ARCHIVED -  Decision CRTC 98-453

Decision

Ottawa, 25 September 1998

Decision CRTC 98-453

Affinity Radio Group Inc.

St. Catharines, Ontario - 199801543

Acquisition of assets

1. Following a Public Hearing in the National Capital Region held on 20 July 1998, the Commission approves the application for authority to acquire the assets of the radio programming undertaking CHTZ-FM St. Catharines from Standard Radio Inc., and for a broadcasting licence to continue the operation of this undertaking.

2. Affinity Radio Group Inc. (Affinity) is controlled by RADIONT Inc., in which Mr. James O'Brien is the majority shareholder. Affinity is also the licensee of CKTB St. Catharines, CKSL London and CHAM Hamilton.

3. The Commission will issue a licence to Affinity, expiring 31 August 2003, (the current expiry date), upon surrender of the current licence. The licence will be subject to the same conditions as those in effect under the current licence, as well as to any other condition specified in this decision and in the licence to be issued.

4. The purchase price relating to this transaction is $5.5 million. Based on the evidence filed with the application, the Commission has no concerns with respect to the availability or the adequacy of the required financing.

5. 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.

6. The Commission has assessed the benefits package identified by the applicant as flowing from this transaction and, in general, is satisfied that it is significant and unequivocal, and that approval of the transaction is in the public interest.

7. According to Affinity, the intangible benefits to result from this application include the preservation of a strong local community voice and greater efficiencies through the combined administration of CKTB and CHTZ-FM.

8. Public Notice CRTC 1998-41 dated 30 April 1998 and entitled Commercial Radio Policy, outlined changes to the benefits test involving radio station acquisitions. In recognition that this application was submitted prior to the publication of those changes, the applicant was offered an opportunity to amend its application to reflect the new policy but declined to do so. Under the new policy, the applicant would have been expected to offer benefits totalling 6% of the purchase price, or $330,000. By maintaining its original proposal, the applicant will expend on tangible benefits a total of $450,000, to be spent over five years. The benefits set out in the application include contributions to FACTOR, musical concerts and an annual talent search with prizes including money, recording time and recording contracts.

9. It is a condition of licence that this station not be operated within the Specialty format as defined in Public Notice CRTC 1995-60, or as amended from time to time by the Commission.

10. It is also a condition of licence that the licensee broadcast, in any broadcast week, less than 50% hit material as defined in Public Notice CRTC 1997-42 dated 23 April 1997, as amended from time to time.

11. The licensee is also required, by condition of licence, to make payments to third parties involved in Canadian talent development at the level identified for it in the Canadian Association of Broadcasters' (CAB) Distribution Guidelines for Canadian Talent Development, as set out in Public Notice CRTC 1995-196 or as amended from time to time and approved by the Commission, and to report the names of the third parties associated with Canadian talent development, together with the amounts paid to each, concurrently with its annual return. The payments required under this condition of licence are over and above any outstanding commitments to Canadian talent development offered as benefits in an application to acquire ownership or control of the undertaking.

12. It is a condition of licence that the licensee adhere to the guidelines on gender portrayal set out in the CAB's Sex-Role Portrayal Code for Television and Radio Programming, as amended from time to time and accepted by the Commission. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the Canadian Broadcast Standards Council.

13. 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.

14. The Commission notes that this licensee is subject to the Employment Equity Act that came into effect on 24 October 1996 (1996 EEA), and therefore files reports concerning employment equity with Human Resources Development Canada. As a result of a consequential amendment to the Broadcasting Act, the Commission no longer has the authority to apply its employment equity policy to any undertaking that is subject to the 1996 EEA.

This decision is to be appended to the licence.

Laura M. Talbot-Allan
Secretary General

This document is available in alternative format upon request.