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Providing Content in Canada's Official Languages
Please note that the Official Languages Act requires that government publications be available in both official languages.
In order to meet some of the requirements under this Act, the Commission's transcripts will therefore be bilingual as to their covers, the listing of CRTC members and staff attending the hearings, and the table of contents.
However, the aforementioned publication is the recorded verbatim transcript and, as such, is transcribed in either of the official languages, depending on the language spoken by the participant at the hearing.
TRANSCRIPT OF PROCEEDINGS BEFORE
THE CANADIAN RADIO‑TELEVISION AND
TELECOMMUNICATIONS COMMISSION
TRANSCRIPTION DES AUDIENCES DEVANT
LE CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT/SUJET:
VARIOUS BROADCASTING APPLICATIONS /
PLUSIEURS DEMANDES EN RADIODIFFUSION
HELD AT: TENUE À:
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
Portage IV Portage IV
140 Promenade du Portage 140, promenade du Portage
Gatineau, Quebec Gatineau (Québec)
August 27, 2007 Le 27 août 2007
Transcripts
In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of
Contents.
However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.
Transcription
Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès‑verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
Canadian Radio‑television and
Telecommunications Commission
Conseil de la radiodiffusion et des
télécommunications canadiennes
Transcript / Transcription
VARIOUS BROADCASTING APPLICATIONS /
PLUSIEURS DEMANDES EN RADIODIFFUSION
BEFORE / DEVANT:
Rita Cugini Chairperson / Présidente
Andrée Noël Commissioner / Conseillère
Ronald Williams Commissioner / Conseiller
ALSO PRESENT / AUSSI PRÉSENTS:
Jade Roy Secretary / Secrétaire
Michael Craig Hearing Manager /
Gérant de l'audience
Stephen Millington Legal Counsel /
Conseiller juridique
HELD AT: TENUE À:
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
Portage IV Portage IV
140 Promenade du Portage 140, promenade du Portage
Gatineau, Quebec Gatineau (Québec)
August 27, 2007 Le 27 août 2007
- iv -
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PHASE I
PRESENTATION BY / PRÉSENTATION PAR:
Astral Media Radio Inc. 4 / 21
PHASE II
INTERVENTION BY / INTERVENTION PAR:
NCRA/ANREC 104 / 669
CRIA 120 / 755
PHASE I
REPLY BY / RÉPLIQUE PAR:
Astral Media Radio Inc. 130 / 807
Gatineau, Quebec / Gatineau (Québec)
‑‑‑ Upon commencing on Monday, August 27, 2007
at 0930 / L'audience débute le lundi
27 août 2007 à 0930
LISTNUM 1 \l 11 THE CHAIRPERSON: Good morning and welcome to everyone.
LISTNUM 1 \l 12 My name is Rita Cugini and I am the CRTC Regional Commissioner for Ontario. I will be presiding over this hearing.
LISTNUM 1 \l 13 Joining me on the panel are my colleagues Andrée Noël, Regional Commissioner for Quebec, and Ronald Williams, Regional Commissioner for Alberta and the Northwest Territories.
LISTNUM 1 \l 14 The Commission team assisting us includes Michael Craig, Hearing Manager and Senior Radio Analyst; Steve Millington, Legal Counsel; and Jade Roy, Hearing Secretary.
LISTNUM 1 \l 15 Please speak with Miss Roy if you have any questions with regard to hearing procedures.
LISTNUM 1 \l 16 At this hearing we will be examining the application presented by Astral Media Radio Inc. to acquire, among other assets, 53 radio undertakings across Canada and two television stations in British Columbia, all of which currently belong to Standard Radio Inc.
LISTNUM 1 \l 17 I will now invite the Hearing Secretary, Jade Roy, to explain the procedures we will be following.
LISTNUM 1 \l 18 Madam Secretary.
LISTNUM 1 \l 19 THE SECRETARY: Thank you, Madam Chair.
LISTNUM 1 \l 110 Nous aimerions souligner quelques points d'ordre pratique qui contribueront au bon déroulement de cette audience publique.
LISTNUM 1 \l 111 Firstly, simultaneous interpretation service is available during the hearing. Receivers are available from the Commissionaire outside the Hearing Room. The English interpretation is on channel 7 and French is on channel 8.
LISTNUM 1 \l 112 When you are in the Hearing Room, we would ask you to please turn off your cell phones, beepers and BlackBerrys as they are an unwelcome distraction and they cause interference on the internal communication systems used by our translators. We would appreciate your cooperation in this regard throughout the hearing.
LISTNUM 1 \l 113 We expect the hearing to take approximately one day. We will take an hour and a half for lunch and a break in the morning and in the afternoon.
LISTNUM 1 \l 114 Pendant toute la durée de l'audience, vous pourrez consulter les documents qui font partie du dossier public pour cette audience dans la salle d'examen qui se trouve dans la Salle Papineau, située à l'extérieur de la salle d'audience à votre droite.
LISTNUM 1 \l 115 Une transcription des comparutions quotidiennes sera affichée sur le site internet du Conseil peu après la fin de l'audience.
LISTNUM 1 \l 116 Les personnes qui désirent acheter des transcriptions peuvent s'adresser au sténographe qui se trouve à la table à ma droite durant la pause ou directement auprès de la compagnie Mediacopy.
LISTNUM 1 \l 117 For the record, Astral filed their Preferred Ownership Scenario and confidentiality has been granted on the residential addresses of the officers and directors of the corporations. An abridged version has been placed on the file.
LISTNUM 1 \l 118 These documents will be posted on the Commission's website and copies are available in the examination room.
LISTNUM 1 \l 119 Now, Madam Chair, we will proceed with the application filed by Astral Media Radio Inc.
LISTNUM 1 \l 120 Appearing for the applicant is Monsieur Jacques Parisien who will introduce his colleagues. You will then have 20 minutes to make your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 121 MR. PARISIEN: Thank you.
LISTNUM 1 \l 122 Good morning, Madam Chair, Commissioners. My name is Jacques Parisien and I am Group President to Astral Media Radio and Astral Media Outdoor.
LISTNUM 1 \l 123 Let me begin by introducing the members of our team.
LISTNUM 1 \l 124 On the far right of our panel, your left, is Ian Greenberg, President and CEO of Astral Media.
LISTNUM 1 \l 125 Next to him is Ian Lurie, Vice‑President and Chief Financial Officer of Standard Radio.
LISTNUM 1 \l 126 On my immediate left is Claude Laflamme, Vice‑President Corporate and Regulatory Affair for Astral Media Radio and Astral Media Outdoor.
LISTNUM 1 \l 127 Next to her is Rob Braide, Vice‑President and General Manager for Montreal for Standard Radio.
LISTNUM 1 \l 128 Behind him in the second row is Gary Slaight, President and CEO of Standard Radio.
LISTNUM 1 \l 129 Next to him Luc Sabbatini, President of Astral Media Outdoor and a familiar face to the Commission as a former member of the Astral Media Radio team.
LISTNUM 1 \l 130 Continuing along the row we have Julie Charest, Research Director for Astral Media Radio.
LISTNUM 1 \l 131 Then Don Shafer, Vice‑President and General Manager of the British Columbia Interior Region for Standard.
LISTNUM 1 \l 132 And finally, Claude Gagnon, Senior Vice‑President and Chief Financial Officer of Astral Media.
LISTNUM 1 \l 133 Madam Chair, we are pleased and proud to appear before you today to present this application for Astral Media's acquisition of the radio and television stations of Standard Radio.
LISTNUM 1 \l 134 This acquisition is a major step forward for our company and we believe a very positive development for the Canadian broadcasting system.
LISTNUM 1 \l 135 So we would like to take a few moments this morning to tell you why approval of our application is clearly in the public interest.
LISTNUM 1 \l 136 First, we will talk about the reasons why Astral and Standard agreed on this transaction.
LISTNUM 1 \l 137 Second, how the transaction maintains both diversity and vigorous competition in all the markets affected.
LISTNUM 1 \l 138 And third, we will describe how our benefits package strengthens radio, the communities involved and the music industry, including emerging artists.
LISTNUM 1 \l 139 Ian.
LISTNUM 1 \l 140 MR. GREENBERG: Thank you, Jacques.
LISTNUM 1 \l 141 Astral Media takes great pride in being a Canadian media company. This acquisition is one of the major steps taken by Astral to achieve its ambition of growing within Canada by focusing on sectors where it has proven expertise, continuous success and a track record of substantial contributions.
LISTNUM 1 \l 142 Radio is clearly one of those sectors. Indeed, we believe firmly in commercial radio. It is an exciting and promising business, both today and in the future.
LISTNUM 1 \l 143 In this context, the combination of Standard Radio and Astral is an ideal marriage. Astral stations in French Quebec and in the Atlantic provinces are a perfect complement to Standard stations in the West, Ontario and English Quebec.
LISTNUM 1 \l 144 But our two companies are also a great fit in another way. This association is one that is built on shared values, great mutual respect and a strong commitment to local communities and the promotion of Canadian culture.
LISTNUM 1 \l 145 This is extremely important to us. It was with this in mind that Astral and Standard initiated discussions and negotiated an agreement with terms fair to both parties.
LISTNUM 1 \l 146 Over the years, Astral has grown its radio business primarily through acquisitions. It started with Radiomutuel in 1999, followed by Télémédia in 2002, and the exchange of stations with Corus in 2005.
LISTNUM 1 \l 147 Astral has proven its ability to integrate these stations, improve upon their success both financially and in listenership, and reinforce their ties with the local communities they serve.
LISTNUM 1 \l 148 We have also demonstrated unfailing respect for the culture of the businesses we acquire and their people. We have learned from them just as they have learned from us so that today Astral's culture emanates from a combination of the best practices that each has brought to the table.
LISTNUM 1 \l 149 We encourage all of our stations to be distinct and to create their own individual voices in order to reflect the realities of their local markets. This is why we are enthusiastic about the people who will be joining us, people who have a well‑demonstrated experience in fostering excellent relationships with their communities.
LISTNUM 1 \l 150 Gary.
LISTNUM 1 \l 151 MR. SLAIGHT: Thank you, Ian.
LISTNUM 1 \l 152 I can't tell you how proud we are of all the things that the people at Standard Radio have been able to achieve in the 22 years since my father Allan Slaight acquired it in 1985.
LISTNUM 1 \l 153 A company is just a piece of paper issued by Industry Canada until the people inside the company work their magic.
LISTNUM 1 \l 154 I am not just talking about people like Rob, Don and Ian who have contributed so much over the years, I am referring to every single one of the over 1,000 Standard employees from Montreal to the West Coast who get up every morning full of new ideas and ready to create great local radio, and I want to welcome the people from THE BEAR who, some of them, are with us today.
LISTNUM 1 \l 155 They are the ones who helped build this small cluster of stations into the largest privately held radio group in Canada and it is just going to get better for them as part of the Astral family.
LISTNUM 1 \l 156 Ian, Jacques and their team share the same passion for radio and the same commitment to the community as do all the members of the Standard family.
LISTNUM 1 \l 157 It is going to be especially good for the Canadian music community. Standard is deservedly proud of the many Canadian acts it has broken with a geographic footprint that stops at the east end of Montreal. As Ian said, it is as if these two great companies had just been waiting to be put together.
LISTNUM 1 \l 158 With a scope that would now extend from coast to coast, the possibilities for Canada's new musical talent to achieve national exposure is, in my opinion, a huge benefit of putting these two companies together.
LISTNUM 1 \l 159 The musicians have already figured this out. An interesting thing about many of the interventions is that the musicians believe that however close they may have been to Standard, the relationship will not change with Astral, who are known to be equally passionate and supportive of Canadian talent.
LISTNUM 1 \l 160 As you know, assuming your approval of this application, I am going on the board at Astral but will not have day‑to‑day responsibilities as CEO anymore. That means I expect that my appearances like this at CRTC hearings will be a thing of the past.
LISTNUM 1 \l 161 So I would like to take this opportunity to thank all of those at the Commission, both present and past, with whom we at Standard have worked with over the years. Together we have built what I think is the best radio system in the world.
LISTNUM 1 \l 162 Jacques.
LISTNUM 1 \l 163 MR. PARISIEN: Both Astral and Standard make it their first priority to answer the needs of listeners in each local community and that is the basis of our thinking about diversity of voices.
LISTNUM 1 \l 164 Each Astral station has a distinct voice that reflects its community. Each Standard station is equally distinctive. The acquisition will not change any of that.
LISTNUM 1 \l 165 If you approve this application, Astral will have quite a variety of stations in its group: English and French stations in large metropolitan markets, in medium‑size cities, and in the smallest towns one can imagine serving.
LISTNUM 1 \l 166 Clearly, there can be no one‑size‑fits‑all service for a range this broad. To be successful with listeners, a radio station has to be part of its community and sound like its community.
LISTNUM 1 \l 167 It is also true that the diversity of voices will not be reduced by the acquisition because, as Ian noted, the two companies' assets complement each other so neatly that in any single market Astral will not increase the number of stations under common ownership.
LISTNUM 1 \l 168 This is a key fact on the competitive landscape as well. It is important to recall that English and French are separate markets and are treated separately by the Commission's Common Ownership Policy, and since the assets of the two companies are entirely in separate markets, the transaction requires no exception from the Ownership Policy or from any other Commission policy for that matter.
LISTNUM 1 \l 169 When you look at all markets across the country grouped together, you can see that the Astral‑Standard combination would certainly be a national leader but this would not have any negative effect on the competitiveness of the market.
LISTNUM 1 \l 170 The radio industry would subsequently have five strong commercial players: Astral Media, Corus, Rogers, CTVglobemedia and Newcap, as well as a host of medium and smaller players and one public broadcaster operating in two languages.
LISTNUM 1 \l 171 In this arena, Astral and Standard would have a combined national share of listening slightly ahead of Corus.
LISTNUM 1 \l 172 In terms of commercial revenues, the pie would still be divided relatively evenly with no player having a big structural advantage. In fact, the leading player in radio would still have a smaller national share than the leading player in conventional television or in discretionary services.
LISTNUM 1 \l 173 Radio is a highly competitive industry and this acquisition won't change that.
LISTNUM 1 \l 174 Now, I would like to ask Rob and Claude to speak about how our benefits package strengthens radio, the communities involved and new talent in television, radio and the music industry, including emerging artists.
LISTNUM 1 \l 175 Rob.
LISTNUM 1 \l 176 MR. BRAIDE: Thank you, Jacques.
LISTNUM 1 \l 177 The benefits package in this transaction totals over $63 million. Of that total, about $1.7 is in respect of television.
LISTNUM 1 \l 178 The $61.6 million earmarked for radio is a record amount in this sector. It is also money that would not be spent if this transaction had not taken place.
LISTNUM 1 \l 179 Within the radio portion nearly $31 million will go to Starmaker and Fonds RadioStar, and $20.5 million to FACTOR. Importantly, with 10 percent of that money directed to MUSICACTION in recognition of Standard's presence in the Quebec market.
LISTNUM 1 \l 180 This funding will enable these organizations to sustain programs that support Canadian musicians, songwriters, artists, including emerging artists, to achieve the success they deserve.
LISTNUM 1 \l 181 As for the discretionary package of over $10 million, it is structured as a coherent whole that fits into the ecology of both music and radio.
LISTNUM 1 \l 182 Its programs address every stage of the creative process from education through creation and performance to promotion and career‑building for emerging artists and ultimately to the recognition and celebration of accomplished artists.
LISTNUM 1 \l 183 First, we believe that music begins with young people. So two of the supportive initiatives are aimed at assisting their musical education.
LISTNUM 1 \l 184 Second, we believe that good radio is based on good songs. So our proposed program contains a number of initiatives designed to encourage songwriters, to help develop their skills and bring their best work to Canadian ears nationwide.
LISTNUM 1 \l 185 Third, we support promotional programs to ensure that the radio and music industries are made aware of these emerging artists.
LISTNUM 1 \l 186 And, to complete the circle, we support initiatives that celebrate successful artists, helping them to continue their careers and enhance their relationship with the public.
LISTNUM 1 \l 187 Claude.
LISTNUM 1 \l 188 MS LAFLAMME: Thank you, Rob.
LISTNUM 1 \l 189 In spoken word, many of the programs are designed to help individual talents develop their skills and careers, so that the radio industry, as a whole, will be well supplied with skilled professional talent in the years to come.
LISTNUM 1 \l 190 That is also true for the television benefits, where, in addition to local programming, the emphasis is on professional development and mentorship for independent producers and journalists.
LISTNUM 1 \l 191 In addition, several of the programs have been designed to specifically support aboriginal initiatives and small markets. This is especially the case for television, where the assets being acquired are in Dawson Creek and Terrace, both very small northern B.C. towns.
LISTNUM 1 \l 192 We believe that these programs will help to develop future broadcasters and improve service from these small stations.
LISTNUM 1 \l 193 The programs will also help the industry as a whole, including campus and community radio stations and small specialized radio services, such as Radio Enfant.
LISTNUM 1 \l 194 Altogether, we believe we have a balanced package that addresses all of the Commission's objectives, including the creation and promotion of Canadian content, the development of skilled professional talent, both in music and spoken word, and the support of the communities served by the stations.
LISTNUM 1 \l 195 Jacques...
LISTNUM 1 \l 196 MR. PARISIEN: Finally, let me reiterate that at Astral we feel confident about the future of commercial radio and have made it a key part of our corporate strategy.
LISTNUM 1 \l 197 Within that strategy, our approach to the Standard station is simple: maintain and improve.
LISTNUM 1 \l 198 We like the way Standard stations operate. We like their close community ties and their emphasis on local services, and we like their support for Canadian music and musicians.
LISTNUM 1 \l 199 Our intent is to build on this record of achievement and improve the stations gradually, as we have with earlier acquisitions.
LISTNUM 1 \l 1100 In conclusion, Madam Chair, we would like to thank the many intervenors who have supported this application, the charities, community organizations, aboriginal organizations, businesses, musicians and their managers. We are encouraged by their support and believe that the stakeholders view this acquisition as a positive step, in compliance with the Commission's policies in every respect, and, conclusively, in the public interest.
LISTNUM 1 \l 1101 Thank you for the opportunity to introduce our application, and we are ready to answer your questions.
LISTNUM 1 \l 1102 THE CHAIRPERSON: Mr. Parisien, thank you, Mr. Greenberg, and to your team, welcome to these proceedings.
