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Ottawa, 19 June 1992
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Decision CRTC 92-396
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Standard Radio Inc.
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Calgary and Edmonton, Alberta - 913033700 - 913034500 - 920055100 - 920056900 - 920057700 - 920118700
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Following a Public Hearing in Edmonton on 5 May 1992, the Commission approves the applications by Standard Radio Inc. (Standard) for authority to acquire the assets of CFCN Calgary and its transmitter (shortwave) CFVP Calgary as well as CJAY-FM Calgary and its transmitters CJAY-FM-1 Banff, Alberta and CJAY-FM-3 Invermere, British Columbia from CFCN Communications Limited (CFCN), and for broadcasting licences to continue the operation of these radio programming undertakings, under the same terms and conditions as the current licences, as well as to any other condition specified in this decision and in the licences to be issued.
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The Commission also approves Standard's applications for authority to acquire the assets of CFRN and CJKE-FM Edmonton from Electrohome Limited (Electrohome), doing business under the name and style of Sunwapta Broadcasting, and for broadcasting licences to continue the operation of these radio programming undertakings, under the same terms and conditions as the current licences as well as to any other condition specified in this decision and in the licences to be issued. The Commission will issue licences to Standard, expiring 31 August 1996, upon surrender of the current licences.
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Standard, the purchaser, is currently the licensee of seven radio programming undertakings in Ontario and Quebec. In addition, Standard Broadcasting Corporation Limited, the applicant's parent company, owns 100% of Télécâble Laurentien Inc., licensee of the cable distribution undertakings serving Rockland, Ontario and Hull, Aylmer and Gatineau, Quebec.
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CFCN, the vendor of radio stations CFCN and CJAY-FM and their transmitters, will continue as the licensee of CFCN-TV Calgary, the CTV affiliate serving southern Alberta. Maclean Hunter Limited, the parent company of CFCN, operates cable, radio and television undertakings across Canada.
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Electrohome, the vendor of CFRN and CJKE-FM, will continue as the licensee of CFRN-TV Edmonton, the CTV affiliate serving northern Alberta, and of CKCO-TV Kitchener, Ontario, the CTV affiliate serving southwestern Ontario.
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The purchase price of the transaction relating to the Calgary stations is $8.75 million. The purchase price of the transaction relating to the Edmonton stations is $5.2 million, subject to adjustments for working capital, plus a revenue-sharing arrangement for a five-year period which is expected to involve an additional payment of $295,000. 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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Because the Commission does not solicit competing applications for authority to transfer effective control of broadcasting undertakings, the onus is on the applicant to demonstrate to the Commission that the applications filed are the best possible proposals under the circumstances, taking into account the Commission's general concerns with respect to transactions of this nature. As a first test, the applicant must demonstrate that the proposed transfers will yield significant and unequivocal benefits to the communities served by the broadcasting undertakings and to the Canadian broadcasting system as a whole, and that they are in the public interest.
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In particular, the Commission must be satisfied that the benefits, both those that can be quantified in monetary terms and others that may not easily be measured in terms of dollar value, are commensurate with the size of the transactions and take into account the responsibilities to be assumed, the characteristics and viability of the broadcasting undertakings in question, and the scale of the programming, management, financial and technical resources available to the purchaser.
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The Commission has assessed the benefits packages identified by the applicant as flowing from these transactions and, in general, is satisfied that they are significant and unequivocal, and that approval of these transactions is in the public interest.
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The benefits packages represent direct expenditures of $897,000 and indirect expenditures of $917,000, over five years, for the transaction related to the Calgary stations, as well as direct expenditures of $590,000 and indirect expenditures of $569,000, over five years, for the transaction related to the Edmonton stations. One of the benefits proposed by Standard is its commitment to allocate on behalf of the Calgary and Edmonton stations a cash grant of $125,000, over five years, to Canadian Women in Radio and Television (CWRT). In qualifying this as an acceptable benefit, the Commission has taken into consideration Standard's commitment that this cash contribution would be "above and beyond any other efforts [it is] making, or expenses... on behalf of employment equity". The Commission has noted the reference made by Standard's counsel at the hearing to the programs that CWRT will support in fulfilment of the organization's objective. The Commission expects Standard to direct that its grant be used to fund CWRT's programs, and not for ongoing administrative costs, nor for membership fees.
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The Commission expects the licensee to submit a report, at licence renewal time, containing precise details concerning implementation of the benefits promised under these applications including the various budgetary expenditures associated with each benefit.
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The Commission reaffirms the particular importance it attaches to the development of Canadian talent. In its applications to acquire the assets of these radio stations, Standard stated that it will assume responsibility for all existing commitments to Canadian talent development by CFCN, CFVP and CFRN, as well as for the initiatives proposed in the renewal applications noted below for CJAY-FM Calgary and CJKE-FM Edmonton.
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It is a condition of each licence that the applicant adhere to the guidelines on sex-role portrayal 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 applicant 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 Eric Neville's comments regarding Standard's application for authority to acquire the assets of the Edmonton stations from Electrohome and the applicant's reply thereto. The Commission also acknowledges the numerous interventions submitted by interested parties in support of these transactions.
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In view of the approval granted herein, no further action is required on application 911690600 submitted by CFCN for the renewal of the licence for CJAY-FM and its transmitters which was announced in Public Notice CRTC 1992-16 dated 20 February 1992. In addition, no further action is required on application 911637700 submitted by Electrohome for the renewal of the licence for CJKE-FM which was on the agenda of the Edmonton Public Hearing on 5 May 1992.
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The Commission also notes that, among the applications considered at the Edmonton hearing, was a request (920057700) by Standard for a network licence for the purpose of broadcasting the hockey games of the Edmonton Oilers during the 1991-1992 hockey season. Given that this hockey season has now been completed, no further action is required with respect to this application.
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Standard had originally applied for authority for a network licence for the purpose of broadcasting the football games of the Edmonton Eskimos (920118700). However, prior to the hearing, Electrohome advised the Commission that it no longer held the broadcast rights for the Edmonton Eskimos. As a result, the Commission did not consider this application at the public hearing and, in Decision CRTC 92-386 released today, has revoked the licence issued to Electrohome in this regard.
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Allan J. Darling
Secretary General
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