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Decision
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Ottawa, 27 September 1990
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Decision CRTC 90-1003
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Power Broadcasting Inc.
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Oshawa, Ontario - 900136300 - 900135500
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Following a Public Hearing in the National Capital Region beginning on 11 June 1990, the Commission approves the applications for authority to acquire the assets of CKAR and CKQT-FM Oshawa from Grant Broadcasting Limited, and for broadcasting licences to continue the operation of these undertakings.
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The Commission will issue licences to Power Broadcasting Inc. (Power), expiring 31 August 1992 for CKQT-FM and 31 August 1995 for CKAR, upon surrender of the current licences. The authority granted herein is subject to the same conditions as those specified in the current licences as well as any other condition that may be specified in the licences to be issued.
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With regard to CKQT-FM, this term will enable the Commission to consider the renewal of this licence at the same time as that of other FM stations, following the review of FM policy announced in Public Notice CRTC 1990-20 dated 16 February 1990.
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The purchase price relating to this transaction is $8.5 million, less any amounts owing to employees and unpaid liabilities. Based on the evidence filed with the applications, the Commission has no concerns with respect to the availability or the adequacy of the required financing.
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The Purchaser, Power, directly and indirectly controls a number of radio and television stations in Quebec and in Ontario, including CFMP-FM Peterborough, a station whose coverage area encompasses part of the coverage area of CKQT-FM Oshawa.
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Therefore, in this particular instance, the Commission not only has applied its test of benefits to the proposed transaction, but has also examined it in light of its policy which generally prohibits the common ownership of two undertakings of the same type serving the same market in the same language.
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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 and because there is, thus, only one proposal presented to the Commission, 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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In assessing these applications, the Commission has given particular consideration to the current licensee's financial situation. Although CKAR has shown a marked improvements in recent years, the stations, on a combined basis, have incurred substantial losses in the past. The Commission is satisfied that Power's resources should restore financial stability to the stations.
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Among the tangible benefits offered by Power were significant technical improvements representing expenditures totalling $970,000 for both stations. They include the cost of replacing CKQT-FM's tower, antenna, transmitter and of CKAR's towers and transmitter as well as other equipment. In its applications, Power stressed the need for these changes, noting that the tower supporting the FM antenna is old and does not comply with current standards, and that this situation has caused serious technical problems and significant outages. Power made a commitment to carry out these improvements within a year. In line with Public Notice CRTC 1989-109 dated 28 September 1989, although the Commission generally considers these expenditures a normal cost of doing business, it is prepared to accept them as clear and unequivocal benefits in this instance as they appear to be beyond the resources of the present licensee.
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With respect to Canadian talent development, Power has made a commitment to broadcast live on CKQT-FM, six times a year, the music of Canadian bands from the Jubilee Pavilion, at a cost of $308,000 over five years, and to simulcast, with its television station CHEX-TV Peterborough, the broadcast of the last of these concerts, at a cost of $269,000. In addition, CKQT-FM will broadcast an annual live concert of the Oshawa Symphony Orchestra ($54,000) and together with CKAR will contribute to FACTOR ($30,000). The Commission notes that Power also proposes to upgrade the stations' news programming at a cost of $275,000, through staff increases and a 2-hour per week increase in news/information programming on each station. These benefits will represent total expenditures of $936,000 over the next five years.
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However, the Commission has rejected, as a tangible benefit of this transaction the amount of $263,000 allocated mainly for on-air promotion of Canadian talent. The Commission considers such initiatives to fall within the categories of intangible benefits that have been generally rejected by the Commission, for reasons outlined in Public Notice CRTC 1989-109.
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The Commission has assessed the projects and initiatives put forward by Power as being benefits associated with the applications. In general, the Commission is satisfied that the remaining tangible benefits package is commensurate with the size and nature of the transaction involved, and tales into account the responsibilities to be assumed by the purchaser, the characteristics and viability of the radio stations concerned, and the scale of the programming, management, financial and technical resources available to Power.
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Based on the available evidence and in view of the particular circumstances of this case, the Commission is satisfied that an exception to its common ownership policy is justified in order to ensure the provision of a good local service in Oshawa. Moreover, the Commission considers that, given the overall benefit package proposed by Power, approval of these applications is in the public interest.
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The Commission has given particular consideration to Power's commitment that the music orientation of CKQT-FM and CFMP-FM will be different and that CKQT-FM will focus on the Oshawa market, particularly with respect to news. The Commission expects Power to adhere to this important commitment. The Commission also expects Power to ensure that CKQT-FM is locally managed with a view to providing a distinct service directed to the needs and interests of the Oshawa/Durham area.
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Moreover, the Commission expects Power to ensure that all of the $2,169,000 in proposed expenditures included in the benefits package, are made in accordance with the schedule outlined in the applications.
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The Commission expects Power to submit an annual report outlining the status of its various projects and initiatives for the development and on-air exposure of local and regional talent.
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The Commission acknowledges the various interventions submitted by elected officials, community organizations and individuals in support of this transaction.
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In view of the approval granted herein, no further action is required on the application (900131400) submitted by Grant Broadcasting Limited for the renewal of CKQT-FM which was heard at the 11 June 1990 Public Hearing.
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In Decision CRTC 90-791 dated 22 August 1990, the Commission has renewed, for administrative reasons, the licence for CKQT-FM until 30 November 1990.
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It is a condition of each licence that the licensee adhere to the Canadian Association of Broadcasters' (CAB) self-regulatory guidelines on sex-role stereotyping, as amended from time to time and approved by the Commission.
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It is also a condition of each licence that the licensee adhere to the provisions of the CAB's Broadcast Code for Advertising to Children, as amended from time to time and approved by the Commission.
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Alain-F. Desfossés Secretary General
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