LISTNUM 1 \l 1103 Mr. Slaight, I am sure I speak on behalf of the whole Commission when I say thank you for your contribution to proceedings ‑‑ maybe not like this one in the past, but certainly to CRTC proceedings, and, above all, your contribution to music and Canadian artists. Not just you, but your family, as well. I am pretty confident that we haven't heard or seen the last of you yet, so thank you.
LISTNUM 1 \l 1104 I will begin the questioning today, and I will take a little bit of a springboard from your oral presentation, where you say that, of course, you will extend your stations from coast to coast, but you encourage your stations to be distinct and to create their own individual voices in order to reflect the realities of their local markets.
LISTNUM 1 \l 1105 It is within this framework that I will be asking some of my questions.
LISTNUM 1 \l 1106 Both companies ‑‑ one of the things you have in common is that you operate certain brands: Radio Énergie, RockDétente and Boom FM. Standard, of course, operates EZ Rock, The Bear and MIX, among other formats.
LISTNUM 1 \l 1107 As a result of this transaction, do you plan on branding more radio stations under these banners, or creating more brands?
LISTNUM 1 \l 1108 MR. PARISIEN: We haven't taken over or operated the Standard stations yet ‑‑ we have gone through due diligence ‑‑ so it is difficult for us to speak in detail about the Standard station, but let me recap what we have done already in the Province of Quebec with our brands, and in the Maritimes with the stations that are there.
LISTNUM 1 \l 1109 In the Province of Quebec we have developed our brands through the notion of networking. Networking is a phenomenon that is much more relevant to the Quebec market, the francophone market, than it is to English Canada. You see more syndication in English Canada and more networking in the Province of Quebec; the difference being that in networking the brand develops programming that is played simultaneously on the same brand stations. The examples you gave of Énergie, Boom and RockDétente are exactly that. We have a drive show in the afternoon that is networked. It is the same show in every market of RockDétente and the same show in every market of Énergie.
LISTNUM 1 \l 1110 Mind you, that show has many, many occasions during the show for local insertions, local services, services to the community, sports, weather, traffic and all of that stuff, and also comments from the local station.
LISTNUM 1 \l 1111 The reason we do networking in Quebec is that it's historical. It has been there for years and years. It also provides the smaller stations with high‑quality programming, because we invest more in that programming because it is networked.
LISTNUM 1 \l 1112 It also frees up some budget for the local markets to put on their own local content, such as the morning show, the midday show, and so on.
LISTNUM 1 \l 1113 So networking is a win‑win for the brand and for the smaller markets.
LISTNUM 1 \l 1114 In English Canada ‑‑ and I will let my colleague Rob Braide, and Gary also, talk about syndication a bit more to complement my answer.
LISTNUM 1 \l 1115 In English Canada there is very little networking. I am leaving aside the CBC. In private radio there is more syndication, where you have the same show that is offered to many stations; not necessarily run by all of the stations, and not necessarily at the same time either.
LISTNUM 1 \l 1116 THE CHAIRPERSON: Can you drill down a little bit further and make that distinction for me, in terms of the difference between your network model versus syndication?
LISTNUM 1 \l 1117 MR. PARISIEN: In our network model, the station has to run the network show. It has no choice, and the network show, as I mentioned, provides for local insertion.
LISTNUM 1 \l 1118 It is very typical to the francophone market. Corus in French does it. Cogeco in French does it. Medium and smaller‑sized players do it, such as Radio Nord, which I consider to be medium‑sized. Also, le Réseau des Appalaches does it in smaller markets.
LISTNUM 1 \l 1119 We own stations in English in the Maritimes. We own eight stations. None of them run network. It doesn't apply to them.
LISTNUM 1 \l 1120 That also reflects how respectful we are of the communities and of the specificity of local markets. We do not impose it. If it's an opportunity, we will look at it and we will do it, but we have no devised strategy to go that route, not at all.
LISTNUM 1 \l 1121 I will let Gary talk about syndication.
LISTNUM 1 \l 1122 MR. SLAIGHT: Thanks, Jacques.
LISTNUM 1 \l 1123 In the rest of Canada, in English Canada, we really find that networking is not something that works. Most of the local markets are so different ‑‑ Hamilton is different from St. Catharines ‑‑ so we don't do a whole lot of networking. We do syndication, and we have a syndication arm which creates and represents programming, which stations across Canada ‑‑ we have about 140 clients, many of which are not Standard Radio stations, who pick up the programming to augment the programming they are carrying in the local markets.
LISTNUM 1 \l 1124 THE CHAIRPERSON: Are your syndicated programs available to only those Standard stations that are branded MIX, The Bear?
LISTNUM 1 \l 1125 MR. SLAIGHT: No, there is a difference. Syndicated programming will run on any radio station in other markets, whether it's a Standard station or not.
LISTNUM 1 \l 1126 EZ Rock is really a brand for the product. As a matter of fact, EZ Rock differs in every market where we use the brand, as does The Bear.
LISTNUM 1 \l 1127 The Bear in Ottawa is totally different from The Bear in Edmonton.
LISTNUM 1 \l 1128 THE CHAIRPERSON: Would two radio stations in the same market carry the same program?
LISTNUM 1 \l 1129 MR. SLAIGHT: In some cases with syndication that will happen, but, as a rule, stations like to have the content exclusively.
LISTNUM 1 \l 1130 THE CHAIRPERSON: Would they run them at the same time, if they did have them?
LISTNUM 1 \l 1131 MR. SLAIGHT: The timing is really up to the radio station, as to when they run the programming.
LISTNUM 1 \l 1132 THE CHAIRPERSON: How much of the programming on the Standard Radio stations is syndicated versus local programming?
LISTNUM 1 \l 1133 MR. SLAIGHT: A very, very small percentage.
LISTNUM 1 \l 1134 It's mostly short‑form programming. It's mostly business features or music features or weekend countdowns, or we might pick up David Letterman and run the short bits that he does on morning shows across the country, again including some non‑Standard radio stations.
LISTNUM 1 \l 1135 The percentage of programming that Standard runs on our radio stations is very small.
LISTNUM 1 \l 1136 THE CHAIRPERSON: Is there a difference, depending on format?
LISTNUM 1 \l 1137 MR. SLAIGHT: Yes, the one difference would be with the EZ Rock brand, where we do run some long‑form programming, i.e., John Tesh, which is carried, but we Canadianize that program, in terms of incorporating Canadian content into the program.
LISTNUM 1 \l 1138 So, for that particular programming, that would be the only difference.
LISTNUM 1 \l 1139 THE CHAIRPERSON: So EZ Rock would probably run the most syndicated programming.
LISTNUM 1 \l 1140 MR. SLAIGHT: Yes, that format would run more than a rock station or a CHR station.
LISTNUM 1 \l 1141 But, again, the John Tesh show runs on some of our stations, but it runs on some of our competitors' stations, as well, in other markets.
LISTNUM 1 \l 1142 THE CHAIRPERSON: At the Standard stations, who decides how much and in what time slots this programming will run?
LISTNUM 1 \l 1143 MR. SLAIGHT: It is really up to the local market, the general manager, the program director and the sales manager to decide whether or not they take the programming.
LISTNUM 1 \l 1144 THE CHAIRPERSON: And that is true of the non‑Standard radio stations, as well?
LISTNUM 1 \l 1145 MR. SLAIGHT: The non‑Standard stations have an opportunity to pick up our programming when it becomes available, and they will decide themselves, also, whether they run it and when they run it.
LISTNUM 1 \l 1146 THE CHAIRPERSON: Your Sound Source website ‑‑ you describe the service as offering a comprehensive range of targeted, substantive and entertaining programming designed to capture and maintain a loyal audience during fixed airtimes throughout the week.
LISTNUM 1 \l 1147 MR. SLAIGHT: Right.
LISTNUM 1 \l 1148 THE CHAIRPERSON: Do those fixed airtimes translate into "You have to run this show at 7 o'clock"?
LISTNUM 1 \l 1149 MR. SLAIGHT: No, I think it would be fixed on a particular radio station, where they can use the fact that they have the program to drive audience to certain time slots on that particular radio station.
LISTNUM 1 \l 1150 THE CHAIRPERSON: So it doesn't mean that Sound Source determines at what time that show is run.
LISTNUM 1 \l 1151 MR. SLAIGHT: Absolutely not.
LISTNUM 1 \l 1152 THE CHAIRPERSON: "Command Performance" ‑‑ which, of course, is a series of live concert performances. You distribute these concerts across the country. Are they broadcast simultaneously by all radio stations that purchase the program?
LISTNUM 1 \l 1153 MR. SLAIGHT: We haven't done many of these lately, but when we did run the program, it was recorded and rebroadcast in most cases.
LISTNUM 1 \l 1154 THE CHAIRPERSON: So not necessarily simultaneously?
LISTNUM 1 \l 1155 MR. SLAIGHT: Exactly.
LISTNUM 1 \l 1156 THE CHAIRPERSON: Do you enter into a formal agreement with radio stations for the running of this type of programming?
LISTNUM 1 \l 1157 MR. SLAIGHT: Yes, they have contracts.
LISTNUM 1 \l 1158 THE CHAIRPERSON: Are you at liberty to tell us what the terms of those agreements are?
LISTNUM 1 \l 1159 MR. SLAIGHT: It really depends on the program, the market, the radio station, but it is usually for barter, i.e., airtime. So they get the program; we would take a 30‑second commercial that we would go to a national advertiser and sell it to.
LISTNUM 1 \l 1160 THE CHAIRPERSON: Are these programs ‑‑ these, too, are available to all radio stations, not just Standard?
LISTNUM 1 \l 1161 MR. SLAIGHT: Yes.
LISTNUM 1 \l 1162 MR. PARISIEN: Maybe, Madam Chair, we should have mentioned that Sound Source ‑‑ Standard operates 52 stations, and Sound Source has 140 stations that are clients of Sound Source.
LISTNUM 1 \l 1163 THE CHAIRPERSON: Including Astral stations?
LISTNUM 1 \l 1164 MR. PARISIEN: No. It is offered to our English stations in the Maritimes, but they don't pick it up.
LISTNUM 1 \l 1165 THE CHAIRPERSON: Again, because their main focus is ‑‑
LISTNUM 1 \l 1166 MR. PARISIEN: Because the local market decides that it doesn't want it.
LISTNUM 1 \l 1167 THE CHAIRPERSON: I wonder if Standard could provide us with a breakdown, station‑by‑station, of how much network programming is used versus local programming; and if in that document you could further compartmentalize it by including call letters, market and format.
LISTNUM 1 \l 1168 MR. SLAIGHT: I believe we have already done that exercise, and I am sure we could provide that.
LISTNUM 1 \l 1169 THE CHAIRPERSON: Would a week be sufficient time for you to ‑‑
LISTNUM 1 \l 1170 MR. PARISIEN: We will do it within a week. Don't worry.
LISTNUM 1 \l 1171 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 1172 As a result of this transaction, do you anticipate that these levels of network programming versus local would increase or decrease?
LISTNUM 1 \l 1173 MR. PARISIEN: As I mentioned, we are not operating the stations yet, but our intention is to continue to do the same thing that Standard has been doing. We don't fix something that's working, and the results are very good. The local markets are satisfied with what is offered and what they choose, so we intend to continue doing the same thing, not increasing.
LISTNUM 1 \l 1174 THE CHAIRPERSON: You also say in your supplementary brief that you do not discount the possibility of importing the network model used by Astral in Quebec to the rest of Canada.
LISTNUM 1 \l 1175 If you are successful in rolling out this model, will it have any impact at all on local programming?
LISTNUM 1 \l 1176 MR. PARISIEN: No, it wouldn't have any impact on local programming, other than what I have described to you as being the way we do it in the francophone market.
LISTNUM 1 \l 1177 THE CHAIRPERSON: Your model includes a decentralized editorial control, allowing stations to upload content and redistribute that content to the network in terms of news.
LISTNUM 1 \l 1178 MR. PARISIEN: In terms of news, you are absolutely right.
LISTNUM 1 \l 1179 In terms of news, our intention is to continue the same way that Standard is doing it with the Standard properties, and to continue doing it the way Astral does it.
LISTNUM 1 \l 1180 We will apply the best practice approach. There are things that Standard does that we don't do that can benefit our stations, and there are things that we do that Standard doesn't do that can benefit their stations.
LISTNUM 1 \l 1181 To the point of news, you are absolutely right, we do have a pretty unique system, called the Burli System, and it is a system where all of the stations have access to a central server, where every newsroom in every station puts on their news content, and it is accessible, with no charge, by any other local market that decides to run the piece of news.
LISTNUM 1 \l 1182 Therefore, it gives small markets and medium markets access to a lot of information. We will put that service in place in the Standard stations as well. So it will be bilingual, bicultural, from coast to coast and it will give access, especially to smaller markets, to news‑breaking events which otherwise they may not be covering. So, in that sense, it will enhance tremendously the news gathering and the news broadcasting.
LISTNUM 1 \l 1183 THE CHAIRPERSON: Do you have a sense right now of how much news content is provided by the network versus how much news content is provided by each individual radio station?
LISTNUM 1 \l 1184 MR. PARISIEN: It is all local, so every local station puts its news content on the server. So I can't answer that question, except by saying that the local station, if it has so many minutes of news, will put it on the system and will be accessible to all the other stations.
LISTNUM 1 \l 1185 THE CHAIRPERSON: And what about national and international news?
LISTNUM 1 \l 1186 MR. PARISIEN: Seventy per cent of what we put there is local content, the rest is national and regional.
LISTNUM 1 \l 1187 THE CHAIRPERSON: And is the national and regional news provided by this network system?
LISTNUM 1 \l 1188 MR. PARISIEN: Yes, it is.
LISTNUM 1 \l 1189 THE CHAIRPERSON: Okay. If you are again successful in rolling out this model across Canada, what effect do you anticipate this would have on on‑air talent, in particular, news readers, but as well as other on‑air talent?
LISTNUM 1 \l 1190 MR. PARISIEN: You know what we have discovered it does and what we have already been doing in Quebec, it puts pressure on the journalists, the news people to do a better job, to gather better content, to deliver better news. It just enhances the whole system, and pretty fast also because ‑‑
LISTNUM 1 \l 1191 THE CHAIRPERSON: So it won't mean job losses?
LISTNUM 1 \l 1192 MR. PARISIEN: ‑‑ a piece of news will be taken by another market and there is a question of ego and who is going to cover it and how good is it going to be and how many people will pick it up and so on and so forth, so it enhances the system completely.
LISTNUM 1 \l 1193 THE CHAIRPERSON: And so you don't anticipate job losses?
LISTNUM 1 \l 1194 MR. PARISIEN: Oh, not at all, not at all.
LISTNUM 1 \l 1195 THE CHAIRPERSON: Okay. On page 11 of the supplementary brief you say that this acquisition represents a benefit in terms of guidance to smaller‑market English stations and employment opportunities. I am wondering if you could elaborate a little bit on that statement and tell me what your plans are.
LISTNUM 1 \l 1196 MR. PARISIEN: Well, again, I have to give you what we have done in the francophone market and in the Maritimes that works and that we could apply to the Standard's property. And what we have done is we have rolled out a system by which we encourage mobility of people across the markets and we have lived through that. We have a lot of our people who move from smaller markets to medium markets to big markets in all categories; on‑air people, research, scripts, all sorts of radio talent do that.
LISTNUM 1 \l 1197 We intend to apply that to the Standard properties also, it has been successful for us. I think Standard also encourages that, so we will continue on the line. But we have a system where we promote it, we also choose, and I think we have addressed it in the supplementary brief, we have a program called Career Plus where we identify young, eager radio employees that want to be on a fast track and Career Plus gives them the advantage to be on a fast track. We will rollout Career Plus in the Standard properties also with the same target of giving access to young, eager radio professionals the possibility to access better jobs and do more.
LISTNUM 1 \l 1198 THE CHAIRPERSON: This transaction also, of course, includes AM stations ‑‑
LISTNUM 1 \l 1199 MR. PARISIEN: Yes, it does.
LISTNUM 1 \l 1200 THE CHAIRPERSON: ‑‑ and even though there isn't a requirement to provide a minimum level of local programming, what are the efficiencies you see for these AM stations that you are acquiring?
LISTNUM 1 \l 1201 MR. PARISIEN: Are you asking me efficiencies in the sense of synergies?
LISTNUM 1 \l 1202 THE CHAIRPERSON: Efficiencies in the sense of synergies and in the sense of further development for on‑air talent, for the retention and hopefully enhancement of local programming.
LISTNUM 1 \l 1203 MR. PARISIEN: Okay. I appreciate the question on synergies and I would like to take a few minutes to talk about synergies because, as we have mentioned and as we have said publicly, the Standard stations compliment the Astral stations. Standard has a structure of management, has a structure of local resources, which we do not intend to change, it just compliments what we already have.
LISTNUM 1 \l 1204 We need all the people, we need to maintain the structure in place and we have the intention of doing so. Except for the very top management, which is Gary Slaight, all the rest of the people are invited to stay.
LISTNUM 1 \l 1205 MR. SLAIGHT: Thank you.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1206 MR. PARISIEN: In terms of AM stations, there is nothing particular about AM stations in terms of human resources. We just intend to maintain the same people in place and just try to do the same good job and, if possible, a better job than what has been done in the past. So there is no strategy to cut, whatever so far.
LISTNUM 1 \l 1207 MR. BRAIDE: Jacques, if I could. The folks at Astral have been very clear with me from the beginning how important it is that our people stay in place and that we keep doing what we have been doing and that has been a clear message from the beginning, since we started talking.
LISTNUM 1 \l 1208 THE CHAIRPERSON: Thank you. We will move to the issue of emerging artists. Currently, Astral has a definition for emerging artists for the French‑language market and Standard offered a definition in the licence renewal application of CIBK‑FM.
LISTNUM 1 \l 1209 Now, I know from your application that you would prefer, as does the rest of the industry, that there be an industry‑wide definition for emerging artists. But, given the fact that Astral has a definition, Standard has offered one, can you point out to me where you see the differences in the two definitions that we have that your two companies have provided to us?
LISTNUM 1 \l 1210 MR. PARISIEN: Well, I will start the answer and then I will ask Rob, who has participated in this debate for quite a few years, to compliment.
LISTNUM 1 \l 1211 Astral Media, as you mentioned, has come to an agreement for the francophone market on a definition for emerging artists with ADISQ. We have been working at it for quite a while and, by the way, we are the only francophone broadcaster who has an agreement with ADISQ so far.
LISTNUM 1 \l 1212 On the English side in the Maritimes our stations don't have an issue with music, it is not a big thing for the stations that we run in the Maritimes, so they haven't been very proactive. But we have, Astral, monitored what has been going on on the English side.
