GATINEAU – In contrast to high-profile hearings to discuss the proposed acquisition of Astral Media by BCE, or the shorter hearing for Corus's acquisition of assets BCE was required to divest in the deal, the CRTC has approved the acquisition of three radio stations in Calgary and Winnipeg by Jim Pattison Ltd. without a full public hearing.
As a condition of its approval of the BCE/Astral deal, the CRTC required Bell to divest 10 radio stations in markets where the merger of the two companies put it over the limits set by the Commission's common radio station ownership policy (in major markets, it amounts to two FM and two AM stations in each language). Bell came to deals that would result in the sale of two stations in Ottawa to Corus, three stations in Calgary and Winnipeg to Jim Pattison, and five stations in Toronto and Vancouver to Newcap Radio.
The three stations sold to Pattison, wholly owned by the Vancouver billionaire, are CKCE-FM (101.5 KooL FM) in Calgary, for $16.5 million, CHIQ-FM (Fab 94.3) in Winnipeg, for $3.5 million, and CFQX-FM (QX104) in Winnipeg, for $5.5 million. That puts the acquisition total at $25.5 million, or $26.5 million when lease commitments are included.
The new stations add to 30 radio stations (including an unlaunched one in Calgary) and three TV stations already owned by Pattison’s broadcasting arm. The Winnipeg stations will be its first outside of British Columbia and Alberta.
The Broadcasting Act states that issuing a new broadcasting licence requires a public hearing. But because the three stations are being acquired by a sale of shares in their parent companies, a new licence doesn't need to be issued.
In 2010, the CRTC set rules establishing how it would handle acquisitions that change the effective control of a licence. It states that "as a general rule," an application to change control of a radio station can be handled administratively if the value of the transaction is below $15 million per station, and if "it does not raise any concerns with respect to Commission policies or regulations, including conditions of licence."
"The Commission agreed that the value of one of the three stations was slightly over the $15 million threshold, but also considered the fact that the value of the other stations involved in the same transaction was well below the $15 million threshold (i.e. $3.5 million and $5.5 million respectively)," CRTC spokesperson Patricia Valladao wrote to Cartt.ca in response to a question about the process.
The Regulator also did not see any policy concerns related to concentration of ownership, cross-media ownership, or diversity of voices and accepted the tangible benefits proposed would make a contribution to the enhancement of the Canadian broadcasting system, so "the Commission concluded that the transaction was in the public interest," added the e-mail.
Pattison presented a standard tangible benefits package representing six per cent of the transaction value, as per CRTC policy. Half of the $1.59 million package over seven years will go to the Canadian Association of Broadcasters' Starmaker Fund, a quarter to FACTOR, 1/12th to the Community Radio Fund of Canada, and 1/6th to local initiatives in Winnipeg and Calgary.
The applications also include a letter from Jim Pattison Broadcast Group LP chairman Rick Arnish complaining about the length of the process which had begun in June. "We are becoming very concerned about the time it is taking to have our application proceed to an administrative approval," Arnish wrote in a letter dated October 28.
While emphasizing the respect that his group has for the Commission and its process, he wrote that "the employees of all three radio stations have been patiently waiting for a decision, so that they can have some surety in the future of their broadcasting careers under new ownership. … We are also concerned that during this long process that the stations have lost some valuable employees due to the uncertainty of the future ownership of the three stations."
The applications were approved on December 18, and announced publicly by the Jim Pattison group on December 20. They were posted to the CRTC website on January 3, consistent with a new policy that sees administrative decisions posted "as the information becomes available" instead of in bulk every two months.
The documents don't provide many specifics for programming changes at the stations, other than to say they will be more local and "focus on community" and that oldies station Fab 94.3 will need some work to improve its ratings. "We believe the format can work in Winnipeg with some fine tuning, research and a commitment to providing the 'best' on-air product in the marketplace," Arnish writes. He also says that all employees of the three stations "will be 'welcomed' into the Pattison family and will be an integral part of the future of our broadcast group."
The acquisitions mean that the three stations are moving before the deal is closed. In Winnipeg, the Pattison group is taking over the former Astral location in the Craig Wireless Building on Lombard Ave. QX104 will stay there, while Fab 94.3 will move there from Bell's Pembina Highway location, and CKMM-FM (Virgin Radio 103.1), the Astral station Bell is keeping, is doing the reverse, moving from Lombard to Pembina.
In Calgary, KooL FM will move from the City TV building on 7th Ave. SW to "a new state-of-the-art broadcast facility located in central Calgary," shared with soon-to-launch CHPK-FM (95.3 The Peak).
