ARCHIVED - Decision CRTC 2000-744

Decision CRTC 2000-744

Ottawa, 29 November 2000

3649091 Canada Ltd.
Montréal, Quebec - 200015364

18 September 2000 Public Hearing
National Capital Region

Acquisition of the assets of CJNT-TV

The Commission approves the application by 3649091 Canada Ltd., a wholly-owned subsidiary of CanWest Global Communications Corp., to acquire the assets of CJNT-TV Montréal currently held by Raymond Chabot inc., trustee of CTEQ Télévision inc., in bankruptcy.

In approving this application, the Commission has taken into consideration CanWest Global's extensive broadcasting experience, including its success in dealing with ailing stations. The Commission has also noted the applicant's strong commitment to consult with Montréal's ethnic communities through CJNT-TV's Advisory Council. The Commission is satisfied that this transaction will permit CJNT-TV to continue serving the needs and interests of various ethnic communities while reflecting the particular characteristics of Montréal's market.

The terms, conditions, commitments and expectation pertaining to the licence are set out in the appendix to this decision.

Background

CJNT-TV was originally licensed to CTEQ Télévision Inc. in 1995 to provide a multilingual television service to audiences in the Montréal area and to meet the distinct needs of the various linguistic communities and diverse cultural groups in the region. The station has encountered financial difficulties ever since it was licensed. In April 2000, CTEQ was placed in receivership. Raymond Chabot inc., acting as trustee of CTEQ, in bankruptcy, was given temporary management authority of CJNT-TV.

CanWest Global is one of the largest, most profitable broadcasters in Canada. Currently, its television stations serve over 80% of the English-language population across the country. In Quebec, CanWest Global, through a limited partnership arrangement, operates CKMI-TV Québec which it acquired in 1997. At the time, CKMI-TV's future was less than certain. Since then, CanWest Global has turned the station around giving it a new look and a more promising future.

Benefits of the transaction

At the hearing, the Commission discussed with CanWest Global its request to be exempted from the benefits policy for ownership transactions involving television stations set out in Building on success - A policy framework for Canadian television (PN 1999-97). In support of its request, CanWest Global stated that it has been contributing $250,000 a month to CJNT-TV for almost a year, totalling about $3 million. CanWest Global inherited an interest in the station as part of a major acquisition that was approved in July 2000. Under this transaction, CanWest Global acquired ownership interest in various broadcasting properties previously held by WIC Western International Communications Corp. (Decision CRTC 2000-221). At the hearing, CanWest Global stated that will "continue to fund [CJNT-TV] while the station recovers and eventually does become profitable." It does not expect the station to achieve profitability in the first four years of operation.

The Commission agrees with the applicant that significant intangible benefits will flow from approval of this application. One of the principal benefits of this transaction is that it will maintain CJNT-TV's ethnic television service to Montréal audiences. In addition, CJNT-TV will be able to share space, technical facilities and administrative resources with CanWest Global's existing operations in Quebec. Accordingly, most of the new revenues generated by the station will be directed to ethnic programming. This will enable CanWest Global to improve the quality of ethnic programming offered on CJNT-TV.

CanWest Global also proposed a number of programming enhancements. It will add a new window to showcase Quebec-based French-language, non-ethnic programming. Such programming will foster better understanding between Montréal's ethnic and French-speaking communities. By simulcasting English-language, U.S. programs on CJNT-TV, CanWest Global hopes to repatriate advertising revenues and viewers from U.S. border stations. CJNT-TV's programming changes are discussed below.

Programming

CJNT-TV will continue to serve a variety of ethnic groups. It will broadcast ethnic programs directed to at least 18 distinct ethnic groups in 15 different languages monthly, and to at least 25 distinct ethnic groups in 25 different languages annually.

CanWest Global emphasized that CJNT-TV's programming will reflect the needs and interests of its target audience. In making its programming choices, the applicant will consult extensively with CJNT-TV's Advisory Council of five members, chosen for their outstanding involvement in local ethnic communities. CanWest Global plans to expand the Council's role to explore various issues such as viewing alternatives, the economic viability of the station as well the proportional size of ethnic communities.