LISTNUM 1 \l 1213 There is a proper forum where it is being discussed, all the players are there and the CAB is driving the exercise, there have been discussions with the Commission. And we intend to continue to play that active role, proactive role I should say, as we have done with ADISQ, and try to come to an agreement as soon as possible.
LISTNUM 1 \l 1214 Maybe, Rob, do you want to add something to that?
LISTNUM 1 \l 1215 MR. BRAIDE: Sure, Jacques. I think maybe we should start off, if you will allow me, by saying that emerging artists are not a group of people who are standing over in a corner waiting to get attention for the first time. Emerging artists have been looked after by Astral and Standard and the Canadian music system in general for decades. I think that emerging artist has become a new buzz word fuelled by some of the industry associations who are, as we are, concerned that Canadian talent get a good plein feux, a good spotlight, and are paid attention to.
LISTNUM 1 \l 1216 That said, you know, during my tenure as Chair of the CAB we worked and in preparation for the review of radio we did a lot of thinking on this subject. There really is a need for this industry get‑together where we can discuss with CIRPA and CRIA and the broadcasters and the Commission and other interested parties what an emerging artist is, how long it takes for that person to emerge and then not be emerging anymore, and whether or not we need a quota. There are many many issues on the table.
LISTNUM 1 \l 1217 The Astral ADISQ definition is very different from the one that the CAB came up with and which other companies such as CHUM in their recent hearing or CTV mentioned. There is just no common ground, Commissioner Cugini, right now, it is just not there and the definitions will ultimately be very different between Canada and Quebec.
LISTNUM 1 \l 1218 THE CHAIRPERSON: Well, we have to acknowledge that this new company, you will be the radio industry leader in Canada as a result and that perhaps other radio broadcasters are going to look to you for guidance on this issue which, Mr. Braide, as you correctly say, has been debated for quite a while now. And somewhere, somehow someone should come up with a definition that is going to be acceptable to all radio broadcasters and perhaps it is you guys.
LISTNUM 1 \l 1219 MR. BRAIDE: And we look forward to that conversation. We just don't feel that even though we will be a leader in radio, we won't be dominant in radio, we won't be able to sort of control the agenda, we will be one of the players. There are four or five others, you know, who are very close to the size of the new combined Astral and Standard.
LISTNUM 1 \l 1220 This really does need to be an industry‑wide conversation which I think the Commission has agreed it is going to take leadership in.
LISTNUM 1 \l 1221 MR. PARISIEN: And we are here to give you some comfort in the fact that Astral Media will be as active on that debate as it has been on the francophone debate.
LISTNUM 1 \l 1222 THE CHAIRPERSON: Thank you for that.
LISTNUM 1 \l 1223 You did mention, Mr. Braide, quotas and, in that renewal application for CIBK, Standard did say that approximately 10 per cent of its selections are devoted to the airplay of emerging artists as defined in that application. Would that be true for all the Standard Radio stations?
LISTNUM 1 \l 1224 MR. BRAIDE: Madam Chair, I believe that it varies. Gary might be able to correct me if I am wrong, but I think it varies within a couple of per cent. Again, it is based upon the format. A country station may have more exposure to emerging artists than an easy rock station in Canada. So I think really it comes down to the local imperative.
LISTNUM 1 \l 1225 MR. SLAIGHT: Yes. It would vary dramatically from market to market and station to station. That particular radio station is a station that plays new music, it has targeted young people and, consequently, it is in our best interest and works out well in terms of the amount of product available for us to be able to do that.
LISTNUM 1 \l 1226 In some other formats it doesn't make as much sense, there is not a lot of new country music. For instance, it is very hard finding new country music featuring Canadian country artists, so it varies market to market and format to format.
LISTNUM 1 \l 1227 THE CHAIRPERSON: Now, both of your companies, as you also mentioned in your opening remarks this morning have, indeed, a proven track record in supporting and promoting emerging artists. How will these efforts be enhanced by this transaction?
LISTNUM 1 \l 1228 MR. PARISIEN: Well, we will definitely continue the same approach as we have and we know, in part, what Standard has been doing and we endorse that also. So we will continue encouraging emerging artists, opening our studios as we do, giving them the chance to be on air, have interviews. We also have studies where we can lend to them where they do shows with a small group of people attending. We will continue to do all that across the country when it is possible and feasible. And we have done it in the Astral Media properties so far and it works, it works very well, it is well received and we have been supporting emerging artists tremendously. I think Standard has the same approach and we will continue to do that.
LISTNUM 1 \l 1229 You must also recognize that we have tabled a benefit package that is quite substantial and addresses also the issue of emerging artists. Maybe I will let Claude and Rob talk about that.
LISTNUM 1 \l 1230 MR. BRAIDE: Let me just say quick that, you know, Gary will be leaving this organization and, you know, his leadership in terms of Canadian music will be missed. But, as a result of Gary's work, concentration on developing artists is deep inside of our culture.
LISTNUM 1 \l 1231 And, you know, with all due respect to my friend and boss, Gary, he setup a system in Standard whereby it will continue to flourish in his absence. He is also going to be on the board of directors of Astral and he is going to have some input here. And, you know, I can just speak from 20 year of experience with this company, this stuff is deep inside of our culture and I know it is that deep inside the Astral culture as well.
LISTNUM 1 \l 1232 THE CHAIRPERSON: We will move on to television because, of course, this transaction does include the two CBC affiliates in Dawson Creek and Terrace.
LISTNUM 1 \l 1233 What are the synergies between the radio holdings and these television stations?
LISTNUM 1 \l 1234 MR. PARISIEN: We are fortunate to have with us the operator, Don Shafer, so I will let him take that question.
LISTNUM 1 \l 1235 MR. SHAFER: Thank you, Jacques.
LISTNUM 1 \l 1236 Madam Chair, these TV stations operate as small families. Each station has roughly 35 people and everybody does everything. Radio and news people carry cameras, both can go on the air for AM or FM or for television when necessary and they do as much as they can to help each other at each station.
LISTNUM 1 \l 1237 THE CHAIRPERSON: Help each other in which way?
LISTNUM 1 \l 1238 MR. SHAFER: Well, I mean, I think I said at the review of television that Dawson Creek, for example, is in a log cabin. It is a small community and the stations are very tiny. Everybody has to help out. They share each other's responsibilities where possible, they help cover each other in different jobs, they promote each other on and off the air and support each other in varying roles.
LISTNUM 1 \l 1239 The engineer sometimes goes no the air when he has to, they setup remotes or they setup remote broadcast. If there's an emergency or a fire or a snowstorm in Dawson Creek, for example, everybody rallies to help the crew that is out in the field. So it really is a small group effort.
LISTNUM 1 \l 1240 THE CHAIRPERSON: And again, when you say everybody, you are including some employees of the Standard Radio stations?
LISTNUM 1 \l 1241 MR. SHAFER: Absolutely.
LISTNUM 1 \l 1242 THE CHAIRPERSON: Do the radio stations provide any news content, for example, to the television stations?
LISTNUM 1 \l 1243 MR. SHAFER: Probable one of the best examples that I could give would be the ferry sinking in Prince Rupert, where one of the first people on site or nearby was one of our radio reporters who also carries a camera. So, the first reports were on the radio station, but also the first footage that we had and that CBC had was from our camera.
LISTNUM 1 \l 1244 THE CHAIRPERSON: Do you anticipate, Mr. Parisien, that these televisions stations will contribute to the network model that you've described earlier for news? In any way, is there a possibility that they could contribute?
LISTNUM 1 \l 1245 MR. PARISIEN: Well, there is a possibility if the system rose out in that fashion, yes, there is a possibility. And because, as Don has said, the news ‑‑ the people are so tightly knit and multi tasking that there is a possibility.
LISTNUM 1 \l 1246 Our intention is to continue to do in those two stations what has been done so far. They're very tied to their community, they serve the community very well, there is interest all around from the community for the services and we just intend to maintain it and if possible, enhance it. That would be one way of enhancing it.
LISTNUM 1 \l 1247 THE CHAIRPERSON: Would enhancement also, therefore, come from the reverse, i.e. would you network model in any way contribute to the provision of local news to those markets?
LISTNUM 1 \l 1248 MR. PARISIEN: Well, that would be great and maybe that will happen, but I don't have any pre‑design or strategy to that effect, except to make our news system gathering available for all the stations and if it works for the television stations, that's going to happen also.
LISTNUM 1 \l 1249 THE CHAIRPERSON: Is the local news program the only program that is produced locally? That is does everything else come from the CBC? Mr. Shafer?
LISTNUM 1 \l 1250 MR. SHAFER: Madame Chair, we produce 13 hours of local programming. Five hours is news, there is five hours of repeats. We run tribal trails, one local religious program and a weekend review at each station.
LISTNUM 1 \l 1251 THE CHAIRPERSON: A weekend review I understand, sir?
LISTNUM 1 \l 1252 MR. SHAFER: A weekend review, a combination of a compilation of the best events or stories of the week.
LISTNUM 1 \l 1253 THE CHAIRPERSON: And is that as per your Affiliation Agreement with CBC? In other words, if you could do more local programming than those 13 hours, would your Affiliation Agreement with CBC allow you to do that?
LISTNUM 1 \l 1254 MR. SHAFER: At present, no, it wouldn't.
LISTNUM 1 \l 1255 THE CHAIRPERSON: It would not?
LISTNUM 1 \l 1256 MR. SHAFER: CBC takes 113 hours week.
LISTNUM 1 \l 1257 THE CHAIRPERSON: Okay. What about your non‑canadian programming? Again, is that a provision of your agreement with CBC in terms of how many hours?
LISTNUM 1 \l 1258 MR. SHAFER: Yes. That's correct, but it's all CBC programming.
LISTNUM 1 \l 1259 THE CHAIRPERSON: All CBC?
LISTNUM 1 \l 1260 MR. SHAFER: Correct.
LISTNUM 1 \l 1261 THE CHAIRPERSON: So, if Astral had a television property that it felt would serve these two markets well, it could not provide those programs to that station with genesis?
LISTNUM 1 \l 1262 MR. SHAFER: That's correct.
LISTNUM 1 \l 1263 THE CHAIRPERSON: It could not.
LISTNUM 1 \l 1264 MR. SHAFER: That's correct.
LISTNUM 1 \l 1265 THE CHAIRPERSON: Are there other synergies that could be realized between the Astral specialty services and the two television stations?
LISTNUM 1 \l 1266 MR. PARISIEN: Not that we know of, no.
LISTNUM 1 \l 1267 THE CHAIRPERSON: Well, thank you. Those are all my questions, but I am going to hand you over now to Commissioner Noël.
LISTNUM 1 \l 1268 COMMISSIONER NOËL: Are you trembling?
LISTNUM 1 \l 1269 MR. PARISIEN: No, but we're all yours.
LISTNUM 1 \l 1270 COMMISSAIRE NOËL: Alors, un petit peu de français pour changer le mode.
LISTNUM 1 \l 1271 Bonjour, madame Laflamme, madame Charest et monsieur Greenberg et monsieur Parisien, monsieur Slaight, monsieur Braide, monsieur Gagnon, monsieur Sabbatini, Mr. Lurie and Mr. Shafer.
LISTNUM 1 \l 1272 I will have discussed a number of things with your this morning, concerning valuation, ownership, et cetera, but first I would like to make a few ‑‑ maybe add to what Mr. Cugini said earlier and ask a few questions.
LISTNUM 1 \l 1273 Monsieur Parisien, on a discuté tout à l'heure de syndication. Monsieur Slaight a parlé de syndication. Au Québec, est‑ce que ça existe la syndication?
LISTNUM 1 \l 1274 MR. PARISIEN: Si vous permettez, je vais répondre en anglais.
LISTNUM 1 \l 1275 COMMISSAIRE NOËL: Oui, c'est correct.
LISTNUM 1 \l 1276 MR. PARISIEN: Pour le bénéfice de mes collègues de Standard surtout.
LISTNUM 1 \l 1277 To the question does it exist in Quebec; not it does not. It's really for the francophone market. It's really a Canadian anglophone phenomenon and there is none in Quebec.
LISTNUM 1 \l 1278 COMMISSIONER NOËL: But isn't it true that some very small stations do purchase programming from the CHORUSES and the Astrals?
LISTNUM 1 \l 1279 MR. PARISIEN: Oh! it's very possible, yes, but it's not a rolled out phenomenon where you see if ‑‑
LISTNUM 1 \l 1280 COMMISSIONER NOËL: Okay, but it's an isolated phenomenon.
LISTNUM 1 \l 1281 MR. PARISIEN: Yes, exact.
LISTNUM 1 \l 1282 COMMISSIONER NOËL: Now, do you believe, monsieur Parisien, and we are talking about emerging artist, do you believe that it's necessary to have only one definition of emerging artist or that we could live with two definitions that coexist for the French and the English markets?
LISTNUM 1 \l 1283 MR. PARISIEN: Yes. I think it has to be two definitions because the environment is so different, the music industry structure, the number of artists that we deal with is so different that ‑‑ and you know, the regulation on radio in French market is completely different than the regulation on radio in English market, so we need two definitions.
LISTNUM 1 \l 1284 I think, Rob, you will agree with that?
LISTNUM 1 \l 1285 MR. BRAIDE: Absolutely, we need two definitions. I would also like to read into the record that, you know, two per cent of this sixty‑six million dollars is going to factor. That's over twenty million dollars. That's going to go a long way to helping emerging artists. It's aside, but yes, I do most definitely believe that two different definitions are necessary. The markets, as we know, are very distinct.
LISTNUM 1 \l 1286 COMMISSIONER NOËL: Thank you. And then, one final little point about your TV operations. Where these TV stations came through the Telemedia transaction that you made earlier, Mr. Slaight, I guess?
LISTNUM 1 \l 1287 MR. SLAIGHT: That's correct.
LISTNUM 1 \l 1288 COMMISSIONER NOËL: Okay. So, there is sort of an anomaly in the overall picture.
LISTNUM 1 \l 1289 MR. SLAIGHT: Right. We had no intention of getting into the TV business at that point in time, but I think we've done a good job in maintaining and running the TV station now.
LISTNUM 1 \l 1290 COMMISSIONER NOËL: And Mr. Parisien, are you dreaming of buying CTV?
LISTNUM 1 \l 1291 MR. PARISIEN: I am not calling it. I am not calling it a ‑‑
LISTNUM 1 \l 1292 COMMISSIONER NOËL: Or Canwest?
LISTNUM 1 \l 1293 MR. PARISIEN: No, no, no. I am not calling it an anomaly; I am calling it a nice‑to‑have. Not necessarily a must‑have, but we're happy to have them.
LISTNUM 1 \l 1294 COMMISSIONER NOËL: A nice‑to‑have and I gather from what Mr. Shafer said earlier, that there is no ‑‑ and I'll use a French term for lack of the proper English one ‑‑ étanchéité between the newsrooms in the operation.
LISTNUM 1 \l 1295 MR. PARISIEN: No. From what we all understand, it's multi tasking and they are a lot. It's a very small community and I think the fact that they do share so much because of a better service of that community also.
LISTNUM 1 \l 1296 COMMISSIONER NOËL: Thank you very much. Those were my frivolous questions. Now, let's get to the meat, and I'm putting my glasses. I have to be able to re‑read my pattes de mouche here.
LISTNUM 1 \l 1297 There is four points that I would like to discuss this morning. The first one will be the value of the transaction; the second one will be the potential effect of common ownership, particularly in the Montreal and Ottawa‑Gatineau market as well as the potential for destabilization of the national and local advertising costs in those markets and the potential for homogenization of the news and information. That's very hard in English. In French it's easy, but in English, it's more complicated. And the possible reduction of overall programming diversity.
LISTNUM 1 \l 1298 Thirdly; I would like to address the ownership and that's going to be very short because of the fact that you have finally chosen your scenario and we received documentation. There are a few things missing that I will ask you to file.
LISTNUM 1 \l 1299 And finally, I would like to discuss corporate renewals, given the fact that many of the licences of the Standard Life will expire in 2010 and 2011 and I would like to address, you know, some of that.
LISTNUM 1 \l 1300 Value of the transaction. You established a value of the transaction in the Purchase Agreement and the total consideration is, according to the Purchase Agreement, $1,082,369,866 payable in cash and in shares.
LISTNUM 1 \l 1301 The cash consideration totals $879,882,800 and the share part totals $4,759,087 Astral Class A non‑voting shares, a weighed average price of $42.62, totalling $202,487,066.
LISTNUM 1 \l 1302 You have all those figures in front of you, I'm sure and, Mr. Gagnon, you have to open your ears because I think you will be ‑‑ you will have to interfere somewhere in here.
LISTNUM 1 \l 1303 So, I'm sorry for the length of the question, but I will come to the meat later on. I am just trying to stage what I have to tell you.
LISTNUM 1 \l 1304 This weighed average price was arrived at by using the trades over a period of five days, from Tuesday April 10, to Monday April 16 inclusive. That means two days before the announcement, the day of the announcement and two days after the announcement of the transaction that was announced on April 12.
LISTNUM 1 \l 1305 You also based that choice, using Chapter 1581 of the CICA Handbook on Business Combinations at paragraph 25 and you quote in one of your answers to the Lettre de lacunes, the market value ‑‑ I'll use the English version :
"The value of the shares is based on their market price over a reasonable period before and after the date, the terms of the business combinations are agreed to and announced."
LISTNUM 1 \l 1306 And that is the bottom part of paragraph 25.
LISTNUM 1 \l 1307 But in the same paragraph the gap also states :
"Accounting for a business combination effected by issuing shares, the quote of the market price of the shares issued generally is used to estimate the fair value of the acquired enterprise after recognizing possible effects of price fluctuations, quantities trade issues, costs and similar items."
LISTNUM 1 \l 1308 Because the market was worried that Astral could pay too much to acquire Standard assets, the value of the class A shares went down considerably during the negotiation period, closing at $41.58 before the public announcement down from a weighed average price of $46.30 between January 22nd and February 2nd.
LISTNUM 1 \l 1309 But after the announcement, the share price rebounded by $1.17 on April 12 and at $42.85 and by another $0.21 the next day, to reach $42.96. And I have somewhere ‑‑ somewhere I do have those. Ah! Voilà. Okay.
LISTNUM 1 \l 1310 So, given that, and here is the question: Given that the uncertainty in the market was only removed after the announcement, would it not be preferable to calculate the weighed share price by using the five‑day period starting on April 12, the day of the announcement and ending on April 18, rather than from April 10 to 16.
