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ARCHIVED -  Decision CRTC 89-639

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Decision

Ottawa, 30 August 1989
Decision CRTC 89-639
Acadia Broadcasting Company Limited
Bridgewater, Liverpool and Shelburne, Nova Scotia - 883088700 - 883215600
Following a Public Hearing in Moncton on 10 April 1989, the Commission approves the application for authority to transfer effective control of Acadia Broadcasting Company Limited (Acadia), licensee of CKBW Bridgewater and its rebroadcasting stations CKBW-FM-1 Liverpool and CKBW-FM-2 Shelburne, through the transfer of 1,843 common voting shares (100%) to New Brunswick Broadcasting Co. Limited (NBB).
Acadia is effectively controlled by Mr. James A. MacLeod of Bridgewater who holds 54.37% of the shares of the company and who, pursuant to a shareholders' agreement represents, with his nominees, a majority of the five-member Board of Directors. Mr. Macleod has been with CKBW since 1947, and stated at the hearing:
 We are proud of what we have accomplished in the past four decades, particularly as it was done with limited resources in a relatively small market. He explained that he and one of the other two major shareholders wish to retire and stated that since 1983 the company has considered eight other potential purchasers. He indicated that NBB was selected because of "our knowledge of their standards and principles" and because Acadia considers that it can endorse that organization as "ready, willing and able to carry on the CKBW tradition".
NBB, which is controlled indirectly by the Irving family of Saint John, is the licensee of radio station CHSJ and CHSJ-TV Saint John and its seven rebroadcasting undertakings in New Brunswick. It is also the licensee of CIHF-TV (MITV) Halifax, Nova Scotia, which pursuant to Decision CRTC 88-841 dated 9 December 1988 will provide programming to rebroadcasters at Bridgewater, Truro and Wolfville, Nova Scotia.
Further, NBB is the licensee of CIHF-TV-2 Saint John which broadcasts programming originating from CIHF-TV Halifax and CHSJ-TV Saint John as well as programs produced in its local studios. CIHF-TV-2 has rebroadcasting undertakings at Fredericton and Moncton, New Brunswick. Other Irving family media interests include daily newspapers in Saint John, Moncton and Fredericton, New Brunswick.
At the hearing, NBB stated that it has operated CHSJ Saint John for 54 years and that if the purchase of CKBW is approved "it would mark the company's first radio expansion" since then. It regards community service as "a first responsibility for us" and the continuance of the CKBW record of community service "as the key to the ongoing success of the station".
The Commission notes that the purchase price for the shares of Acadia is appoximately $2.5 million and considers that this amount reflects the on-going capital improvements effected at the station, which have totalled $1 million since 1974.
The Commission has considered the financial strength of the purchaser and has no concerns related to the financing of the transaction.
As stated in a number of decisions relating to applications for authority to transfer the ownership or effective control of broadcasting undertakings, and because the Commission does not solicit applications for such transfers, the onus is on the applicant to demonstrate to the Commission that the application filed is the best possible proposal under the circumstances, taking into account the Commission's general concerns with respect to transactions of this nature.
In considering the benefits of this transaction, the Commission has considered important the fact that Acadia will be controlled by an experienced, Atlantic-based broadcasting company which has recently launched an alternative independent television service. It also notes that Mr. Robert A. MacLaren intends to continue to be involved in the day-to-day operation of the station. Mr. MacLaren, who is currently a major shareholder of Acadia, has been with CKBW for 37 years. He will remain as station manager and will continue to hold a seat on the Board of Directors.
With respect to those benefits which can be quantified in monetary terms, the Commission is cognizant of the fact that, as mentioned previously, CKBW's technical facilities are modern and well-maintained. In this regard, Acadia remarked at the hearing that the station's physical plant is "very healthy" and that the station requires no additional improvements beyond those offered by the purchaser. Accordingly, the proposals offered in respect of capital expenditures are modest and, because they are considered by the Commission to be expenditures normally associated with the cost of doing business, they have not been accepted as benefits accruing from this transaction. The proposed expenditures include $10,000 for a music scheduling computer system, $15,000 for a portable audio board and $60,000 for an automatic diesel back-up power facility. At the hearing, NBB committed to ensure that these improvements will all be in place within the first two years of its ownership of CKBW.
Most of the quantifiable benefits proposed by NBB relate to the promotion, development and on-air exposure of Canadian talent, most particularly local talent.
NBB plans to introduce two weekly, one-hour musical programs on CKBW. "Maple Leaf Music" will feature music by pop and soft rock artists while "Maple Leaf Country" will feature Canadian country-music artists. NBB stated that the programs will be "dedicated to new, promising Canadian music" and that
 The programs will be well researched and written, with each host providing interesting background material on these new Canadian artists and their material.
