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Ottawa, 29 January 1993
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Decision CRTC 93-37
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CHUM Limited
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Windsor, Ontario - 920344900 - 920345600 - 920551900
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Following a Public Hearing in the National Capital Region beginning on 21 September 1992, the Commission approves the applications by CHUM Limited (CHUM) for authority to acquire the assets of the radio programming undertakings for CKLW and CKLW-FM Windsor from Trillium Cable Communications Limited (Trillium), 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 CHUM, expiring 31 August 1996, upon surrender of the current licences. The short-term licences granted herein take into account the precedent-setting nature of this decision and will enable the Commission to review, following a reasonable period of time, the stations' financial situation, and the corresponding level of local service they provide as well as their contributions to Canadian talent development. The licences will be subject to the same conditions as those specified in 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 vendor, Trillium, is a wholly-owned subsidary of CUC Broadcasting Limited (CUC). CUC acquired effective control of Amicus Communications Inc. (Amicus), then licensee of CKLW and CKLW-FM in 1988 (Decision CRTC 88-135 dated 3 March 1988). Amicus was amalgamated with Trillium in 1989. CUC has extensive cable holdings in the province of Ontario, including the cable television undertaking serving Windsor. With more than 250,000 subscribers, CUC is the third largest cable operator in Ontario and the sixth largest in Canada. As well, CUC holds a 25.4% interest in YTV Canada Inc., Canada's national, English-language youth specialty service.
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The purchaser, CHUM, is a public company controlled by Allan F. Waters of Toronto. CHUM, one of Canada's largest broadcasters, owns many television and radio stations, including CKWW and CIMX-FM Windsor, the two other private radio stations currently serving Windsor. CHUM is also the licensee of MuchMusic, the English-language music video service, and holds a 50% interest in MusiquePlus, the French-language music video service.
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The purchase price relating to this transaction is $1,750,000. 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 applications for authority to transfer ownership or 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.
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In view of the fact that CHUM currently owns CKWW and CIMX-FM Windsor, the Commission has assessed the present applications in light of its concerns regarding concentration of ownership and its longstanding policy that two undertakings of the same type serving the same market in the same language should not fall under common ownership. In evaluating these applications, the Commission has also taken into consideration the unique circumstances of the Windsor market. Windsor is located immediately adjacent to Detroit, Michigan. Commercial radio stations operating in Windsor experience intense competitive pressure from the multitude of U.S. signals emanating from Detroit, the sixth largest radio market in the U.S. As a group, Windsor's four local commercial radio stations have operated at a loss over the entire period of 1981-1991. In Public Notice CRTC 1984-233 dated 25 September 1984, entitled "Windsor Radio Review" and in subsequent decisions related to Windsor, the Commission acknowledged the special characteristics that set Windsor apart from other Canadian radio markets. Given the particular difficulties facing private FM broadcasters in Windsor, the Commission has taken an extraordinarily flexible approach to the regulation of FM radio stations in that city.
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The Commission has given particular consideration to the current licensee's financial situation. At the hearing, Trillium described the difficulties of operating in the Windsor market, as demonstrated by the fact that CKLW and CKLW-FM have not produced a profit during its ownership. The Commission notes in this regard that, despite Trillium's efforts, the two stations have continued to experience substantial losses under its ownership, and that these losses have prevented the current licensee from fulfilling $73,000 of the benefits promised as part of the transfer of control approved in Decision CRTC 88-135. Trillium stated that, if approval of this transaction were denied, it may be obliged to cease the operation of CKLW and CKLW-FM. In addition, Trillium stated that, of the four offers that it had received, only CHUM's proposal contained a fully-funded commitment.
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In line with the Commission's policies, CHUM was called upon to demonstrate that the benefits to be realized under the current transaction are significant and unequivocal, commensurate with the size and nature of the transaction, taking into account the resources and responsibilities of the purchaser, and will yield measurable improvements to the community served, to the broadcasting undertakings concerned and to the Canadian broadcasting system as a whole.
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At the hearing, CHUM submitted that approval of the proposed transaction will yield a number of significant, non-quantifiable benefits. According to CHUM, the major benefit to accrue from this transaction is its commitment "to maintain two Windsor radio signals that might otherwise go silent".
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CHUM proposes to operate Windsor's four commercial stations from one central broadcast facility. The applicant argued that its plan would maintain diversity in the Windsor market because it would retain the four current formats, targeted to four different audiences covering a demographic spectrum from older teens to seniors. Moreover, CHUM claimed that the synergistic relationships and the economic efficiencies that would be achieved through consolidating the various operations of four stations would make it possible to operate the stations profitably.