LISTNUM 1 \l 1311 And, of course, the weighed average price would be different. It would be $42.94 and that's according to the calculation you submitted to us instead of $42.62, that's $0.32 difference and it could increase the value of the transaction by that amount multiplied by the number of shares.
LISTNUM 1 \l 1312 Monsieur Parisien.
LISTNUM 1 \l 1313 MR. PARISIEN: Well, I'll give you the short form answer to that and then I will let Claude Gagnon give you details and before giving Claude the chance to ‑‑ I'll give you the details and I'll also talk about valuation in general.
LISTNUM 1 \l 1314 The short answer to that is "no". The value of the share has no impact on the price of the transaction, okay, and Claude will address that for you.
LISTNUM 1 \l 1315 This deal was dealt between a motivated vendor and a motivated purchaser. It was negotiated at arms' length, in good faith. We used a multiple formula, which is something you see in all industries and it was applied with the right standards.
LISTNUM 1 \l 1316 It was also backed by our advisors and we have filed with the Commission documentation to that effect and there are three different documents. One is a KPMG document, a National Bank document and the Ernst & Young document.
LISTNUM 1 \l 1317 So our advisors did confirm that the price in the negotiation reflected a fair market value as agreed upon by both parties. And maybe Claude can explain to you what the documents refer to and why it doesn't affect ‑‑ why the share price doesn't affect the price of the transaction.
LISTNUM 1 \l 1318 COMMISSIONER NOËL: Maybe just before that, do you mean to say that the cash part would have varied if the price had been ‑‑
LISTNUM 1 \l 1319 MR. PARISIEN: No. I think we should listen to the experts explanation.
LISTNUM 1 \l 1320 COMMISSIONER NOËL: Merci, monsieur Parisien. Monsieur Gagnon, je suis tout ouïe.
LISTNUM 1 \l 1321 MR. GAGNON: Thank you, Jacques, for the compliment.
LISTNUM 1 \l 1322 Alors, madame la Commissaire, to specifically reply to your question, would it be preferable to use a five‑day period subsequent to the announcement, the answer to that is : no, the rules are quite clear that the market value of the shares to be established on the basis of the trading price over a short period of time, prior to the announcement and a short period of time subsequent to the announcement.
LISTNUM 1 \l 1323 So, we have to cover a period prior to the announcement of the binding agreement between the two parties.
LISTNUM 1 \l 1324 Yes, we did supply that information at the request of the Commission and I think frankly that information demonstrates that the share price did not fluctuate significantly after the, say, the three‑day period beginning with the date of the announcement.
LISTNUM 1 \l 1325 So, the rules are quite clear and we have to abide by the rules. We're a public corporation and we report on the basis of Canadian generally accepted accounting principles and we have followed those.
LISTNUM 1 \l 1326 As a matter of fact, the example that is depicted in the CICA Handbook, it so happens covers the same period of time. Two days prior to the announcement of the binding agreement, the day of the announcement and two days subsequent, hence, the price of $42.62 a share.
LISTNUM 1 \l 1327 I'll just correct something that monsieur Parisien mentioned and that if the share price varies, of course, the value of the share component is going to vary. It could have varied up or down between the day of the non‑binding agreement between the two parties and the day of the binding agreement.
LISTNUM 1 \l 1328 So, either way that component could have varied. It so happens that the share price did go down. It could have gone up for other reasons, but we've reported on the basis of the rules.
LISTNUM 1 \l 1329 COMMISSIONER NOËL: Merci, monsieur Gagnon.
LISTNUM 1 \l 1330 Now, Mr. Parisien, if the Commission was to determine if, in its wisdom and despite your arguments, that the value of the shares is actually $42.94 and not $42.62, the value of the transaction would increase by $1,520,316. Could you comment on this possible approach?
LISTNUM 1 \l 1331 MR. PARISIEN: Well, I would be very surprised if the Commission would defy the general recognized Canadian accounting principles and not follow the rule. I would be surprised to see the Commission go in that direction.
LISTNUM 1 \l 1332 COMMISSIONER NOËL: Merci, monsieur Parisien pour ce conseil de sage.
LISTNUM 1 \l 1333 Maintenant, the Purchase Agreement provides that Mr. Slaight will be appointed to the Board of Astral if the transaction is approved.
LISTNUM 1 \l 1334 In an answer to a deficiency letter, you confirmed that the fees payable to directors on the Board of Astral are $40,000 a year, what fee payable in two instalments, 20‑20.
LISTNUM 1 \l 1335 Could you tell us why this amount should not be added to the value of the transaction or do you not consider it to be a remuneration?
LISTNUM 1 \l 1336 MR. PARISIEN: It is definitely not remuneration. Mr. Slaight will have no dealings or no responsibility in the operation of the Standard properties nor of Astral Media Radio. He was invited to sit on the Board of Astral and that fee is paid as a compensation for his role as an administrator director of Astral, sitting on the Board the same way we remunerate all our other directors.
LISTNUM 1 \l 1337 COMMISSIONER NOËL: But it's also a financial advantage for him.
LISTNUM 1 \l 1338 MR. PARISIEN: That's his tax problem, but it has nothing to do with the operation of the radio stations.
LISTNUM 1 \l 1339 MR. GREENBERG: If I can just add something to that, Commissioner Noël. It is customary for someone who is a large shareholder of a corporation to also have a seat on the Board.
LISTNUM 1 \l 1340 COMMISSIONER NOËL: Especially if his shares are non‑voting.
LISTNUM 1 \l 1341 MR. GREENBERG: Well, 98 per cent of all shares of Astral are non‑voting, but the point is that he is compensated as a director. The reason he is on the Board is because he is going to become a significant shareholder.
LISTNUM 1 \l 1342 As you know, Board of Directors are approved and voted on every year. There is no guarantee he is there for one year, 10 years or 20 years. So, it's quite customary. We have had it in the past when a large corporation bought a significant amount of shares, we've offered them.
LISTNUM 1 \l 1343 I mean, we offered Mr. Slaight to sit on the Board the same way we offered other companies when they had a large shareholding to sit on the Board and they get the exact same remuneration all that year.
LISTNUM 1 \l 1344 COMMISSIONER NOËL: And there is also some liabilities that are attached to the duty of directors.
LISTNUM 1 \l 1345 MR. GREENBERG: Absolutely.
LISTNUM 1 \l 1346 COMMISSIONER NOËL: That are probably far more important than the $40,000 a year of compensation.
LISTNUM 1 \l 1347 MR. GREENBERG: I would think so.
LISTNUM 1 \l 1348 COMMISSIONER NOËL: But some of our personnel are questioning the validity of adding this to the transaction or not and since there are no terms for the appointment of a director because he is re‑elected every year, as you say, by the voting shareholders, but our personnel or our staff estimated that five years would be a reasonable time frame to evaluate the value of this item to be added to the value of the transaction, at $200,000.
LISTNUM 1 \l 1349 Bear with me, we are not ‑‑ and I am not talking about the bear here ‑‑ so, I've heard your comments. It's clear that you don't think that this should be added to the value of the transaction. But in the hypothesis that the Commission determines that the value of the transaction is increased by those two amounts that I have mentioned, $1,520,316 based on the weighed average price of the shares, $42.94 versus $42.62, and by an additional $200,000, i.e. the remuneration paid to Mr. Slaight as a director of the company, based on a five‑year tenure, this would bring the total value of the transaction to $1,084,090,316, a total increase of $1,720,316 over more than a billion dollars.
LISTNUM 1 \l 1350 And using the same allocation you used between the regulated and the non regulated assets, i.e. 94.83 per cent for the 52 radio stations and 1.54 per cent for the two TV stations, staff calculated that an additional $110,469 should be payable as benefits, for a total of $61,683,000 for the radio assets and $1,670,000 for the TV assets.
LISTNUM 1 \l 1351 Would you agree to file an amended benefits plan to take into consideration those additional amounts?
LISTNUM 1 \l 1352 MR. PARISIEN: I think the benefit package that we have offered is ‑‑ you know, it's one of the most generous package ‑‑ it is the most generous package in the radio industry of Canada. It has conformed to all of the Commission's regulation, to general accepted accounting principles and to the way businesses are run, especially public companies with board and members on the boards.
LISTNUM 1 \l 1353 I think it would be a very dangerous precedent and it would be unfair because all the cases have not been treated the same way. I know Astral has gone through another case when it purchased Radio Mutuelle and monsieur Beauchamp joined the Board and we never considered his compensation as a Board member at that time.
LISTNUM 1 \l 1354 So, why would it change today?
LISTNUM 1 \l 1355 So, I am not sure that's the right direction to go.
LISTNUM 1 \l 1356 COMMISSIONER NOËL: Merci, monsieur Parisien. I have one final question on the topic of valuation of the transaction and I would like you to give us your point of view on materiality.
LISTNUM 1 \l 1357 Could you tell us what are your views on the materiality of the changes we just discussed and what should we do with that?
LISTNUM 1 \l 1358 MR. PARISIEN: Claude, do you want to address the materiality issue?
LISTNUM 1 \l 1359 MR. GAGNON: You're talking about the two adjustments that ‑‑
LISTNUM 1 \l 1360 COMMISSIONER NOËL: Voilà.
LISTNUM 1 \l 1361 MR. GAGNON: ‑‑ the staff may deem, the Commission may deem ‑‑
LISTNUM 1 \l 1362 COMMISSIONER NOËL: Yes. If we were in pure accounting, would that be material?
LISTNUM 1 \l 1363 MR. GAGNON: To answer that question, pure accounting, the answer would be "no", but I think what monsieur Parisien expressed here has nothing to do with materiality. It's more a matter of principle.
LISTNUM 1 \l 1364 COMMISSIONER NOËL: Merci beaucoup, monsieur Gagnon. Alors nous allons laisser le sujet de l'évaluation de la transaction et on va parler de common ownership.
LISTNUM 1 \l 1365 Given, that you will own four FM and one AM stations in Montreal, that's two FM in French, two FM in English and one AM in English, and that you will own three FM in the Ottawa‑Gatineau area, and that's two French and one English, if the transaction is approved, is there a risk that it could destabilized the cost of local and national advertising in those two markets?
LISTNUM 1 \l 1366 MR. PARISIEN: No, that could not happen and I will explain why. I think Rob would like to comment on that and Mr. Sabbatini also.
LISTNUM 1 \l 1367 You know, at the end of the day in the radio industry, rates and tariffs are not established by the radio operator. They're established by the marketplace and that's a fact. Any broadcaster in radio would come here and say that you can push your tariff as much as you want, there is ‑‑ the ultimate decision is done by or is made up by the clients.
LISTNUM 1 \l 1368 To address a specific situation in the English and French market, I just want to remind the Commission that, you know, this has been debated in the last five years at length in Canada, through the Commission, through the Competition Bureau and that are measuring bureau, the BBM Offices consider the English market as one market and the French market as another market.
LISTNUM 1 \l 1369 The Competition Bureau in recent cases where we have been involved has also established that Montreal French and Montreal English are two different markets, just as the BBM reports them as two different markets.
LISTNUM 1 \l 1370 And I think the Commission also supported that in recent decisions and in policies.
LISTNUM 1 \l 1371 We consider them as two different markets and we cannot add them together to talk about the size of the share in those two markets.
LISTNUM 1 \l 1372 In the Montreal market something also particular is the fact that CHORUS is in the same situation, as Astral will be. They have French stations, English stations and that doesn't seem to be an issue.
LISTNUM 1 \l 1373 I also know that Rob has spent 30 years, even thought he doesn't look like it, living through that, so maybe he can add something on that.
LISTNUM 1 \l 1374 COMMISSIONER NOËL: Only his hairdresser knows.
LISTNUM 1 \l 1375 MR. BRAIDE: Madame Noël, Montréal est une ville très très bien intégrée au niveau culturel. We are very well‑integrated culturally in Montreal. The English and French communities move virtually seemlessly amongst each other.
LISTNUM 1 \l 1376 However, in terms of radio sales, we might as well be the East Coast and the West Coast. They are very very distinct markets. It has been the source of some frustration for me over the 30 years of my career in Montreal that we haven't been able to get quite for the francophone tuning on our radio stations, therefore selling a reduced percentage of our cumulative audience.
LISTNUM 1 \l 1377 I have fought these Astral guys hard on this over the past years and I have lost at every turn.
LISTNUM 1 \l 1378 However, you know, I understand your concern. On the face of things, it would be perplexing, but from my personal experience as an anglo‑québécois and as a business person in Quebec, I can assure you that this does not change the face of the market place at all. They are two marchés séparés.
LISTNUM 1 \l 1379 COMMISSIONER NOËL: Et, monsieur Braide, je sais que vous êtes un montréalais pure laine, mais what about the Ottawa‑Gatineau market? Do we have the same phenomenon in the Ottawa‑Gatineau market?
LISTNUM 1 \l 1380 MR. SABBATINI: I can talk about the Ottawa market and just for Montreal ‑‑
LISTNUM 1 \l 1381 THE CHAIRPERSON: Ah! monsieur de l'affichage extérieur.
LISTNUM 1 \l 1382 MR. SABBATINI: Well, since you give me the opportunity to talk about outdoor, outdoor is a real ‑‑
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1383 MR. SABBATINI: One of the first lunches I had with Rob, I just made a joke to Rob and I said : this is great. You guys are now going to move in our offices on Papineau and René‑Lévesque. So, as I was saying that, I saw his face turn to white because most of the people working at CHOM, CJAD and mix never went so much east in Montreal, So ‑‑
LISTNUM 1 \l 1384 COMMISSIONER NOËL: And what about the team?
LISTNUM 1 \l 1385 MR. SABBATINI: So, that shows you the big difference between the French and the English market in Montreal.
LISTNUM 1 \l 1386 And first, before I go to the Ottawa‑Gatineau market, I should say that in the Montreal market, we will have five stations if this transaction goes through, just to remind you that CHORUS has six. And now, CHORUS has just teamed up with COGECO and Radio Nord to form a national rep shop where they have eight stations altogether with 55 shares in the French market to sell to advertisers.
LISTNUM 1 \l 1387 So, you know, again, I had to reflect on my career in radio after 20 years and I was very unsuccessful to increase rates and now I understand why, because they have no control on rates and we have no control on rates. Rates in radio go up when the ratings go up and they go down when the ratings go down.
LISTNUM 1 \l 1388 In the Ottawa‑Gatineau market ‑‑ we have our GM who is in the room ‑‑ we are a small player and a very small player in the Ottawa English market.
LISTNUM 1 \l 1389 In Ottawa English, Rogers has four stations and they have like 26 shares. CHUM, they have four stations plus TV and they have 40 shares. Newcap has two stations with 20 shares. And the Standard radio station has one FM with 11 shares.
LISTNUM 1 \l 1390 So even if we teamed up, even though it's two different markets, with our small French station we are unable to reach the English advertisers. We are not a dominant player, we are not even a leader, we are a very small player compared to these guys.
LISTNUM 1 \l 1391 CONSEILLERE NOËL : Merci beaucoup, Monsieur Sabbatini de cet éclairage.
LISTNUM 1 \l 1392 Maintenant, the other team I announced, is there a risk of homogenization of the news and information, especially in the Montreal and the Ottawa‑Gatineau market?
LISTNUM 1 \l 1393 MR. PARISIEN: No, there is no danger of homogenization ‑‑
LISTNUM 1 \l 1394 COMMISSIONER NOËL: Ah, tu n'es pas mieux que moi.
‑‑‑ Rires / Laughter
LISTNUM 1 \l 1395 MR. PARISIEN: ‑‑ for the newsroom in Ottawa or Montreal, and to that effect, Madam Commissioner, anywhere else.
LISTNUM 1 \l 1396 The issue of diversity is an important one to us. There will be no reduction of diversity. We are substituting one broadcaster by another. We are not reducing the number of stations.
LISTNUM 1 \l 1397 We are maintaining and, if possible, enhancing the news programming and the local programming and so on and so forth. So no, there will not be any reduction.
LISTNUM 1 \l 1398 COMMISSIONER NOËL: What you are telling us is that finally what we are doing ‑‑ if the transaction is approved, what we would be doing is reconstituting the old Télémédia ‑‑
LISTNUM 1 \l 1399 MR. PARISIEN: It is maintaining ‑‑
LISTNUM 1 \l 1400 COMMISSIONER NOËL: ‑‑ that was spanning across the country?
LISTNUM 1 \l 1401 MR. PARISIEN: ‑‑ maintaining the editorial voices as they are, yes, which reflects what was there five‑six years ago.
LISTNUM 1 \l 1402 COMMISSIONER NOËL: The Great Atlantic and Pacific Company. You should rebrand it that way.
LISTNUM 1 \l 1403 Finally on that topic, although you claim in your supplementary brief that you will remain a medium‑size player after the transaction, and I guess you are comparing yourself to the CTVs and Rogers and other players of the world ‑‑ I see Mr. Lind in the back of the room here ‑‑ you will become if the transaction is approved the largest radio broadcaster in the country.
LISTNUM 1 \l 1404 Could this be an advantage in terms of national sales and advertising?
LISTNUM 1 \l 1405 MR. PARISIEN: No, it is not because, again, it has to be looked at market by market and we are not necessarily the number one or the number two or necessarily the number three station in all the markets where we are present.
LISTNUM 1 \l 1406 We have markets where we are stronger and markets where we are weaker and as Mr. Sabbatini mentioned, so goes the BBM, so goes the revenue, and it is more a reflection of our performance than it is size.
LISTNUM 1 \l 1407 If you look at size, I think there are two criteria we should consider to establish a comparison and they are generally recognized by the industry.
LISTNUM 1 \l 1408 One is the listening hours. So when we put all of our stations, the Astral Media stations and the 52 stations that Standard is operating, we get, if we base it on the last BBM we had, a 19 percent share of the Canadian market, followed very closely by Corus at 17.
LISTNUM 1 \l 1409 And if we want to compare our leadership to the radio industry, well, I don't think that is dominant, for sure, especially since the word "dominant," if you look in a standard dictionary ‑‑ standard in the sense of Webster or these kinds of dictionaries ‑‑
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1410 MR. PARISIEN: ‑‑ you will see that it is something ‑‑
LISTNUM 1 \l 1411 COMMISSIONER NOËL: It is not Mr. Slaight's definition.
LISTNUM 1 \l 1412 MR. PARISIEN: ‑‑ that pertains to sovereignty.
