TRANSCRIPT OF PROCEEDINGS
FOR THE CANADIAN RADIO-TELEVISION AND
TRANSCRIPTION DES AUDIENCES DU
CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
CALL FOR FM/
LICENCES DE RADIODIFFUSION
APPEL DE DEMANDES FM
HELD AT: TENUE À:
Delta Bessborough Delta Bessborough
William Pascoe Room Salle William Pascoe
Saskatoon, Saskatchewan Saskatoon (Saskatchewan)
16 November 1999 Le 16 novembre 1999
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and staff attending the public hearings, and the Table of
However, the aforementioned publication is the recorded
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spoken by the participant at the public hearing.
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Canadian Radio-television and
Conseil de la radiodiffusion et des
Transcript / Transcription
Public Hearing / Audience publique
Broadcasting Licences / Licences de radiodiffusion
Call for FM / Appel de demandes FM
BEFORE / DEVANT:
Barbara Cram Chairperson / Président
Commissioner, Manitoba and
Conseillère, Régions -
Manitoba et Saskatchewan
Ron Williams Commissioner,
Alberta and N.W.T. Regions/
Conseiller, Régions -
Alberta et T.N.O.
Andrée Noël Commissioner, Quebec
Région du Québec
ALSO PRESENT / AUSSI PRÉSENTS:
Michael Burnside Hearing Manager /
Gérant de l'audience
Peter McCallum Legal Counsel /
John Traversy Director, Regulatory
Gary Krushen Secretary / Secrétaire
HELD AT: TENUE À:
Delta Bessborough Delta Bessborough
William Pascoe Room Salle William Pascoe
Saskatoon, Saskatchewan Saskatoon (Saskatchewan)
16 November 1999 Le 16 novembre 1999
- iv -
TABLE OF CONTENTS / TABLE DES MATIÈRES
Présentation au nom de/Presentation on behalf of:
Elmer Hildebrand 5
Rawlco Communications (Sask.) Ltd. 57
Forvest Broadcasting Corporation 115
Intervention au nom de/Intervention on behalf of:
Elmer Hildebrand 169
Rawlco Communications (Sask.) Ltd. 170
Forvest Broadcasting Corporation 171
Elmer Hildebrand 172
Forvest Broadcasting Corporation 180
Forvest Broadcasting Corporation 189
Forvest Broadcasting Corporation 199
Réplique au nom de/Reply on behalf of:
Forvest Broadcasting Corporation 206
Rawlco Communications (Sask.) Ltd. 207
Elmer Hildebrand 207
--- Upon commencing on Tuesday, November 16, 1999
at 0900 / L'audience débute le mardi
16 novembre, 1999 à 0900
1 THE CHAIRPERSON: Good morning, ladies and gentlemen.
2 Can you hear me?
3 Welcome to this public hearing.
4 Bonjour, mesdames et messieurs, et bienvenue à cette audience publique.
5 Je m'appelle Barbara Cram and I am the CRTC Commissioner for Manitoba and Saskatchewan. I will be presiding over this hearing.
6 Permettez-moi de vous présenter mes collègues du comité d'auditions.
7 Il s'agit de Ron Williams, conseiller du CRTC pour l'Alberta et les Territoires du Nord-Ouest, et d'Andrée Noël, conseillère pour du CRTC pour le Québec.
8 The staff who will be assisting for this hearing, our Hearing Manager, Michael Burnside, who is absent right now; legal counsel, Peter McCallum; Director of Research, John Traversy; Hearing Secretary, Gary Krushen; and Exam Room Manager, Judy Henry.
9 Today we will hear five applications for FM radio licences, three for Saskatoon, two for Lloydminster, Alberta. It is our hope, by the way, that we can finish the Saskatoon ones today, just in case you were trying to plan your lives.
10 For Saskatoon, we will examine an application from Elmer Hildebrand for a classic rock music station, an application from Rawlco Communications to operate a rock music radio station and an application from Forvest Broadcasting Corporation for a contemporary hits format radio station.
11 Mr. Hildebrand and Forvest Broadcasting Corporation originally applied for 106.7 and 103.9 frequencies respectively. Unfortunately, Industry Canada has informed us that these frequencies are not technically acceptable. However, we have decided to go ahead with their presentations as we have been assured that there are other acceptable frequencies that are available to accommodate these two applicants should their applications for licence be approved.
12 With regard to Lloydminster, we will hear applications from Peace River Broadcasting Corporation Limited for a pop/rock music station on frequency 106.1 and from Sask-Alta Broadcasters Limited for a popular music format station on FM 95.9.
13 Before getting down to work here, if I may, I would like to add a personal note to these proceedings. As the new Commissioner for Manitoba and Saskatchewan, I must tell you that I am very pleased to be here in my home province, God's country as I call it, for the first time as Chair of a CRTC panel. As it is my first panel as a Chair, I hope you will bear with me.
14 I am also very pleased to see these new applications. They show that the radio industry in the west is healthy and growing. They also show that the CRTC's new radio policy issued last year is working. By encouraging competition in radio markets, it is ultimately providing more choices for Canadian listeners.
15 Before we begin to hear from the parties making presentations, I will ask the Hearing Secretary, Mr. Krushen, to go over some administrative and housekeeping matters regarding the conduct of this hearing.
16 Mr. Secretary.
17 MR. KRUSHEN: Thank you, Madam Chair.
18 First I will describe the procedure that will be followed for today's applications. Each set of applications being heard will proceed in four phases. Phase one is the presentation by the applicant to the Commission and 20 minutes is allocated. In phase two, the applicants reappear in the same order to intervene against other competing applicants. Ten minutes is allocated for each intervention. Phase three is where the appearing intervenors make their presentations to the Commission and ten minutes is allocated for each. In phase four, the applicants appear in reverse order to rebut or comment on interventions. Again, after any of these phases there may be questions from the Commission. The procedure is documented in your agenda if you would like to refer to that for reference.
19 For your general information, the public files associated with the items at this hearing are available for viewing in Salon Batoche, which is at the other end of the hotel and one floor up. CRTC staff, Mrs. Judy Henry, will be pleased to assist you, but pleased be aware that while an application is being heard, the public files associated with it will be in this room and not available for viewing.
20 There is a verbatim transcript of this hearing being taken by the Court Reporter from StenoTran. If you have any questions about how to obtain all or parts of this transcript, please approach the Court Reporter for information.
21 Finally, if you wish to have any messages taken, we will be pleased to post them within the Salon Batoche. The phone number for the public examination room is 975-4929. Again, the number is in the introductory pages to your agenda.
22 If you have any further questions, please do not hesitate to contact any of us and we will be pleased to assist you whenever we can.
23 Madam Chairman.
24 THE CHAIRPERSON: Mr. Hildebrand, please proceed.
PRESENTATION / PRÉSENTATION
25 MR. ELMER HILDEBRAND: Madam Chair, Commissioners, good morning and welcome to Saskatoon. My name is Elmer Hildebrand. With me today are Jeff Vidler, Angus Reid Group, the organization that did the research for my application. Jeff is behind me.
26 In the middle is Tracy Pearce, lawyer. On my left in the back is Jim McLaughlin, long time friend and co-worker of mine at the CAB and BBM, someone who has a great deal of experience in the rock music industry and one of the original founders of FACTOR.
27 On my left is Jim Jackson, Programmer, with many years experience in the field of music we are going to be playing. He worked for the original Canadian rock station, CKLW in Windsor, and has been with my organization since the early nineties.
28 On my right is Ken Goldstein, Communication Management and economic and futuristic guru.
29 We are pleased to be here today to present our application for a new FM radio station to serve Saskatoon.
30 First of all, a little history. As you may know, I have been actively involved in hands-on broadcasting since the late fifties and have during that time developed a strong broadcast organization with more than 225 employees, operating in total 17 AM and FM radio stations in Manitoba, Saskatchewan and Alberta.
31 Our stations are all totally involved with the community, becoming a part of the fabric of every community we operate radio stations in. I have also been involved in establishing radio stations and Caribbean. You could say "radio" is my middle name. During this time I have developed a financially strong organization able to do what it takes to make a difference.
32 My commitment to the industry and to serving various size markets is well known by the Commission. In addition to building a strong and growing broadcast group, I have been actively involved in trying to make the entire broadcast industry better.
33 I have served three terms at the Canadian Association of Broadcasters, both as Treasurer and Joint-Chair, eight years at BBM as Treasurer and nearly 20 years at the Radio Marketing Bureau as Treasurer.
34 I was also a founding director of the Canadian Women in Communications and remain committed to helping this organization with ongoing moral and financial support.
35 At the present time I am actively working on expanding my total group of stations and for this reason it is of utmost importance to me that the CRTC approve my application for this new FM radio station in Saskatoon.
36 In preparing this FM application, we have done extensive market analysis of the economic and program realities of the Saskatoon market, which is half the size of London, a market you recently held similar hearings and where you only approved one of the applications.
37 The information filed with the application illustrates two key factors that have to be considered. First, that the market needs a new rock radio station, which was extensively and comprehensively documented by the Angus Reid Organization. Second, that the Saskatoon market, though profitable, can realistically only absorb one new licence at this time. This has been well documented by the report prepared by Ken Goldstein of Communications Management.
38 As everyone knows, Canada's Prairies are not an expanding market and Saskatoon is no exception. The province actually had a net decline in population in the last reporting period by StatsCanada, and while the population of Saskatoon has not declined, it is not reasonable to project great population growth in the near term.
39 As the CRTC knows, I entered the Saskatoon market with the purchase of the assets of CHSN-FM from the Ethier family, thereby rescuing the station from the scrap heap. In order to make this a viable entity, I entered into an LMA, subsequently changed the format to a more appealing sound, and changed the call letters to CKOM-FM. I am cancelling this LMA and will now be undertaking to operate CKOM-FM as a stand alone station in the market.
40 While the station is profitable at this time, I really need the second FM licence to level the playing field so that I can compete adequately with two Rawlco stations and two Forvest stations.
41 It is obvious that the Saskatoon market can only support one more FM station, and with your approval of this application, each of the operators in the market would serve Saskatoon with two stations.
42 To emphasize my commitment to Saskatoon and the Saskatoon/Saskatchewan music industry, I am offering to provide $1 million to the region's music scene, $1 million in cash to promote rock music and I have committed to a threshold of 40 per cent Canadian music. Together, $1 million and 40 per cent will provide for excitement and real promotion and growth in the Saskatoon/Saskatchewan scene.
43 We will establish a committee respecting all levels of the rock music industry. This committee will meet quarterly to review the needs and then allocate the funds accordingly. In addition to the obvious needs in production and manufacturing, we also see part of the fund going to help struggling bands cover some of their travel costs.
44 Because of the distances between centres on the Prairies, travel costs are much greater than in high density markets like Toronto, Montreal, Ottawa and Vancouver. Some travel funds would, therefore, be of great assistance to emerging music groups and individuals. I have had groups tell me that to accept jobs in Winnipeg, Thunder Bay or Calgary, for example, requires a lot of money for travel and accommodation and that they many times leaves no margin for growth.
45 Jeff Vidler will now highlight the need for our rock format in Saskatoon. The Angus Reid study and indeed other studies have clearly shown a rock-based hole in the market.
46 MR. JEFF VIDLER: Thank you, Elmer.
47 We interviewed by telephone a total of 400 18 to 54 year olds in Saskatoon. The interviews took place in April 1999, or roughly nine months after the format changes of mid-1980s had a change to settle into the market. Several findings from the research reinforce the diversity that would be provided by a rock format, a format which would include classic rock as one of its primary music styles.
48 First, listeners attracted to this format were significantly more likely than other 18 to 54 year olds to express dissatisfaction with the listening options currently available in Saskatoon.
49 Second, of the broad spectrum of music styles we tested, a seventies-based classic rock style emerged as the most underserved. Specifically, this rock-based style generated the greatest combination of active interest and a belief that this style was either rarely or never played on Saskatoon radio.
50 Third, less than one-third of all listeners who would be attracted to this rock format felt that there was any station in Saskatoon that currently specializes in this format.
51 The most convincing evidence of the demand for this type of rock station is the depth of interest expressed in the format itself. Fully 16 per cent of all 18 to 54 year olds said they would actually change their favourite station if this type of rock station were licensed in Saskatoon. Our experience in modelling the results of this type of question indicates that this figure should translate into a potential 18 to 54 audience share of at least 16 per cent in BBM ratings.
52 Although 16 per cent is a large audience share figure, it is validated by recent ratings in Regina. Like this proposed station, Regina's The Wolf has a classic rock orientation. And again, like this station, it represents the sixth commercial station in its market. Over the past several years, The Wolf has generated an audience share at or above the 16 per cent share estimated in our format search study.
