ARCHIVED -  Decision CRTC 95-118

Decision

Ottawa, 27 March 1995

Decision CRTC 95-118

Partners of Radiomédia S.E.N.C., including Télémédia Communications Inc. and Radiomutuel Inc.

Montreal, Quebec - 941518300 - 941526600

Transfer of assets of CKAC and new French-language news network -
authorized

Following a Public Hearing in Montréal on 19 December 1994, the Commission approves the application for authority to acquire the assets of CKAC Montreal from Télémédia Communications Inc. (Télémédia), and for a broadcasting licence to continue the operation of this undertaking.

The Commission also approves the application for a broadcasting licence to operate a French-language AM radio news network for the purpose of broadcasting newscasts, public affairs programs and sports programs in place of the AM news network currently operated by Télémédia.

The Commission will issue licences to the partners of Radiomédia S.E.N.C., including Télémédia Communications Inc. and Radiomutuel Inc. (Radiomédia S.E.N.C.), expiring 31 August 1999, upon surrender of the current licences for CKAC and the Télémédia AM news network. This period will enable the Commision to review, within a reasonable period, the implementation of the programming proposals put forward by the applicant. It will also enable the Commission to consider the renewal of these licences at the same time as those of the other radio broadcasting undertakings in the region. CKAC's licence will be subject to the conditions in effect under the current licence; both licences will also be subject to any other condition specified in this decision and in the licences to be issued.

In view of the approval granted herein, no further action is required on the applications (940785900 and 940795800) submitted by Télémédia for the renewal of the licences of CKAC and its AM news network, which were also on the agenda of the 19 December 1994 public hearing.

Restructuring of AM radio in Quebec

The current applications were filed with the Commission in the context of a major restructuring of the AM broadcasting undertakings of Télémédia and Radiomutuel Inc. (Radiomutuel) in the province of Quebec, announced on 30 September 1994. Under this restructuring, six AM radio stations have been closed: CJMS Montréal, CJRP Quebec City, CJTR Trois-Rivières, CJRS Sherbrooke, CJMT Chicoutimi and CKCH Hull. At the request of the licensees involved, the Commission revoked the licences of these stations, as well as the licence for Radiomutuel's AM radio network, on 2 November 1994 (Decisions CRTC 94-845 and 94-846).

Radiomédia S.E.N.C. argued that this restructuring had become necessary, due in part to the difficult economic situation AM radio has been facing for a number of years and the significant losses it had incurred. It noted in particular that, between 1989 and 1993, AM radio in Quebec as a whole posted cumulative losses of more than $60 million, close to 50% of which was borne by Télémédia and Radiomutuel. It added that, during this period, advertising revenues declined by 33%, and that the situation was apparently not about to improve, notwithstanding certain measures that had been taken to rationalize operations.

The applicant stated that, in the circumstances, it had come to the conclusion that it would have to regroup and retrench its AM radio holdings in Quebec if it were to maintain an adequate level of service. It decided to implement this plan by retaining a single AM station in each region, the one with the best frequency and capable of reaching the widest audience, and by creating a new AM network, the Radiomédia network, anchored by two stations owned equally by Télémédia and Radiomutuel, namely CKAC Montréal and CHRC Quebec City (see CRTC Decision 95-119 of today's date). The applicant has also decided to establish a news agency, Radiomédia Information, with CKAC as the flagship station, to provide the Radiomédia network stations with a news service operating 24 hours per day, 7 days per week.

Ownership

Radiomédia S.E.N.C. is a general partnership owned equally by Télémédia and Radiomutuel. In this regard, the applicant noted at the hearing that Télémédia and Radiomutuel have not merged their respective undertakings; it added that, with the exception of CKAC and CHRC, AM stations maintained in operation following the restructuring will be affiliated to the Radiomédia network and will continue to be owned by Télémédia or Radiomutuel as the case may be. It also noted that the FM stations of Télémédia and Radiomutuel are likewise unaffected by the restructuring, and will continue to compete in their respective markets.