LISTNUM 1 \l 1413 And also, the other criteria is national sales, revenues ‑‑ not national but all revenues, and if you look at the last compilation of statistics, the English market shares were for the combined Astral and Standard at 22 percent, followed by Corus at 18 and Rogers at 14.
LISTNUM 1 \l 1414 Now, we all know how volatile radio is. Three BBMs from now, that 4 or 3 percent spread could change from one player to the other. You lose two or three market shares in Toronto and that makes a helluva difference.
LISTNUM 1 \l 1415 So I submit that no, there is no way that that leadership can turn into controlling prices or controlling rates and such awful thoughts.
LISTNUM 1 \l 1416 COMMISSIONER NOËL: Market dominance.
LISTNUM 1 \l 1417 MR. SLAIGHT: If I could just add another small point. In terms of national sales, and we have dealt with it and it is difficult, Corus and Rogers sell together nationally in most marketplaces, so they will continue to dominate in terms of putting those two audiences together.
LISTNUM 1 \l 1418 COMMISSIONER NOËL: Except in Quebec where they sell with Cogeco and Radio Nord ‑‑
LISTNUM 1 \l 1419 MR. SLAIGHT: Yes.
LISTNUM 1 \l 1420 COMMISSIONER NOËL: ‑‑ RNC Media.
LISTNUM 1 \l 1421 MR. SABBATINI: On the national side, I should remind you that nothing is going to change.
LISTNUM 1 \l 1422 We are already a client of IMS and we have been a client of IMS for many, many years. So that doesn't change anything in Toronto, that doesn't change anything in Vancouver, where, like Gary mentioned, CBS is a much stronger national rep firm.
LISTNUM 1 \l 1423 And in terms of French or Ottawa‑Gatineau, we have been rep'd by IMS, so we have been together for close to 10 years now. So this transaction doesn't change anything in terms of adding stations or control.
LISTNUM 1 \l 1424 CONSEILLERE NOËL : Merci beaucoup, Monsieur Sabbatini.
LISTNUM 1 \l 1425 I will now switch to ownership and I would just ‑‑ well, you confirmed by a letter dated August 17th that Astral Media Radio General Partnership would be the licensee of the undertakings covered by the transaction if it is approved.
LISTNUM 1 \l 1426 The partners will be Astral Media Radio (Toronto) Inc., a wholly owned subsidiary of Astral Media Radio Inc., instead of doing it directly with Astral Media Radio Inc., and the other partner will be 4382072 Canada Inc., a wholly owned subsidiary of Astral Media Inc.
LISTNUM 1 \l 1427 Could you refile an executed partnership agreement between Astral Media Radio (Toronto) Inc. and the numbered company?
LISTNUM 1 \l 1428 MR. PARISIEN: Yes, absolutely.
LISTNUM 1 \l 1429 COMMISSIONER NOËL: Okay. Could you also refile an amended Déclaration d'enregistrement de la société with the proper partners?
LISTNUM 1 \l 1430 MR. PARISIEN: Yes.
LISTNUM 1 \l 1431 MME LAFLAMME : Elle est déjà faite et je l'ai en main. Je pourrais la laisser tout à l'heure.
LISTNUM 1 \l 1432 CONSEILLERE NOËL : Merci.
LISTNUM 1 \l 1433 Maintenant, dernier point que je voulais aborder avec vous, the corporate renewals.
LISTNUM 1 \l 1434 I have a little chart here in front of me of renewals for the next seven years of the Standard radio licences: one in 2007; four in 2008; two in 2009; then we jump to 17 in 2010; 13 in 2011; and then it trickles down to barely nothing in 2014.
LISTNUM 1 \l 1435 So the bulk of the renewals are concentrated in 2010 and 2011, 30 out of 53, and the balance is scattered across the board.
LISTNUM 1 \l 1436 So would you agree if the transaction is approved to have administrative renewals of all the licences expiring in the years 2007 to 2010 inclusively, that means 24 licences, and administrative renewal 2011, at which time the Commission could review the renewal applications of 37 out of the 53 stations?
LISTNUM 1 \l 1437 MR. PARISIEN: Yes, we would.
LISTNUM 1 \l 1438 CONSEILLERE NOËL : Alors, mesdames, messieurs, je vous remercie beaucoup d'avoir participé à cet échange, et je n'ai plus de questions.
LISTNUM 1 \l 1439 Madame la Présidente.
LISTNUM 1 \l 1440 THE CHAIRPERSON: Thank you, Commissioner Noël.
LISTNUM 1 \l 1441 We will be taking a break but before we do I just wanted ‑‑ for those of you planning your day, we will break at noon for lunch for an hour and a half. A couple of us have a meeting back at the CRTC offices.
LISTNUM 1 \l 1442 So we will now take a break for ‑‑ which may also mean that we will interrupt Ron Williams when he is asking his questions but so be it.
LISTNUM 1 \l 1443 So we will now take a 15‑minute break. We will resume at 11:10.
LISTNUM 1 \l 1444 MR. PARISIEN: Thank you.
LISTNUM 1 \l 1445 THE CHAIRPERSON: Thank you.
‑‑‑ Upon recessing at 1055 / Suspension à 1055
‑‑‑ Upon resuming at 1112 / Reprise à 1112
LISTNUM 1 \l 1446 THE CHAIRPERSON: Order, please.
LISTNUM 1 \l 1447 Commissioner Williams.
LISTNUM 1 \l 1448 COMMISSIONER WILLIAMS: Good morning, Mr. Greenberg, Mr. Slaight, Mr. Parisien and the Astral/Standard panel members.
LISTNUM 1 \l 1449 I will direct my questions to you, Mr. Parisien, and you can decide the most appropriate way to answer.
LISTNUM 1 \l 1450 The areas that I am going to be covering in the next little while will deal with tangible benefits, compliance and outstanding benefits payments, and Canadian content development with respect to its regulatory change.
LISTNUM 1 \l 1451 To begin, I would like to confirm that the benefits arising from this transaction will be exclusive of any other commitment, sponsorship, CCD commitment, outstanding benefit or other source of funding already directed at any of these initiatives from either Astral or Standard.
LISTNUM 1 \l 1452 MR. PARISIEN: That is right.
LISTNUM 1 \l 1453 COMMISSIONER WILLIAMS: I would also like to confirm whether these benefits would be tied to specific undertakings or would be a corporate payment.
LISTNUM 1 \l 1454 MR. PARISIEN: I'm sorry, could you elaborate a bit on that question?
LISTNUM 1 \l 1455 COMMISSIONER WILLIAMS: I guess that you could tie the benefit to individual pieces of the transaction ‑‑
LISTNUM 1 \l 1456 MR. PARISIEN: No. So, in that sense, they will be corporate.
LISTNUM 1 \l 1457 COMMISSIONER WILLIAMS: In the case of one of your benefits to the Canadian Communications Foundation, the initiative does not appear to directly support, promote, train or develop Canadian musical or spoken word talent. I wonder if you would consider the possibility that this initiative may not be acceptable and you may wish to explore the manner in which Astral would redirect funding, should we find that this ‑‑
LISTNUM 1 \l 1458 MR. PARISIEN: Maybe we should take some time to explain that benefit, because I think it is an interesting benefit to consider.
LISTNUM 1 \l 1459 COMMISSIONER WILLIAMS: That would be very good.
LISTNUM 1 \l 1460 MR. PARISIEN: We are fortunate to have with us two experts on benefits, Claude Laflamme and Rob Braide, so I will let them explain to you what it is.
LISTNUM 1 \l 1461 MR. BRAIDE: Thank you, Jacques.
LISTNUM 1 \l 1462 Commissioner, referring quickly to paragraphs 169 and 170 of our supplementary brief, there is an explanation of what this benefit would promote; also referring to paragraph 108 of the new commercial policy that the Commission instituted, or is about to institute.
LISTNUM 1 \l 1463 Quoting from paragraph 108:
"All CCD initiatives must involve direct expenditures and must be allocated to the support, promotion, training and development of Canadian musical and spoken word talent, including journalists."
LISTNUM 1 \l 1464 It is our strong belief that the Canadian Communications Foundation portion, which is $140,000 during the course of the licence, at $20,000 per year, is part of the global initiative which we are trying to present to the Commission today.
LISTNUM 1 \l 1465 We have a wide variety of items, adding up to, as I pointed out, over $10 million. Each of them takes a step.
LISTNUM 1 \l 1466 I spoke of the ecology of our benefit package, and we believe that it starts when the individual picks up the pen to write the song. We are working with the Canadian Songwriters Association, again to the extent of over $1 million over the seven years of the licence.
LISTNUM 1 \l 1467 As well, CARAS MusiCan will be putting musical instruments into the hands of young Canadians, for $100,000 a year, for $700,000 for the term of licence.
LISTNUM 1 \l 1468 I can refer to several other items.
LISTNUM 1 \l 1469 We see the donation to the Canadian Communications Foundation as kind of the cherry on the sundae, if you will, in that you have to understand history, and there needs to be a place, in our opinion, that you can point to and say: Here is an archive of Canadian broadcasting. Here is what spoken word broadcasters, journalists, can look to to understand where we came from, and also to have access to some of the history of Canadian broadcasting, to further make them understand what Canadian broadcasting is all about.
LISTNUM 1 \l 1470 We believe that it does, very clearly, fit into, as I mentioned, paragraph 108 of the new commercial policy.
LISTNUM 1 \l 1471 If that answers your question ‑‑
LISTNUM 1 \l 1472 COMMISSIONER WILLIAMS: It does. It gives good clarification. Thank you, Mr. Braide.
LISTNUM 1 \l 1473 Does Astral feel it would be appropriate to submit annually a report detailing the manner in which the required benefits have been extended, including the amounts and the recipients, so that it's easier for us to track?
LISTNUM 1 \l 1474 MR. PARISIEN: Absolutely. We would volunteer for that.
LISTNUM 1 \l 1475 COMMISSIONER WILLIAMS: I would like to talk a bit more about the Astral benefit package, along the lines of consideration of the pros and cons of different approaches to administering benefits packages.
LISTNUM 1 \l 1476 If you could touch on the following themes: long‑term versus short‑term funding; independently administered versus broadcaster administered funds; regional voices and regional representation; opportunities for new players vis‑à‑vis independent production; flexibility within the creative process; and responsiveness to broadcasters' needs and viewer demand.
LISTNUM 1 \l 1477 I recognize that that is long, so as you work your way through I will tick them off, and if we miss some I will come back to them.
LISTNUM 1 \l 1478 MR. PARISIEN: I will let Claude and Rob address the specifics of that, but the general principle that we tried to lay out when we drafted our benefit package was to, again, continue a lot of what Standard had already done and committed to in the field of the music industry, including emerging artists, evidently.
LISTNUM 1 \l 1479 Also, to favour local communities as much as possible, and I think we have succeeded in doing that.
LISTNUM 1 \l 1480 So in terms of long‑term, short‑term, and our overall commitment, we are dedicated to making those benefits happen.
LISTNUM 1 \l 1481 As you know, we have provided for an administrator in our operating costs, not in the benefits themselves. This is pretty unique. It will be someone on staff with Astral, paid by Astral from its operating budgets and not the benefits, who will administer all of this. That person will monitor the feedback from the benefits and the effects of the benefits, and that person will probably be the one who will be doing the annual report that we talked about in your previous question.
LISTNUM 1 \l 1482 In that report, you will also be able to follow the long‑term and shorter term effects of the benefits.
LISTNUM 1 \l 1483 Rob may want to add something to that.
LISTNUM 1 \l 1484 MR. BRAIDE: I am excited about this new position. It is important to underline that this is new head count for Astral. This individual is not being charged against the benefit package.
LISTNUM 1 \l 1485 This individual ‑‑ let's say about $100,000 a year ‑‑ will be in charge of administering a portion of our benefits. The vast majority of those benefits will be administered by the individual organizations that we are giving the money to.
LISTNUM 1 \l 1486 For example, Canadian Music Week, the expansion of the Canadian Radio Star Competition ‑‑ for a total of $2,175,000 during the term of the licence ‑‑ Canadian Music Week would administer this. This would not be done in‑house at Astral.
LISTNUM 1 \l 1487 In that regard, I would like to refer the Commission to its Decision 2005‑247 regarding Sirius Canada. In that decision the Commission said that :
"it found it quite acceptable that the management of the discretionary portion of these funds to the eligible third parties would be done by Sirius."
LISTNUM 1 \l 1488 I won't quote chapter and verse here, but we feel that there is some precedent here.
LISTNUM 1 \l 1489 But I want to underline, once again, that this is head count for Astral, this is not being charged against the benefits program, because Astral and Standard do far more than just administer and hand out benefit money. As I mentioned, emerging artists are not a group of individuals standing over in the corner waiting to be recognized.
LISTNUM 1 \l 1490 This individual will be responsible for a wide variety of initiatives across the country.
LISTNUM 1 \l 1491 Speaking of across the country, I understand your question regarding ‑‑ there won't be sort of a Toronto‑centricity to this, or a Montreal‑centricity. What we tried to do was take a couple of existing programs, certainly the expansion of the Canadian Radio Star Competition, which, in a remarkable way ‑‑ and I have worked with this program for almost 14 years now, as one of Standard's managers. We go on the air and we ask local songwriters to submit great music. A panel is established internally. In Toronto it's one kind of panel, and in Montreal it's a different kind of panel. All of the Standard Radio stations, at this point, take submissions locally, and then we feed that into what becomes the Canadian Radio Star Competition.
LISTNUM 1 \l 1492 Habitually, the Songwriters Association of Canada, another significant recipient of our benefit program, would take it over at that point and hold a songwriting session in Toronto leading up to the actual Canadian Music Week.
LISTNUM 1 \l 1493 What we are trying to do is take this out and move it across the country, whereby we will be funding workshops on songwriting in each individual market where we have radio stations, making this truly a national program.
LISTNUM 1 \l 1494 It will also allow songwriters, in combination with the Songwriters Association of Canada benefit, to be able to go online and get online tutorials and input without having to go to Toronto ‑‑ again, removing that Toronto‑centricity.
LISTNUM 1 \l 1495 We believe that there is a wide variety of national input. Certainly our initiative with the National Aboriginal Achievement Foundation is one that I am particular excited about. I have been working with these people for many years. There will be $600,000, which will be spread across the country.
LISTNUM 1 \l 1496 What they have, really, is a great system. It has worked for the pulp and paper industry and the transportation industry. They create a module ‑‑ they make a film, basically.
LISTNUM 1 \l 1497 So they will work with our broadcasters and they will develop a really high‑end film which will explain the broadcasting industry and how to get involved, the various jobs that you might be able to do, and then it will take that project into the schools where aboriginal youth are.
LISTNUM 1 \l 1498 Certainly, aboriginal youth are represented across the country.
LISTNUM 1 \l 1499 It is innovative. It has never been done before. It's an exciting project, with a really good national footprint.
LISTNUM 1 \l 1500 I could go on and on in terms of the national footprint of the vast majority of our benefits. I will let Don Shafer talk about the television benefits package later, but I hope that has addressed some of your questions.
LISTNUM 1 \l 1501 COMMISSIONER WILLIAMS: Let's go back to the National Aboriginal Achievement Foundation work.
LISTNUM 1 \l 1502 You have allocated $300,000 in the first year for the development of this module. Will those be the costs of producing the film that you spoke of? Is there consultation money built into that? Will there be a team of people, or will it purely be the costs of the film?
LISTNUM 1 \l 1503 MR. BRAIDE: It will be the costs of the film and whatever work they need to do within their organization to get that done.
LISTNUM 1 \l 1504 The money is front‑end loaded because it is a pretty high‑end product that they put out. I have seen the one for the softwood lumber industry, and the transportation industry, and it's very high‑end stuff. It is captivating video, which it has to be to get the attention of young kids.
LISTNUM 1 \l 1505 How they expend the money, I am sure, will be partially on film and partially on putting it together.
LISTNUM 1 \l 1506 COMMISSIONER WILLIAMS: How will the film or this module be presented? Will Standard employees make a presentation along with the film?
LISTNUM 1 \l 1507 MR. BRAIDE: No, this will be completely administered by the NAAF. They will take it into the schools themselves ‑‑ members of the aboriginal community presenting to members of the aboriginal community.
LISTNUM 1 \l 1508 COMMISSIONER WILLIAMS: Thank you.
LISTNUM 1 \l 1509 In your benefit regarding internship in small markets you suggest that the beneficiaries of this initiative be selected from the North Peace and northern B.C. regions and areas.
LISTNUM 1 \l 1510 Why the geographical focus?
LISTNUM 1 \l 1511 MR. BRAIDE: Mr. Shafer will take this question.
LISTNUM 1 \l 1512 MR. SHAFER: Thank you, Rob.
LISTNUM 1 \l 1513 Mr. Commissioner, the benefit is tied directly to television, and there are a number of needs in those areas. One is, we need more producers.
LISTNUM 1 \l 1514 Speaking with various First Nations groups, it is very, very difficult to find these kids and encourage them to choose careers in broadcasting, so we have been working with various elders and various groups to try to develop an initiative, and this is the one that materialized. It specifically reaches into the various bands, finds kids that are eligible for a grant ‑‑ a scholarship at BCIT, and then encourages them to work in the markets, to begin telling their local stories.
LISTNUM 1 \l 1515 We are quite excited about this.
LISTNUM 1 \l 1516 COMMISSIONER WILLIAMS: That's great.
LISTNUM 1 \l 1517 I am wondering why, as a national player, you have targeted that particular region, or that particular part of a region.
LISTNUM 1 \l 1518 MR. BRAIDE: Basically because this benefit relates more to television, and our television stations are in that region.
LISTNUM 1 \l 1519 COMMISSIONER WILLIAMS: Thank you.
LISTNUM 1 \l 1520 Your benefits are substantial, there is no question. Do you anticipate that there would be a shock to the broadcasting system a few years out when the benefits end?
LISTNUM 1 \l 1521 MR. PARISIEN: Well, what's your call?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1522 MR. PARISIEN: Seven years from now.
LISTNUM 1 \l 1523 "Shock" may be an overstatement. I am sure there will be other transactions and there will be other processes that will come in to fill that void which, after seven years, may happen. Hopefully those benefits will have generated other initiatives and other activities.
LISTNUM 1 \l 1524 We have seen that the funds that we have put forward have helped fund makers and others to survive longer, and there will be other players that will come along.
LISTNUM 1 \l 1525 That is a very hypothetical question, but I am confident that this is not the end of it.
