ARCHIVED - Broadcasting Decision CRTC 2002-91

Broadcasting Decision CRTC 2002-91

Ottawa, 19 April 2002

Standard Radio Inc. (Standard)
Hamilton, London, North Bay, Orillia, Pembroke, Sault Ste. Marie, St. Catharines, Sudbury, Timmins and Toronto, Ontario

Athabasca, Blairmore, Brooks, Calgary, Drumheller, Edson, Grand Centre (Cold Lake), High Prairie, Hinton, St. Albert, St. Paul, Slave Lake, Stettler, Wainwright, Westlock and Wetaskiwin, Alberta

Dawson Creek, Fort Nelson, Fort St. John, Golden, Kelowna, Kitimat, Nelson, Osoyoos, Penticton, Prince Rupert, Princeton, Terrace, Revelstoke, Salmon Arm, Summerland, Trail, and Vernon, British Columbia

Application Numbers: see appendix
Public Hearing at Montréal, Quebec
19 November 2001

Standard acquires the assets of radio stations, radio networks and television stations in Ontario, Alberta and British Columbia

1.

The Commission approves applications by Standard Radio Inc. (Standard) to acquire from Telemedia Radio Inc. and from its subsidiary Telemedia Radio (West) Inc. (collectively referred to throughout this decision as "Telemedia"), the assets of the broadcasting undertakings set out in the appendix to this decision. These undertakings, which serve communities in Ontario, Alberta and British Columbia, consist of 64 radio stations and related transmitters, including two transitional digital radio undertakings, as well as three radio networks and two television stations.

2.

Upon surrender of the licences held by Telemedia, the Commission will issue licences to Standard that will expire on the dates set out in the appendix to this decision. These expiry dates are the same as the expiry dates for the current licences except for those licences that currently expire on 31 August 2002. The new licences for such stations will expire on 31 August 2003 so that the licensee will have adequate time to prepare and file applications for licence renewal. The new licences will be subject to the same terms and conditions as those in effect under the current licences.

3.

This decision is one of three issued today that approve a series of transactions under which the assets of each of the broadcasting undertakings formerly held by Telemedia in Ontario, Alberta and British Columbia are ultimately transferred to one of three parties: Standard, Rogers Broadcasting Limited (RBL) or 3937844 Canada Inc. (3937844), a subsidiary of Newcap Inc. The decisions may be summarized as follows

. In the current decision, the Commission approves applications by Standard to acquire all of the above-mentioned broadcasting assets formerly held by Telemedia in Ontario, Alberta and British Columbia.

. In Rogers acquires the assets of radio stations and a radio network in Ontario, Decision CRTC 2002-92, 18 April 2002, the Commission approves applications by RBL to acquire the assets of 14 radio stations, including one transitional digital radio station, and one radio network that Standard acquired from Telemedia, as approved in the current decision. All of the stations that RBL has acquired are located in Ontario.

. In 3937844 Canada Inc., a subsidiary of Newcap Inc., acquires the assets of radio stations in Alberta, Decision CRTC 2002-93, 18 April 2002, the Commission approves applications by which 3937844 acquires the assets of 15 radio stations and related transmitters that Standard acquired from Telemedia, as approved in the current decision. All of the stations that 3937844 has acquired are located in Alberta.

4.

A description of the cumulative impact of today's decisions is set out in Introductory statement to Decisions CRTC 2002-91 to 2002-93: Transfer of the assets of radio, television and network undertakings in Ontario, Alberta and British Columbia formerly held by Telemedia, Public Notice CRTC 2002-19, 18 April 2002. The public notice also includes a discussion of matters related to the value of the transactions, financial gains that could be generated from selling broadcasting undertakings within a relatively short period of time after they are acquired, and possible concerns related to the sale of the Calgary FM station licensed to Telemedia in 2001.

5.

The Commission notes that, upon completion of the transactions noted above, Standard will remain in compliance with the Commission's radio ownership policy set out in Commercial Radio Policy 1998, Public Notice CRTC 1998-41, 30 April 1998 (the Commercial Radio Policy) specifying that:

. in markets with less 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;

. 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.

Benefits

6.

The total value of the transaction is $385.4 million. This amount includes $369.6 million for the radio undertakings and $15.8 million for the two television stations. After selling 14 of the former Telemedia radio stations to RBL and 15 stations to 3937844 for a combined total of $139.3 million, the value of the transaction for the former Telemedia radio stations retained by Standard is $230.3 million. Standard has therefore based its benefits package on a value of $230.3 million for the radio undertakings and $15.8 million for the television stations.