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The Commission is satisfied that, with CHUM's financial support, broadcasting experience and managerial expertise, these Canadian radio services can be maintained and enhanced in Windsor. Based on the unique circumstances of the Windsor market, the Commission is further satisfied that an exception to its ownership policy is justified in order to ensure the continuation of these Canadian services in Windsor, and considers that approval of these applications is in the public interest.
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The Commission reminds the applicant, however, that the primary role of CKLW and CKLW-FM is to provide Canadian radio services that meet the particular needs and interests of Windsor residents. Accordingly, the Commission emphasizes the importance that it attaches to CHUM achieving the levels for minimum weekly Canadian content of popular music and for news programming specified later in this decision, by imposing conditions of licence in this regard.
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CHUM asked the Commission to grant CKLW and CKLW-FM flexibility with respect to certain programming commitments. The applicant based these requests upon the special circumstances of the Windsor market noted in the "Windsor Radio Review", as well as upon Windsor's status as a border market under the guidelines set out in Public Notice CRTC 1992-3. Among other requests, CHUM asked the Commmission to attach to CKLW and CKLW-FM's licences conditions authorizing the stations to broadcast a minimum weekly level of 10% Canadian popular music.
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The Commission notes that the Radio Regulations, 1986 (the regulations) require a minimum weekly level of 30% Canadian content for popular music for both AM and FM stations. In Decision CRTC 87-295 dated 15 April 1987, the Commission approved a Canadian content level of 12% for CKLW-FM in accordance with its status as an experimental licensee. Subsequently, in Decision CRTC 92-18 dated 23 January 1992, the Commission authorized CKLW-FM to maintain this level. The Commission stated in Decision CRTC 92-18 that at CKLW-FM's next licence renewal the Commission would "examine the special competitive situation for commercial broadcasters in the Windsor market and the financial situation of CKLW-FM, with a view to assessing whether or not exemptions to the regulations and elements of the FM policy should continue to be required".
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Given CHUM's ownership of all the local commercial stations in the Windsor market as a consequence of the approval granted herein and the importance that the "Windsor Radio Review" placed upon the maintenance by stations serving that market of a firm Canadian orientation in music programming, the Commission considers that CHUM should be required to increase the level of Canadian content of the popular music broadcast on CKLW-FM. The Commission therefore denies CHUM's request to be allowed to broadcast a minimum level of 10% Canadian content in the category 2 music broadcast each week on CKLW-FM. Rather, the Commission requires CHUM, as a condition of licence, to ensure that a minimum level of 20% of the category 2 music broadcast on CKLW-FM each week be Canadian.
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The Commission, however, accepts CHUM's argument that a lower level of Canadian content is justified in the case of CKLW because the majority of the musical selections which it broadcasts were composed prior to 1956, when little Canadian music was recorded. Accordingly, the Commission approves, by condition of licence, CHUM's request to broadcast a minimum weekly level of 10% Canadian category 2 music on CKLW, as long as 90% or more of the station's category 2 music selections consist of music composed before 1956. If less than 90% of CKLW's category 2 music selections consist of music composed before 1956, the Commission requires CHUM, by condition of licence, to broadcast a minimum weekly level of 20% Canadian content for category 2 music selections.
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These requirements are consistent with the provisions contained in the Commission's policy statement released today entitled "Changes to the Content Requirements for Canadian Music on Radio" (Public Notice CRTC 1993-5). In accordance with that public notice, if CKLW broadcasts category 2 music consisting exclusively of music composed before 1956, CHUM may wish to apply to the Commission to amend the station's condition of licence so that the required Canadian content level may be decreased to not less than 2% on a weekly basis.
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The Commission acknowledges the interventions submitted by the Canadian Independent Record Production Association and the Society of Composers, Authors and Music Publishers of Canada opposing CHUM's proposals to program only 10% Canadian content in the popular music broadcast each week on these stations.
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The Commission considers it vital that CHUM provide a firm Canadian orientation in the news services it produces for Windsor residents. Accordingly, the Commission approves, by condition of licence, the proposal contained in CHUM's applications to broadcast a weekly minimum of 1 hour 30 minutes of news on CKLW and CKLW-FM.
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The Commission also considers it essential that there be diversity of news programming offered by these four stations, they being the only commercial radio stations licensed to serve Windsor, and particularly in light of the inundation of Windsor by U.S. radio signals emanating news from Detroit. At the hearing, CHUM stated that it plans to operate one news centre for all four stations which would share one news director and news staff. The Commission also notes CHUM's statement at the hearing that:
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... because each of these stations is to be targeted at a different audience, the news approach of each station will be different. This difference will be developed by a news supervisor at each station, who, while drawing on the resources of the CKWW newsroom, will be dedicated to developing a news approach specifically designed to serve that station's audience.