53 This rock format as proposed will have an impact on tuning to Rawlco's C95. However, as both our research, the Forvest and Rawlco studies and BBM ratings show, C95 is by far the dominant station in the Saskatoon radio market. In fact, despite the impact this type of rock station would have on C95, our research suggests that C95 would remain the market leader with a tuning share of 31 per cent among 18 to 54 year olds, nearly twice the 16 per cent share projected for a new rock radio station that is rooted in classic rock.
54 MR. HILDEBRAND: Thank you, Jeff.
55 My program schedule will be designed and moulded by two individuals who have a lifetime of history in the rock music scene, Jim McLaughlin and Jim Jackson. Here is Jim Jackson to elaborate.
56 MR. JIM JACKSON: Madam Chairman, Members of the Commission, I want to describe our enthusiasm for the programming on this new station, but I am only up to the task of outlining its terrific components and hoping through them to catch your excitement about our enthusiasm.
57 First, what we are. We will be a solid FM rock station with a foundation of recognized artists of yesterday and today. Most importantly, we will be the Saskatoon station where you can hear both international and local musicians every day. Keep in mind that Saskatoon has had no real rock station and we do have a lot of catching up to do.
58 We will start our support with 40 per cent Canadian content spread throughout the broadcast day. The evening hours will be used to lay the foundation of our Canadian talent support. Our Monday to Friday programming will include the top seven at seven, the top selling and most requested rock artists in Saskatoon today. Why? To showcase the most successful new releases along with the hottest talk about the music scene.
59 At eight Band Wars, an on-air battle of new bands. The format here is well known. We feature two bands, play their music and the audience votes. We get to introduce the newest as yet uncharted music from all over the world to the audience. Saskatoon bands like Widemouth Mason or Touchstone Gurus would definitely qualify to compete on this feature.
60 At nine we go to the Saskatoon Wave, an hour each night of new releases and interviews with local Saskatoon and region artists. There is a vibrant rock music scene in Saskatoon, but it's survived till now unheralded. Down on Broadway there are four clubs in a four block stretch with live music almost every night. We want to reflect and support that activity.
61 Right after the Wave, we will follow with the "Top Saskatunes". I will never get away with that name, but the show will pit two local songs against each other in another battle of the bands format. The winner moves on to fight again the next night.
62 Another way, and perhaps the most important way, we will demonstrate our support of local talent will be our "Play of the Day". We will feature a song by a local artist every day and give it full hit rotation throughout every daypart. That translates to at least four plays in a full rotation a day, the same sort of airplay the number one song on the charts would get.
63 Simple things like club and concert listings have not been available on a rock station in Saskatoon. Five times every day we will offer a complete update of all the rock music activity around Saskatoon.
64 There are many more program ideas I could talk about, but I don't want to leave out our five year $1 million Canadian talent commitment. Let me tell you about some of the things our commitment will accomplish for both the listeners and the musicians of Saskatoon.
65 The rock musicians of Saskatoon have gone without the fundamental support of a rock music station in their community. We think this lack of radio support has hurt and they are now way behind their contemporaries in other communities, so it's up to us to spend our money right here at home. We need to help these local musicians with all the support we can muster.
66 Our support fund will, of course, be operated by a local board which will make all the funding decisions, but we have developed an outline of the kinds of grants we would like them to start with.
67 Elmer already mentioned the tour support component of the fund, so let me first outline our proposed annual "Saskatoon CD". We want to provide the funds for at least one CD each year featuring the best of Saskatoon chosen by an independent panel. The fund will pay all studio costs right through to the finished product while the station will heavily advertise its release date, broadcast live the release party from a local club and, of course, give the CD participants extensive air play through our "Play of the Day" feature.
68 Local clubs currently hold an annual contest called the "Great Western Band Wars". We see the development fund providing prize money for the contest that would include the funding for a complete CD for those groups finishing in the top three spots. The station would broadcast the finals live, giving the groups exposure on their winning night. The CD can be used by the bands to further their negotiations with record companies and clubs around the circuit.
69 One of the biggest problems local bands have is obtaining exposure right here at home. We are going to fix that. We will offer local charitable groups live local bands for their fundraisers and activities. We will pay the bands a fair wage for their work. The charities win and so do the bands. They get their important local exposure and some decent financial return for their efforts. The station will, of course, publicize all these events and will cover some of them live.
70 Time won't permit covering more of the ideas for the fund, but I would be happy to cover more questions as they come along.
71 Thank you.
72 MR. HILDEBRAND: Thanks, Jim.
73 As you can see, I have retained a great deal of history and expertise to make sure this new station will be on the market to fill the hole in the market as illustrated by Angus Reid. In addition to this, we will work closely with the music industry in the area. This willingness to work with me is well documented by the letters of support received from over 50 music groups for my application.
74 As I indicated in my opening remarks, the CRTC should only license one of the three applications at this time, and I will ask Ken Goldstein to underline this rationale.
75 MR. KEN GOLDSTEIN: Madam Chair and Members of the Commission, you have our economic analysis on file, so I will touch very briefly on the key economic elements that relate to the Saskatoon radio market.
76 First, our analysis indicates that the Saskatoon radio market should be able to absorb one additional radio station. While there would be some impact on current stations, it can be absorbed by the market.
77 Second, we have also analysed the impact of licensing a new station on the question of market balance, the need to find the right balance of efficiency of operation, competition and diversity.
78 The simple count of the stations provides one indicator. Currently, two of the applicants before you already have two stations in the market, while this applicant has a single station. It is obvious that a licensing decision that produces a 3-2-1 outcome will be very different in terms of a market balance than a decision that produces a 2-2-2 outcome.
79 In addition to considering the number of stations, we have also created an economic model to project the relative shares of advertising revenue in the market to 2003 among the three players, depending on which applicant might be licensed.
80 Those market shares are illustrated on the pie charts that have been distributed to you and I would add that this page contains the same information as the last page of our report, which is already on file. As you can see from the pie charts, the best opportunity for balance and diversity in the market occurs with scenario "B", the licensing of the application by 614546 Saskatchewan Ltd.
81 Based on our analysis, we also concur with Elmer's comments that licensing more than one station at this time would not serve the interests of either public policy or the market.
82 If two stations were to be licensed, the imbalance against the third operator would be clear. And if three stations were to be licensed, it would not just be a zero sum game for two important reasons. First, because the market would still be unbalanced going into that situation and, second, because there is not likely to be enough revenue in the market to cover the costs of adding three new operations.
83 To sum up, I would say that the economics of the Saskatoon radio market lead to four clear conclusions. First, the market can support one new station. Second, licensing this application creates the best opportunity for balancing efficiency, competition and diversity in the market. Third, licensing two new stations would likely destroy that balance and, fourth, licensing three new stations would run the risk of severely damaging the market itself.
84 MR. HILDEBRAND: Thank you, Ken.
85 As I have stressed throughout my application, my commitment to the Province of Saskatchewan is strong and the new FM station will be no exception. Total community involvement as it relates to the rock music scene will see the industry grow and thrive in the future.
86 One million dollars in cash will be provided to support talent in the region. We and our committee will work directly with the Saskatchewan recording industry and the artists to make sure we get the most bang for this money possible.
87 I have demonstrated my commitment to the radio industry over the past years and the Commission knows that I will live up to all of my commitments and more.
88 At this time I am the smallest player in the Saskatoon market and since my LMA is over, this new FM licence is a must to put me on an even footing with Rawlco and Forvest. With the approval of this application, there will be six privately held licences in Saskatoon. Any more than six in a city of 225,000 would indeed be over-licensing. As I have said, any more than six would be over-licensing.
89 In closing, please let me review the six reasons that this licence is so important to me and why I believe it deserves to be approved.
90 Number one, the application fulfils the need of Saskatoon listeners as demonstrated in our research.
91 Number two, it makes a solid commitment to Canadian talent.
92 Number three, it will level the playing field in Saskatoon -- three owners, two stations each.
93 Four, it will assure the long term viability of CKOM-FM.
94 Five, my commitment to news and community service is well known. Our newsrooms are growing in the markets we serve, which has made me probably the largest broadcast employer in Saskatchewan.
95 Six, I have demonstrated my commitment to the Canadian radio industry over many years and the Commission knows I will live up to my promises and more.
96 Members of the Commission, I respectfully ask for your approval of this application and we will now be pleased to answer any questions.
97 THE CHAIRPERSON: Thank you.
98 I will ask Commissioner Noël if she would ask questions for clarification.
99 COMMISSIONER NOËL: Mr. Hildebrand, you are aware of the decisions that the Commission recently issued in the Victoria, Kelowna and the London markets and the introductory statements which outlines the specific factors that the Commission considers to be generally relevant to the evaluation of competitive applications under the commercial radio policy.
100 Would you like to take this opportunity to address these factors with respect to your application and which factors you consider to be most relevant with respect to the Saskatoon radio market?
101 MR. HILDEBRAND: I think the most relevant factor in the Saskatoon market would be diversity. As we have outlined, providing an additional licence at this time would really fill a hole that is illustrated clearly by not only our research, but by other research that was done.
102 It would seem to me that to fulfil the Commission's mandate of total diversity, a rock licence in this market would be fulfilling that process.
103 COMMISSIONER NOËL: Your application notes that the target audience of your proposed station is the 18 to 54 year olds. What is your primary target audience? Is it more younger listeners or older listeners?
104 MR. HILDEBRAND: I will ask Jeff to answer that.
105 MR. VIDLER: I'm looking at the research just in terms of the audience profile of the people who would be most attracted to the rock format as described in the research. Give me a second to find it here.
106 The highest share, I mean there would be audience appeal for the format throughout the 18-54 demographic. The highest audience share would be among 18 to 34 year olds, a roughly 21 share among 18 to 34 year olds compared to a 16 share among 18 to 54 year olds in general. If you take that to 18 to 49 year olds, the estimated share would be 18 per cent; to 25 to 54 year olds, the share would be 16 per cent.
107 The other thing to mention here is that it would be predominantly male skewed. The station would be roughly 70 per cent male tuning, which is typical of most rock stations across Canada. This means that when you get 18 to 34 year olds, for example, the station would generate a 30 share of 18 to 34 year old males.
108 COMMISSIONER NOËL: That covers my second question. What stations are the listeners which you are proposing to target listening to now?
109 MR. HILDEBRAND: Again, Jeff could elaborate on that.
110 MR. VIDLER: A large majority of the audience currently listens to C95. I mean they are the dominant radio station in that 18 to 54 demographic and specifically in the 18 to 44 end of things. The per cent, you are looking at those who would tune this station most often. This would be their core station. Roughly two thirds currently identify C95 as the station they now listen to most often.
111 COMMISSIONER NOËL: Thank you.
112 MR. VIDLER: And about 18 percent to CKOM-FM.
113 COMMISSIONER NOËL: Your Angus Reid study found that based on the expectations of its potential listeners, a pure classic rock station is more likely than a rock-mix station to generate new hours tuned to radio. Could you provide an estimate of the percentage of the proposed station's listening audience that would be comprised of new hours tuned to radio?
114 MR. HILDEBRAND: Jeff, would you continue.
115 MR. VIDLER: I think that's a little difficult to speculate. Certainly we do ask a question relating to that, but it is something that until the radio station comes on the air, for people to hypothesize about the amount of time they would spend at the new radio station is perhaps asking a little more than I can.
116 One thing that does come out of the research which is important is when we asked with a station like this, do you think you would listen to the radio a lot more often or a little more often, we asked about the classic rock station, we asked about the rock-mix station, which was a softer station, 14 per cent of the people who would listen to a classic rock station said they would listen to the radio a lot more often.
117 Of those who were most interested to listen to a rock-mix station, only 7 per cent said they would listen a lot more often and that number falls through to as well in terms of percentage who say they would listen a little more often to either format. In total, 39 per cent said they would listen more often to the radio if a classic rock station was on the air.
118 COMMISSIONER NOËL: Thank you.
119 If we go to revenues, advertising revenues, your communications management study projects that a new entrant in the Saskatoon radio market would increase market advertising revenues by only about 2 per cent in year one. Could you please explain why your station would not increase Saskatoon market revenues more than 2 per cent?
120 MR. HILDEBRAND: Ken.
121 MR. GOLDSTEIN: When we do these economic models for broadcast markets, we tend to relate the revenues to other revenue or economic factors like personal disposable income or retail sales. In this particular case, the relationship with retail sales and local advertising revenues is obviously the absolute key relationship since local advertising revenues is the overwhelming source of revenue for radio.
122 In this particular case, we looked at the Regina market where there are six stations, the Saskatoon market where there are five. We looked at the relationship between retail sales and local advertising revenues in Regina and we thought that with the addition of a new station in Saskatoon, the indicator would come to the same point as in Regina. It's a little higher in Regina than it is in Saskatoon, so we thought it would be reasonable, given the similarities of the markets. That's why we made that projection.
123 It's based on having the same number of stations and coming to the same relationship with retail trade. It's not, in other words, some arbitrary percentage where one would say "Oh, well, it will go up X per cent because there's a new station". It's based on an indicator with broader economic data.
