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Ottawa, 30 July 1993
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Decision CRTC 93-324
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CHUM Limited
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Kitchener, Ontario - 930153200
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930154000
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Acquisition of assets
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Following a Public Hearing in the National Capital Region held on 16 June 1993, the Commission approves the applications for authority to acquire the assets of CKKW and CFCA-FM Kitchener from Electrohome Limited (Electrohome), doing business under the name and style of "CAP Communications", and for broadcasting licences to continue the operation of these undertakings.
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The Commission will issue licences to CHUM Limited (CHUM), expiring 31 August 1996, the current expiry date, upon surrender of the current licences. The licences will be subject to the conditions in effect under the current licences, as well as to those conditions specified in this decision and in the licences to be issued.
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CHUM, the purchaser, is the largest private radio broadcaster, and one of the largest multi-media broadcasters in Canada. It owns and operates 22 AM and FM radio stations, 6 television stations and one specialty service, MuchMusic. In Ontario, CHUM operates radio stations in Ottawa, Toronto, Windsor and Peterborough.
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The purchase price relating to this transaction is $5,000,000. 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. 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 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. As a first test, the applicant must demonstrate that the proposed transfer will yield significant and unequivocal benefits to the community served by the broadcasting undertaking and to the Canadian broadcasting system as a whole, and that it is in the public interest.
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The Commission has assessed the various projects and initiatives put forward by CHUM as being the benefits associated with this transaction. In general, the Commission is satisfied that the benefits package is clear and unequivocal, and that approval of these applications is in the public interest.
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According to CHUM, the intangible benefits to result from these applications include the continued operation of CKKW, CHUM's depth of experience and resources, as well as the implementation of the CHUM Free Ad Plan to promote new Canadian recordings on the two stations.
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Among the proposed tangible benefits, the Commission noted in particular $526,000 to be spent in the first year of operations for new facilities for CKKW and CFCA-FM, and $304,500 proposed to be spent over seven years for various projects to benefit the broadcast education program at Conestoga College in Kitchener.
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Although the Commission notes the benefit claimed in respect of the applicant's plans to spend $7,000 over seven years to provide guest speakers to Conestoga College, the Commission considers that this proposal is similar to a service that is already provided by Electrohome to the College, is not incremental and has therefore not been considered a benefit of the transaction. Nevertheless, the Commission expects the applicant to ensure that all of the proposed expenditures included in the benefits package are made in accordance with the schedule outlined in the application. This will result in a total of $830,500 in capital and operational expenditures to be incurred during the next seven years.
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In approving these applications, the Commission has taken particular note of the commitment by CHUM to preserve AM radio service to the Kitchener-Waterloo area, through the term of these licences.
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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, CHUM stated that it will assume responsibility for all existing commitments to Canadian talent development by CKKW and CFCA-FM. In addition, the Commission expects CHUM to continue to provide annual reports of Canadian talent development projects undertaken on behalf of CKKW.
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In Public Notice CRTC 1992-59 the Commission announced implementation of its employment equity policy. It 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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In Decision CRTC 93-38, dated 29 January 1993, approving CHUM's application to acquire CKLW and CKLW-FM Windsor, the Commission required the licensee to develop and implement an effective plan of action to ensure that adequate employment equity practices are followed throughout its organization. The Commission reminds the licensee to consider employment equity issues in its hiring practices and in all other aspects of its management of human resources. In particular, the Commission encourages the licensee 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 CKKW and CFCA-FM.
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It is a condition of licence that the licensee adhere to the guidelines on gender 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 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 notes the interventions submitted in opposition to this application by numerous residents of the Kitchener-Waterloo region, expressing concern primarily with the level of instrumental music to be broadcast on CFCA-FM, as well as the licensee's response to the concerns raised. The Commission encourages CHUM to be sensitive to the demands and needs of the community, although it also notes that FM radio licensees have considerable latitude in programming styles of music and that the proposals herein approved conform to the Commission's policies regarding FM radio.
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Allan J. Darling
Secretary General
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