ARCHIVED - Decision CRTC 2000-766

Decision CRTC 2000-766

Ottawa, 21 December 2000

Grand Slam Radio Inc.
Vancouver, British Columbia
- 200017055

20 November 2000 Public Hearing
Burnaby, British Columbia

Assets transfer - CKST Vancouver

The Commission approves the application by Grand Slam Radio Inc. for authority to acquire the assets of CKST Vancouver from Radio One Broadcasting Corporation, and for a broadcasting licence to continue the operation of the undertaking.

The Commission will issue a licence to Grand Slam expiring 31 August 2003 (the current expiry date), upon surrender of the current licence. The licence will be subject to the conditions contained in the licence to be issued, as also set out in Public Notice CRTC 1999-37, and to the further condition specified later in this decision concerning expenditures on Canadian talent development.

Benefits test not applied

The purchase price attached to this transaction is $1.1 million, subject to adjustments on closing. 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.

CKST has been unprofitable over the three years preceding filing of this application. Accordingly, and in keeping with the Commission's policy for commercial radio, the tangible benefits normally obligatory in respect of transactions involving the transfer of ownership or control of radio undertakings are not required in this case. The Commission notes, however, the important intangible benefit associated with this transaction, that being the maintenance of CKST as a viable, local radio service. In addition, because the purchaser is a new participant in the radio industry, there will be no decrease in the diversity of radio news voices available in the Vancouver radio market. Accordingly, the Commission is of the view that approval of this application is in the public interest. The Commission also notes the applicant's plans to program CKST in an all-sports format, one not currently offered by other stations in that market.

Proposed Canadian talent development initiatives

The new licensee has not proposed to participate in the Canadian talent development (CTD) plan created by the Canadian Association of Broadcasters. Instead, it has agreed to abide by a condition of licence requiring it to expend a minimum of $25,000 per year on CTD initiatives and, in fact, has proposed annual expenditures well in excess of that amount ($56,500).

Of this $56,500, Grand Slam proposed to spend a minimum of $7,000 each year on scholarships to assist students enrolled in the broadcast journalism program at the British Columbia Institute of Technology. A further minimum of $4,500 per year will be spent on bursaries awarded to students planning careers in sports broadcasting, and who are enrolled at the University of British Columbia, Simon Fraser University or the University of Victoria.

As a third initiative, Grand Slam proposed to invest $45,000 per year in sports broadcasting internships. The program, to be run in partnership with local post-secondary educational institutions and sports groups, would provide in-station training to a series of qualified candidates each year.

The Commission notes that, in order to qualify as acceptable CTD initiatives, expenditures must generally be linked to the development of Canadian musical and /or artistic talent. Scholarships and bursaries that provide financial support to students engaged in music, journalism or other artistic studies, such as those described in paragraph 6 above, also qualify. However, in the case of internships or other in-station training, the Commission has generally considered such initiatives to be as much a potential benefit to the station concerned as they are to individuals participating in the program. It has therefore deemed expenditures related to such initiatives to be regular programming expenses, and thus not to be acceptable CTD expenditures.

It is therefore a condition of licence that, in addition to its commitments to annual expenditures of $11,500 on bursaries and scholarships noted above, the licensee make further direct contributions to CTD each year of at least $13,500. The Commission requires the licensee to ensure that the full minimum amount of $25,000 to be expended each year meets the Commission's criteria for generally accepted direct CTD expenditures as set out in Appendix I of Public Notice CRTC 1990-111 entitled An FM policy for the nineties.

Past CTD requirements left unfulfilled by Radio One

In Decision CRTC 99-502, the Commission renewed the CKST licence held by Radio One for a short term only. This was due to Radio One's failure to comply with a condition of its licence specifying an annual CTD expenditure of $27,000. In its decision, the Commission expected Radio One to make up the outstanding shortfall in such expenditures, namely $34,500, during the first two years of its renewed licence. This obligation remains unfulfilled. Accordingly, the Commission notes the purchaser's commitment to make a contribution of $34,500 to FACTOR on the closing date of this transaction.

Discharge of outstanding benefits obligations

In 1994, the Commission approved the transfer of control of CKST through the transfer of all of the issued and outstanding shares of Radio One to new shareholders. In accordance with the Commission's policy on benefits, responsibility passed to the licensee's new shareholders for fulfilment of all benefits then left outstanding from yet an earlier transfer of effective control occurring in 1992 (Decision CRTC 92-27). At the time of the 1994 transaction, the amount of tangible benefits associated with the 1992 transfer of control, but which then remained unspent, was calculated to be $180,508. The new shareholders had proposed to meet their assumed responsibilities in this regard through expenditures totalling this amount on benefits over seven years. The Commission therefore notes the documentation submitted with the current application demonstrating, to the Commission's satisfaction, that this outstanding obligation has now been discharged.

Employment equity

The Commission encourages the licensee to consider employment equity issues in its hiring practices and in all other aspects of its management of human resources (PN 1992-59).

Interventions

The Commission has taken note of the interventions received with respect to this application and of the applicant's reply to certain concerns raised therein.

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