124 COMMISSIONER NOËL: Thank you.
125 Although the AM stations as a group in the Saskatoon market have been losing audience shares to FM stations for the past five years, the AM stations continue to report a relatively high share of advertising revenues and relatively high level of profitability in this market. Could you please try to explain to us this anomaly.
126 MR. HILDEBRAND: Well, I think one of the reasons that is happening is AM radio in the Prairies is still very strong. Unlike metropolitan high density areas like Toronto, Ottawa, Montreal, Vancouver, the AM signals in the Prairies work very well. They are efficient. They cover a large geographic footprint. As a result, they maintain their audience share better than in other markets.
127 We anticipate that that will continue for some time down the road. AM I think has a fair bit of life left in the Prairies for sure. I think that's why the anomaly would show up.
128 COMMISSIONER NOËL: Thank you.
129 You currently operate radio stations in a number of smaller markets in Manitoba, Saskatchewan and Alberta. Your Saskatoon station is managed as part of an LMA at the present time. Do you anticipate any difficulties operating two stations in a larger competitive market such as Saskatoon?
130 MR. HILDEBRAND: No. As I said earlier in my application, I have a lot of people in our organization. We have over 125 people working in Saskatchewan now. We have expertise at all levels. I do not see that as a difficult situation.
131 COMMISSIONER NOËL: Thank you.
132 MR. JIM McLAUGHLIN: If I could add to that. If you were to ask a major broadcaster from a major centre what the secret to their success is, most of them would start by telling you that they stayed very close to their community and they served the community and they stay on top of the community much like the operators in small markets do.
133 In this case we have the fellow that has the Ph.D in operating in small markets and really knows how to do that.
134 COMMISSIONER NOËL: Thank you.
135 Could you please provide estimates of the percentage share of advertising revenues of the proposed station that would be derived from each of the following sources: local market radio stations, increase in advertising budgets and other media.
136 MR. HILDEBRAND: I think this is an add-on to something that Ken was talking about before, so he can probably elaborate a little more.
137 MR. GOLDSTEIN: I don't know that I have the precise percentages in front of me in our study, but if you will just bear with me for a moment, I could -- In the first year, the growth in the market, in other words the natural growth in the market, stimulation in the market, I think would cover approximately 50 to 55 per cent of the new station's revenue and approximately 45 per cent would come from other stations.
138 COMMISSIONER NOËL: And nothing from new media that would decide to advertise, given that you have this new classic rock station.
139 MR. GOLDSTEIN: Well, that's all in the growth.
140 COMMISSIONER NOËL: In the natural growth, okay.
141 MR. GOLDSTEIN: Yes.
142 COMMISSIONER NOËL: Thank you.
143 CFMC, which you refer to as C95, currently dominates radio tuning among younger listeners in the Saskatoon market. Could you estimate the percentage of the audience of the proposed station which would be comprised of listeners who currently listen to C95?
144 MR. GOLDSTEIN: I think that was part of the Angus Reid report, so Jeff could answer that.
145 MR. VIDLER: Again, if you look at the percentage of listeners who say that the classic rock station would be their favourite station, that would represent the share of hours tuned to that station, the lion's share of the hours tuned to that station, roughly two thirds of those hours tuned are currently being spent with C95.
146 COMMISSIONER NOËL: So two thirds of your listeners would come from C95.
147 MR. VIDLER: C95. These numbers were all in the context of the report, but in different places. If it might help the Commissioners, I would be pleased to offer a summary of the impact of this station on the other stations in the market. In fact, we have even mapped out some scenarios in terms of, you know, with the station in the market what the shares are based on the research prior to the station being launched and after the station being launched and what the audience share would be like.
148 COMMISSIONER NOËL: When you say two thirds of your listeners would come from C95, that would represent what share of the C95 listeners?
149 MR. VIDLER: What share of the C95 listeners? It's a smaller percentage share. The audience for C95 in the research study among 18 to 54 year olds, C95 had a 42 per cent share of station most often tuned mentions. With this station on the air, taking as two thirds of its audience coming from C95, C95 would still have an audience share of 31 per cent, so you would be talking about somewhere in the range of one quarter to one third of C95's audience, two thirds of this new station's audience, but one quarter, one third of C95's.
150 COMMISSIONER NOËL: You know the figures are not the same.
151 MR. VIDLER: C95 would still have roughly twice the audience share of the classic rock station.
152 COMMISSIONER NOËL: So they would remain at 31 per cent of the listeners.
153 MR. VIDLER: That's right.
154 COMMISSIONER NOËL: Okay. Now, Mr. Hildebrand, with the discontinuation or cancellation of your LMA, if in the hypothesis that we award the licence to another applicant in Saskatoon, what would be the competitive implications to CKOM-FM? Would CKOM-FM be able to compete?
155 MR. HILDEBRAND: Yes, I would be able to compete in that event. Obviously it would be more difficult, but CKOM-FM under its present format is profitable and is doing reasonably well. Revenue has increased fairly nicely over the last while, so I am very confident that I would be okay if you turn me down, but I think to be on an even footing for the future and for future competitive balance and diversity, it would obviously make sense to provide this licence to me.
156 COMMISSIONER NOËL: Thank you.
157 Could you emphasize -- you mentioned that your station is now profitable and that its revenues have increased nicely. Was this a result of the LMA signed with Rawlco or was this due to other factors?
158 MR. HILDEBRAND: This was mainly due to a change of format, to the new format when it became CKOM-FM. At that point the audience moved up nicely. As I have also indicated, the economy in Saskatoon is fairly good. There has been some natural revenue growth as well.
159 COMMISSIONER NOËL: Okay. Would you renew your LMA if the Commission were to deny both your proposal and that of Rawlco?
160 MR. HILDEBRAND: I don't know that. My guess is no.
161 COMMISSIONER NOËL: The Commission could deny your application and license either the Forvest or Rawlco applications or both of them. While your financial projections are based on the assumptions that the LMA will not be renewed, would you renew it if a new FM licence was awarded to Rawlco or Forvest?
162 MR. HILDEBRAND: If there were licences awarded to either Rawlco or Forvest and not to me, I guess I would then need to consider the options down the road. At the moment, as I said, CKOM is a very viable entity on its own and, you know, I would soldier on, but what options would present themselves in the future, I can't speculate on that.
163 COMMISSIONER NOËL: Thank you.
164 MR. HILDEBRAND: But I would not prefer to operate on my own. I would prefer to have at least two licences, just like the other folks.
165 COMMISSIONER NOËL: Now, when you purchased the assets -- well, you did purchase the assets of CHSN, which is now CKOM, in early 1997. The Commission notes that the advertising revenues of CKOM, specifically local time sales, have increased significantly in 1997 and 1998. Has this trend continued during fiscal 1999?
166 MR. HILDEBRAND: Yes. The revenues have continued to grow.
167 COMMISSIONER NOËL: Are they currently growing because we are in the next --
168 MR. HILDEBRAND: Yes. They are still continuing to grow. I would project modest increases over the next cycle of all things being equal.
169 COMMISSIONER NOËL: What do you call a modest increase?
170 MR. HILDEBRAND: Probably 4 or 5 per cent.
171 COMMISSIONER NOËL: Okay. Now, in your application you mention that CKOM's advertising revenues would increase significantly from 1998 to 2000 under both the approval and denial scenario. Could you please explain these projected increases?
172 MR. HILDEBRAND: Well, again, it's based on the fact that CKOM-FM is a well established format and has a good audience share and the economy continues to be positive in Saskatoon and area. That's why we would be able to continue to see growth. Also, we have been able to develop strong sales forces and strong sales campaigns that -- our whole genre is to work on sales all the time. Besides programming, that's the only thing that we focus on, so we need to keep on growing.
173 COMMISSIONER NOËL: Okay. Now, let's go to programming. Could you please reconfirm that you are committing the conditions of licence requiring to broadcast a weekly minimum of 40 per cent Canadian content in category two music as well as daily minimums of 40 per cent of Canadian content from 6 a.m. to 6 p.m.
174 MR. HILDEBRAND: Yes. Our commitment is firm to do the 40 per cent 6 a to 6 p. I think we also said earlier this morning that we will do the same in the evening hours. Our commitment to 40 per cent is firm. We are going to do that. As I say, we will do that and more.
175 COMMISSIONER NOËL: Okay. A few radio stations, as you know, in Canada are currently operating under a condition of licence requiring 40 per cent Canadian content. Do you anticipate any difficulties in meeting the conditions of licence in terms of availability of music or the repeat factor?
176 MR. HILDEBRAND: No. If this will be a condition of licence, I would be comfortable with that. My experience is that music is available. You can find it. It's probably a little harder to do, but it's not impossible. In some of the other markets where I operate, we play well in excess of the minimum requirements as a matter of course. It is not something that is that difficult.
177 COMMISSIONER NOËL: Okay. Now, if we look at this undertaking of 40 per cent as opposed to a normal condition of licence requiring 35 per cent Canadian content, how would this affect your business plan?
178 MR. HILDEBRAND: I think in the long run it would be positive because much of this additional music that we would be playing would be from Saskatoon, from Saskatchewan. That would only enhance our overall sound and enhance our revenue producing capabilities. I don't see this as a negative. I see this as a positive.
179 COMMISSIONER NOËL: As a positive.
180 Thank you.
181 You suggest in your application that this new FM or proposed new FM station would be involved in all aspects of life and activity in Saskatoon and surrounding communities. Could you elaborate on this, for example, what amount of local news do you propose, will you have public announcement segments or do you intend to cover any special community events?
182 MR. HILDEBRAND: Well, certainly we would cover all of those normal aspects of news and information surveillance throughout the day. We would be heavily involved with obviously promoting the kind of music that is on the station. All of those events would be heavily promoted.
183 As I mentioned in my preamble, stations that I am involved with go the second mile in providing news and information. All of our newsrooms are growing as opposed to shrinking, so we see news and information as one of the things that sets us apart from other radio stations. We spend more money on that. That translates into more revenue producing opportunities. I see news as a very important factor. My philosophy is not to downgrade or reduce news coverage.
184 COMMISSIONER NOËL: Would you use the same newsroom as you are using for your existing station or would it be a separate newsroom?
185 MR. HILDEBRAND: Well, it would obviously be a separate newsroom.
186 COMMISSIONER NOËL: Now, if we go to diversity of news voices, we know that you control 614546 Saskatchewan Ltd. which now has the licence for CKOM-FM. Therefore, if you were awarded a new licence for Saskatoon, you would own two FM stations in this market. Could you elaborate on how your new FM would contribute to overall diversity of news voices? Would it be by a separate newsroom?
187 MR. HILDEBRAND: There would be two different formats, two different musical formats, so you also then need to provide two different styles of news presentation. You could use the same bag of news information, but you would present it differently, write it differently. It would have a different sound. It would have to flow and feel like it was part of that particular music format.
188 If you have people covering different meetings, you can share that information. I think that the community would be better served by another voice. It would be diversity enhanced from what there is now. I see it as a very positive thing for Saskatoon.
189 COMMISSIONER NOËL: Thank you.
190 Finally, one last question. In the event that the Commission decides to grant new FM licences to yourself and your competitors as part of this proceeding, and I think you mentioned that before, could you outline for us the impact of such a scenario on your submitted business plan, particularly on the projected revenue and audience shares, the hypothesis if we licence all three applicants.
191 MR. HILDEBRAND: I think I will ask Ken Goldstein to answer that.
192 MR. GOLDSTEIN: In the event that you would do that, each of the three business plans would have to be completely rewritten because each of the business plans essentially assumes the licensing of a new station. You would not be able to just simply add the projected revenues of each of those three applicants together and all of a sudden insert it into the market. There's not enough money there, to put it as simply as possible.
193 You would also have a very devastating, I think, impact on the formats in the market. While the proposed formats of the stations are not absolutely identical, you would have an enormous ripple effect on how the formats would work out. I would think that the effect of licensing all three, particularly given the fact that there is an imbalance in the market as your starting point, the effect of licensing all three would be chaos.
194 COMMISSIONER NOËL: Thank you.
195 I do not have any more questions, Madam Chair.
196 THE CHAIRPERSON: Thank you.
197 Commissioner Williams.
198 COMMISSIONER WILLIAMS: No questions.
199 THE CHAIRPERSON: I have a few questions.
200 Mr. Hildebrand, you talked about the most relevant factor being diversity. Did you mean diversity of genre? When we were talking about the recent licensing decisions and the various factors, you said in this case you think that diversity is the most important factor for us to consider. Do you mean genre? Is that what you meant?
201 MR. HILDEBRAND: There is a specific hole in this market that we are looking to fill. That would then translate to, I think, the Commission's mandate to make sure that there is total diversity in the market and to license one of the applicants here I think would make a lot of sense. It would fill out your mandate.