Level of ethnic and non-ethnic programming

Currently, CJNT-TV must, by condition of licence, broadcast only ethnic programming. The Commission imposed this condition based on CTEQ's commitments in its original application for a licence.

CanWest Global argued that CJNT-TV cannot survive if it offers only ethnic programming and relies on advertising as its sole source of revenues. It explained that it must offer non-ethnic programming that would appeal to mainstream audiences in order to generate the revenues needed to support its ethnic programming and to achieve profitability. The applicant asked the Commission to remove CJNT-TV's current condition and to impose a new one that would allow the station to offer non-ethnic programming. The Commission approves this request.

Under the new condition, CJNT-TV must devote at least 50% of the evening period between 6 p.m. and midnight to ethnic programming, on a monthly basis. It must also broadcast at least 75% ethnic programming between 8 p.m. and 10 p.m., annually.

At the same time, in each year, CJNT-TV must not broadcast more than 40% non-ethnic programming over the broadcast day and not more than 50% between 6 p.m. and midnight.

CJNT-TV's model is similar to the approach that has worked in practice for ethnic station CFMT Toronto.

CanWest Global proposed to simulcast non-ethnic, U.S. English-language programming, primarily during the early evening and late night weekdays, and to introduce Quebec-based, French-language, non-ethnic programming in the noon, early afternoon and evening periods. The applicant maintained that CJNT-TV would not entirely reflect the reality of the Montréal market without the presence of French-language programming. It cited interventions to an earlier application by CTEQ pointing out that many members of Montréal's ethnic communities speak French rather than English as their second language (Decision CRTC 99-70).

During the periods where the licensee chooses to broadcast non-ethnic programming, no less than 35% but no more than 60% of the total number of hours devoted annually to non-ethnic programming shall be devoted to non-ethnic English-language programming. Similarly, no less than 35% and no more than 60% of the total number of hours devoted annually to non-ethnic programming shall be devoted to non-ethnic French-language programming.

The Commission notes CanWest Global's commitment not to broadcast any French-language programming between 8 p.m. and 10 p.m.

CanWest Global made a commitment to devote at least 25% of its film schedule to Canadian films. CJNT-TV will broadcast non-ethnic films on weekends (excluding the late afternoon). Each week, it will alternate between English- and French-language films.

At the hearing, CanWest Global stressed that even though CJNT-TV will offer some conventional programming, its [Translation] "service will remain predominantly ethnic." The applicant also stated that [Translation] "during the "peak prime viewing" time between 8 p.m. and 10 p.m. ethnic programming will be predominant".

Local reflection

As outlined in its Ethnic broadcasting policy, the Commission considers that ethnic stations have a primary responsibility to serve and reflect their local community. In the policy, the Commission advised ethnic broadcasters that it would expect them, at the time of licensing and renewal, to provide plans on how they will reflect local issues and concerns.

The Commission is confident that CanWest Global's extensive broadcasting experience and its existing resources in Quebec will strengthen CJNT-TV's ethnic service. At the same time, the Commission considers that the local ethnic programming offered by CJNT-TV is a key factor to the station's success. Accordingly, the Commission expects CanWest Global to increase the level of local ethnic programming broadcast on CJNT-TV as the station's financial position improves over the licence term.

Canadian content

The Ethnic broadcasting policy requires ethnic television stations to broadcast the same minimum Canadian content levels as non-ethnic, private television stations: 60% Canadian content overall and 50% during the evening broadcast period (between 7 p.m. and 11 p.m.). This requirement is set out in the Television Broadcasting Regulations, 1987.

In the Ethnic broadcasting policy, the Commission stated that it could vary the Canadian content requirements for ethnic television stations where warranted, taking into consideration, among other things, the licensee's commitments and the circumstances of the local market. The Commission considers that, in this case, it is appropriate to permit CJNT-TV to broadcast a lower minimum level of Canadian content. Accordingly, the Commission approves CanWest Global's request to be exempted, by condition of licence, from this requirement of the regulations. Instead, CJNT-TV will broadcast minimum Canadian content levels of 50% during the broadcast day and 40% during the evening broadcast period.