LISTNUM 1 \l 1526 MR. BRAIDE: If I could add, 3 percent of our benefits, or $30,800,000, is going to Starmaker, and I know that my friend Chip Sutherland was expressing some concern a couple of years ago that this fund was going to dry up. It is anything but dry at this point, and it is extremely well funded heading into the future.
LISTNUM 1 \l 1527 As Mr. Parisien just pointed out, transactions come along, and history has shown that these are sustainable operations.
LISTNUM 1 \l 1528 COMMISSIONER WILLIAMS: I would imagine, looking down the road, that there will be fewer and fewer opportunities for transactions as consolidation takes force. That is mainly why I was asking that question.
LISTNUM 1 \l 1529 MR. PARISIEN: I understand that.
LISTNUM 1 \l 1530 Maybe an option would be to pay the benefits on a longer term.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1531 COMMISSIONER WILLIAMS: It would have to be over a larger amount, as well, then, to recognize the diminishing value of money over the years.
LISTNUM 1 \l 1532 Astral suggests prolonging some of the benefit payments on previous transactions. Could you please give us some insight as to the reason for prolonging these payments?
LISTNUM 1 \l 1533 For example, from Broadcasting Decision 2000‑291, the current date is 2008, and the proposed date is 2009. And from 2000‑216, again from `08 to `09. And from 2000‑1769, from `08 to `09.
LISTNUM 1 \l 1534 Why the rescheduling of these payments?
LISTNUM 1 \l 1535 MR. PARISIEN: Again, I will let Madam Laflamme give you clarification on this.
LISTNUM 1 \l 1536 MS LAFLAMME: Those were previous benefits that Standard had from previous acquisitions, so we will continue the commitments. We will carry on the commitments of Standard from the previous acquisitions.
LISTNUM 1 \l 1537 MR. BRAIDE: We saw some great ideas. We saw some great ideas, certainly, when the Astral guys asked me to help out a little bit on generating the benefits ideas. I was able to look at what Gary did for the Canadian Radio Star Competition, and that benefit was about to end. And so our suggestion is that we not only continue that and carry it on, but also expand it significantly.
LISTNUM 1 \l 1538 COMMISSIONER WILLIAMS: But why would you extend the time by which it is to pay the outstanding benefits inherited by Standard for one year? Why would you extend it one year?
LISTNUM 1 \l 1539 MS LAFLAMME: We are not extending it. Are you talking about the CMW benefit?
LISTNUM 1 \l 1540 COMMISSIONER WILLIAMS: Sorry, I have got ‑‑
LISTNUM 1 \l 1541 MS LAFLAMME: The Canadian Music Week commitment? Because there is one year remaining, so Standard has to pay another $100,000 for the next year following the transaction with Telemedia. So we are going to continue that $100,000 and we add $235,000 for this year, and after it is going to be $325,000 a year I think.
LISTNUM 1 \l 1542 MR. BRAIDE: Yes, this is basically ‑‑ the project is $250,000 a year. And in the first year we have $100,000 left from the Standard benefit. We will supplement that out of the Astral package up to the amount of the $250,000. And then years two through seven will be entirely money falling from the Astral/Standard transaction.
LISTNUM 1 \l 1543 COMMISSIONER WILLIAMS: Okay, thank you. Would you accept conditions of licence on each of your stations, except for your new licence in Regina, reflecting the Commission's proposed changes to the radio regulations as they apply to CCD? This, of course, would include minimum contributions to FACTOR and would be based on annual revenues rather than by market, as in the former CAB plan.
LISTNUM 1 \l 1544 MS LAFLAMME: Yes, we will do.
LISTNUM 1 \l 1545 COMMISSIONER WILLIAMS: Thank you. Well, that completes my line of questioning, Mr. Parisien. Thank you.
LISTNUM 1 \l 1546 MR. PARISIEN: Thank you.
LISTNUM 1 \l 1547 COMMISSIONER WILLIAMS: Thank you, Madam Chair.
LISTNUM 1 \l 1548 THE CHAIRPERSON: Thank you, Commissioner Williams.
LISTNUM 1 \l 1549 Commissioner Noël.
LISTNUM 1 \l 1550 COMMISSIONER NOËL: Just one question, Mr. Parisien. Mr. Williams mentioned that there could be a shock at the end of the benefits period and you mentioned that there could be other transactions.
LISTNUM 1 \l 1551 How many radio stations did Astral own seven years ago?
LISTNUM 1 \l 1552 MR. PARISIEN: Seven years precisely, none, Madam Noël.
LISTNUM 1 \l 1553 COMMISSIONER NOËL: That is what I thought. And now, will be the..?
LISTNUM 1 \l 1554 MR. PARISIEN: Now, we have eight in the Maritimes, 21 in Quebec in French and we are acquiring 52 operating stations, plus one pending opening soon.
LISTNUM 1 \l 1555 COMMISSIONER NOËL: For a total of?
LISTNUM 1 \l 1556 MR. PARISIEN: Eight‑three.
LISTNUM 1 \l 1557 COMMISSIONER NOËL: Eh?
LISTNUM 1 \l 1558 MR. PARISIEN: Eighty‑two.
LISTNUM 1 \l 1559 COMMISSIONER NOËL: Quatre‑vingt‑deux, 82 stations. Okay, thank you.
LISTNUM 1 \l 1560 So there is ‑‑
LISTNUM 1 \l 1561 MR. PARISIEN: And I must say Commissioner Williams also ‑‑ I maybe should ‑‑
LISTNUM 1 \l 1562 COMMISSIONER NOËL: ‑‑ there is evolution.
LISTNUM 1 \l 1563 MR. PARISIEN: There is evolution and there are markets where we only have one station and we will probably try to apply for other stations where we will, again, offer interesting benefits.
LISTNUM 1 \l 1564 COMMISSIONER NOËL: Mais pas nécessairement dans en Québec?
LISTNUM 1 \l 1565 MR. PARISIEN: Not necessarily in Quebec, you are absolutely right.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1566 COMMISSIONER NOËL: Merci, Monsieur Parisien.
LISTNUM 1 \l 1567 THE CHAIRPERSON: Thank you. I do have some follow‑up questions with regard to the line of questioning by Commissioner Williams.
LISTNUM 1 \l 1568 You are allocating some, in total, $490,000 to Canadian Music Week in three separate projects in fact. And I remember asking CTV this same question, Canadian Music Week, well‑attended, certainly Canada's premiere event for Canadian talent, both emerging and established. Can you give me your rationale as to why such a large portion of your benefits money is going to this one event?
LISTNUM 1 \l 1569 MR. BRAIDE: I have known this organization myself as has the industry for many years and Neil Dickson and his people truly have their finger on the pulse of what is going on out there. The event is ground‑breaking, it is leading edge, the ideas that he comes up with are innovative and has truly a national footprint.
LISTNUM 1 \l 1570 You know, over $4 million of benefits to one organization is a huge amount of money, but we just feel that they can administer it exceedingly well, they can achieve the objectives of the commercial policy and of the Broadcasting Act with the assistance of our dollars. We feel very well about the organization.
LISTNUM 1 \l 1571 MR. SLAIGHT: And again, Rob and Claude put together the benefits, but I believe it is a focus on making some of the events better and helping the artists who are in Toronto at that point in time get more exposure and bring the songwriters' contest to a larger forum. So I think the even itself is large, I think we are trying to take advantage of that to the benefit of the artists out there in Canada.
LISTNUM 1 \l 1572 THE CHAIRPERSON: And one of the things that these benefits includes is the production of I think it is the Canadian Radio Music Awards, the television show, to be produced from that, well to actually produce the awards show, right ‑‑
LISTNUM 1 \l 1573 MR. SLAIGHT: True.
LISTNUM 1 \l 1574 THE CHAIRPERSON: ‑‑ and distribute it. Will this show be available to all television broadcasters?
LISTNUM 1 \l 1575 MR. SLAIGHT: It has in the past. Yes, we have produced it before ‑‑
LISTNUM 1 \l 1576 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 1577 MR. SLAIGHT: ‑‑ and it has been offered to everybody in the past.
LISTNUM 1 \l 1578 THE CHAIRPERSON: So this isn't an incremental?
LISTNUM 1 \l 1579 MR. SLAIGHT: No, we took it upon ourselves at Standard to produce it one year in conjunction with Barb Williams when she was at the Toronto TV station. So it was a one‑time thing that we did just to see how it would go. And they have taken that concept and taken it to a larger vision.
LISTNUM 1 \l 1580 THE CHAIRPERSON: And would this be available to the two CBC affiliates in Terrace and Dawson Creek, for example?
LISTNUM 1 \l 1581 MR. PARISIEN: Sure, it could be.
LISTNUM 1 \l 1582 THE CHAIRPERSON: At cost or..?
LISTNUM 1 \l 1583 MR. PARISIEN: You would have to negotiate with Mr. Shafer at that point in time, which is tough.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1584 THE CHAIRPERSON: They are tough negotiators aren't they, Mr. Shafer? Would this be at a cost to those two stations?
LISTNUM 1 \l 1585 MR. SLAIGHT: No, we would give it to the stations to run. It is about giving the talent exposure.
LISTNUM 1 \l 1586 THE CHAIRPERSON: And what about the radio on podcast specials? I know in response to deficiencies you said that the podcasts would be distributed to all radio stations. Again, would this be at no cost to those radio stations?
LISTNUM 1 \l 1587 MS LAFLAMME: Totally free.
LISTNUM 1 \l 1588 THE CHAIRPERSON: Totally free? And all really does mean all?
LISTNUM 1 \l 1589 MS LAFLAMME: All.
LISTNUM 1 \l 1590 THE CHAIRPERSON: Across the country?
LISTNUM 1 \l 1591 MS LAFLAMME: All radio stations across Canada.
LISTNUM 1 \l 1592 THE CHAIRPERSON: Okay. The Astral Media Artist Development Assistance, you say in your application that this could provide up to 20 grants for projects proposed by individuals aimed at developing spoken‑word programming. I guess ultimately Astral could benefit from the giving of these grants by hiring some of these recipients and, as you know, the benefits package says that the person giving the benefits should not receive any indirect or direct benefit.
LISTNUM 1 \l 1593 So can you tell me how this is applicable to our policy?
LISTNUM 1 \l 1594 MR. BRAIDE: Yes, by all means. You know, it is a very valid question and, you know, there may be ‑‑
LISTNUM 1 \l 1595 THE CHAIRPERSON: I have had practice.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1596 MR. BRAIDE: You know, there may be a Wayne Gretzky out there or two, there is no question.
LISTNUM 1 \l 1597 I think what we are trying to do with this initiative, Madam Chair, is stimulate the growth of broadcasting excellence across the country and, particularly, individuals who might be working in community radio stations, campus radio stations, smaller radio stations in smaller markets.
LISTNUM 1 \l 1598 It is not immediately assumed that as a result of being a recipient of one of these grants that you are going to get a job with Astral, Rogers, Corus or CTV. What we are trying to do is give an opportunity for individuals to be identified by their local managers, again, community radio stations. I was the first program director at Radio Carleton here in Ottawa in 1975. I have a deep understanding and love for campus radio. It would have been great if we would have had this kind of initiative back then to allow people to develop as broadcasters.
LISTNUM 1 \l 1599 We want to develop broadcasters, we are not trying to grab the cream of the crop. These individuals will not have to sign any kind of, you know, contract with Astral Media, they will be available to the entire country.
LISTNUM 1 \l 1600 THE CHAIRPERSON: Would you deem it appropriate, or not, if we were to say, you know what, perhaps Astral should consider capping the number of people that it would take from this Artist Development Program and, if you are in agreement with that, what number of that 20 would you cap it at?
LISTNUM 1 \l 1601 MR. BRAIDE: I would pass that question to Mr. Parisien.
LISTNUM 1 \l 1602 MR. PARISIEN: Well, I am not sure I would like to see a cap there, because from year to year the crop may change. It is a volatile environment once again. I understand where you are coming from, you don't want it to be too self‑serving. But I think a cap is like a very drastic approach to that worry you have.
LISTNUM 1 \l 1603 THE CHAIRPERSON: And this is why you use the term "up to" to 20?
LISTNUM 1 \l 1604 MR. PARISIEN: Exactly, exactly.
LISTNUM 1 \l 1605 THE CHAIRPERSON: And I don't assume, but same question for the Astral Media Small Market Internship Program. Again, these could be interns that are hired by the Astral Radio stations, ultimately?
LISTNUM 1 \l 1606 MR. PARISIEN: Well yes, it is the same answer.
LISTNUM 1 \l 1607 THE CHAIRPERSON: Okay. Andy my understanding is that this is just for them to come up with spoken‑word projects?
LISTNUM 1 \l 1608 MS LAFLAMME: Exactly.
LISTNUM 1 \l 1609 THE CHAIRPERSON: In the event that you were to hire one of these interns that had been a recipient of this internship program, would that be their only function at the radio station, to develop this type of programming, and would this be a fulltime job?
LISTNUM 1 \l 1610 MR. PARISIEN: Yes, it could turnout to be that way, absolutely.
LISTNUM 1 \l 1611 THE CHAIRPERSON: But spoken‑word programming would be their only task?
LISTNUM 1 \l 1612 MR. PARISIEN: M'hmm.
LISTNUM 1 \l 1613 THE CHAIRPERSON: Okay. Mr. Braide, you did speak about the National Aboriginal Achievement Foundation, and I do now have a better understanding of what the classroom module will ultimately accomplish. But what assurances do we have that this new module will in fact focus on musical and spoken‑word initiatives and not on the more technical aspects of radio?
LISTNUM 1 \l 1614 MR. BRAIDE: Well, let me clarify, Madam Chair. The idea is to increase representation of Aboriginals in the Canadian broadcasting system. We are not saying that these individuals will focus on spoken word, they might end up in non‑on‑air roles. They will enhance the nature of the Canadian broadcasting system. And again, this initiative is very clearly to increase the representation of Aboriginals in the system and they may end up doing any kind of work in the system.
LISTNUM 1 \l 1615 THE CHAIRPERSON: But you do note from our benefits policy that the focus is on developing musical and spoken‑word talent as opposed to radio operators?
LISTNUM 1 \l 1616 MR. BRAIDE: Yes, I understand that and I feel comfortable that that is where these individuals are heading. They want to be disc jockeys, they want to be announcers, they want to be people involved in the music system.
LISTNUM 1 \l 1617 THE CHAIRPERSON: Okay. The Canadian Communications Foundation, I hear your rationale, but we do know that it chronicles the history of broadcasting and, absolutely, anybody wanting to get into broadcasting, important to know where it all came from. But this appears to be more of a social benefit than a direct initiative to develop musical and spoken‑word talent.
LISTNUM 1 \l 1618 So based on that, based on the theory of social benefit versus a direct benefit to the development of talent, can you tell us why you feel that this initiative, in particular, is compliant with our benefits policy?
LISTNUM 1 \l 1619 MR. BRAIDE: Well, again, I would refer to paragraph 108 of the new Commercial Radio Policy, and in the last sort of line or two it says:
"training and development of Canadian musical and spoken‑word talent, including journalists.."
LISTNUM 1 \l 1620 I believe that this exists as an excellent training tool, an ability for young broadcasters or existing broadcasters to go in and examine the system find out what has worked in the past and have access to an archive of information on their careers and the future of their careers.
LISTNUM 1 \l 1621 THE CHAIRPERSON: So you do dismiss it as a social benefit as opposed to ‑‑
LISTNUM 1 \l 1622 MR. BRAIDE: No, I believe and I believe Astral believes that it does satisfy the requirements of paragraph 108 of the Commercial Radio Policy.
LISTNUM 1 \l 1623 THE CHAIRPERSON: If, by some stroke, we decide that, you know what, we just don't agree with you, we don't think that it complies with our benefits policy, would you be willing to redirect the funds?
LISTNUM 1 \l 1624 MR. PARISIEN: Yes, definitely.
LISTNUM 1 \l 1625 THE CHAIRPERSON: And would you have any idea right now as to which initiative you would redirect those funds to or would you come up with a new initiative?
LISTNUM 1 \l 1626 MR. PARISIEN: We would come up with a new proposition.
LISTNUM 1 \l 1627 THE CHAIRPERSON: Okay. One of the areas that I believe was examined in deficiencies was the use of Microsoft's SPOT data on the SCMO channels of four of your radio stations currently. We just want confirmation that in the future, should you decide to do this on more radio stations, you will notify the Commission upon making that decision?
LISTNUM 1 \l 1628 MS LAFLAMME: Yes, we will do.
LISTNUM 1 \l 1629 THE CHAIRPERSON: Thank you. Sorry, I do need to go back to the benefits package for just a moment. We did talk earlier with Mr. Shafer about the local programming on CFTK and CJDC, we talked about the number of hours and the type of programming. Will any of the benefits money be used to fund the production of those existing programs, you know, the $1.6 million, approximately, in television benefits?
LISTNUM 1 \l 1630 MR. PARISIEN: Don.
LISTNUM 1 \l 1631 MR. SHAFER: I am not sure I understand the question completely.
LISTNUM 1 \l 1632 THE CHAIRPERSON: Well, the television benefits that you are proposing are a 30‑minute daily internally‑produced interview program with local service and community groups for each station over the seven‑year period and 30‑minute local documentaries produced by independent producers on topics of specific interest to those regions. That is what your application says in terms of the local programming initiatives for television.
LISTNUM 1 \l 1633 MR. SHAFER: Correct.
LISTNUM 1 \l 1634 THE CHAIRPERSON: So is that in addition to what the two television stations are currently ‑‑
LISTNUM 1 \l 1635 MR. SHAFER: Yes, it is.
LISTNUM 1 \l 1636 THE CHAIRPERSON: ‑‑ doing in terms of local programming? So your CBC‑affiliated agreement allows for you to increase the number of local hours?
LISTNUM 1 \l 1637 MR. SHAFER: I think the best thing that we can do is to reduce the amount of repeat programming within that 13 hours that we presently use. We need more original programming on the air and so, by eliminating some repeats, we can accommodate the new programming that we are proposing that we produce.
LISTNUM 1 \l 1638 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 1639 MR. PARISIEN: And the agreement allows for that.
LISTNUM 1 \l 1640 THE CHAIRPERSON: Okay. Thank you very much.
LISTNUM 1 \l 1641 Will all of this programming be produced by independent producers or is some of it allocated to in‑house production?
LISTNUM 1 \l 1642 MR. SHAFER: The 30‑minute public affairs program we saw as an opportunity to increase the amount of local faces and local stories on television using the existing crew, but our intention was to hire an independent producer to pull it together and to direct it, and we think we can do that.