202 THE CHAIRPERSON: Thank you.
203 You agree with me though that it wouldn't bring diversity of voices, any more diversity of voices than there is now.
204 MR. HILDEBRAND: Well, I think so, yes, because you would have another format in the market. It has been my experience that it doesn't matter so much who owns the radio station. It's what's on the radio station that makes it diverse.
205 With two FM frequencies, I would be able to provide much more diversity than with one and serve two groups of people. I think it's a big win for the market.
206 THE CHAIRPERSON: Do I hear you correctly that you are now full day 40 per cent Cancon?
207 MR. HILDEBRAND: In many of our stations across the country, we are well in excess of 35.
208 THE CHAIRPERSON: But you are proposing for the new station --
209 MR. HILDEBRAND: For the new one, this would be 40 per cent minimum.
210 THE CHAIRPERSON: Full day and weekends.
211 MR. HILDEBRAND: Weekends.
212 THE CHAIRPERSON: Okay. I'm not clear on this LMA. I read your application and it appeared the LMA was going to be cancelled. I read what you said today. Page 15 said it is cancelled. Where is that LMA right now? What is happening to your station right now?
213 MR. HILDEBRAND: It's being terminated because we provided a notice to terminate it. As we go forward, CKOM will be on its own.
214 THE CHAIRPERSON: So you have given the notice to terminate?
215 MR. HILDEBRAND: Right.
216 THE CHAIRPERSON: If I read the LMA correctly, it's a one year notice.
217 MR. HILDEBRAND: Yes.
218 THE CHAIRPERSON: So when was the notice filed?
219 MR. HILDEBRAND: It was filed earlier this year, when we filed the application.
220 THE CHAIRPERSON: Okay. We can assume that the notice of termination was filed --
221 MR. HILDEBRAND: When this application was in. That was in May.
222 THE CHAIRPERSON: So it was done about May of 1999.
223 MR. HILDEBRAND: Right.
224 THE CHAIRPERSON: Okay. I hear you correctly that you will go ahead with your single station, or at least that's your present plan, notwithstanding anything that happens here today.
225 MR. HILDEBRAND: That's right.
226 THE CHAIRPERSON: Mr. Goldstein, I read your study and I just have a few questions. If I understand, and I am at page 8 of your study, your assumption is based on a flat, in other words, no increases in terms of Saskatoon's share of the market and Saskatoon's economics, the revenues and the advertising revenues. Is that correct?
227 MR. GOLDSTEIN: No. There are increases.
228 THE CHAIRPERSON: The average increases.
229 MR. GOLDSTEIN: The increases flow. Radio, the media business is a business which is a derivative of other parts of the economy. If we say that the relationship between local advertising revenues and retail sales, for example, is going to stay at $5 per thousand or $5.20 per thousand, or whatever the number is, that isn't a projection of flat. That's a projection that it will track the increases in retail sales.
230 THE CHAIRPERSON: But in your projection, you are using the same percentages. You are not projecting an increase. You are just projecting the same growth.
231 MR. GOLDSTEIN: Without a new station, we are suggesting it would track exactly and with a new station, we are suggesting it would move up to a slightly higher relationship, that which is equivalent to the situation in Regina. Yes.
232 THE CHAIRPERSON: And you are basing it on disposable income and retail sales, both of which are, can I say, quite sensitive to the economy.
233 MR. GOLDSTEIN: Absolutely, and our projections for retail sales and for personal disposable income come from the Royal Bank, the Government of Saskatchewan and other sources of that nature.
234 THE CHAIRPERSON: When you talk about growth in the third paragraph here, the growth with a new station, and I know you are basing it on Regina's share and that sort of thing, have you studied other markets and what happens in other markets with the introduction of a new station? What I'm asking is why did you use this number and is there a historical basis for that?
235 MR. GOLDSTEIN: Yes. We have studied many, many markets for many, many years. In fact, this is actually quite a good situation in terms of being able to project because you do have another market with that one more station in it.
236 Saskatoon, of course, is bigger than Regina, so you can look at the relationships, you can look at the growth and you will note in our projections that based on our experience, we haven't done what I think has been done on occasion in these kinds of studies, which is to assume that the stimulation would take place in the first year.
237 If you will notice in our projections, we have got the stimulation coming in in two stages, in the first year and the second year, and then finding its new level. That is based on experience in a number of markets because it takes a while until the new station is known, until there is a ratings book and that sort of thing.
238 We think it's much more realistic to say there's a two year ramp-up instead of a single year.
239 THE CHAIRPERSON: So the 10 cents, the 20 cents in the second year, there are other markets where that has happened exactly that way.
240 MR. GOLDSTEIN: Well, I wouldn't say exactly 10 cents per thousand in each year.
241 THE CHAIRPERSON: Why did you pick that number?
242 MR. GOLDSTEIN: I picked that number because I thought it was reasonable to rise to the level in Regina and then I spread it over two years.
243 THE CHAIRPERSON: Okay. You are certainly aware of the situation in Regina where although there is the increased ratio, the five/ten, there are, I believe, two stations somebody can tell me in this room that are not doing well in Regina.
244 MR. GOLDSTEIN: The last figures that we have are for the fiscal '98 and in fiscal '98 in total the Regina market had PBIT of about ten point something per cent and the Saskatoon market had PBIT of 11 point something per cent.
245 THE CHAIRPERSON: Thank you.
246 I just wanted to -- I'm sorry, on your chart at the end --
247 MR. GOLDSTEIN: The colourful pie chart.
248 THE CHAIRPERSON: I have got the uncoloured one because I read it when it was uncoloured. The assumption that no new station is licensed, that is based on the LMA not existing for the numbered company, is that correct?
249 MR. GOLDSTEIN: That's correct, and on carrying forward the '98 data as we estimated it.
250 THE CHAIRPERSON: Yes. Thank you.
251 Mr. McCalllum.
252 MR. McCALLUM: Thank you.
253 I take it with the LMA being cancelled, you have now taken steps to get new premises and get a new studio or something like that.
254 MR. HILDEBRAND: Yes, I have.
255 MR. McCALLUM: So you have I guess an unconditional deal to take over new premises regardless of the outcome of this.
256 MR. HILDEBRAND: And I have a number of options that I can look at. Ultimately I will need more space for two stations than for one. Again, to some extent it's very important for me to get this approval because in that way I will be able to use more space and will please the realtors more.
257 MR. McCALLUM: So by May of 2000 then, you will be physically located somewhere other than with Rawlco.
258 MR. HILDEBRAND: Yes.
259 MR. McCALLUM: Depending on the outcome of this and other factors, you will determine where to go. Is that right?
260 MR. HILDEBRAND: Right. I have a number of options, as I say, in Saskatoon. I'm hoping that an early decision will be forthcoming so that I can make my plans.
261 MR. McCALLUM: I take it you have budgeted to build new studios as well.
262 MR. HILDEBRAND: For sure.
263 MR. McCALLUM: One thing I didn't understand. Maybe Mr. Goldstein can assist. At one point in response to one of the questions from Commissioner Noël, it was explained that the new revenue growth in the market would be no more than about 2 per cent. Is that right?
264 MR. GOLDSTEIN: We didn't calculate it on a percentage basis, but I think that is what the result will be. We did it on a relationship with retail trade.
265 MR. McCALLUM: Okay. At another point in time in response to another question, you were projecting in the first year 55 per cent growth from growth in the market and 45 per cent from other stations. What I didn't understand was how the 2 per cent can be reconciled with the 55 per cent growth in the market.
266 MR. GOLDSTEIN: Well, there's two elements to the growth. There is the growth that would occur in the market in any event. Then there is the growth that would occur which is the extra stimulation. I think the 2 per cent only applies to one of those.
267 To put it in very round terms, you have a market with approximately $13 or $14 million worth of revenue in it in the first year of the new station. The station proposed in this application would take $1.2 million revenue in the first year if it achieves its first year projection. Of that $1.2 million, approximately $600,000 to $650,000 or 50 to 55 per cent of that $1.2 million would come from the growth and the stimulation in the market. Approximately 45 per cent of that $1.2 million would come from other stations.
268 MR. McCALLUM: I take it the stimulation of the market includes, as you said earlier, other media. How do you break it down between, shall we say, new stimulation to the market in the first place versus from other advertisers like newspapers or television that's already there?
269 MR. GOLDSTEIN: Actually we don't. The reason we don't is because the -- we could break it down if you wanted to break down the growth in the market and say of the $600,000 or $650,000 in round terms, you can say that about half would come from normal growth and half would come from stimulation.
270 I mean if you wanted to do a rough assessment that way, but the business of attempting to predict how much would come from television and how much would come from newspapers in fact ignores how the markets really work. The markets work on constant ebbs and flows of different kinds of marketing decisions, some of which are made locally, some of which are made nationally.
271 There's always money flowing back and forth. To actually attempt to pinpoint that exactly 2.6 per cent of something is going to come out of the Star Phoenix I think is a level that stretches all credibility. I think we know that based on experience that a new FM station has some stimulative effect. Some will come from newspapers, some might come from outdoor, some might come from television.
272 MR. McCALLUM: Thank you.
273 Mr. Hildebrand said that there was some I think growth in both revenue figures and audience share figures in the current period of time. Referring, for example, to the 1999 fiscal year, that is the year that finished, I guess, August 31, 1999, can you say approximately what percentage growth in revenue and share you experienced over the previous fiscal year?
274 MR. HILDEBRAND: Probably 10 to 12 per cent.
275 MR. McCALLUM: In both audience share and revenue?
276 MR. HILDEBRAND: In audience, probably bigger from the time that the format was changed, but revenue would have gone up about 15 per cent and audience would probably be more like 20 per cent from my original format.
277 MR. McCALLUM: I see. So comparing '99 to '98, they are up by around 15 to 20 per cent, 15 for the revenue and 20 for the audience share.
278 MR. HILDEBRAND: Audience, right.
279 MR. McCALLUM: Are those trends continuing in the current fiscal year, '99?
280 MR. HILDEBRAND: For the moment, as I said earlier, for the moment they are continuing. With the economy holding, I would envision that that process would continue, though I doubt audience growth wouldn't continue to grow. Audience would plateau out, but with hard work, I think we can continue to grow with the revenue.
281 MR. McCALLUM: Thank you.
282 I believe at page 6 of the presentation there was a reference to the estimation that 16 per cent would actually change their favourite station and this would result probably in a 16 per cent share in the market. I wondered how you could explain that the 16 per cent in the sampling would translate to a 16 per cent of the share.
283 MR. HILDEBRAND: I will get Jeff to answer that.
284 MR. VIDLER: Certainly. This is a modelling technique that we have used in the past five years, I think in about somewhere between 12 and 15 different format search studies. By presenting people with the format description of a proposed format and then very simply asking them if they would listen to the format and if they would listen to it, then saying "Would this station become your favourite? Would you get you to switch from what is now your favourite station to become your favourite?"
285 By clocking the percentage of people who said they would switch favourite station, their P1 station if you like as the industry often calls it, from one station to another, the resulting share figure that you get, the per cent share that say they would switch their favourite station ends up, when validated in the marketplace itself, coming remarkably close to what when these formats, and out of these 12 to 15 studies, I think we have had eight or ten different examples where a tested format actually did come to air. In virtually every instance the station achieved that share or something slightly above that share.
286 MR. McCALLUM: Can you give an example of where that occurred?
287 MR. VIDLER: Actually an example of research that we did but the licence was not awarded to the applicant that we were working with would be in Toronto, CISS-FM, which changed format from country to top 40 in 1997. We did a study in front of the CRTC which predicted that a pop Top 40 station in Toronto would achieve a 7 share. It has in fact already achieved an 8 share.
288 MR. McCALLUM: Thank you.
289 Referring to the Canadian talent development commitment, I take it a million dollars over five years in terms of the commitment.
290 MR. HILDEBRAND: Yes, that's correct.
291 MR. McCALLUM: Which I guess is $125,000 per year over five years.
292 MR. HILDEBRAND: No. It's $200,000.
293 MR. McCALLUM: Sorry, $200,000. Excuse me. That's what I have been working on, $200,000. I apologize. Sorry.
294 I take it you would accept that as a condition of licence.
295 MR. HILDEBRAND: Yes, we do.
296 MR. McCALLUM: If it were a seven year licence, what would the commitment be?
297 MR. HILDEBRAND: Then the million dollars would be stretched over seven years. I think it comes out to marginally less than -- you divide seven into a million.
298 MR. McCALLUM: If that were the condition of licence, that would be perfectly acceptable as well.
299 MR. HILDEBRAND: Yes, it would be.
300 MR. McCALLUM: As mentioned at the beginning of this presentation, the frequency that you have applied for has been found technically unacceptable. Are you planning to file the necessary revisions with Industry Canada?
