ARCHIVED - Decision CRTC 2001-768

Decision CRTC 2001-768

Ottawa, 20 December 2001

Standard Radio Inc.
Montréal, Quebec 2001-0779-9

19 November 2001 Public Hearing
Montréal, Quebec

Acquisition of assets

1.

The Commission approves the application by Standard Radio Inc. (Standard) for authority to acquire the assets of radio programming undertaking CHOM-FM Montréal, from CHUM Limited (CHUM), and for a broadcasting licence to continue the operation of this undertaking.

2.

Upon surrender of the current licence, the Commission will issue a licence to Standard, expiring 31 August 2006, the current expiry date. The licence will be subject to the applicable terms and conditions set out in Public Notice CRTC 1999-137.

3.

This transaction represents part of a non-severable agreement between Standard and CHUM, whereby Standard has agreed to acquire CHOM-FM from CHUM, in exchange for the Standard station CFWM-FM Winnipeg. The value of CFWM-FM is estimated to be $7 million, while the value of CHOM-FM is estimated at $15 million. Consequently, Standard will pay $8 million to CHUM to compensate for the difference in value between the two stations. An application by CHUM to acquire CFWM-FM is the subject of a separate decision, also published today (Decision CRTC 2001-769).

4.

The total consideration relative to this transaction is $15 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.

Standard currently owns two other commercial radio stations in Montréal, namely CJAD and CJFM-FM, and there are a total of six English-language commercial radio stations currently operating in Montréal. As a result of this transaction, Standard will own three commercial rado stations in the same market. This application therefore falls within the scope of the Commission's policy on the common ownership of radio stations. According to this policy, in markets with fewer than eight commercial stations operating in a given language, a single licensee may own or control as many as three stations operating in that language, with a maximum of two stations on either the AM or FM band.

6.

In evaluating applications that would result in common ownership, the Commission requires applicants to address the issue of diversity of voices. The Commission is satisfied that, following approval of this application, Montréal will continue to be served by a diversity of news voices.

7.

Consistent with the requirements of the benefits test outlined in Commercial Radio Policy, 1998 (Public Notice CRTC 1998-41), the benefits offered represent the required minimum direct financial contribution to Canadian talent development of 6% ($900,000 over a seven-year period) of the value of the transaction. This includes:

· 3% ($450,000) to be allocated to the Radio Starmaker Fund;

· 2% ($300,000) as a contribution to FACTOR; and

· 1% ($150,000) to MusicAction.

8.

These commitments are over and above CHOM-FM's existing commitments and conditions of licence.

Intervention

9.

An intervention in conditional support of this application was submitted by l'Association quebecoise de l'industrie du disque, du spectacle et de la vidéo (ADISQ). L'ADISQ expressed its concern that, due to the station's position in a francophone market, the allocation of contributions in the benefit package should be directed to the francophone organizations involved in Canadian talent development. The intervener stated that, since English-language radio stations in Montréal are required to allocate yearly contributions to MusicAction, the benefits proposed should be reallocated to: 3% to Fonds RadioStar, 2% to MusicAction and 1% to FACTOR.

10.

In reply to the intervention, Standard expressed its belief that, as the operator of an English-language station in Montréal, it has a special obligation to support Anglophone artists in the province of Quebec. It further stated that it believes its proprosed allocation of funds is equitable in the circumstances.

11.

Under the proposal submitted by the Canadian Association of Broadcasters (CAB) to establish the Radio Starmaker Fund/Fonds RadioStar, the CAB indicated that, for transactions involving English-language radio stations, 20% of funds directed to Radio Starmaker Fund would be allocated to Fonds RadioStar. Similarly, 20% of all funds directed to Fonds RadioStar in transactions of French-language radio stations would automatically be directed to the Radio Starmaker Fund. Based on the method of allocating funds, the Commission is satisfied that the applicant's proposal for the 3% allocation is appropriate. With regard to the remainder of the benefits proposal, the Commission is satisfied that the proposal is acceptable, based on the language of the station.

Other matters

12.

The Commission notes that 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.

Related CRTC documents

. Public Notice 1999-137 - New licence form for commercial radio stations

. Public Notice 1998-41 - Commercial radio policy 1998

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