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Ottawa, 22 January 1991
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Decision CRTC 91-58
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Western World Communications Ltd.
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Regina, Saskatchewan and Winnipeg, Manitoba - 902072800 - 902073600 - 902074400 - 902075100
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Following a Public Hearing in Edmonton beginning on 21 November 1990, the Commission approves the applications submitted by Western World Communications Ltd. (Western World) for authority to acquire the assets of CKCK, CKIT-FM Regina and CKRC, CHZZ-FM Winnipeg from Armadale Communications Limited (Armadale), and for broadcasting licences to continue the operation of these undertakings, under the same terms and conditions as the current licences.
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The Commission will issue licences to Western World upon surrender of the current licences. The licences will expire 31 August 1992 in respect of CKIT-FM and CHZZ-FM, 31 August 1994 in respect of CKRC and 31 August 1995 in respect of CKCK. These correspond with the expiry dates of the current licences. The licences to be issued will be subject to the same conditions as those specified in the current licences as well as any other conditions that may be specified in this decision or in the licences to be issued. Western World, which is effectively controlled by Clint C. Forster of Saskatoon, is licensee of CJWW Saskatoon and CKST Langley, and owns 100% of Balsa Broadcasting Corp., licensee of CHMG St. Albert.
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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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The purchase price relating to this transaction is $10,500,000, subject to adjustments. 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 Commission has assessed the benefits package identified by the applicant as flowing from this transaction. These benefits totalled $1,071,690 which included $827,190 in direct expenditures over five years. In general, the Commission is satisfied that the proposed benefits are significant and unequivocal, commensurate with the size and nature of the transaction, and that they take 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 Western World. Further, although neither claimed by the applicant nor treated by the Commission as benefits accruing from this transaction, the Commission, has taken note of Western World's undertaking, outlined in its plan to improve the financial situation of the four stations, to spend over $1 million in technical improvements and $350,000 over five years in audience research studies.
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The Commission has also considered the commitment made by Mr. Forster at the hearing to the effect that Western World and its parent company will make available the required financial resources to ensure that the stations remain in operation. In this regard, Mr. Forster stated that "the radio services... have not been profitable for a number of years and we expect it will take another three to four years to turn them into black ink operations".
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In light of all the above, the Commission considers that approval of these applications is in the public interest.
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The Commission expects Western World to ensure that all of the proposed $827,190 in direct expenditures included in the benefits package are made in accordance with the schedule outlined in the applications.
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The Commission also notes that Western World assumes the responsibility for ensuring that all existing commitments of the four stations, including contributions to the development of Canadian talent, are met over the current licence terms.
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At the hearing, the Commission discussed with Armadale the results of a Self-Assessment Report submitted by CKIT-FM for the week of 19 to 25 August 1990. This report revealed a shortfall in foreground programming and a breach of the condition of licence restricting vocals to a maximum of 65% of all category 5 selections aired during any broadcast week. At the hearing, Armadale stated that more foreground programming has been added to its schedule and gave assurances that it is currently exceeding its commitment of 15% foreground programming and that the level of instrumental selections broadcast by the station is currently averaging 36% to 38% per week.
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The Commission notes Armadale's assurances that CKIT-FM and the three other stations are currently operating in compliance with their Promises of Performance. It places particular importance on the further assurances by Western World that such compliance will be maintained.
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In the case of each station, it is a condition of licence that the applicant adhere to the guidelines on sex-role stereotyping set out in the Canadian Association of Broadcasters' (CAB) Sex-Role Portrayal Code For Television and Radio Programming, 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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The Commission acknowledges the numerous interventions received in support of Western World's applications.
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Allan J. Darling
Secretary General
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