ARCHIVED - Decision CRTC 2001-208

Decision CRTC 2001-208

Ottawa, 2 April 2001

Humber Valley Broadcasting Company Limited
Corner Brook, Deer Lake, Port-aux-Choix and St. Anthony; Channel-Port-aux-Basques and St. Andrews; and Stephenville, Newfoundland; Goose Bay, Wabush and Churchill Falls, Labrador 2000-1963-9

Application processed by Public Notice CRTC 2000-174 dated 15 December 2000

Transfer of control

The Commission approves, by majority vote, the application for authority to transfer the effective control and ownership of Humber Valley Broadcasting Company Limited through the transfer of all its issued and outstanding shares to Newcap Inc.

Humber Valley is the licensee of radio stations CFCB Corner Brook and its transmitters CFDL-FM Deer Lake, CFNW Port-aux-Choix, CFNN-FM St. Anthony; CFSX Stephenville; CFGN Channel-Port-aux-Basques and its transmitter CFCV-FM St. Andrew's, Newfoundland; and CFLN Goose Bay and its transmitters CFLW Wabush and CFLC-FM Churchill Falls, Labrador.

Newcap is the licensee of a number of originating radio stations and retransmitters serving communities across Newfoundland. It also currently holds a 33.3% interest in Humber Valley. As of today, Newcap will assume full control and ownership of Humber Valley.

Newcap's parent company, Newfoundland Capital Corporation Limited, owns more than 15 weekly community newspapers across the island.

The purchase price for the shares is $1,306,400. 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.

Currently, there are 16 commercial radio stations serving different communities in Newfoundland and Labrador. They are presently divided among three owners: Newcap, Humber Valley and Newfoundland Broadcasting Company Limited. As a result of this transaction, Newcap will control 15 of these 16 stations and will capture 82% of the radio advertising sales in the province.

Newcap argued that competition for advertising dollars among the existing radio services is contributing to the decline of radio advertising sales in Newfoundland. Consolidating radio stations will allow Newcap to increase its advertising rates, which will help improve the financial performance of the province's commercial radio sector.

The Commission is satisfied that this consolidation is fully consistent with the ownership rules set out in its 1998 Commercial radio policy (Public Notice CRTC 1998-41). In markets with less than eight commercial stations operating in a given language, a licensee may own or control as many as three stations operating in that language, with a maximum of two stations on the AM or FM band. Except for Corner Brook, Humber Valley's radio stations are located in markets that Newcap does not currently serve. Newcap already owns an FM commercial station in Corner Brook (CKXX-FM) and, as a result of this transfer, will gain control of a second station in that community (CFCB).

The Commission is also satisfied that the benefits offered comply with the benefits test outlined in Public Notice CRTC 1998-41. Newcap will make the required minimum direct financial contribution to Canadian talent development of 6% ($78,384) of the transaction. This includes:

The Commission has also considered the possible impact that this concentration of ownership might have on diversity of news voices, particularly in view of the fact that, in some communities, effective ownership and control of the local radio station and weekly community newspaper would reside with Newcap's parent company. The Commission is satisfied that diverse news voices are provided in these communities by CBC's radio service, the radio and television networks offered by Newfoundland Broadcasting Company Limited and by other television services. Corner Brook and Stephenville, the two largest communities, are also served by a daily newspaper as well as at least three other weekly newspapers. None of these newspapers are affiliated with Newfoundland Broadcasting Company Limited.

The Commission considers that the benefits of permitting increased consolidation of ownership within Newfoundland's radio industry balance concerns regarding the potential reduction of diversity of news voices in the communities concerned. In particular, the Commission is satisfied that the substantial resources that Newcap will bring to these local stations will ensure their continued operation.

The Commission expects Newcap to ensure that each of the radio stations that it has acquired from Humber Valley continues to serve the interests and reflect the diversity of the local community and allows for a variety of views and opinions to be aired.

In approving this application, the Commission has also taken into consideration the fact that it did not receive any interventions or comments from the general public or from other broadcasters operating in the markets concerned in response to Public Notice CRTC 2000-174. The Commission has also noted the apparent lack of alternative purchasers.

Related CRTC document

. Public Notice 1998-41 - Commercial radio policy, 1998

Secretary General

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