7.

The Commission accepts Standard's approach, noting that RBL and 3937844 will implement benefits packages for the stations that they acquire in the transactions approved today.

8.

The Commission notes that all of the commitments that Standard has proposed as benefits are over and above the existing commitments and conditions of licence currently in effect for the broadcasting undertakings that Standard is acquiring. Standard is to fulfil any outstanding benefits commitments for stations that it will retain, and to file a report concurrently with its annual return related to the fulfilment of such commitments.

Radio benefits

9.

In the Commercial Radio Policy, the Commission established its policy with respect to the benefits required at the time of the change of ownership or control of radio undertakings. It determined that an applicant must make commitments to a tangible benefits package related to the development of Canadian musical and other artistic talent representing a minimum of 6% of the value of the transaction. According to the policy, benefits are to be allocated as follows:

. 3% to the Radio Starmaker Fund/Fonds RadioStar;

. 2% to FACTOR or MusicAction;

. 1% to either of the above initiatives, or to other initiatives relating to the development of Canadian talent.

10.

In accordance with the Commercial Radio Policy, the applicant has proposed a total benefits commitment of $13,818,000 (6% of $230.3 million) payable over seven years. Standard will allocate $6,909,000 (3% of $230.3 million) of this amount to the Radio Starmaker Fund/Fonds RadioStar and $4,606,000 (2% of $230.3 million) to FACTOR. Since the stations that Standard will retain are located in Ontario and British Columbia, the Commission encourages the applicant to ask FACTOR to earmark these funds to artists in those provinces. The remaining $2,303,000 (1% of $230.3 million) will be allocated as described below.

National Songwriting Competition - $600,000 over seven years

11.

This amount will provide additional support for the National Songwriting Competition founded by Standard and the Songwriter's Association of Canada in 1992. Standard proposes to devote $50,000 per year in 2002 and 2003 to this initiative, and $100,000 per year in 2004 to 2008. This money will be used to:

. provide prizes for winners of the competition;

. produce a master recording of the winning song featuring Canadian performers;

. produce and distribute a CD that includes the winning song;

. reimburse the Songwriter's Association of Canada for travel costs and/or teleconferences arising directly from activities in connection with the competition.

12.

The Commission reminds the licensee that, under its policy Contributions by radio stations to Canadian talent development - A new approach, Public Notice CRTC 1995-196, 17 November 1995, portions of this $600,000 may not be allocated to on-air promotion of the competition.

Canadian Radio Music Awards - $70,000 over seven years

13.

Standard will provide $10,000 each year for seven years to help pay the costs for performers at the Canadian Radio Music Awards. These awards honour first-time charted artists on radio and are held in conjunction with Canadian Music Week each spring.

Historica - $303,000 over seven years

14.

Standard will pay $303,000 to Historica, a not-for-profit foundation dedicated to raising public awareness of Canadian history and heritage. The money will be spent on talent fees for Canadian writers and actors that take part in the production of Heritage Radio Minutes.

15.

Since all the funds will go to Canadian writers and actors, the Commission considers that this initiative qualifies as an acceptable Canadian talent development initiative.

Aboriginal Voices Radio - $630,000 over 7 years

16.

Aboriginal Voices Radio (AVR) is currently licensed to operate a radio network, as well as radio stations in Toronto, Ottawa, Calgary and Vancouver. Standard will contribute $90,000 a year to AVR for seven years.

17.

The Commission notes that the purpose of the benefits requirements, as they relate to commercial radio stations, is to promote and support Canadian music and artistic talent. In this regard, the Commission notes that Standard has submitted a letter from AVR confirming that all of the funds received from Standard will be used to further the development of Aboriginal or Canadian artists. Specifically, the funds will be used to hire a Canadian talent development coordinator, to support and present performances by artists, and to fund studio recordings of Aboriginal artists and storytellers. The Commission therefore considers that the proposed support for AVR is an acceptable Canadian talent development initiative.

VoicePrint - $700,000 over seven years

18.