301 MR. HILDEBRAND: Yes. We are already working with that. We will file whatever necessary to make it happen.
302 MR. McCALLUM: When were you planning to do so?
303 MR. HILDEBRAND: Well, my consultant is already working on that. He has already put that in motion.
304 MR. McCALLUM: I'm just wondering. If we are looking at -- how far in the future are we looking for that to be filed?
305 MR. HILDEBRAND: Well, that could be filed within the next few weeks.
306 MR. McCALLUM: So we are looking at by mid-December it's likely to be filed. Is that what we are talking about?
307 MR. HILDEBRAND: Surely. Before that.
308 MR. McCALLUM: If you were to receive a licence in this case, I assume it would be acceptable if you got some sort of conditional approval, subject to obtaining Industry Canada approval of the new frequency for the station.
309 MR. HILDEBRAND: Yes, it would be acceptable.
310 MR. McCALLUM: Thank you.
311 THE CHAIRPERSON: Thank you very much.
312 What I am suggesting is that we would take a brief break so that you can deplane yourselves and we can have Rawlco Communications.
313 I understand that Rawlco Communications will be using part of that stage behind and people may not be able to see us. If you want to stay there and not see us, that's fine. If you do want to see us, then I suggest you move closer into the other seats.
314 We will take 15 minutes.
315 MR. HILDEBRAND: Thank you very much.
316 THE CHAIRPERSON: Thank you.
--- Recess at / Pause à 1013
--- Upon resuming at / Reprise à 1033
317 THE CHAIRPERSON: We will reconvene, Mr. Secretary.
318 MR. KRUSHEN: Thank you, Madam Chair.
319 The next application is by Rawlco Communications Ltd. for a broadcasting licence to carry on an English language FM radio programming undertaking in Saskatoon. The applicant is proposing a rock music format.
320 THE CHAIRPERSON: Mr. Rawlinson.
PRESENTATION / PRÉSENTATION
321 MS PAM LEYLAND: Madam Chair, Members of the Commission, Rawlco owns and operates two radio stations in Saskatoon, CFMC-FM, also known as C95, and CINT, known as 650 NTR, or News/Talk Radio. My name is Pam Leyland. I am the Vice-President and General Manager of those two radio stations.
322 I would like to introduce the panel to you. To my left, Sharon Taylor. Sharon has been with Rawlco for a decade, most recently managing CISS-FM in Toronto. Sharon will be the Manager of our new FM station in Saskatoon.
323 To my right, my boss and the President of Rawlco Communications, Gord Rawlinson.
324 To Gord's right, someone our radio stations couldn't do without, Marianne Yurchuk. Marianne is our Promotions Manager and has been for 14 years. She is also very involved in Saskatoon's rock music scene. Marianne has managed a Saskatoon rock band. She is a member and past director of the Saskatchewan Recording Industry Association.
325 Sitting behind me, the Doug and Doug show. These are the guys who direct the programming of all our stations. Doug Rawlinson, Executive Vice-President of Rawlco Communications, and Doug Pringle, Rawlco's Director of Programming.
326 Also behind me, Kaan Yigit, President of Solutions Research Group. Kaan did the research for our application.
327 Madam Chair, I'd like to begin by telling you the story of our two radio stations in the little building on Eighth Street which we call Broadcast House.
328 I started working in the newsroom at CKOM in 1978 after taking radio and television arts in Edmonton. Back then, the station was at the bottom of the ratings and losing money. In 1982, Gord and Doug Rawlinson bought CKOM and life became much more exciting. With new energy and enthusiasm, a great station was born.
329 In 1984, I became News Director and when Gord and Doug bought C95 in 1985, I was the first Program Director. In 1987, I became General Manager and thanks to a really dedicated group of people, C95 went from worst to first and both stations became successful by focusing on serving Saskatoon.
330 The last two years have been full of exciting changes at Broadcast House. Elmer Hildebrand's FM station moved in under an LMA. When Mr. Hildebrand heard of our plans to go to news/talk radio on our AM, he recognized that the station's music format and very popular morning team of Brent and Penney would sound great on FM. So in September of last year, Mr. Hildebrand's FM had a new format and new call letters, CKOM-FM. At the same time, Rawlco launched news/talk radio in Saskatoon.
331 I'm very proud of the contribution our stations have made to Saskatoon. Many events simply wouldn't happen without the energy and commitment of our people. I'd like to tell you about a few of the events we're most proud of.
332 Cruise Nite started 17 years ago in an A&W parking lot. Now it's one of the top ten car shows in North America. Nine hundred classic cars crowd downtown Saskatoon on a Friday night in August and 40,000 people show up.
333 More than ten years ago C95 held its first radio marathon to raise money for Royal University Hospital. Now this annual event is a major fundraiser for pediatric health care in Saskatoon. Just last month we raised the most money ever, over $67,000 in a 30 hour marathon.
334 Ten years ago we started a project called Coats for Kids. We ask listeners to drop off coats their children no longer need and give them to kids who do. Last year we helped over 1,500 families with warm winter coats.
335 At Christmas C95's Tree of Plenty campaign is a huge fundraiser for the Saskatoon Food Bank. Last year we raised more than $120,000 in cash and food donations.
336 Our Adopt A Family project has been in place for 11 years. It's really a wonderful campaign. Families, businesses and community groups adopt a family of their own. They buy toys for the children and a Christmas dinner for the family. We work hand in hand with the Salvation Army matching hundreds of families with our listeners.
337 We believe that a large part of our success is our commitment to helping the people of Saskatoon. We've worked hard to make a real tangible difference in our community.
338 In addition to community involvement, the music on C95 has always been a critical part of its success. In the mid nineties, our slogan was Classic Hits and Hot New Music. For the last two years, it has been known as All Hits C95. We play a wide variety of hit music, including the full Top 40 chart in our contemporary hits music format.
339 One thing C95 is not is a rock station and there is a significant void in Saskatoon for this kind of station.
340 Our research shows clearly that Saskatoon wants rock music. All forms of rock music scored well with 72 per cent liking classic rock, 70 per cent new rock, 55 per cent harder rock, 52 per cent alternative rock and 50 per cent pure rock. We will air the full range of rock music for listeners in the Saskatoon area.
341 MS SHARON TAYLOR: Saskatoon really does want a rock radio station. Young people and young adults are currently underserved and what they want is quite simple. They want to rock.
342 Despite not having a rock station, Saskatoon already has a healthy live rock scene. There are many rock artists in Saskatchewan and a key part of our proposal is to help these young musicians reach their true potential.
343 First and foremost, the most important thing we can do for Saskatchewan artists is to play their music. We will play a minimum of 40 per cent Canadian music, not just on our new rock FM, but on C95 as well.
344 These two unprecedented moves will be more important for Canadian talent than any of our other initiatives. Both the new FM and C95, the station with the largest audience in Saskatoon, will both broadcast a minimum of 40 per cent Canadian music. Within the context of a minimum of 40 per cent Canadian content, I would like to describe how our programming features will also benefit Canadian artists.
345 We will build a fully equipped production and recording studio as part of the new station. Its main purpose will be to host a program called "Live at Five". We'll invite local and visiting artists to come to our studio, set up their equipment and then play live on the radio.
346 The concept for "Live at Five" originated at CISS-FM in Toronto. I was at CISS and I can attest to the power of this show. In fact, the show became the cornerstone feature of our programming. There were many, many magical moments that can only happen when performers are right there live on the radio.
347 "In Conversation with..." is a programming feature where we interview an artist, followed by the song referred to in the interview. "Indie Hour" will feature the music of unsigned artists and review the latest Indie releases. "Saskatoon Concert Listings" will tell people where they can find their favourite artists playing live.
348 The "Six O'clock Rock Report" will be all about the news and happenings of the day in rock music. "What's Happening" will take a look at the arts and entertainment scene here in Saskatoon. "In Toon" will give listeners a chance to express their opinions on the issues of the day. "Good Rockin' This Week" will be hosted by young people from this area. It will focus on what's happening in Saskatoon from their point of view.
349 "Live from the Streets" refers to the programming we will do from the first mobile studio of its type in Saskatoon. With our mobile unit, we will be at events all over the city. Event organizers will benefit from the excitement we generate live on the air and they will also be able to use the sound system for performances.
350 All of our programming plans are designed to provide us with different ways of supporting and developing Canadian talent. First, we play their music. Second, we feature them in our programming and, third, we get out on the streets to be with them where they perform. Our single-minded effort to focus on their musical careers is also the common thread of our Canadian talent development initiatives.
351 The centrepiece of our Canadian talent development plans is an annual contribution of $250,000 for five years to FACTOR. We will require that FACTOR use these funds to support Saskatchewan artists.
352 FACTOR has been helping Canadian artists for 17 years. They have learned what works and what doesn't work. The limiting factor has always been the funds they have available. Our contribution of $1,250,000 will represent a quantum leap forward for Saskatchewan rock artists. Their dreams will become a reality.
353 With this level of funding, FACTOR will be able to fully support Saskatchewan artists. For those more advanced in their careers, it will mean better production facilities, more experienced producers, more promotion and the opportunity to launch national tours. New artists will be able to produce that first really high quality CD. Whatever their level, a new era will open up for Saskatchewan artists, one that even they may have trouble envisioning today.
354 A brief look at the current situation in Saskatchewan will give you a sense of just how important this new funding will be for the rock stars in the province.
356 MS MARIANNE YURCHUK: There are approximately 60 active recording acts in Saskatchewan today. Of this number one group, Widemouth Mason, is a true success story. They have a record deal with Warner Music, they tour nationally and their accomplishments include opening for the Rolling Stones. They have received FACTOR funding in the past, but they have now reached the stage where they can largely make it on their own.
357 There are three other acts in Saskatchewan who are approaching this level. Nicol Lishka played at Lilith Fair and has a wide following throughout the province. The Touchstone Gurus were voted the hottest band at the Coco Showcase where bands performed for universities across Canada. Five Minute Miracle is another group who is both very popular locally and can tour nationally. For these acts, FACTOR funding is vital to their careers.
358 At the third level are the many artists and groups whose first goal is to give their day jobs so that they can pursue musical careers full time. Almost all have produced CDs for local distribution either on their own or on Indie labels. Many are extremely popular in the province.
359 Bands like Wood have put out three CDs, are very popular locally and have performed in front of crowds as large as 7,000. Morally Sound was a finalist in a recent Battle of the Bands competition and has a big fan base in the area. Another local group, Huge, has reached the point where they are able to make real money off their CDs.
360 These are just a few examples of the many up and coming groups in Saskatchewan. Today, FACTOR usually runs out of money before it gets to artists at this level. I believe that it is at this level that our contribution to FACTOR will have its most dramatic impact and I can hardly wait to see the results.
361 MS TAYLOR: Beyond our $1,250,000 contribution to FACTOR, we have other Canadian talent development plans. I have already described our "Live at Five" program and the production studio we will build at the station. When not used for this program, we will use the studio to help local artists just getting started produce their demo recordings.
362 We will also host two free concerts each year featuring Canadian talent. Certainly the best event at CISS-FM was our New Country Festival on Canada Day in downtown Toronto.
363 Here in Saskatoon our summer show will be held in Diefenbaker Park. The second concert will be held in February at Sask Place. For this show, all 7,000 tickets will be given away free to our listeners.
364 We will have national acts like Widemouth Mason, Great Big Sea, Big Sugar or the Mathew Good Band headline the show and then surround the headliner with Saskatchewan talent like Wood, Calm or Feederchain.
365 The production and distribution of a compilation CD is another initiative we will undertake each year. We will invite artists to submit songs and a panel of judges will determine the winners. We'll promote the CD heavily and ensure that it has wide distribution. All proceeds will go back to the artists.
366 We will also develop a mentoring program for area students. They will gain exposure and experience in engineering, production and programming. It will give them a taste of the radio business and some may become our broadcasters of tomorrow.
367 Finally, we will create an Internet site so that we can forge a union with our audience, our artists and our community. It will be a comprehensive site that will include links to artist pages and to the venues where they play. We plan to explore the many opportunities the Internet offers for assisting new talent.
368 I hope you can see from this brief description of our plans the ripple effect that will be achieved by not just investing, not only the funds but all of our creative efforts into Canadian talent development. These initiatives combined with 40 per cent Canadian music on both C95 and the new FM station and a $1,250,000 investment to FACTOR will forever change the music scene in Saskatoon.
369 MS LEYLAND: Madam Chair, because it has been such a big part of my life for the past year, before concluding, I would just like to comment on the challenges we faced launching news/talk radio in Saskatoon.
370 First, it's the most stimulating and challenging format I have ever been involved in. It is also the most costly, requiring a large newsroom and many smart, experienced and, therefore, expensive broadcasters.
371 NTR, news/talk radio, has become a forum where people come together to get information, share ideas and form opinions. I was told before we started that launching a news/talk radio station would be tough and that then it just gets tougher. Well, now, with over a year's experience, I would have to say that's absolutely true.
372 Now to conclude, Madam Chair. I would like to highlight the important points we have made in our presentation this morning.
