ARCHIVED - Decision CRTC 2001-769

Decision CRTC 2001-769

Ottawa, 20 December 2001

CHUM Limited
Winnipeg, Manitoba 2001-0780-7

19 November 2001 Public Hearing
Montréal, Quebec

Acquisition of assets

1.

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

2.

This transaction represents part of a non-severable agreement between Standard and CHUM, whereby CHUM has agreed to acquire CFWM-FM from Standard, in exchange for the CHUM station CHOM-FM Montréal. 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 Standard to acquire CHOM-FM is the subject of a separate decision, also published today (Decision CRTC 2001-768).

3.

Upon surrender of the current licence, the Commission will issue a licence to CHUM, expiring 31 August 2004, the current expiry date. The licence will be subject to the condition set out below, as well as to those set out in Public Notice CRTC 1999-137.

4.

Consistent with Decision CRTC 2000-290, the licensee is relieved, by condition of licence, from the requirement of section 10.1 of the Radio Regulations, 1986, that it own and operate its transmitter. The Commission expects the licensee to retain, at all times, full control of its undertaking, including control of its programming transmission and scheduling.

5.

The total consideration relative to this transaction is $7 million. In view of the structure of the transaction as explained above, the Commission has no concerns with respect to CHUM's ability to complete the transaction.

6.

CHUM currently owns two other commercial radio stations in Winnipeg, namely CFST and CHIQ-FM. As a result of this transaction, CHUM will own three commercial radio 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 eight commercial stations or more operating in a given language, a single licensee may be permitted to own or control as many as two AM and two FM stations in that language.

7.

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, Winnipeg will continue to be served by a diversity of news voices.

8.

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% ($420,000 over a seven-year period) of the value of the transaction. This includes:

· 3% ($210,000) to be allocated to the Radio Starmaker Fund;

· 2% ($140,000) as a contribution to FACTOR; and

· 1% ($70,000) to new Canadian talent development initiatives.

9.

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

10.

With respect to the $70,000 commitment to new Canadian talent development initiatives, the applicant requested flexibility to allocate such funding in response to projects and initiatives that present themselves on a year to year basis. In view of this flexibility, the Commission requires that CHUM file a report at the commencement of each broadcast year for the Commission's approval, outlining how and to whom the funds will be allocated.

Other matters

11.

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