Standard will contribute $700,000 over seven years to VoicePrint. VoicePrint is a national English-language audio network that provides a service of particular benefit to Canadians who are blind, visually impaired or print handicapped. Its programming consists of a selection of articles from daily newspapers and magazines read in their entirety by volunteers. VoicePrint has indicated that it will use the funds to train and manage volunteers who read for the service at its regional office in Vancouver. Since the Commission considers that VoicePrint's reading function is tantamount to acting or narration, it views the allocation as assisting in the development of Canadian talent, and particularly local Canadian talent in Vancouver.

Television benefits

19.

The Commission set out its policy with respect to the benefits required at the time of the change of ownership or control of television undertakings in Building on success - A policy framework for Canadian Television, Public Notice CRTC 1999-97, 11 June 1999. It determined that an applicant must make a commitment to a tangible benefits package representing a financial contribution equal to 10% of the value of the transaction as accepted by the Commission.

20.

In accordance with the Commission's policy, Standard presented a benefits package with a value of $1,580,000 (10% of the $15.8 million purchase price) as part of its applications to acquire the assets of CJDC-TV Dawson Creek and CFTK-TV Terrace. The benefits package includes the elements described below.

VoicePrint - $350,000 over seven years

21.

Standard will contribute $50,000 per year for seven years to support the VoicePrint Vancouver bureau. This amount is in addition to the funding for VoicePrint discussed above in the section describing radio benefits.

TV Documentary Fund - $1,050,000 over seven years

22.

Standard will contribute $150,000 per year for seven years to a TV documentary fund. The fund will support annual production of a one-hour long-form documentary focussing on topics related to Canadian music, composers or recording artists. An independent producer from Western Canada will produce the documentaries, and they will qualify as priority programming. Standard will broadcast the documentaries on its newly-acquired television stations in Dawson Creek and Terrace.

Communications and Diversity Network - $180,000 over seven years

23.

Standard will provide an annual grant to the Canadian Communications and Diversity Network (CCDN) of the Pearson-Shoyama Institute for seven years. The grant will total $30,000 in the first year and $25,000 in the six subsequent years. The CCDN will use the funds to conduct research related to radio and television with a view to facilitating the development and greater reflection of minority Canadians in these media.

Interventions

24.

The Commission received interventions in support of these applications from parties including those who would benefit directly from Standard's benefits proposals, Canadian musicians, those involved in the production of television programs, and charitable organizations. The Canadian Association of Broadcasters and CIBC World Markets commented on matters related to calculating the value of the transaction. The Commission has taken all interventions into account in reaching its decision.

25.

The Commission notes that it received no interventions that opposed the applications.

Other matters

26.

Because this licensee is subject to the Employment Equity Act and files reports with Human Resources Development Canada, its employment equity practices are not examined by the Commission.

Conclusion

27.

The transactions approved in this decision result from a decision by Telemedia to divest of all of its broadcasting assets across Canada. The Commission considers that the acquisition of radio assets formerly held by Telemedia as well as CFTK-TV and CJDC-TV will enhance Standard's position as a strong player in the broadcasting system. It further notes that, following the sale of various radio assets to RBL and 3937844, Standard will remain in compliance with the Commission's policy with respect to the ownership of broadcasting undertakings in particular markets. Standard has also fufilled the provisions of the Commission's policies with respect to benefits packages that must be presented at the time of the transfer of control of radio and television undertakings.

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

Appendix to Broadcasting Decision CRTC 2002-91

Broadcasting undertakings acquired by Standard Radio Inc. (Standard)

Note: In Broadcasting Decisions CRTC 2002-92 and 2002-93 issued today, Standard is selling the assets certain of the undertakings listed below to Rogers Broadcasting Limited (RBL) and to 3937844 Canada Inc. (3937844), a subsidiary of Newcap Inc. In this list, the call signs of the undertakings that Standard will sell to RBL are marked with an *, and the call signs of undertakings that Standard will sell to 3937844 are marked with an **