With regard to the terms of the transaction in relation to the transfer of the CKAC assets, and more particularly the condition attached to all licences stipulating that a broadcasting undertaking "shall be operated in fact by the licensee itself", the Commission has noted the explanations given by the applicant at the hearing concerning compliance with this condition of licence.

Proposed benefits

With the exception of an annual contribution of $25,000 to Musicaction over a seven-year period, which was proposed as support for Canadian talent, the applicant did not propose any tangible benefits in the context of the CKAC transaction. The Commission notes, however, that CKAC has been unprofitable over the four years preceding filing of this application. Accordingly, the Commission is satisfied that the applications meet the criteria set out in Public Notice CRTC 1993-68 entitled "Application of the Benefits Test at the Time of Transfers of Ownership or Control of Broadcasting Undertakings".

Radiomédia S.E.N.C. further argued that, notwithstanding the unfortunate consequences of the restructuring, including station closures and job losses that were the subject of a number of interventions, both the industry and the general public will derive some definite benefits. In particular, the applicant argued that the restructuring will improve the economic health of Quebec radio and create favourable conditions for ensuring the survival of news and public affairs radio with a predominantly spoken word content.

Programming

In addition to producing 50 hours 30 minutes per week of programs for the Radiomédia network, CKAC will also produce 75 hours 30 minutes per week of local programs directed to the metropolitan Montréal area. This production includes 6 hours 36 minutes per week of local and regional news and 10 hours of provincial, national and international news which CKAC will also aprovide to the Radiomédia network. The balance of the network's programming will be composed of public affairs, magazine programs and open-line talk shows dealing with sports.

Of those who submitted interventions to the current applications, eight appeared at the hearing. They included the Fédération professionnelle des journalistes du Québec, unions representing the interests of the employees of the affected stations, and two journalists who appeared in a personal capacity. Although most of the interveners did not oppose the applications, several expressed some concern regarding the consequences of the restructuring, especially on the quality of news reporting. They argued, among other things, that the rationalization measures applied to radio in recent years have primarily been at the expense of news services, and they demanded safeguards in this regard in the form of conditions of licence or some other
mechanism.

The Commission has examined closely the requests of the interveners and the applicant's statements in this regard at the hearing, and is of the view that imposition of a condition of licence would be justified in the circumstances. Since the operation of CKAC and the proposed news network will be closely linked, and in order to ensure the long-term supply of a minimum level of news reporting, it is a condition of licence applicable to both CKAC and the proposed network that the licensee produce and broadcast at least 16 hours 36 minutes of news per week.

Some interveners expressed concern about the parliamentary coverage provided in Quebec City and Ottawa by CHRC Quebec City and CJRC Gatineau. The Commission notes the applicant's statement in reply that there would be ongoing coverage of both Parliament Hill and the National Assembly while each of the respective parliaments is in session.

The Commission further notes that, in the context of the current applications, Radiomédia S.E.N.C. will establish a news agency, Radiomédia Information. The agency will employ about twenty journalists, 14 of whom will be stationed in Montréal and Quebec City. A further 25 journalists working in the newsrooms of the network's stations will act jointly with the agency's staff to provide a provincial, national and international news service on a sustained basis, including evenings and weekends. The applicant explained that Radiomédia Information now serves approximately fifty radio stations throughout Quebec.

It is a condition of each 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 accepted by the Commission. The aforementioned condition of licence shall not apply as long as the licensee is a member in good standing of the Canadian Broadcast Standards Council.

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 accepted by the Commission.

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. Following the discussion on this matter at the hearing, the Commission expects Radiomédia S.E.N.C. to develop and implement a plan to ensure that adequate measures are established in each of its undertakings in regard to employment equity. The Commission expects the licensee to submit a report within six months of the date of this decision stating what steps have been taken to this effect. It also intends to review this issue at the next licence renewal of the applicant's undertakings.

Allan J. Darling
Secretary General