The Commission notes that the direct costs associated with the production of these programs amount to $67,200 over five years, that the programs will be broadcast on weekend evenings and will receive extensive on-air promotion. NBB also noted that it expects to exchange "Maple Leaf Country" with CHSJ which produces a similar program, thereby providing performers with interprovincial exposure. NBB stated at the hearing that these programs would be "over and above the 30% Canadian music content of the station".
Further, NBB plans to broadcast 10 programs each year featuring artists performing at local music festivals "who might otherwise not receive such exposure". When indirect costs are discounted, these concerts will represent expenditures of $18,500 over five years.
CKBW's existing Canadian programs featuring local performers will be continued by NBB. Although the Commission has not accepted as a benefit the $145,700 in direct and indirect expenditures for "Uncle Jarge Newfoundland Show", "Maritime Memories" and "The Bluegrass Jamboree", it notes the popularity of these programs with CKBW's listeners. NBB has also undertaken to increase by $1,200 per year the current $501.60 annual contribution which Acadia makes to FACTOR.
The purchaser has committed to create a $1,000 annual scholarship to be awarded to a student wishing to pursue a career in broadcasting. The Commission notes that the winner will be chosen by the educational institution, King's Regional Vocational School, whose students will also benefit from an apprenticeship program to be introduced at the station.
At the public hearing, the Commission raised with NBB the possibility that CKBW co-operate with MITV in the production of entertainment specials. Recognizing that the concept of "synergistic projects" could offer greater opportunities for Canadian talent development, NBB undertook to co-produce at least two television specials with MITV within the next five years at an estimated cost to CKBW of $25,000 per program.
The Commission also discussed with the purchaser issues relating to cross-media ownership and concentration of ownership because of its obligation to ensure that, in any given region, there continues to be a diversity of ownership and a variety of opinions, sources of information and of broadcasting outlets that enable the residents of the communities served to be offered differing views on matters of public concern. The Commission has noted NBB's statement:
  ... as we own no other radio stations that penetrate CKBW's service area, we will maintain the ownership balance that currently exists in the area.
In this regard, the Commission notes that BBM has reported that CHSJ radio has marginal ratings of 4% and 2% of total hours tuned in Yarmouth County and Kentville in King's County respectively. Further, NBB stressed that because the MITV rebroadcaster in Bridgewater will be operational later this fall, there could be some advantages in terms of news coverage with respect to the provision of news stories to CIHF-TV Halifax and the obtaining of news items directly from the Halifax television studios. It was also noted that the Irving interests do not publish any newspapers in the province of Nova Scotia.
An intervention was presented at the hearing by Mr. David F. Barrett of Lower Sackville, Nova Scotia, who applauded the efforts of Acadia in serving the south shore of Nova Scotia "extremely well" over the years. Mr. Barrett also acknowledged the "excellent job" performed by NBB with respect to the MITV service. While he considers that this performance record will be repeated at CKBW, he expressed concern that control of the station will be assumed by a large corporate entity which could "... use its power against individuals or small companies".
In response to the intervention, NBB stated that control of the radio station, "particularly the news and editorial policy" will remain in the control of the station manager, Mr. MacLaren and that the station will accept advertisements from any Irving competitor.
Having regard for the above, the Commission is satisfied that this application raises no concerns with respect to concentration of ownership or cross-media ownership. Further, having assessed all the evidence submitted with respect to the application, the Commission considers that the benefits are commensurate with the size of the transaction and that approval is in the public interest.
The Commission expects NBB to submit a report 12 months from the date of this decision providing details regarding the implementation of the benefits proposed with respect to this transaction. NBB is further expected to file a report with the next CKBW licence renewal application, outlining details about measures taken to maintain the current level of staff and to ensure that CKBW's programming continues to be directed to its primary audiences in Lunenburg, Queens and Shelburne Counties.
At the same public hearing, the Commission considered an application to renew the broadcasting licences for CKBW and its rebroadcasting undertakings. The Commission has taken into consideration NBB's assurances that it does not intend to change the programming of CKBW and that the station will continue to be "all things to all people".
Accordingly, the Commission renews the licences for CKBW Bridgewater, CKBW-FM-1 Liverpool and CKBW-FM-2 Shelburne from 1 October 1989 to 31 August 1994, subject to the conditions specified in this decision and in the licences to be issued.
The Commission reaffirms the particular importance it attaches to Canadian talent development. The Commission considers that the licensee has an excellent base in terms of resources, talent and facilities from which to expand its Canadian talent development initiatives and encourages the licensee to increase its commitment with regard to the support, development and on-air exposure of local and regional talent.
It is a condition of licence that the licensee adhere to the Canadian Association of Broadcasters' (CAB) self-regulatory guidelines on sex-role stereotyping, as amended from time to time and approved by the Commission.
It is also a condition of licence that the licensee adhere to the provisions of the CAB's Broadcast Code for Advertising to Children, as amended from time to time and approved by the Commission.
Fernand Bélisle
Secretary General