ARCHIVED -  Decision CRTC 94-709

Decision

Ottawa, 29 August 1994

Decision CRTC 94-709

Western World Limited Partnership

Winnipeg, Manitoba - 931160600 - 940231400

Licence renewal and deferral of benefits

Following a Public Hearing in Saskatoon beginning on 6 June 1994, the Commission renews the broadcasting licence for CKRC Winnipeg from 1 September 1994 to 31 August 1997, subject to the conditions in effect under the current licence, as well as to those conditions specified in the licence to be issued.

Although the licence term granted herein is less than the maximum of seven years permitted by the Broadcasting Act, this is solely for the purpose of enabling the Commission to consider the next licence renewal of this undertaking in accordance with the Commission's regional plan and to better distribute the workload within the Commission. This term is not reflective of any Commission concerns regarding the licensee's performance.

Also considered at the 6 June hearing was an application by the licensee to defer, until the station is operating profitably, approximately $164,700 in tangible benefits related to Canadian talent development, accepted in Decision CRTC 91-58, which approved the acquisition of CKRC from Armadale Communications Limited (Armadale). The same application also requested the deferral of $28,325 in direct expenditures for Canadian talent development, accepted in Decision CRTC 89-539, which last renewed the licence for CKRC. Those direct cost commitments were assumed by the licensee, as part of the acquisition from Armadale.

At the hearing, the licensee explained that, although it had "found a number of ways to reduce operating costs" since its purchase of CKRC, the station continued to suffer large losses each month, due to the economic pressures of the recession.

With respect to the request to defer the implementation of benefits accepted in Decision CRTC 91-58, at the hearing the licensee revised its estimate of the value of the unimplemented benefits to a total of $176,100. The licensee proposed an implementation schedule for these benefits, to take effect over a seven-year period. Under this schedule, any expenditures in respect of these outstanding commitments would be completely deferred until the third year. Spending in each of years three to five would be set at a minimum of $25,000 and, in years six and seven of the schedule, the licensee would spend $50,000
annually.

In light of the station's serious and long-standing financial difficulties, the Commission approves this request, and expects the expenditures to be made in accordance with the schedule noted above.

The Commission reaffirms the particular importance it attaches to the development of Canadian talent. With respect to the licensee's undischarged commitment of $28,325 in direct cost expenditures on Canadian talent development during the current licence term, the licensee proposed to allocate direct costs of $9,240 over the next seven years ($1,320 per year) to FACTOR, and to meet the remaining commitment of $19,000 over the same time period through initiatives involving indirect costs. Given the licensee's financial circumstances, the Commission has no objection to this proposal, and the request is accordingly approved.

Since the new licence term is for a period of only three years, the Commission will wish to review with the licensee its progress in implementing both the schedule and the plans noted above, at the time of the next licence renewal of CKRC.

As part of its renewal application, the licensee did not propose a commitment in direct expenditures to Canadian talent development, except for the amount of $9,240 noted above which is to be deferred from the licence term about to expire.

In Public Notice CRTC 1992-72 entitled "A Review of the CRTC's Regulations and Policies for Radio", the Commission stated that "it would be prepared, at the time of licence renewal, to consider proposals by the licensees of unprofitable stations that they meet their obligations through indirect on-air initiatives... Such stations will, however, be expected to maintain a strong commitment to Canadian talent development through indirect initiatives." The licensee is encouraged to expand further its indirect expenditures and/or initiatives until such time as the station achieves a positive operating income, the profit before interest and tax (PBIT) index being the primary profitability indicator.

In Public Notice CRTC 1992-59 dated 1 September 1992 and entitled "Implementation of an Employment Equity Policy", the Commission announced that the employment equity practices of broadcasters would be subject to examination by the Commission. It encourages the applicant to consider employment equity issues in its hiring practices and in all other aspects of its management of human resources.

Allan J. Darling
Secretary General