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Ottawa, 29 August 1990
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Decision CRTC 90-829
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Western Broadcasting Limited
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Corner Brook, Newfoundland - 894591700 - 894303700
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Pursuant to Public Notice CRTC 1990-55 dated 25 May 1990, the Commission approves the application for authority to transfer effective control of Western Broadcasting Limited (Western), licensee of CKXX (formerly CKWK) Corner Brook and CKXX-1-FM (formerly CJDY-FM) Deer Lake, through the transfer of 80% of the issued shares of the licensee company to NewCap Broadcasting Limited (NewCap). The remaining 20% of the common voting shares will be held by D.Y. Holdings Limited which is owned by Derek Young (71%), Judy Young (19%) and the Young Family Trust (10%).
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As a result of this transaction, NewCap will directly control Western Broadcasting Limited. NewCap, licensee of radio stations in Nova Scotia, Newfoundland, Ontario, Alberta, British Columbia and Prince Edward Island, is owned (100%) by Newfoundland Capital Corporation Limited, which is effectively controlled by its principal shareholder, Mr. H. Steele.
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The purchase price for the shares is $9,001. NewCap is also obligated to repay the shareholders' outstanding loans owed to an associated company and its directors at the time of closing. Based on the evidence filed with the application, the Commission has no concerns with respect to the availability or the adequacy of the required financing.
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The Commission has assessed the various projects and initiatives put forward by NewCap as being benefits associated with the application. In general, the Commission is satisfied that the benefits package is clear and unequivocal, commensurate with the size and nature of the transaction involved, and takes into account the responsibilities to be assumed by the purchaser, the characteristics and viability of the broadcasting undertakings concerned, and the scale of the programming, management, financial and technical resources available to NewCap. Moreover, the Commission has taken into consideration CKXX's precarious financial situation and has considered NewCap's extensive broadcasting experience and its commitment to resolve the station's financial difficulties and to maintain service. Accordingly, the Commission considers that approval of this application is in the public interest.
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The Commission, however, has rejected as benefits of this transaction NewCap's financial commitments of $100,000 to improve studio facilities and to install a microwave transmitter link; $14,000 for a country music library and $6,000 for a technical study on possible alternative frequencies to improve CKXX's coverage. The Commision considers that these proposals fall within the categories of proposed benefits that have been generally rejected by the Commission, for reasons outlined in Public Notice CRTC 1989-109 dated 28 September 1989. Furthermore, the Commission advises NewCap that it considers only direct expenditures as eligible contributions for Canadian talent development and has therefore rejected the $20,000 commitment in indirect costs in this regard.
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Nevertheless, the Commission expects NewCap to ensure that the proposed direct and indirect expenditures of $515,000 included in the benefits package are made in accordance with the schedule outlined in the application.
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Humber Valley Broadcasting Limited (Humber), licensee of CFCB Corner Brook, filed an opposing intervention arguing that, given the small size of the Corner Brook market and NewCap's resources as a radio network owner and operator, an approval would put Humber in an 'impossible competitive position' which would threaten the viability of the intervenor's station at Corner Brook as well as its rebroadcasting stations in Labrador and northern Newfoundland.
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NewCap replied that CKXX would remain a local station with improved locally-produced programming and that its format would not be competitive with that of Humber's station CFCB. NewCap further argued that the Corner Brook market is capable of supporting two successful radio stations.
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After careful evaluation of the submission and intervenor's arguments, the Commission is satisfied that approval of this application should maintain the diversity of radio service at Corner Brook without threatening the viability of Humber's stations there or elsewhere. Moreover, pursuant to CRTC Public Notice 1990-58 dated 5 June 1990, the Commission renews the broadcasting licence for CKXX Corner Brook from 1 September 1990 to 31 August 1995.
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The Commission reaffirms the particular importance it attaches to the development of Canadian talent and is satisfied with the annual budgets allocated and the initiatives proposed by the licensee in this respect. It encourages the licensee to continue its efforts in this regard during the new licence term and to develop new initiatives for the support, development and on-air exposure of local and regional talent.
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It is a condition of 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 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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