373 One, both our research and our own knowledge of the market tells us that rock music is the music that is missing on Saskatoon radio.
374 Two, the station we propose will provide a much needed service for young people in our listening area.
375 Three, Saskatchewan artists will be showcased in a program called "Live at Five" and we will have many programs and features that spotlight Canadian talent.
376 Four, we will feature the music of Canadian artists and air a minimum of 40 per cent Canadian content on both the new FM and on C95.
377 Five, we will contribute $1,250,000 to FACTOR over five years. The funds will be designated for artists in Saskatchewan.
378 Six, through our other Canadian talent development projects such as the two free concerts and our annual CD, for the first time Saskatchewan's rock artists will have the opportunity of achieving their full potential and of having real musical careers.
379 Seven, most importantly, we will be able to achieve all of this without impacting any of the other radio stations in Saskatoon. As the graphic vividly demonstrates, almost all of the audience will come from C95.
380 This concludes our presentation. We would be pleased to answer any questions you may have.
381 THE CHAIRPERSON: Thank you.
382 I will ask Commissioner Williams to ask the questions first.
383 COMMISSIONER WILLIAMS: Good morning. As you know, each of the Commission's recently released decisions for Victoria, Kelowna and London contained an introductory statement which outlines the specific factors the Commission considers to be generally relevant to the evaluation of competitive applications under the commercial radio policy.
384 Would you like to take this opportunity to address these factors with respect to your application and which factors do you consider to be most relevant with respect to the Saskatoon radio market?
385 MS LEYLAND: Thank you, Mr. Commissioner.
386 We believe there are actually a number of factors that are relevant. I would like to ask Gord to speak to this also, but first of all the one that I would like to address is diversity.
387 I'm very excited about the opportunity to launch a rock station in Saskatoon because, quite simply put, there is not a rock station right now. I am stating the obvious.
388 When you look at radio across the country, there are really four major musical groups or holes. There's contemporary hit music radio, which is C95. There's country radio. There's adult contemporary radio, which is CKOM. Then there's rock radio. It's really quite amazing that a city this size, now well over 200,000, doesn't have a rock station. There's a huge group of people out there. They're not just underserved, they are not served.
389 This radio station will give choice to all those people.
391 MR. GORDON RAWLINSON: If I also may comment on this a bit. I think, quite frankly, that the quality application, which you list off a number of factors there, I think all should be considered, the business plan and the right format which Pam talked about, reflecting the community which, quite frankly, I think all the applicants will do a tremendous job of serving the community. Canadian content carriage and Canadian talent development.
392 When you talk about diversity of news voices, because this LMA is going to end soon, there really only are three players. Whoever gets the licence, I think you have got diversity of news voices with three operators.
393 I'm guessing that we will talk about market impact. I'm guessing there will be a question or two on that about how many licences, so I won't comment on that.
394 If I might, I would like to, and this might take a couple of minutes, but I would like to kind of tell you the story of the market as we see it. That might give you our picture of -- is that okay if I just take a couple of minutes and run through this?
395 COMMISSIONER WILLIAMS: Yes.
396 MR. GORDON RAWLINSON: Thank you.
397 First of all, it's hard to know what the real story is in this market. What criteria did you use to judge what's fair, what's competitive balance and so on? Is it the number of stations? Is it the number of FMs? Is it profits or audience or revenues? It's really hard to assess and it's hard to know what the right definition of how to achieve the right balance is.
398 My definition exists where there are two things. There's two tests. Are all of the radio stations able to provide good service to the community and are all of the operators profitable? I think it's important to look at the situation as it exists today and the situation as it will exist if you licence another radio station.
399 Are all the operators today providing good service? Are all the stations providing good service and are all the operators profitable? Secondly, what happens if you license a new service? Will all of the stations still be able to provide a good service and will all of the operators be profitable?
400 If I can just describe the Saskatoon market as I see it today and start with C95. C95 is truly a great radio station. I mean it's got great programming, a great staff, great service. It's no wonder that it's the number one station. It wasn't always this way.
401 When we bought this station, it was the worst station in Saskatoon in 1985. It went, as Pam said, from worst to first because Pam and her team put many, many years of hard work into building this radio station. Today C95 is doing very well. It's the top station and it's nicely profitable.
402 The next two stations I want to talk about together. That's our news/talk AM and Mr. Hildebrand's FM.
403 A little over a year ago we had an AM station that was doing well. It was one of the few successful music based AM stations in Canada that was doing okay, but we decided to change the format to news/talk for three reasons.
404 First of all, music based AM stations, it's getting tougher and tougher for stations that are music based on AM to do well. They often go into a long decline. Secondly, there was a need for news/talk. Every city of this size I think should have a news/talk station. Thirdly, we had just started operating Mr. Hildebrand's FM under an LMA and it wasn't doing very well.
405 The two of us made a decision to move the popular music format from the AM station, which used to be called CKOM-AM, to the FM station and named it CKOM-FM and moved the format, the morning team, the whole thing over to that station and we launched news/talk.
406 Overnight Mr. Hildebrand had a great radio station. All of the audience moved over immediately and so did all the advertisers. He had a great station going there and we had to start from scratch. What I mean start from scratch, we were starting with no audience and, as it turned out, even though we didn't think it would be quite that bad, no advertisers to start out. It was a big change.
407 We thought this would all be fine because we were operating under an LMA and we were going to get the benefit of operating these three stations together. Well, the next thing that happened was the call for applications for a new station. Mr. Hildebrand, and I don't blame him, said "Well, gee, this is an opportunity for me. I have a station that's doing really well. It's an opportunity for me to apply for a new station". Even if he doesn't win, he's better off because he's got a station that's doing well, that's profitable.
408 To summarize the situation today, C95 is doing well, it's profitable, and news/talk we are starting from scratch and C95 is subsidizing this station. Mr. Hildebrand has a successful station that I think would be profitable on his own and I think he said that too, that it was nicely profitable this past year.
409 Then there's Forvest which operates an AM traditional country radio station and an FM new country station. Country music is popular in this part of Canada, in Saskatchewan. I think these stations are really well appreciated by the listeners. They are both excellent stations and they provide a tremendous amount of community service, as you have seen from all their letters of support. To the best of my knowledge, their operation is also nicely profitable.
410 That's the situation as it exists today. All of the stations are providing good service and I believe all of the operators are profitable. So that's the first test on the balance in the market. As I said, I think all the stations need to be providing good service, and I think they are, and all the operators are profitable.
411 What happens if a new licence is granted? Well, the first thing is whoever wins is better off and the two who lose are worse off. I think that's pretty obvious. In fact, I think everyone of us would say "If we can't win, we would wish there were no licence granted", but that's probably not realistic.
412 At the same time, I think each of the three applicants feels that Saskatoon needs a new station. Two of us feel strongly that the real need is for a rock station. We all want a new station, none of us wants to get hurt, so what's the pain versus the clear benefit of a new FM for Saskatoon?
413 If I can tell you our situation. I think there's one thing that everybody agrees on, all the audience. A high percentage of the new audience for the FM is going to come from our station, C95. If someone else gets the new FM, C95 will lose a large part of its audience and advertising revenue and our combined operation will no longer will be profitable.
414 C95 will still do okay, but if you combine the two stations with news/talk, we will become not profitable. However, we are prepared to say that we will just work that much harder and we will not decrease the level of service. We will not drop the news/talk format, we will not decrease the level of service even if we become not profitable, unless at some time, a long time in the future, it becomes truly impossible. While we will no longer be profitable, we are prepared to say that we will carry on with the service.
415 We think CKOM-FM is targeted older and quite differently than any of the new proposals. We think he will lose very little audience, but the presence of a new station impacts everybody to some extent. He will lose a little bit of revenue, but not nearly as much as C95 would. I think he will continue to be profitable.
416 I believe a new rock station would have virtually no impact on the audience of the two country stations. They would lose some revenue because a new station affects everybody, but if you don't lose any audience, it doesn't affect you as much. They run good stations. They have got good stations. I think that they wouldn't be affected by very much.
417 While none of us wants a new competitor, I believe that the quality of the radio service in Saskatoon, even with a new station, won't be affected, i.e. each of the radio stations will still be able to provide a good level of service. The only operator that would be put in a loss position would be us, but as we said, we will continue to provide the service.
418 I think that's a key part of this. I'm sorry to have taken so long. I think if my assessment is essentially correct that what exists today and what will exist in the future, all the stations will be able to provide good service and all the operators will be profitable, then you can focus more on things like quality of the application and so on.
419 I'm sorry to go on so long, but it's kind of a complicated long story that has happened in the last several years in Saskatoon. I thought that I could provide our perspective on it. Thank you for the time to do that.
420 COMMISSIONER WILLIAMS: Thank you, Mr. Rawlinson. An analysis of the comparative state of the market in Saskatoon I'm sure isn't an easy topic and does require a bit of time.
421 My next question is with your application, that you indicate to plan to offer a rock format on your proposed FM with a target audience in the 12 to 44 demographic. Do you think the station's audience will skew to the older or younger side of your target audience and is the station expected to have a greater appeal to male or female listeners?
422 MS LEYLAND: Mr. Commissioner, our target demographic is 18 to 44. I think within that there are two distinct groups. First and foremost, the 18 to 34 year olds. They are going to be the primary target audience for this new radio station, followed by the 35 to 44 year olds.
423 This is going to be the first radio station in Saskatoon that has ever really been designed for men. Predominantly the audience of this radio station is going to be a male audience. Just travelling across Canada listening to the various radio stations, I'm sure you have heard the rock stations. They just sound like male radio stations. That's not to say women are not going to listen. There are going to be some women listening to our radio station, but it's going to be a smaller percentage. I think the research shows like 63 per cent male and 37 female, something like that.
424 To me it's almost a common sense sort of thing because younger women -- when I was younger, I was more into rock music than I am now, not that I'm so terribly old or anything. I'm not into rock music as much as when I was going out, when I was going to the bars, when I was in university, when I was listening to live music.
425 Certainly women will listen, but they are going to be on the younger end of the spectrum. We are going to be the first radio station that the men of Saskatoon are really going to say "Hey, that's a radio station that's really for me musically" and also in terms of our attitude and our approach.
426 COMMISSIONER WILLIAMS: Thank you.
427 Is it the conclusion of your research that this target audience is currently underserved in Saskatoon?
428 MS LEYLAND: Very much so. I mean the research shows -- you know, I'm not a research analyst at all, but when I saw the research I thought "Gosh, it's just amazing how strongly people are saying they want a rock station. There isn't a rock station in the market. Why don't we have a rock station?"
429 I think maybe Saskatoon feels a bit left out of things. Frankly, there are rock stations in every other market this size and some even smaller across the country. I think the research is very conclusive that rock music is what is missing.
430 COMMISSIONER WILLIAMS: How much audience duplication would your proposed station have with CFMC and CFQC?
431 MS LEYLAND: With C95 and with CFQC, with the country FM station?
432 COMMISSIONER WILLIAMS: Yes.
433 MS LEYLAND: Well, C95, as we said in the presentation, is certainly not a rock station, but you know, it's the closest thing that Saskatoon has right now. That's why the last graphic so vividly demonstrated the audience loss that is going to come from C95 to the new FM station. As for the country FM station, I don't think that there's going to be much duplication at all.
434 COMMISSIONER WILLIAMS: Okay. Thanks.
435 Research undertaken for you by the Solutions Research Group contains estimates of the percentages of the proposed station's audience that will be captured from the various stations. Would the percentages of the proposed station's advertising revenues from the other stations be the same as these audience percentages?
436 MS LEYLAND: They would be similar.
437 COMMISSIONER WILLIAMS: Okay. Although AM stations as a group in the Saskatoon radio market have been losing audience share to the FM stations for the past five years, AM stations continue to report a relatively high share of advertising revenues and a relatively high level of profitability.. Can you elaborate on why that would be?
438 MS LEYLAND: Over to Gord.
439 MR. GORDON RAWLINSON: Maybe I can comment on that. Well, we kind of partially fixed that.
440 MS LEYLAND: You see he's taking the blame for that, not me.
441 MR. GORDON RAWLINSON: CKOM in the last year that I think that you have seen had substantial revenue. It was doing a lot of revenue. Again, as we mentioned earlier, we felt that it was eventually going to go into a long decline.
442 The revenue on our current AM station in this past year is about 40 per cent of what the AM was that you have. It's down -- well, if they were a hundred, we are at 40. If CKOM is at a hundred, we are at 40. I would rather not talk specific figures, but that's what happened with the figures that we will be filing shortly, you know. We have to file by the end of November to Statistics Canada for November. That's a ballpark estimate.
443 We took our AM station from kind of a break-even situation to a healthy loss in this last year, but that's what happens when you start a new station. Unless you have got, you know -- usually the case is if it's a new FM and it's got an obvious hole, it can do pretty well fairly quickly, but to build a news/talk station takes time. It takes a big investment and it takes time.