LISTNUM 1 \l 1643 THE CHAIRPERSON: Okay. And one final question, from me anyway. Earlier this month Astral received a letter asking for comment on one of the recommendations in the CTF report wherein that recommendation said that an appropriate amount of benefits money should be allocated to the CTF.
LISTNUM 1 \l 1644 Now, I do recognize that you may not have been prepared to answer or ‑‑ not answer, because it is not really a question, it is just we would like your opinion on that recommendation. I recognize that you may not be prepared to answer this question at this hearing, but I am wondering, first of all, if you are and, if you aren't, would you be prepared to give us an answer in writing?
LISTNUM 1 \l 1645 MR. PARISIEN: Don.
LISTNUM 1 \l 1646 MR. SHAFER: Madam Chair, I think it is important to note that if we took their advice we would eliminate a big part of our benefits package. The approach we took was for a balanced, holistic approach to television, especially considering the local markets or the small markets. And it addresses market needs and local production, it addresses scholarships to find young people to bring into the television business, specifically from the region, and the mentorship and training is ongoing and benefits young producers and young people in television across the country.
LISTNUM 1 \l 1647 So to eliminate the last two I think would be a mistake and we disagree with them.
LISTNUM 1 \l 1648 THE CHAIRPERSON: So you do not believe that it would be beneficial to your local markets even if we were to say a percentage of the benefits should go to CTF? In other words, do you believe that 100 per cent of the benefits all the time should be either self‑directed or just not go to the CTF no matter the magnitude of the benefits package?
LISTNUM 1 \l 1649 MR. SHAFER: Again, I think our approach was very balanced and covers all sectors. And 70 per cent of the monies in our benefit package goes directly towards television product and specifically nurtures and develops young producers to get into television.
LISTNUM 1 \l 1650 THE CHAIRPERSON: Okay, thank you. I have no more questions.
LISTNUM 1 \l 1651 Legal counsel? No questions. Okay, well that concludes our questioning.
LISTNUM 1 \l 1652 MR. PARISIEN: Well, Madam Chair, if you would allow me just a ‑‑
LISTNUM 1 \l 1653 THE CHAIRPERSON: Please.
LISTNUM 1 \l 1654 MR. PARISIEN: ‑‑ a closing statement? Thank you very much.
LISTNUM 1 \l 1655 First of all, since this is probably the last time that a lot of us will be appearing before Madam Noël and Mr. Williams, I would like to thank them for their contribution to the Commission and to the industry in general, thank you very much.
LISTNUM 1 \l 1656 COMMISSIONER NOËL: Merci beaucoup, Monsieur Parisien.
LISTNUM 1 \l 1657 MR. PARISIEN: Earlier today I indicated that we would tell you why approval of our application is clearly in the public interest. I believe that we have demonstrated that this transaction maintains both diversity and a vigorous competition in all the markets affected.
LISTNUM 1 \l 1658 This transaction also strengthens radio, the communities involved and the music industry through our benefit package. It brings together Standard Radio and Astral Media in an association that is built on shared values, great mutual respect and a strong commitment to local communities and the promotion of Canadian Culture.
LISTNUM 1 \l 1659 Thank you very much.
LISTNUM 1 \l 1660 THE CHAIRPERSON: Thank you, Mr. Parisien, Mr. Greenberg, Mr. Slaight and to the rest of your team.
LISTNUM 1 \l 1661 We will now break for lunch. We will resume at 1:30.
LISTNUM 1 \l 1662 Thank you.
‑‑‑ Upon recessing at 1150 / Suspension à 1150
‑‑‑ Upon resuming at 1335 / Reprise à 1335
LISTNUM 1 \l 1663 THE CHAIRPERSON: Madam Secretary.
LISTNUM 1 \l 1664 THE SECRETARY: Thank you, Madam Chair.
LISTNUM 1 \l 1665 We will now proceed to Phase II in which other parties appear in the order set out in the agenda to present their intervention.
LISTNUM 1 \l 1666 I would now ask NCRA/ANREC, Arc du Canada and ARCQ to appear and present its intervention.
LISTNUM 1 \l 1667 Please introduce yourself, after which you will then have 10 minutes for your presentation.
LISTNUM 1 \l 1668 Thank you.
INTERVENTION
LISTNUM 1 \l 1669 MR. STEVENSON: Good afternoon, Madam Chair and Members of the Commission.
LISTNUM 1 \l 1670 My name is John Harris Stevenson. I am President of CHUO FM in Ottawa, which is Canada's only bilingual community radio station, and a member of the Advisory Board of the National Campus and Community Radio Association.
LISTNUM 1 \l 1671 M. PAQUIN : Bonjour, Monsieur et Mesdames les Commissaires.
LISTNUM 1 \l 1672 Mon nom est Serge Paquin. Je suis Secrétaire général de l'Alliance des radios communautaires du Canada, ici à Ottawa.
LISTNUM 1 \l 1673 Donc, je vais laisser la première partie de l'intervention à mon collègue John, et je vais faire la conclusion.
LISTNUM 1 \l 1674 MR. STEVENSON: We are here today representing a partnership of Canada's three largest community radio associations: the NCRA, Arc du Canada and the Quebec Association ARCQ.
LISTNUM 1 \l 1675 We thank the Commission for the opportunity to participate in this process.
LISTNUM 1 \l 1676 Our objection to this application is restricted only to the proposed tangible benefits package.
LISTNUM 1 \l 1677 We note that this merger along with the recently approved purchase of CHUM by CTVglobemedia will together result in benefits of over $165 million from which community radio was unable to secure support.
LISTNUM 1 \l 1678 In the past two years we have been involved in an historic level of cooperation, our three associations, which together represent more than 140 community and campus stations and radio projects across the country.
LISTNUM 1 \l 1679 While we have worked together on a variety of issues from copyright fees to policy and regulation, our principal project has been the creation of a national funding mechanism for all community radios in Canada.
LISTNUM 1 \l 1680 Our goal is to establish a new organization for community media which will benefit our listeners, our volunteers and our communities.
LISTNUM 1 \l 1681 We have modelled our Community Radio Fund on similar funding bodies in other jurisdictions, including Australia's successful Community Broadcasting Foundation and the new Community Radio Fund in the United Kingdom.
LISTNUM 1 \l 1682 The principal object of the fund and our main priority is building capacity. That means providing training, support and expertise to station staff and volunteers so that they can provide more and better programming to their local communities. This will result in more relevant, more inclusive and better quality news, community access, music and cultural programming.
LISTNUM 1 \l 1683 We must also respond to the many communities, overwhelmingly in rural areas, who seek to establish a community radio of their own but lack the resources to do so.
LISTNUM 1 \l 1684 As well, community radio will not continue to grow unless it can take advantage of new distribution technologies, particularly digital radio and internet broadcasting.
LISTNUM 1 \l 1685 Over the past several months we have pursued two equally important avenues of support for our fund: the federal Department of Canadian Heritage and through the Commission's benefits process of private broadcasters.
LISTNUM 1 \l 1686 We understand that our effort to gain support from the federal government is likely a long‑term project. We have discussed our plans for the fund with staff at Heritage on several occasions, including the Deputy Minister. We have spoken with staff in the Minister of Heritage's office as well as with Members of Parliament from all political parties.
LISTNUM 1 \l 1687 In May, we appeared before the House of Commons Standing Committee on Canadian Heritage to talk about our sector and one of the results of our efforts thus far has been the commissioning of a significant study by Heritage on the role and impact of community radio in Canada.
LISTNUM 1 \l 1688 With regards to benefits from commercial broadcasting, we know that is also a very substantial effort. Despite our very different mandates and approaches to media, we have had generally good relations with commercial broadcasters and have endeavoured to build those relationships further through discussions with the CAB and the former CHUM Limited.
LISTNUM 1 \l 1689 We believe we will be aided in our efforts by the inclusion by the Commission of a Community Radio Fund in its list of eligible Canadian content development funding recipients earlier this year.
LISTNUM 1 \l 1690 Unfortunately, to this point, our work to secure funding through the benefits process has not been successful.
LISTNUM 1 \l 1691 We continue to believe that the Commission's Benefits Policy can be an effective instrument for the development of community media in Canada. We also believe that community radio can build partnerships with commercial media to our mutual benefit.
LISTNUM 1 \l 1692 However, since support is voluntary, our concern is that commercial broadcasters may not see supporting the community radio sector as a whole as economically or politically advantageous.
LISTNUM 1 \l 1693 We continue to feel that support for community radio makes economic sense for commercial broadcasters. In addition to funding the development of emerging musicians and providing training in broadcasting to thousands of people, sustained support may mean our sector is less reliant on revenue from advertising and sponsorship.
LISTNUM 1 \l 1694 We have noted, however, that in other jurisdictions with community media support mechanisms none rely in whole or in part on voluntary donations from commercial media.
LISTNUM 1 \l 1695 In the past, we have recommended that the Commission require a portion of CCD funds be directed to the Community Radio Fund and until support for the fund has reached a sustainable level we will continue to explore this idea while at the same time attempting to build partnerships with commercial broadcasters.
LISTNUM 1 \l 1696 Work on the fund will continue in the coming months and we are close to finalizing the governance structure of the organization. Our proposed bylaws will provide for membership open to all community‑oriented and campus radio broadcasters and associations while creating a completely independent board of directors and an arm's‑length funding process.
LISTNUM 1 \l 1697 This will ensure that the fund works in the best interests of our local communities, reflecting their hopes and ambitions for Canadian community radio.
LISTNUM 1 \l 1698 While we know we have made substantial progress in our efforts, we must also preserve the progress we have made in the past five years.
LISTNUM 1 \l 1699 Focusing so much of our resources on the Community Radio Fund has been risky. As we have been unable to find support during these last two very substantial benefits processes, we must take a step back and ensure that our associations individually have the resources they need to maintain existing levels of service to our members.
LISTNUM 1 \l 1700 For example, for the past several years, the National Campus and Community Radio Association National Office had been supported by a benefit from Corus which now is ending. Unless further funding is secured, the NCRA office is likely to close in the new year and its one full‑time employee laid off. The NCRA is now devoting all of its national resources in an attempt to maintain its existing presence in Ottawa.
LISTNUM 1 \l 1701 Arc du Canada, which has had more diverse funding over the years, recently saw a substantial decrease in support for its national activities when a similar benefit from Shaw Communications ended.
LISTNUM 1 \l 1702 Arc du Québec is also focused on fundraising.
LISTNUM 1 \l 1703 Stability and sustainability is a concern for all of us.
LISTNUM 1 \l 1704 We would ask the Commission to assess Astral's proposed tangible benefits package against the acceptability criteria for Canadian content development initiatives as outlined in the Commercial Radio Policy 2006.
LISTNUM 1 \l 1705 As we stated in our written intervention, the Community Radio Fund provides a single mechanism which benefits scores of communities in all regions of the countries, making it an extremely cost‑effective means of promoting media diversity and the development and distribution of Canadian content.
LISTNUM 1 \l 1706 M. PAQUIN : Merci, John.
LISTNUM 1 \l 1707 J'aimerais mentionner que deux mois avant l'avis public de cette audience, les trois associations ont fait parvenir une lettre demandant une rencontre avec les gens d'Astral, et, malheureusement, on n'a jamais reçu de réponse ni d'accusé de réception.
LISTNUM 1 \l 1708 Donc, on a été très déçu de cette attitude‑là, de voir que les gens d'Astral nous ont complètement ignorés. On a trouvé ça un peu de manque de professionnalisme de la part d'une compagnie qui, comme vous le voyez, va transiger des millions, voire des milliards de dollars. Donc, on a été très déçu de ce silence‑là.
LISTNUM 1 \l 1709 Je crois que c'est une attitude assez généralisée de la part de l'entreprise privée, qui voit les radios communautaires, les radios de campus, comme des compétiteurs. Je crois qu'on est beaucoup plus complémentaire que compétiteur. Avec moins de 2 pour cent du marché, je ne crois pas qu'on est vraiment une menace sérieuse à l'entreprise privée.
LISTNUM 1 \l 1710 Donc, cette attitude‑là se perpétue aujourd'hui. On a fait des approches similaires avec les autres gros mergers qu'il y a eu, puis c'est ça, c'est toujours la même chose. On n'a pas de contact. On a beaucoup de difficulté d'avoir un dialogue direct avec les entreprises privées.
LISTNUM 1 \l 1711 Comme vous le savez, le mandat des radios communautaires est très exigeant. C'est un mandat qui est difficile. Les radios communautaires et les radios de campus, c'est basé sur le bénévolat.
LISTNUM 1 \l 1712 On a des petites équipes, on a des petites radios, on doit faire beaucoup de nouvelles locales, des émissions d'affaires publiques, on a beaucoup de contenu verbal, et tout ça, on doit le faire avec nos propres moyens.
LISTNUM 1 \l 1713 On doit faire des bingos et des levées de fonds pour arriver à donner ce service‑là que les Canadiens sont en droit d'avoir, parce qu'il n'y a pas juste la radio de divertissement au Canada, il y a aussi de la radio qui est là pour informer les gens.
LISTNUM 1 \l 1714 C'est très important que la population puisse avoir des nouvelles de ce qui se passe chez eux dans leur langue et vraiment traiter des sujets qui sont importants pour les communautés.
LISTNUM 1 \l 1715 Comme vous l'avez mentionné, on questionne un peu aussi la liste des bénéficiaires, la pertinence de certains bénéficiaires. Malheureusement, on n'est pas sur cette liste‑là.
LISTNUM 1 \l 1716 Il y avait une belle occasion ici pour vraiment renforcir le système canadien de la radiodiffusion en contribuant de façon volontaire au Fonds canadien de la Radio communautaire. Malheureusement, c'est une chose qui ne s'est pas fait. On trouve ça un peu déplorable.
LISTNUM 1 \l 1717 On comprend que la politique du CRTC, c'est d'amener les entreprises privées à contribuer sur une base volontaire, mais l'expérience nous dit que ça ne fonctionne pas.
LISTNUM 1 \l 1718 A plusieurs reprises, on est apparu devant le CRTC pour demander, de façon obligatoire, à ce que le système privé contribue au troisième secteur, qui est le secteur communautaire, puis le CRTC a décidé que ça pourrait se faire sur une base volontaire. Mais malheureusement, force est de constater que ça ne fonctionne pas.
LISTNUM 1 \l 1719 Comme on l'a dit, on a fait beaucoup de représentations auprès du Gouvernement, auprès des députés, on nous dit : *Allez voir le CRTC, le CRTC va pouvoir faire quelque chose pour vous parce que le gouvernement n'est pas très enclin à contribuer à des fonds pour le développement du troisième secteur.
LISTNUM 1 \l 1720 À l'instar de plusieurs autres pays industrialisés, malheureusement, le Canada est un enfant pauvre. On nous compare... même tout récemment à la marque internationale, on a voté une motion à l'effet qu'on encourageait le Mexique et le Canada, les gouvernements respectifs de ces pays‑là, à mettre sur pied un fonds pour aider le tiers secteur.
LISTNUM 1 \l 1721 Donc, c'est là qu'on est rendu. Je veux dire, la France a des dispositions. On a nombre de pays, on est un des rares pays industrialisés qui n'a pas un mécanisme pour aider le tiers secteur.
LISTNUM 1 \l 1722 Donc, ceci, en conclusion, c'est que les trois associations que l'on représente, on est déterminé à poursuivre notre travail auprès du gouvernement, auprès du secteur privé, auprès du CRTC afin de revendiquer une part juste et une aide qui est tout à fait méritée afin de renforcer le système canadien et pouvoir contribuer pleinement à la diversité des voix, à la diversité aussi de contenus, tout ça dans le respect des trois systèmes, soit le privé, le public et le communautaire.
LISTNUM 1 \l 1723 Je vous remercie de votre attention.
LISTNUM 1 \l 1724 THE CHAIRPERSON: Commissioner Noël.
LISTNUM 1 \l 1725 COMMISSAIRE NOËL: Je n'ai pas beaucoup de questions, monsieur Paquin. Je pense que je vais vous les adresser.
LISTNUM 1 \l 1726 Monsieur John, votre nom de famille c'est quoi? Je n'ai pas entendu.
LISTNUM 1 \l 1727 MR. STEVENSON: John Stevenson.
LISTNUM 1 \l 1728 COMMISSIONER NOËL: Stevenson?
LISTNUM 1 \l 1729 MR. STEVENSON: Yes.
LISTNUM 1 \l 1730 COMMISSIONER NOËL: So, thank you for your intervention, Mr. Stevenson.
LISTNUM 1 \l 1731 Monsieur Paquin, vous avez répondu avant que je la pose, à ma première question : avez‑vous contacté les gens d'Astral avant d'écrire votre lettre de position? Vous nous avez dit que vous les aviez contactés par écrit.
LISTNUM 1 \l 1732 Est‑ce que vous avez fait une relance quand vous n'avez pas eu de réponse?
LISTNUM 1 \l 1733 M. PAQUIN: Oui. Il y a eu la secrétaire générale de l'ARC du Québec a tenté à maintes reprises de communiquer avec la personne, la destinataire de la lettre, je crois que c'est madame Aumont, et elle n'a jamais eu de retour de courrier ni de téléphone.
LISTNUM 1 \l 1734 COMMISSAIRE NOËL : Bien, écoutez; j'espère qu'à l'avenir Astral aura quelqu'un qui répondra au moins pour vous dire non en personne, s'ils ne veulent pas vous en donner.
LISTNUM 1 \l 1735 Mais je vais vous rappeler une chose. Il y a notre ami, monsieur... comment est‑ce qu'il s'appelle, monsieur Radio‑Enfant ‑‑ appelons‑le *monsieur Radio‑Enfant+. Pardon?
LISTNUM 1 \l 1736 M. PAQUIN: Monsieur Michel Delorme.
LISTNUM 1 \l 1737 COMMISSAIRE NOËL: C'est ça, monsieur Delorme. Monsieur Delorme est venu, puis, moi, ça fait longtemps que je suis au CRTC là, j'achève ma carrière et puis ça va faire neuf ans complets à la fin du mois d'octobre, je pense que monsieur Delorme, il n'y a pas une audience où on ne l'a pas vu venir nous parler du fait qu'il voulait avoir de l'argent puis qu'il y ait de l'argent pour lui dans les bénéfices et je pense que, moi, j'appellerais ça le *principe de persistance+. Monsieur Delorme, cette fois‑ci, il est allé puis il en a eu.