Ontario

Application Number

Location

Call Sign

Licence expiry

date

2001-0974-5

Hamilton

CKOC

2005-08-31

2001-0975-3

Hamilton

CKLH-FM

2005-08-31

2001-0976-1

Hamilton

CHAM

2006-08-31

2001-0977-9

London

CKSL

2003-08-31

2001-0978-7

London

CJBK

2005-08-31

2001-0979-5

London

CJBX-FM

2005-08-31

2001-0980-3

London

CIQM-FM

2005-08-31

2001-1029-7

North Bay

*CKAT

2005-08-31

2001-1030-5

North Bay

*CKFX-FM

2004-08-31

2001-1031-2

North Bay

*CHUR-FM

2005-08-31

2001-1121-1

Orillia

*CICX-FM

2003-08-31

2001-0981-0

Pembroke

CHVR-FM

2005-08-31

2001-1033-8

Sault Ste. Marie

*CHAS-FM

2004-08-31

2001-1034-6

Sault Ste. Marie

*CJQM-FM

2004-08-31

2001-1035-4

Sault Ste. Marie

*CIRS

2004-08-31

2001-0982-8

St. Catharines

CKTB

2003-08-31

2001-0983-6

St. Catharines

CHTZ-FM

2003-08-31

2001-0984-4

St. Catharines

CHRE-FM

2003-08-31

2001-1036-2

Sudbury

*CIGM

2004-08-31

2001-1037-0

Sudbury

*CJRQ-FM

2004-08-31

2001-1038-8

Sudbury

*CJMX-FM

2004-08-31

2001-1040-4

Timmins

*CKGB-FM

2007-08-31

2001-1041-1

Timmins

*CJQQ-FM

2008-08-31

2001-0985-2

Toronto

CJEZ-FM

2005-08-31

2001-0986-0

Toronto

CJEZ-DR-1(Digital radio)

2003-08-31

2001-1042-9

Toronto

*CJCL

2005-08-31

2001-1043-7

Toronto

*CJCL-DR-2 (Digital radio)

2003-08-31

2001-1044-5

Toronto

*Prime Time Sports Network

2005-08-31

Alberta

2001-1053-6

Athabaska

**CKBA

2003-08-31

2001-1056-0

Blairmore/Elkford

**CJPR

2003-08-31

2001-1047-9

Brooks

**CIBQ

2003-08-31

2001-1122-9

Calgary

**new FM

2007-08-31

2001-1045-3

Drumheller

**CKDQ

2003-08-31

2001-0987-8

Edmonton (St. Albert)

CFMG-FM

2003-08-31

2001-1058-6

Edson

**CJYR

2003-08-31

2001-1049-5

Grand Centre (Cold Lake)

**CJCM

2003-08-31

2001-1055-2

High Prairie

**CKVH

2003-08-31

2001-1057-8

Hinton

**CIYR

2003-08-31

2001-1048-7

Saint Paul

**CHLW

2003-08-31

2001-1052-8

Slave Lake

**CKWA

2003-08-31

2001-1046-1

Stettler

**CKSQ

2003-08-31

2001-1050-3

Wainright

**CKKY

2003-08-31

2001-1054-4

Westlock

**CFOK

2003-08-31

2001-1051-0

Wetaskiwin

**CKJR

2003-08-31

British Columbia

2001-1017-2

Dawson Creek

CJDC-TV

2003-08-31

2001-1002-3

Dawson Creek

CJDC

2003-08-31

2001-1004-9

Fort Nelson

CKRX-FM

2003-08-31

2001-1005-7

Fort St. John

CHRX-FM

2003-08-31

2001-1009-9

Fort St. John

CHRX-FM network

2003-08-31

2001-1003-1

Fort St. John

CKNL

2003-08-31

2001-1007-3

Golden

CKGR

2004-08-31

2001-0993-5

Kelowna

CKBL

2004-08-31

2001-0994-3

Kelowna

CHSU-FM

2004-08-31

2001-0991-9

Kitimat

CKTK

2004-08-31

2001-1001-5

Nelson

CKKC

2004-08-31

2001-0998-5

Osoyoos

CJOR

2004-08-31

2001-0995-1

Penticton

CJMG-FM

2004-08-31

2001-0996-9

Penticton

CKOR

2004-08-31

2001-1010-7

Penticton

CKOR network

2004-08-31

2001-0990-2

Prince Rupert

CHTK

2003-08-31

2001-0988-6

Princeton

CIOR

2003-08-31

2001-1006-5

Revelstoke

CKCR

2004-08-31

2001-1008-1

Salmon Arm

CKXR

2004-08-31

2001-0997-7

Summerland

CHOR

2004-08-31

2001-0989-4

Terrace

CFTK

2003-08-31

2001-0992-7

Terrace

CJFW-FM

2003-08-31

2001-1018-0

Terrace

CFTK-TV

2003-08-31

2001-1000-1

Trail

CJAT-FM

2004-08-31

2001-0999-3

Vernon

CICF

2004-08-31