444 Eventually we believe that this station can break even, this AM station, although it's going to take a lot of years to do that. That's our side of it. I don't know what the story is with the other AM station, but that I think explains what's happening now with our side of the AM market.
445 COMMISSIONER WILLIAMS: Thank you.
446 Could you please provide estimates of the percentage share of the proposed station's advertising revenues that would be derived from each of the following sources: One, the local market radio stations; two, increase in advertising budgets and other media.
447 MR. GORDON RAWLINSON: I'm going to jump in on this one too, if I may.
448 First of all, I must tell you from experience that even after we have done this in several markets where we have introduced a new station, we weren't sure where it came from. It's not always clear because there are so many other factors that come in. This is a very inexact situation.
449 It's our belief, because out of market tuning is so low in this market -- It's virtually nothing. If you don't count CBC, I think it's something like 4 per cent in this market. At least that's what the BBM shows if you take the CBC out of that.
450 Given that all of the audience is going to come from existing stations, and again we think it's virtually all coming from C95, we think that probably 75 per cent or more of the revenues for a new station will come from the existing stations, and again primarily from C95. It might even be higher than that.
451 To break out the other category, I'm going to following Mr. Goldstein and say it's just too hard to know. I can tell you the vast bulk of it will come from existing radio stations and the rest from the other sources, you know, natural growth and other media, but I don't know how to break out that part.
452 COMMISSIONER WILLIAMS: Okay. Thank you.
453 At page 30 of your supplementary brief, you theorize that CFMC-FM's audience will decline by approximately the size of the new FM audience, yet the projections which you filed under the approval scenario indicate that C95's advertising revenue losses would be marginal.
454 The revenue losses appear to come from the AM. Could you explain this apparent contradiction?
455 MS LEYLAND: The numbers you are looking at, Mr. Commissioner, for C95 I believe are for the 1997-1998 year. The year we are about to file with StatsCan shows a substantial increase in the revenues of C95. That explains the drop. C95 had a good year last year.
456 COMMISSIONER WILLIAMS: Okay. Thank you, panel.
457 THE CHAIRPERSON: And CINT had a bad year. News/talk really had a bad year.
458 MS LEYLAND: Yes. Well, Gord gave a very good answer to that question. The way I more quickly state it is we lost our shirt on NTR last year.
459 MR. GORDON RAWLINSON: So if I can just add to that. If you look at C95's revenue, it's up almost 20 per cent in this past year. As we said earlier, our AM revenues are away off. If you look at those figures then as a starting point, it changes the picture of what we think will happen with a new station.
460 We think that our revenues will continue to grow. We are actually projecting that our AM revenues by the time that happens will actually be higher than what they did this past year, even with the introduction of a new station because it's so low now and it will start growing.
461 It's just a new station and that's what always happens. We really believe in news/talk. We think it's really important. I'm sure it's confusing to look at the old figures in our new projections. We realize that we probably should have explained it better.
462 COMMISSIONER WILLIAMS: Thank you, Mr. Rawlinson.
463 If we can explore a denial scenario. Under that type of scenario, your financial projections show substantial revenue reductions for your existing stations. They also show substantial reductions in the sales and administrative expenses. However, they also indicate that you expect substantial increases in programming expenses.
464 Can you explain why under the denial scenario you project an increase in the programming expenses?
465 MS LEYLAND: First of all speaking about NTR, as I mentioned in the presentation, it's a very expensive format to do right, but quite simply put, you have to do it right if you are going to make an impact and if you are going to get listeners and if you are going to attract clients.
466 Our newsroom includes -- totals 12 positions. That's a very large newsroom and it requires, as I said, smart and experienced people. Whether we get the licence or not, our commitment continues to news/talk radio and to do it the right way and to spend the money to get the results.
467 On C95, C95 has a great staff, a great announcing staff, many of whom have been with us for many, many years now and they are successful, as you can tell. If you could see what I paid the morning show on C95, you would know where some of the programming expense comes from.
468 Also, we market the station aggressively and spend quite a bit of money on marketing and promotion. The revenues have been there too, high sales expense.
469 COMMISSIONER WILLIAMS: Thank you.
470 After Elmer Hildebrand purchased CHSN-FM in 1997, you signed an LMA with him to manage his station. It would appear this LMA has been instrumental in improving the performance of the Hildebrand station in Saskatoon. Has this LMA been beneficial from Rawlco's perspective and would you renew it?
471 MS LEYLAND: I'm going to ask Mr. Rawlinson to speak to that one.
472 MR. GORDON RAWLINSON: As I said earlier, the LMA was going to be a wonderful long term situation. We thought we had it all figured out. Things changed. We just didn't anticipate somebody triggering a call for applications.
473 I guess you are asking if we were to not get the licence, what would we do. I think Mr. Hildebrand wants to stay on his own. I can't tell you what would happen in the future. We know we would be put into a loss position if we don't get the licence. It's just really hard to project what would happen.
474 It appears the LMA is over now and going to be over for the period of time and I think we would have to see -- for several years -- and I think we would have to see what happens. I think that that's a possibility for anybody. If you picture what might happen in the circumstances, if we get a licence, that leaves Forvest with two stations and Hildebrand with one station.
475 If Forvest gets a licence, then they have got three stations and we have got two and Mr. Hildebrand has one. I guess there's always possibilities either way, but it looks like that -- unfortunately, we did too good of a job on making the rate station between Mr. Hildebrand and ourselves.
476 He certainly contributed, but had we not provided that opportunity, I mean it was kind of a ready built format audience, a morning team that has been in the market for almost 20 years and so on.
477 I guess I can't really tell you what would happen, but we certainly have no plans to go into an LMA.
478 COMMISSIONER WILLIAMS: Thank you.
479 On the second half of that question, other than the changes by the new call for licence, has the LMA been beneficial from Rawlco's perspective?
480 MR. GORDON RAWLINSON: Yes. Yes, it has.
481 COMMISSIONER WILLIAMS: Okay. Thank you.
482 I guess further on the LMA, if the Commission were to deny both Rawlco and Mr. Hildebrand, would some consideration be given to renewing that LMA?
483 MR. GORDON RAWLINSON: I think we would sure look at it. I think it would have to be a different deal. The deal that we made, the LMA deal that we made, was a fair amount in our favour, quite frankly, when we did it because he was just taking over a station that was losing money. He knew it was a loser when he bought it, but when he got in there, it was in even worse shape than what he thought.
484 We were able to strike a fairly advantageous deal for our side on this LMA. I think it would be a different thing. Whether there could be any arrangements made, I don't know, but it would certainly be different.
485 I guess what I'm saying is it's a whole new ball game and who knows might happen? There's always a possibility in any market for an LMA now, I guess, if it doesn't contravene the rules.
486 COMMISSIONER WILLIAMS: Okay. Thank you.
487 The Commission could deny your application and yet license either the Hildebrand or Forvest applications. While your financial projections are based on the assumptions that the LMA would not be renewed, would you still be interested to renew it if (a) a new FM licence is awarded to Hildebrand or (b) if the Forvest request is approved instead?
488 MR. GORDON RAWLINSON: Well, if I can take the first example. My understanding of the most recent announcement of the LMA policy that to do an LMA that's greater than the ownership limits requires approval by the Commission. The language was something like it had to be exceptional circumstances or it had to be a very special situation to warrant that.
489 I guess it would be a difficult thing to do if Mr. Hildebrand won. If Forvest won, as I said, I think my answer is the same as to the previous question.
490 COMMISSIONER WILLIAMS: Okay. In Public Notice CRTC-1998-41, which was the commercial radio policy 1998, the Commission indicated that in their local programming, licensees must include spoken word material direct and particular relevance to the community served, such as local news, weather, sports and the promotion of local events and activities.
491 While you have outlined that your proposed station is focused to be on the Saskatoon and Saskatchewan rock music scene, what role will regular information updates such as news, weather and sports have at this station?
492 MS LEYLAND: News, weather and sports information will be important, as it always is. Of course, we are going to be a rock station playing lots and lots of music, so our news, sports, weather information is going to be primarily concentrated in morning and afternoon drive periods which is when the audience wants their information.
493 I would like to ask Sharon, if I may, Sharon Taylor, to speak to a couple of the special spoken word programs and features that we have planned for our new FM station that are really going to target this audience in a pretty unique way.
495 MS TAYLOR: What Pam said is absolutely true. Some would say I suppose with any format, but I do believe that with this format what's very, very critical is not just what information we are giving, but how we are giving that information. This is going to be a younger audience and it's going to be very exciting for us.
496 We believe that the audience, of course, is there. We have lots of plans for giving them the kind of information that they are interested in and, of course, giving it to them in a style that they will be interested in hearing it.
497 We have devised, as we outlined in our presentation and our application, a number of different ways of deploying that information. Of course, there will be the regular surveillance of news and sports and weather, primarily in the drive periods in mornings and afternoons.
498 Even those newscasts will be quite different, I believe, in the delivery than what you are hearing offered in Saskatoon today. Of course, that's because our format will be different, our audience will be different and the way that they want to hear their information will be quite different.
499 Musically, we will be putting in the information like "In Toon", the concert listings and all these various programming features that will be spoken word programming, but we feel appealing directly to the audience, the younger audience, and predominantly male audience that we will be serving in the community.
500 MS LEYLAND: Mr. Commissioner, if it's alright just to go on on this point for a couple more minutes because this is an area that I am really excited about when I think about having this new radio station on the air.
501 Saskatoon is a great city. I know Madam Chair knows that because she spent some time here. It's a misunderstood city. I think a lot of people don't realize how much goes on in Saskatoon. They tend to think of our cold Prairie winters and that's the only thing that happens here.
502 There's a ton of great events that happen here in this city. Every weekend during the summer there's a special event going on. I'm going to ask Marianne to speak to a couple of the events that we have talked about that would be ideal events to take our mobile studio to.
503 MS YURCHUK: As Pam said, there are in the summer practically every weekend different festivals. We have the Jazz Festival, the Fringe Festival, the Children's Festival, Taste of Saskatchewan Air Show. Every weekend you can do something.
504 Having our studio live at these events will bring excitement for the event organizers, plus our listeners actually get a chance to see us at their event. They get to interact with us. It would be lots of fun.
505 We also have -- our university is a big part of the city. Our U of S Huskies, especially our football team, they're the best in Canada. They are going to win the championship. Come on now. Because of that it's a great place for us to be at, at Husky games because there's a lot of our audience at those events.
506 MS LEYLAND: If I could jump in. Our motto in thinking about our live studio in particular and some of the areas that we would like to cover for our audience is to be the first on it and the last off it and all over it. We really do want to bring this radio station out to the people and have an interactive station which, as Pam said, we are very excited about.
507 COMMISSIONER WILLIAMS: Thank you.
508 In regard to your weekly level of spoken word and music programming, have you worked on or calculated a percentage breakdown between the two?
509 MS LEYLAND: Sorry, between spoken word and music, have we?
510 COMMISSIONER WILLIAMS: Yes.
511 MS LEYLAND: I don't think we have, to be honest, Mr. Commissioner, unless Sharon has got a number in her head.
512 COMMISSIONER WILLIAMS: Okay. Thank you.
513 MS LEYLAND: Sorry.
514 COMMISSIONER WILLIAMS: As part of your proposed Canadian talent development budget, you have outlined that $250,000 per year would be allocated to FACTOR over a five year period and that you would request that the entire budget be earmarked to support local Saskatchewan rock artists.
515 I guess I have a couple of questions in this area. One is have you held discussions with FACTOR on this specific budget allocation request? That's one. Two, is your entire FACTOR contribution dependent on this contribution being directed to the support of local Saskatchewan rock artists?
516 MS LEYLAND: I would like to pass this over to Sharon.
517 COMMISSIONER WILLIAMS: Thank you.
518 MS TAYLOR: Yes, we have spoken to FACTOR. It is, as you can see, a sizeable contribution. We have had discussions with them, particularly on how it's spent. They understand that our preference is to spend it only in Saskatchewan and preferably only with rock artists.
519 MR. GORDON RAWLINSON: As a matter of fact, it's not just our preference. We will make that a condition of it so they must spend it on Saskatchewan artists.
520 COMMISSIONER WILLIAMS: And how has FACTOR responded to this proposal of yours?
521 MR. GORDON RAWLINSON: They think it's great.
522 MS LEYLAND: They think it's fabulous.
523 MR. GORDON RAWLINSON: They are delighted with it. I went to see Heather Ostratag, the head of FACTOR. She wrote us a letter saying she was quite pleased with that and would look forward to doing that. I think there's a great need in Saskatchewan, and they're the experts, so --
524 MS LEYLAND: I think a number that might be helpful is over the past three years, FACTOR has received requests from this province, Saskatchewan, for assistance totalling just a little over $750,000. In that same period of time, in the past three years, FACTOR has been able to approve just a little over $150,000 of that funding, so I think that fairly clearly shows at the present time the assistance that is being asked for and the ability that FACTOR has to respond to that.
