ARCHIVED -  Decision CRTC 93-22

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Ottawa, 22 January 1993
Decision CRTC 93-22
CHQT Broadcasting Ltd.
Edmonton, Alberta - 920933900
Following a Public Hearing in the National Capital Region held on 30 November 1992, the Commission approves the application for authority to transfer effective control of CHQT Broadcasting Ltd., licensee of CHQT Edmonton, through the transfer of all the issued shares from Monarch Broadcasting Ltd. (Monarch) to Shaw Cablesystems Ltd. (Shaw).
Shaw, the purchaser, is an Edmonton-based company with extensive cable holdings across Canada, including a cable undertaking serving part of Edmonton. Shaw currently controls five radio stations in Alberta, including CISN-FM Edmonton, CHEC Lethbridge and CFEZ Taber, as well as two radio stations in Ontario.
Monarch, the vendor, an Alberta-based broadcasting company controls two television and seven radio stations in western Canada. It is a wholly-owned subsidiary of Monarch Communications Inc., which is a holding company owned and controlled by W.H. Yuill.
In a related decision released today (Decision CRTC 93-23), the Commission approved Monarch's applications for authority to acquire the assets of CHEC Lethbridge and CFEZ Taber from Shaw Radio Ltd. Monarch had advised the Commission that these applications and Shaw's application to acquire CHQT were interdependent.
In Decision CRTC 90-684 dated 27 July 1990, the Commission approved the transfer of control of CHQT from A.M. Shoults to Monarch. Over the past two years, CHQT has experienced serious financial difficulties which are projected to continue. Monarch stated that it cannot afford to continue to operate CHQT, particularly because it is a stand-alone AM station in a highly competitive market.
The purchase price for the shares is $3,500,000. Based on the evidence filed with the application, the Commission has no concerns with respect to the availability or the adequacy of the required financing.
Because the Commission does not solicit competing applications for authority to transfer effective control of broadcasting undertakings, 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. As a first test, the applicant must demonstrate that the proposed transfer will yield significant and unequivocal benefits to the community served by the broadcasting undertaking and to the Canadian broadcasting system as a whole, and that it is in the public interest.
The Commission has assessed the benefits package identified by the applicant as flowing from this transaction and, in general, is satisfied that it is significant and unequivocal, and that approval of this application is in the public interest.
Shaw proposed a benefits package totalling $771,990, which includes the remaining $678,837 in benefit expenditures flowing from Monarch's purchase of CHQT, approved in Decision CRTC 90-684. In addition, Shaw will maintain Monarch's commitment to spend $29,010 over four years on Canadian talent development. Among the proposed tangible benefits, the Commission noted in particular Shaw's commitment to spend $675,000 over four years on "Project Discovery", an annual talent search to promote musical talent in Alberta.
Shaw currently operates CISN-FM Edmonton, as well as a cable undertaking serving part of Edmonton. According to Shaw, the intangible benefits to result from this application include the synergistic relationship and economic efficiencies that will be achieved between its Edmonton cable undertaking and the joint AM-FM operation that would be created by joining CHQT and CISN-FM under one owner. In addition, Shaw stated that it will be able to ensure that CHQT has all the financial support necessary to sustain and improve its operation.
In evaluating this application, the Commission has taken into consideration the fact that the transfer will occur less than three years after Monarch acquired control of CHQT. The Commission notes however that the financial difficulties facing CHQT are beyond Monarch's control and that the vendor will not profit from the sale of the station. Moreover, the Commission considers that the benefits of a joint AM/FM operation will serve to ensure CHQT's long-term health. Accordingly, the Commission is satisfied that this transaction does not constitute trafficking of a licence.
The Commission acknowledges the numerous interventions submitted in support of this application.
Allan J. Darling
Secretary General

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