Broadcasting Procedural letter addressed to Kevin Goldstein (Bell Media Inc.)

Ottawa, 16 November 2017

Our reference: 2017-0943-7

BY EMAIL: kevin.goldstein@ctv.ca

Mr. Kevin Goldstein
Vice-President, Regulatory Affairs
Bell Media Inc.
299 Queen Street West
Toronto, ON
M5V 2Z5

Re: Broadcasting Application 2017-0943-7 – Request to rescind Commission determination of tangible benefits audit – Broadcast Year 2013-2014

Dear Mr. Goldstein:

This letter is in reference to the above noted application made by Bell Media Inc. (the applicant or Bell) requesting that the Commission reverse, in part,  its decision regarding the audit of the applicant’s tangible benefits expenditures for the 2013-2014 broadcasting year.

Specifically, the applicant requests the Commission reverse its finding that certain expenditures were not eligible tangible benefits and directing Bell to pay the resulting shortfall of $433,120 to FACTOR, Musicaction, the Community Radio Fund (CRFC), Radio Starmaker Fund and Fonds Radiostar.

Section 28(1)(a) of the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure provides that the Commission may request parties to file information, particulars or documents where needed. In order to complete the record, please address the following:

  1. Commission staff notes that Bell provided certain financial information for the Commission during the confidential audit process, which is currently not on the public record of this proceeding. Commission staff is of the view that some of the information provided during the confidential audit process is important and in the public interest, and therefore should be on the public record for this proceeding for potential intervenors to comment on.

    Commission staff is of the view that the amount of funding directed towards a non-Canadian artist relative to the total amount directed to the event as a whole is significant and relevant to both the eligibility of the event and the public interest.

    As such, Commission staff requests the following additional information regarding Fanfest at CMW be filed as part of the public record of this proceeding. 

    Specifically, please provide the following:

    1. the full line-up of performers;
    2. the total overall costs of the Fanfest event at CMW and a breakdown for the following expenditures:
      1. talent fees and expenses;
      2. production, staging and venue costs;
      3. administrative and event staff fees; and
      4. other (any other expenses incurred).
  2. In its 24 May 2016 response to a request for information regarding how tickets were distributed for CMW, Bell responded as follows:

    Tickets were distributed through the CMW website at the cost of $40 per ticket.  The revenue was used by CMW to further support Fanfest.  Special invitations were extended to international attendees (music supervisors, festival buyers and talent bookers) at CMW.

    In its present Part 1 Application, Bell acknowledged that it used “marketing-spin” in a public press release dated 9 May 2014 to give the impression to the public that limited tickets were available for an exclusive, fan-only event headlined by a non-Canadian artist for Canada Music Week.  In that same press release, Bell also directed the public to visit CHUMFM.com to obtain tickets, as opposed to the CMW website.

    Bell also stated in its present application that both ‘Bell Media Contest Winners’ and ‘CMW International Guests’ attended the concert, representing approximately 15% and 10% of the total tickets allocated, respectively.

    1. With respect to the 25% of tickets that were not available for purchase, please provide details on the face value of these tickets, and what, if any, benefits these ticket holders obtained that ticket purchasers did not.
    2. Please provide details on how listeners were made aware that tickets were available to win, and the process by which winners were selected.
  3. In its Part 1 Application, Bell stated that it was not asked to provide documentation on ticket distribution.

    Broadcasting Information Bulletin CRTC 2011-795Footnote1 offers guidance with respect to filing requirements for annual returns as they relate to Canadian content development forms, with Paragraph 20 stating the following:

    20.    As an example, supporting documentation for payments made to a music festival should include the following items to support the expenditure: a brochure from the event sponsored indicating that the event took place, a letter from the recipient organization confirming the uses of the fund, and a brief summary of how the event meets the criteria for an eligible initiative. The documentation should always include information regarding revenues generated by the event, the organization that retained the revenues, the manner in which tickets were distributed to the public, the artists that were sponsored with the funds, and proof of the licensee’s independence from the recipient organization.(emphasis added)

    Bell provided all of the above information in their annual returns, with the exception of complete details on the manner in which tickets were distributed and the treatment of any revenues.

    By letter dated 25 April 2016 Commission staff addressed this deficiency during the audit process, asking Bell to provide “Details on how tickets were distributed and any corresponding revenues”, giving Bell an opportunity to provide a full account on the manner in which tickets were distributed.

    As noted above, Bell’s response was as follows:

    Tickets were distributed through the CMW website at the cost of $40 per ticket.  The revenue was used by CMW to further support Fanfest.  Special invitations were extended to international attendees (music supervisors, festival buyers and talent bookers) at CMW.

    Please provide details on any direct or indirect benefits received by Bell related to the sponsorship of this event or any other Canada Music Week (CMW) event, including, but not limited to, free tickets for the event, VIP passes, corporate suites, name recognition, etc.

  4. Commission staff notes that in Bell’s application, the Breakthrough Canada Concert Series was referenced.  Commission staff is of the view that if the Breakthrough Canada Concert initiative is part of the supporting evidence used to put forward Bell’s arguments, then it is important and in the public interest that such additional details related to the event be provided as part of the public record for this proceeding for potential intervenors to comment on.
    1. Please file a revised abridged version of the Part 1 Appendix A that does not redact details relating to the Breakthrough Canada Concert Series.
  5. Please provide details on any additional direct or indirect benefits received by Bell related to the sponsorship of the Breakthrough Canada Concert Series events, including, but not limited to, frees tickets for the event, VIP passes, corporate suites, name recognition, promotional tickets for contests, etc.
  6. In Bell’s Part 1 Application, certain documents from the audit process were not included in Appendix A and other documents were only provided in their abridged versions. To ensure a full and complete record for this Part 1 Application, it is important that all relevant documents from the audit process are submitted as part of this Part 1 Application process. Please file complete versions of the following documents as part of your response to this letter.  File both an abridged and confidential version of the documents, where necessary:
    1. Audit correspondences regarding the audit of the 2013-2014 tangible benefit expenditures claimed by Bell between Bell and Commission staff, dated: 24 May 2016 and 19 August 2016;
    2. Correspondences between Bell and the CRTC’s Chief Consumer Officer, dated: 18 July 2017 (dispute letter) and 1 September 2017 (invoices).

Deadline for Response

The information requested herein is to be submitted to the Commission by 27 November 2017, failing which, the application may be returned to be completed and resubmitted with the Commission should Bell wish to pursue this proposal.

Any interested party may submit a response by 4 December 2017. Any comments must only relate to the information Bell has submitted in its response to this letter.

Bell may reply to any comments by 11 December 2017.

The Commission requires that your response and/or other documents be submitted electronically by using the secured service “My CRTC Account” (Partner Log In or GCKey) and filling the “Broadcasting and Telecom Cover page” or the “Broadcasting Online Form and Cover Page” located on this web page. Also on this web page you will find information on the submission of applications to the Commission “Submitting applications and other documents to the CRTC using My CRTC Account.”

A copy of this letter and all related correspondence will be added to the public record of the proceeding for this application.

Should you need further information concerning this application, please do not hesitate to contact me by telephone at 819-639-3179 or by e-mail at lynn.asselin@crtc.gc.ca.

Sincerely,

Original signed by

Lynn Asselin
Senior Analyst,
Radio Policy & Applications

C.C.  Ms. Susan Wheeler, Vice-President, Regulatory, Media, Rogers Media Inc.
Ms. Sylvie Courtemanche, Vice President and Associate General Counsel, Government Relations and Compliance, Corus Entertainment Inc.

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