Other matters

At the hearing, CanWest Global committed to close-caption 90% of its U.S. non-ethnic programming. It was, however, unable to offer any specific commitments to close-caption local and other Canadian ethnic programming. The Commission encourages the applicant to make a significant effort to offer captioned third-language programming during the new licence term.

The Commission has taken into consideration all of the interventions to this application.

Related CRTC documents

• Decision 1999-97 - Acquisition by CanWest Global Communications Corp., through its wholly-owned subsidiary CW Shareholding Inc., of the ownership interests held previously by WIC Western International Communications Ltd. in various conventional television stations and in certain other broadcasting undertakings

• Decision 99-70 - Change in ownership of 2922045 Canada inc., the company that controls CTEQ Télévision inc.
  

• Decision 97-85- Acquisition of the assets and licence amendments for CKMI-TV Québec
  

• Decision 95-569 - New multilingual television service
  

• Public Notice 1999-117 - Ethnic broadcasting policy
  
  

Secretary General

This decision is to be appended to the licence. It is available in alternative format upon request, and may also be examined at the following Internet site: www.crtc.gc.ca

Appendix to decision 2000-744

Terms, conditions, commitments and expectation pertaining to the licence issued to 3649091 Canada Ltd., a wholly-owned subsidiary of CanWest Global Communications Corp., for the ethnic television programming undertaking CJNT-TV

Terms

Upon surrender of the current licence, the Commission will issue a licence to 3649091 Canada Ltd., expiring 31 August 2007. The licence will be subject to the conditions specified in this appendix and in the licence to be issued.

This licensee is subject to the Employment Equity Act that came into effect on 24 October 1996 and therefore files reports concerning employment equity with Human Resources Development Canada.

Conditions of licence

1. CJNT-TV shall devote to the broadcasting of ethnic programs:

a) not less than 50% of the total number of hours broadcast monthly between 6 p.m. and midnight; and

b) not less than 75% of the total number of hours broadcast annually between 8 p.m. and 10 p.m.

2. CJNT-TV shall devote to the broadcasting of Canadian programs:

a) not less than 50% of the total number of hours broadcast annually between 6 a.m. and midnight; and

b) not less than 40% of the total number of hours broadcast annually between 6 p.m. and midnight.

3. CJNT-TV shall devote to the broadcasting of non-ethnic programs:

a) not more than 40% of the total number of hours broadcast annually between 6 a.m. and midnight; and

b) not more than 50% of the total number of hours broadcast annually between 6 p.m. and midnight.

4. In periods where the licensee chooses to broadcast non-ethnic programming:

a) no less than 35% and no more than 60% of the total number of hours dedicated annually to non-ethnic programming shall be devoted to English-language non-ethnic programming;

b) no less than 35% and no more than 60% of the total number of hours dedicated annually to non-ethnic programming shall be devoted to French-language non-ethnic programming;

5. CJNT-TV shall broadcast ethnic programs directed toward not less than 18 distinct ethnic groups monthly, and toward not less than 25 distinct ethnic groups annually.

6. CJNT-TV shall broadcast ethnic programs in not less than 15 different languages monthly, and not less than 25 different languages annually.

7. The licensee shall adhere to CJNT-TV's Code of programming standards and practices, as filed with the approved application, and as amended from time to time and accepted by the Commission.

8. In addition to the 12 minutes of advertising material permitted by section 11(1) of the Television Broadcasting Regulations, 1987, the licensee may broadcast more than 12 minutes of advertising material in any clock hour in a broadcast day, in order to broadcast infomercials as defined in Public Notice CRTC 1994-139 and in accordance with the criteria contained in that public notice, as amended.

9. The licensee shall 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.

10. The licensee shall adhere to the guidelines on the depiction of violence in television programming set out in the CAB's Voluntary code regarding violence in television programming, as amended from time to time and approved by the Commission.

12. The licensee shall 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.

Commitments

The licensee will not broadcast any French-language programming between 8 p.m. and 10 p.m.

The licensee will devote at least 25% of its film schedule to Canadian films.

The licensee will broadcast 13 hours 30 minutes of original local ethnic programming each week.

The licensee will close-caption 90% of its U.S. non-ethnic programming.

Expectation

The Commission expects the licensee to increase the level of local ethnic programming broadcast on CJNT-TV as the station's financial position improves over the licence term.