenditures necessary to permit the closed captioning of its local program production, but wishes to be certain that the captioning system it purchases is adequate to its needs. It suggested that the necessary equipment would be purchased within the first two or two-and-a-half years of the new licence term:

When we caption, we want to do it right. We are committed to it, we will do it and we are going to do it as quickly as technology allows us to do it properly.

In light of the importance the Commission attaches to this particular issue, it expects CFCF Inc., within the first year of the new licence term, to aquire the means to provide closed captions, at a minimum, of the headlines and other scripted portions of its major local newscasts. Further, the Commission expects the licensee to acquire a telephone device for the deaf (TDD) within the first year of the new licence term, and to install it in the master control room or wherever is most appropriate to ensure access to the station throughout the broadcast day by deaf or hearing-impaired viewers.

In renewing this licence, the Commission also authorizes the licensee to make use of the Vertical Blanking Interval. The Commission expects the licensee to adhere to the guidelines set out in Appendix A to Public Notice CRTC 1989-23 dated 23 March 1989 entitled "Services Using the Vertical Blanking Interval (Television) or Subsidiary Communications Multiplex Operation (FM)".

The Commission has reviewed the programming proposals and commitments of CFCF Inc. and, on the whole, considers these to be commensurate with the licensee's financial and other resources. In those areas where the Commission considers that some greater effort and attention is required of the licensee, the Commission has expressed expectations and encouragements regarding its future performance, and is confident that the licensee will respond fully to these. Accordingly, the Commission is satisfied that the licence for CFCF-TV should be renewed for a full term.

The Commission acknowledges the intervention submitted by the Canadian Association of Broadcasters in support of this application for licence renewal.

Fernand Bélisle
Secretary General

APPENDIX

Conditions of licence for CFCF-TV Montreal

1. The licensee shall operate this broadcasting undertaking as part of the network operated by CTV Television Network Ltd.

2. The licensee shall expend on Canadian programming, at a minimum:

(a) for the year ending 31 August 1990, the amount of $17,474,000;

(b) for the year ending 31 August 1991, the amount set out in paragraph (a) above, increased (or decreased) by the year-over-year percentage change for the year ending 31 August 1990, in the total of the station's revenues from local time sales, national time sales and payments (if any) received from networks, as reported in the relevant Annual Returns;

(c) for the year ending 31 August 1992, the minimum required expenditure calculated in accordance with paragraph (b) above, increased (or decreased) by the average of the year-over-year percentage changes for the years ending 31 August 1990 and 31 August 1991, in the total of the station's revenues from local time sales, national time sales and payments (if any) received from networks, as reported in the relevant Annual Returns; and

(d) in each subsequent year, an amount calculated in accordance with the following formula: the amount of the previous year's minimum required expenditure, increased (or decreased) by the average of the year-over-year percentage changes for the years ending on 31 August of the three previous years, in the total of the station's revenues from local time sales, national time sales and payments (if any) received from networks, as reported in the relevant Annual Returns;

with all terms or calculations found in paragraphs (b), (c) and (d) set out above to be interpreted or made in accordance with the explanations set out in Public Notice CRTC 1989-27 dated 6 April 1989.

3. The licensee shall adhere to the Canadian Association of Broadcasters' self-regulatory guidelines on sex-role stereotyping, as amended from time to time and approved by the Commission.

4. The licensee shall adhere to the provisions of the Broadcast Code for Advertising to Children published by the Canadian Association of Broadcasters as amended from time to time and approved by the Commission.