LISTNUM 1 \l 1738 Alors, moi, ce que je vous dirais, c'est ne vous découragez pas, le forum pour débattre de la question de savoir si ça devrait être obligatoire ou facultatif, c'est les audiences de politique. Ce n'est pas ici qu'on va décider, contrairement à la politique qui vient d'être émise, la politique de cette année‑là, qu'on a émise à la fin d'octobre ou novembre 2006, je pense, la nouvelle politique de radio, ce n'est pas ici qu'on va la modifier.
LISTNUM 1 \l 1739 Mais ce que je vous dis c'est le principe de persistance et puis quand vous essayez d'avoir des fonds, appelez donc directement un dénommé Jacques Parisien là. Je vous le dis, lui, il retourne ses appels.
LISTNUM 1 \l 1740 Moi, je n'ai pas d'autres questions. Écoutez, c'est très louable ce que vous faites, le fonds c'est très louable. Malheureusement, je pense qu'il y a eu des *glitches+ dans la communication en quelque part parce que vous n'avez même pas eu un accusé de réception, mais monsieur Parisien aime ça beaucoup faire des acquisitions, ça fait que la prochaine fois, il va prendre votre numéro de téléphone.
LISTNUM 1 \l 1741 Merci.
LISTNUM 1 \l 1742 THE CHAIRPERSON: Thank you. I just have one question. Excuse me. In the oral presentation this morning given by Astral, they say the programs will also help the industry as a whole, including campus and community radio stations.
LISTNUM 1 \l 1743 Did you hear anything this morning that was said that gives you some reassurance that, in fact, the program as proposed by the applicant will indeed help campus and community radio?
LISTNUM 1 \l 1744 MR. STEVENSON: I think that there is a lot of positive elements in the benefits package, but I think that the best people to identify the needs that we have are members and our associations.
LISTNUM 1 \l 1745 And I have been involved in community radio for many many years and when I started out in the mid‑eighties, it was a different set of requirements than right now and I think that, you know, judging from the mid‑seventies might not be the best place to start.
LISTNUM 1 \l 1746 And again, if the benefits were targeted at us, some contact with us to indicate what we would like to do or what we feel our needs are might have been the best idea.
LISTNUM 1 \l 1747 I am not, you know, saying that people won't apply for any of those programs, but they aren't really our problem right now.
LISTNUM 1 \l 1748 THE CHAIRPERSON: In your contact with us, was it a formal proposition that you had made to them or ‑‑ I mean, in other words, outlining how part of their benefit package could indeed affect your membership, how it could benefit your membership and what kind of programs you would support with their benefit money or was it more of a let's sit down and talk about your benefits package?
LISTNUM 1 \l 1749 MR. STEVENSON: It was just, yes, an attempt to start a dialogue and, you know, wires might have been crossed, but we ‑‑ these letters tend to get lost every once in a while when we write them. It's not ‑‑ this isn't the first time this sort of things has happened.
LISTNUM 1 \l 1750 Serious, Canada won't even call us back after making a commitment at the satellite radio hearings and that's just the reality of who we are within the broadcasting system, I guess, but it's unfortunate because we would rather build those partnerships than appear here today and spend the day, you know, trying to find a middle ground between what we need and maybe what the industry can provide us.
LISTNUM 1 \l 1751 THE CHAIRPERSON: Well, I want to thank you for your contribution to these proceedings and I'm sure that people have heard you. Thank you very much.
LISTNUM 1 \l 1752 Madame Secretary.
LISTNUM 1 \l 1753 THE SECRETARY: The last appearing intervention will be presented by Canadian Recording Industry Association.
‑‑‑ Pause
LISTNUM 1 \l 1754 THE SECRETARY: Please, introduce yourself and you will have ten minutes to make your presentation. Thank you.
INTERVENTION
LISTNUM 1 \l 1755 MR. HENDERSON: Thank you, madame Secretary.
LISTNUM 1 \l 1756 Good afternoon, madame Chair, members of the Commission. My name is Graham Henderson and I'm the President of the Canadian Recording Industry Association. CRIA is pleased to appear before the Commission to address Astral's application.
LISTNUM 1 \l 1757 As the Commission is aware, our members have indicated their support for this application, subject only to what I am now about to say.
LISTNUM 1 \l 1758 The current application again raises a pressing issue, the need for new benchmarks to increase the airplay and promotion of new and emerging Canadian artists.
LISTNUM 1 \l 1759 The purpose of our remarks today is to address the appropriate process by which these benchmarks can be implemented. Based on the record before the Commission, the applicant supports the need for this process.
LISTNUM 1 \l 1760 Before we can move forward and establish these commitments, a key issue that needs to be resolved is this : the need for a workable and meaningful definition of new and emerging Canadian artist.
LISTNUM 1 \l 1761 Various industry groups including CRIA have previously raised this definitional issue with the Commission. The issue has once again been highlighted in the current application.
LISTNUM 1 \l 1762 Without such a definition, well‑intentioned companies like Astral, like Standard are unable to demonstrate conclusively that they are promoting new and emerging Canadian artists in the most optimal manner. For example, in response to an application question from the Commission in regard to the percentage of musical selections which featured new and emerging artists Astral's frank reply was that "In the absence of a clear definition of the term "emerging artists", it is not possible to calculate what percentage might apply, either on current performance or future proposals".
LISTNUM 1 \l 1763 To use a metaphor, without knowing how the referee is defining what the goal line is, Astral cannot demonstrate that it has crossed that goal line into the end zone.
LISTNUM 1 \l 1764 Now, I am not here today to propose a definition of new and emerging. Our objective is much more modest than that. It is simply to once again underscore the need for a commission‑sanctioned industry working group that will as a first step establish a consensus‑based definition of new and emerging Canadian artist and a corresponding set of benchmarks.
LISTNUM 1 \l 1765 In terms of this modest proposal, there was a remarkable degree of unanimity within the very ‑‑ from the various stakeholders in the music industry, from CTV to Astral, to SIRPA, to ADISQ, to CRIA, we all support this proposal.
LISTNUM 1 \l 1766 Now, while we may have different ideas of the definition and what the specific benchmarks should be, we all agree that the best way to resolve those differences that we have is to negotiate a common set of standards using a collaborative process under CRTC auspices.
LISTNUM 1 \l 1767 A germane illustration of this consensus is in Astral's written reply to the intervention where it noted that the "outstanding issue in both French and English radio markets was the lack of such a definition".
LISTNUM 1 \l 1768 They went on to state that : "the industry needs to meet in some Commission sanction process to develop a consensus on the definitions appropriate to each market and radio format, that any new policy in this respect should be applied across the industry and at the same time, and that it would be useful once equipped with definitions for the CRTC to begin to monitor radio industry practices in this regard".
LISTNUM 1 \l 1769 And we completely agree with these recommendations. Without a common definition and a set of benchmarks, we will be unable to move forward to establish meaningful commitments with respect to the airplay and promotion of new talent.
LISTNUM 1 \l 1770 Without these commitments, the music industry would be left adrift and up and coming talent, the life blood of our industry, would be shortchanged.
LISTNUM 1 \l 1771 Now, this is not to say that we want an inflexible set of standards. We agree with the applicant and it has always been CRIA's position that we need a taylors system that is geared toward the specialized circumstances of individual formats.
LISTNUM 1 \l 1772 While creating such a system will take work. CRIA wishes to emphasize the fact that there is today significant momentum and goodwill for such a collaborative process.
LISTNUM 1 \l 1773 In this regard, I would echo the sentiments of my friends at SIRPA when they highlighted their strong desire to be part of a policy for creating such a definition they said : "We are prepared at all times along with other industry groups and associations that may be involved in the process to contribute towards an effective workable solution.
LISTNUM 1 \l 1774 As the SIRPA submission highlights, the music industry is looking to the Commission to help them achieve a goal which they all agree is necessary, but which that they cannot achieve with the Commission's assistance. The time to act is now.
LISTNUM 1 \l 1775 The Commission's role is crucial because as independent arbitrator of various stakeholder positions it can help the parties avoid log jams, find common ground and perhaps most importantly, when consensus is finally reached, formalize the definition and benchmarks across the entire radio industry, having had the institutional benefit of being at the table, of course, during the negotiation process.
LISTNUM 1 \l 1776 In terms of its specific mandate as CRIA has previously discussed with the Commission, in our view once the working group has established a meaningful definition of new and emerging, the process should produce through consensus workable and meaningful commitments by commercial radio licences with respect to new and emerging Canadian artists, commitments that would include maximum exposure during the appropriate times of day to achieve critical mass of airplay.
LISTNUM 1 \l 1777 It would accord individual radio stations with flexibility in applying commitments to new and emerging artists, the model must recognize that different radio formats may require different standards.
LISTNUM 1 \l 1778 It would establish criteria to manage, fund and monitor a transparent and measurable national data base of airplay and new and emerging artists. This will permit the industry to report its progress to the Commission across the entire radio spectrum.
LISTNUM 1 \l 1779 Finally, it would develop appropriate procedures to resolve disputes within the framework of consensus based problem solving.
LISTNUM 1 \l 1780 There is a historic opportunity here. We stand at a cost spin time when the livelihood of our artists are subjected to unprecedented threats. This is no time for a game of hot potato. The CRTC has an opportunity to exercise leadership in a time of crisis and that's what it is.
LISTNUM 1 \l 1781 What we are asking for is not an unwarranted intrusion into the marketplace. This is appropriate, this is measured and most of all, it is desired by all parties.
LISTNUM 1 \l 1782 Help us to develop the framework and I am confident we can do the rest and of one thing I am certain, that we, none of us, can do this alone, the CRTC included.
LISTNUM 1 \l 1783 Thank you. I will be happy to take any of your questions.
LISTNUM 1 \l 1784 THE CHAIRPERSON: Thank you, Mr. Henderson. Commissioner Williams.
LISTNUM 1 \l 1785 COMMISSIONER WILLIAMS: Good afternoon, Mr. Henderson.
LISTNUM 1 \l 1786 Okay; a Commission sanctioner working group. Has CRIA tried to work with the industry in the absence of the Commission to establish this working group and what has your experience been to date?
LISTNUM 1 \l 1787 MR. HENDERSON: It has been relatively good. I mean we, but prior to the commercial radio hearing last year, we worked with the Canadian Association of Broadcasters and sort of came up with in effect the same language.
LISTNUM 1 \l 1788 But that's just two of us. It's not everybody and as you can see from the processes that followed, at that time we said : look, we need a working group. The Commission in its wisdom decided that there wouldn't be a working group and since that time we've seen a multiplicity of definitions emerging from all sides.
LISTNUM 1 \l 1789 And each on their own, they don't enjoy any sort of imprimatur, there is no way that they can be imposed, so it becomes a hedge pogge from coast to coast with everybody with their own idea of what a new and emerging artist is.
LISTNUM 1 \l 1790 COMMISSIONER WILLIAMS: So, what do you envision? A small process put together by the CRTC to bring all these thoughts together.
LISTNUM 1 \l 1791 MR. HENDERSON: Yes.
LISTNUM 1 \l 1792 COMMISSIONER WILLIAMS: And then some sort of consensus reached and then, that would be the definition Canada‑wide?
LISTNUM 1 \l 1793 MR. HENDERSON: Yes, yes, and I recognize, I mean in the last proceeding, when we brought this up, I was sort of tackled on procedural grounds that at that time it was inappropriate form to bring this forward. But I'm having a hard time understanding where the appropriate form is or when it's going to appear.
LISTNUM 1 \l 1794 We can't sit back and just let this drift. We have to act now and if we do sit back and let is drift, we're never going to be able to measure our progress. I mean, in any business, right, when you set goals, you set thresholds, you have to be able to measure and the CRTC is in the same position, the industry is and we want to know. Are we moving the yard sticks down, down the field and we don't know?
LISTNUM 1 \l 1795 So, yes, I think it's a relatively straightforward process, I believe that there is a precedent for this within the history of the commission and I would urge that Commission to look to that precedent and take this opportunity to try and bring everyone together.
LISTNUM 1 \l 1796 COMMISSIONER WILLIAMS: Okay. Thank you, Mr. Henderson. That's my question.
LISTNUM 1 \l 1797 THE CHAIRPERSON: Commissioner Noël.
LISTNUM 1 \l 1798 COMMISSIONER NOËL: Now, Mr. Henderson, I did ask the questions out of Mr. Parisien and I think Mr. Braide jumped in also in the fray, do you think that there should be two definitions: one for the English and one for the French markets?
LISTNUM 1 \l 1799 MR. HENDERSON: They are greater authorities on that than I, but it certainly makes a heck of a lot of sense to me.
LISTNUM 1 \l 1800 COMMISSIONER NOËL: Merci.
LISTNUM 1 \l 1801 THE CHAIRPERSON: Thank you, Mr. Henderson, for your intervention.
LISTNUM 1 \l 1802 MR. HENDERSON: Thank you.
LISTNUM 1 \l 1803 THE CHAIRPERSON: Madam Secretary.
LISTNUM 1 \l 1804 THE SECRETARY: This completes the list of appearing interveners, therefore, phase 2.
LISTNUM 1 \l 1805 We will now proceed to phase 3 in which the applicant can reply to all interventions submitted on their application.
‑‑‑ Pause
LISTNUM 1 \l 1806 THE SECRETARY: You have ten minutes for this purpose.
REPLY / RÉPLIQUE
LISTNUM 1 \l 1807 MS LAFLAMME: First of all, we apologize for not having responded to the letter from the Community Radio Association. Clearly it was a miscommunication. As suggested by madam Noël, we invite the Community Radio Association to call Jacques Parisien for further discussion.
LISTNUM 1 \l 1808 Finally, we would like once again to thank all the interveners in this process. We are grateful for the substantial support we have received and the many enthusiastic comments.
LISTNUM 1 \l 1809 Thank you.
LISTNUM 1 \l 1810 THE CHAIRPERSON: Wow!
LISTNUM 1 \l 1811 COMMISSIONER NOËL: Can you hand them your direct phone line?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1812 MR. HENDERSON: I'll give them a business card as soon as we are finished.
LISTNUM 1 \l 1813 COMMISSIONER NOËL: Merci, monsieur Parisien.
LISTNUM 1 \l 1814 THE CHAIRPERSON: You see, one of the roles of the Chairperson of the hearing is I get to do a little bit of clean‑up at the end.
LISTNUM 1 \l 1815 So, I want to just ask you a couple of questions with regards to the benefits again. And, Mr. Parisien, when I asked you about the feasibility of capping the number of interns, for example, that Astral would hire, your answer was that would be unreasonable to impose a limit at all.
LISTNUM 1 \l 1816 Do you have any suggestions as to any other safeguards that would be acceptable to you, to ensure that Astral does not benefit directly from either of the two programs: the internship program and the spoken word?
LISTNUM 1 \l 1817 MR. HENDERSON: Well, I suggest that one of the interesting safeguards could be the annual report that we would be filing with the Commission where we can put an emphasis on ‑‑ and try in particular what is happening in that area on both counts. We could do that.
LISTNUM 1 \l 1818 THE CHAIRPERSON: And if in doing that in your report therefore, if we were to see that too many of the ‑‑
LISTNUM 1 \l 1819 MR. HENDERSON: Self‑serving, yes.
LISTNUM 1 \l 1820 THE CHAIRPERSON: Okay. That we could then, at that point, ask you to redirect these funds?
LISTNUM 1 \l 1821 MR. HENDERSON: Yes, that would be suitable.
LISTNUM 1 \l 1822 THE CHAIRPERSON: But what if we decided in our deliberations over the next few days that, you know, while we are not convinced, we do believe that Astral will benefit directly from both of these programs, would it be acceptable to you for us to say, you must redirect your funds for these two projects?
LISTNUM 1 \l 1823 MR. HENDERSON: Well, I would repeat the same answer I gave you this morning, that I don't think it would be reasonable.
LISTNUM 1 \l 1824 THE CHAIRPERSON: Because, basically, you're telling me : trust us right now?
LISTNUM 1 \l 1825 MR. HENDERSON: Yes, madam, yes.
LISTNUM 1 \l 1826 THE CHAIRPERSON: Without any safeguards in place?
LISTNUM 1 \l 1827 MR. HENDERSON: Well, I've offered the same part of the report and you can track the report, get back to us and then we can adjust or redirect as you suggested. That, to me, would be sufficient.
LISTNUM 1 \l 1828 THE CHAIRPERSON: O.K. Well, thank you very much.
LISTNUM 1 \l 1829 MR. HENDERSON: Thank you very much.
LISTNUM 1 \l 1830 THE CHAIRPERSON: Legal counsel, I should ask you if you have any? Maybe one; there you go, our legal counsel.
LISTNUM 1 \l 1831 MME VÉRONIQUE LEHOUX: Juste une petite question, monsieur Parisien puis ça a trait à Sun Source et l'émission Common Performance, je veux juste m'assurer que j'ai bien compris tout à l'heure. Je veux juste que vous me confirmiez que les ententes entre Sun Source puis les stations de radio locales ne comportent pas de clause qui oblige les stations locales à diffuser l'émission Common Performance à un moment précis qui serait imposé par Sun Source?
LISTNUM 1 \l 1832 Je veux m'assurer que les stations locales aient carte blanche?
LISTNUM 1 \l 1833 M. PARISIEN: Et vous avez raison.
LISTNUM 1 \l 1834 MME VÉRONIQUE LEHOUX: C'est ça?
LISTNUM 1 \l 1835 M. PARISIEN: Oui.
LISTNUM 1 \l 1836 MME VÉRONIQUE LEHOUX: Merci.
LISTNUM 1 \l 1837 THE CHAIRPERSON: Thank you. Madam Secretary.
LISTNUM 1 \l 1838 THE SECRETARY: This completes the configuration of Item 1 on the agenda. There are a number of non‑appearing applications listed on the agenda of this particular hearing for which interventions were received.
LISTNUM 1 \l 1839 The panel will consider these interventions along with the applications and decisions will be rendered at a later date.
LISTNUM 1 \l 1840 This completes the agenda of this particular hearing, madame Chair.
LISTNUM 1 \l 1841 THE CHAIRPERSON: Thank you very much, madam Secretary. Thank you.
LISTNUM 1 \l 1842 M. PARISIEN: Thank you.
LISTNUM 1 \l 1843 THE CHAIRPERSON: Thank you to all the participants and we stand adjourned.
‑‑‑ Whereupon the hearing concluded at 1408 /
L'audience est terminée à 1408
REPORTERS
____________________ _____________________
Johanne Morin Monique Mahoney
____________________ _____________________
Susan Villeneuve Madeleine Matte
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