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The Commission expects CHUM to maintain this commitment to employ a news supervisor at each station responsible for selecting, editing and packaging the news solely for that station's target audience. In view of the unique circumstances of the Windsor market, the Commission is prepared to extend the flexibility requested by CHUM with regard to certain of its other programming commitments.
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Specifically, the Commission approves, by condition of licence, CHUM's request to broadcast a weekly minimum spoken word level of 5% on CKLW-FM, rather than the minimum weekly level of 15% required by the regulations.
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CHUM asked the Commission to delete the requirement that none of the hit selections broadcast by CKLW-FM be less than five years old and to increase the station's level of hits to 100%. In the circumstances, the Commission has decided to exempt CKLW-FM from any regulatory requirements with regard to the level of hits. Moreover, the Commission has determined not to impose a requirement regarding adherence to a stated format on CKLW-FM.
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CHUM also proposed to decrease CKLW-FM's weekly music list to at least 350 distinct musical selections and to increase the maximum repeat factor to 42. In accordance with Public Notice CRTC 1992-72 dated 2 November 1992 entitled "A Review of the CRTC's Regulations and Policies for Radio", the Commission relieves CKLW-FM of any commitments with respect to the number of distinct musical selections and repeats.
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The Commission approves CHUM's application to amend the licence for CKWW Windsor to make use of the technical facilities of CKLW Windsor, including use of the existing antenna site, the frequency of 800 kHz and the power of 50,000 watts. The new licence for CKLW Windsor will be issued showing the station's technical facilities as those currently used by CKWW Windsor (frequency 580 kHz; power 500 watts and antenna site).
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CHUM indicated that it plans to create a regional Canadian information station by broadcasting CKWW's news/talk format on the strong 800 kHz frequency, which covers much of southwestern Ontario. The Commission notes CHUM's commitment made at the hearing to maintain a news/talk format on CKWW.
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The Commission reaffirms the particular importance it attaches to the development of Canadian talent. At the hearing, CHUM made a commitment to spend $5,000 annually on Canadian talent development on behalf of CKLW-FM in years one and two of the licence term, increasing to $20,000 annually commencing in year three and for the remainder of the licence term. A minimum of $5,000 of the expenditures committed on behalf of CKLW-FM will be directed to FACTOR. CHUM also made a commitment to spend $5,000 on Canadian talent development on behalf of CKLW for each year of the licence term.
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The Commission expects CHUM to submit a report, within three months of the date of this decision, providing specific details on its expenditures for the Windsor/Detroit International Freedom Festival.
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In Public Notice CRTC 1992-59, the Commission announced implementation of its employment equity policy. The Commission advised licensees that, at the time of licence renewal or upon considering applications for authority to transfer ownership or control, it would review with applicants their practices and plans to ensure equitable employment.
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Subsequent to the hearing, CHUM submitted a report on its activities in support of employment equity. In its report, CHUM acknowledged that within its organization the number of "aboriginal people, people with disabilities and visible minorities are admittedly low". CHUM did, however, indicate its intention to conduct a new census of employees.
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The Commission recognizes CHUM's involvement in various employment equity initiatives, as well as its efforts with respect to the representation of women in on-air positions. Nevertheless, the Commission considers that CHUM could increase its efforts with regard to employment equity, particularly in relation to visible minorities, people with disabilities and aboriginal people.
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The Commission requires CHUM to develop and implement an effective plan of action to ensure that adequate employment equity practices are followed throughout its organization. The Commission also encourages CHUM to promote equitable representation in on-air staff positions and in voice-overs of station-produced commercial messages. The Commission will review with the licensee its progress in these areas at the time of the licence renewal of the CHUM stations.
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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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Bea-Ver Communications Ltd., licensee of CKSY-FM Chatham, Ontario, Andrew Forsyth and Douglas Kirk, submitted opposing interventions expressing concern, among other things, that common ownership of the four stations in the Windsor market is not in the public interest. As indicated earlier in this decision, the Commission is satisfied that the unique circumstances of the Windsor market warrant an exception to the Commission's ownership policy prohibiting common ownership of two or more undertakings of the same type serving the same market. The Commission acknowledges the concerns regarding the technical amendments to CKLW's licence expressed in the interventions submitted by Reginald Gates, Ronald R. Kaucnik and Mr. and Mrs. Brant Watson. The Commission is satisfied with the applicant's replies thereto.
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The Commission also acknowledges the numerous interventions submitted in support of these applications.
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In view of the approval granted herein, no further action is required on the applications 912554300 and 911959500 submitted by Trillium for the renewal and the amendment of the licences for CKLW and CKLW-FM which were heard at the 21 September 1992 Public Hearing in the National Capital Region.
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Allan J. Darling
Secretary General
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