525 I would also like to suggest that with the initiatives we have in place, the airplay and the many programs that we have, it will only increase the desire for assistance. There will be artists who will be coming forward, I think, now, now thinking that it's not possible perhaps to get that assistance and in the future hoping that they will be able to get it.
526 COMMISSIONER WILLIAMS: Thank you, Sharon.
527 Few radio stations in Canada, if any, are currently operating under a conditional licence requiring 40 per cent Canadian content. Do you anticipate any difficulties in meeting this condition of licence in terms of availability of music or your repeat factor?
528 MS LEYLAND: Mr. Commissioner, no, I don't. I would like to ask Doug Pringle to speak to this point, if I may. Doug's very involved in the music that we program on all our radio stations, but I absolutely don't.
529 Right now successful rock stations across the country are obviously programming 35 per cent Canadian content. We are talking about taking it up to 40 6 a.m. to 6 p.m. I did the calculations the other day and it really works out to another seven or eight songs in that 12 hour period.
530 As you can see, we are going to be bringing along Saskatchewan artists and Saskatoon artists. Of course, they are going to be giving us lots of songs that will help us cushion that up to 40 per cent.
531 Doug, do you have anything to add?
532 MR. DOUG PRINGLE: Well, really, if you look at all the areas that Canada competes in globally, probably one of our biggest success stories is in music, particularly pop rock. Even going back to the early rock and roll days of the fifties, Paul Anka, The Diamonds, people like that, all the way through to today. The biggest selling artist in the world is a Canadian, Celine Dion.
533 In fact, and they can argue, the top four biggest female artists in the world are all Canadians. We don't just have quality of music in Canada, but we have also got quantity. As Pam says, another seven or eight songs a day, it's really not very much, so I don't think there is going to be any problem.
534 Also, in all of our other stations, we already play about 37 per cent Cancon voluntarily, so it's not really a big job.
535 COMMISSIONER WILLIAMS: Okay. Thank you, Doug.
536 We note in your application that you have committed to both weekly and a 6 a.m. to 6 p.m. minimum Canadian content level of 40 per cent. As you may be aware, the weekly category two music distribution Canadian content regulation applies to the period between Monday through Friday from 6 a.m. to 6 p.m.
537 Your distribution equivalent, however, sets out the 6 a.m. to 6 p.m. period over the entire broadcast week, including Saturday and Sunday. Could you please clarify for us your commitment in this area?
538 MS LEYLAND: Our commitment is to play 40 per cent Canadian content across the board.
539 COMMISSIONER WILLIAMS: Okay. Thank you.
540 How would this condition of licence affect the business plan for your proposed station compared with a condition of licence requiring 35 per cent Canadian content?
541 MS LEYLAND: I think you probably detected from my first response that I don't think it's going to limit us at all. In fact, I think it's going to enhance a rock music station that wants to develop and promote its own Saskatchewan rock artists.
542 COMMISSIONER WILLIAMS: Okay. You also outline plans at programming the same 40 per cent Canadian content level at CFMC. Could you confirm your undertaking to submit an amendment application to increase the level of Canadian content on C95 upon the approval of your new Saskatoon FM station?
543 MS LEYLAND: Yes. If the Commission grants new licences to yourself and your competitors as part of this proceeding, could you outline for us the impact of such a scenario on your submitted business plan, particularly on the projected revenues and audience share?
544 MS LEYLAND: I would like to ask Gord to comment on that.
545 MR. GORDON RAWLINSON: I think the first thing is -- if I may, let me use the example of two people getting a licence.
546 If two licences are granted, it appears still that both those stations would be attacking C95. While we are saying that C95 would take a big hit if one station is granted, if two are granted, it would be devastating on our picture.
547 I really think that, and I'm going to tell you quite frankly, I think that granting more than one licence for Saskatoon would be very bad for the people of Saskatoon. What the people would gain through an additional choice, they would more than lose through the deterioration in the quality of the radio stations in the impact it would have.
548 If I might just take a couple of other points to do with that. I had operated stations in Calgary for a number of years. Calgary has five FM stations and the radio revenue in that market is $46 million. If Saskatoon had five FM stations with a revenue by that time of $13 million or $14 million, you can see the huge difference it would be.
549 The other thing, when you give two licences, the third person is really in tough shape because they do not have any options. You know, we heard Mr. Hildebrand say he wanted to go on his own. We are willing to be on our own, but there are no options in the future.
550 Again, because of the ownership limits, the guy who has left on his own is facing two competitors who each have two FMs. They are both at the maximum limit, so they can't do anything. That's one more reason why I think giving out two licences is wrong.
551 The PBIT in Saskatoon was, I think, about -- my figures that we got from Statistics Canada showed I think about a million three, somewhere in that ballpark. I'm not sure if I'm exactly right. The revenue of this first station, it's going to wipe it out. If you add the revenues of two new licences, it puts the whole market into a loss situation.
552 When you get more radio stations than a market can handle, you get each of the radio stations scrambling for revenue. They start getting into rate cutting and pretty soon people have to start cutting costs. It hurts everybody.
553 Saskatoon has had a history of having a station in trouble from time to time. CFQC went bankrupt a number of years ago. Then when Mr. Hildebrand bought CHSN, the old station from Mr. Ethier, it was virtually bankrupt. We are saying this market can handle one station and that will be a challenge to absorb for a little while, but more than one station would be disastrous for the people of Saskatoon.
554 COMMISSIONER WILLIAMS: Okay. Thank you very much.
555 That concludes my questions on your application for now. We may come back with more, Madam Chair.
556 THE CHAIRPERSON: Commissioner Noël.
557 COMMISSIONER NOËL: Just a few questions.
558 I have read the letter from FACTOR in the interventions. I didn't see them say "We are happy with your earmarking it for Saskatchewan", but it's your understanding that there is no problem at all with making the money conditional on it, that it would only be to Saskatchewan.
559 MS LEYLAND: Sorry. We are double clutching here. I think we have three people ready to answer that question, Sharon, myself and Gord. Yes. We want the money coming into Saskatchewan.
560 COMMISSIONER NOËL: And is it your understanding that this is in addition to the money presently being forwarded by CTD, that FACTOR understands this will be additional money?
561 MS LEYLAND: Yes. That's correct.
562 COMMISSIONER NOËL: And did I understand you, Ms Taylor, to say that over the $150,000 that FACTOR injected into Saskatchewan artists, that's a cumulative number over three years.
563 MS TAYLOR: That's correct.
564 COMMISSIONER NOËL: And the 750 was a cumulative number over three years.
565 MS TAYLOR: Correct.
566 COMMISSIONER NOËL: I wanted to go to the policy, Mr. Rawlinson. I have read -- not the policy, the recent decisions. The issue of the competitive state of the market, and I will quote from one of the decisions. It talks about:
"The new ownership limits increase the possibility of competitive imbalance in the radio market".
567 That is a factor that they are talking about evaluating. I hear you on profitability and good service, but what about the Forvest argument of competitive imbalance? What do you say to that?
568 MR. GORDON RAWLINSON: Well, we think that the market will stay virtually the same if we were given this new licence because all of the audience is going to come from, virtually all of the audience is going to come from C95.
569 There is no question that if we get this licence, we will be as strong or maybe even slightly stronger in total, but we won't necessarily make more money because we are going to have to carve out that chunk of money that's on C95 and put it on this new station. What we have really done is just added the expense of the new station.
570 There are some advantages to having a strong regional radio station operator. We were just trying to get going on that until all of a sudden our MLA got broken up because we were very strong with that.
571 Having a strong regional player, a strong regional radio station operator, you can devote resources into getting more dollars into radio. In areas like more government working on the share of advertising dollars that come from government will hire into radio. When you are the strong buy, you know you will get a good share of that anyway, so you can focus on attacking the other media as opposed to just attacking the other radio stations.
572 Another thing that we do is we have a person full time living in Toronto that's separate from our rep firm that spends most of their time trying to get more dollars spent on radio into Saskatchewan, more national dollars.
573 Saskatchewan doesn't do quite as good as it should nationally as far as the percentage of dollars that come into the province relative to population and so on, so we are always trying to boost Saskatchewan and get more money into Saskatchewan.
574 Of course, if you can be attacking the newspaper or attacking other media and focus on that as opposed to attacking each other, one of the problems in the radio business everywhere in Canada, and we are as guilty as the next guy, is we all attack each other and try to fight over radio dollars and fight for the radio share.
575 If you are a really strong person, then you say "Gee, I know I will get my fair share or maybe even a little more than my fair share", so the way to grow this is to grow the whole pie and not just to try and get a bigger share of the pie. I think that that's --
576 In addition to my two tests, will each station be able to provide a good level of service and will each operator still be able to be profitable, I think that's another factor to be taken into consideration in this competitive balance question.
577 COMMISSIONER NOËL: Help me because I'm not an economist. If you had a third licence, Forvest you say would not be in the same position they are now, saying you have got a three station buy, because you are going to grow the market, you are going to make the pie bigger, which is grow the national market or the outside market, as opposed to doing the three station buy here.
578 MR. GORDON RAWLINSON: I think, quite frankly, they will say -- I'm not saying they are going to say this is good. I think they will say, and I don't blame them, they are going to say "Gee, that's leaving too much in Rawlco's hands". It is our contention that we will be able to grow the market. That's one of the benefits of having a stronger person.
579 I think the single biggest factor in this whole thing, though, is the question of where is the audience going to come from and hence the bulk of the revenues. We already are very strong in this market. Thanks to Pam and her team, we have got a great radio station. It's number one by a good margin, thanks to their efforts. It's a great station and it's no wonder it does so well as it does because it is a great station.
580 If we lose a fair chunk of audience off that station and it goes on to another one of our stations, we will be marginally better off from an audience point of view because it's not 100 per cent, but primarily we will still be left as the strongest person. I don't think they will be hurt substantially. They won't be as well off. I think I said that. Every one of us, if we don't get the licence would rather not have a licence granted.
581 I believe the people of Saskatoon would lose if there were no licence and I believe they would lose if there was more than one licence. I believe that the best way to maintain competitive balance is if our proposal is approved because of that factor that the bulk of the audience and the bulk of revenues will come from our station.
582 THE CHAIRPERSON: Thank you.
583 Mr. McCallum.
584 MR. McCALLUM: On the $250,000 per year Canadian talent development contribution for $1.25 million over five years, what would the commitment be if a seven year licence were awarded?
585 MR. GORDON RAWLINSON: We would still spend the $250,000 per year for the first five years. It's our belief that if a seven year licence is granted, we can always, you know, if it ends up being -- if by some chance, for example, that all the money didn't get spent, we would have an extra two years to do it in, but we think it's important to make an impact fast, so we would rather not spread it out over seven years. We would like to do it all in the first five.
586 MR. McCALLUM: The total remains the same.
587 MR. GORDON RAWLINSON: Yes.
588 MR. McCALLUM: It might be spread out over seven years, but the total of it --
589 MR. GORDON RAWLINSON: No. We are saying we want to do it over five. If, for example, in the fifth year they spent $200,000, you know, we could still do it over that, but we will commit to that. We want to spend it over the first five.
590 MR. McCALLUM: Right. What you are saying though is that the total does not change, even if it's seven years.
591 Thank you.
592 Vis-à-vis the LMA, you did receive the Notice of Termination, I gather, in May of this year.
593 MR. GORDON RAWLINSON: Yes. I think Mr. Hildebrand is being rather strict when he says that it has to be over by May. It will depend on when this decision comes out. He has got to find space and get set up. It will make a couple more months than that. I mean we are not going to hold him to that.
594 The purpose of having the one year notice was to say it should be a minimum of one year. He's moving out.
595 MR. McCALLUM: How does it affect you vis-à-vis the continued operations? Let's suppose that your application is denied and he moves out in the future. What does that do you vis-à-vis space and building and premises and studios, et cetera?
596 MR. GORDON RAWLINSON: Well, we are kind of bursting at the seams right now. The CKOM building -- well, maybe Pam can talk to this -- was originally built for one radio station. We have taken some additional space.
597 MS LEYLAND: Let me put it this way. The staff is forever asking me when we're moving because we really are crowded right now. To the extent that CKOM is going to move out and if we are awarded another licence, we may be able to stay by putting an addition on or we may just have to move. We don't have a lot of room.
598 MR. McCALLUM: I see. In the denial scenario, you simply expand into the spot vacated. In the approval scenario, that spot may not be big enough to accommodate you and you might have to move. Is that right?
599 MS LEYLAND: We may have to move or put an addition on to our present building.
600 MR. McCALLUM: Would that account for extra expenses than what are in your application or how would that affect your expense levels?
601 MS LEYLAND: It's not reflected and it would definitely cost something, so that would put us into a worse position.
602 MR. GORDON RAWLINSON: However, the radio stations rent, don't own the building there. It's owned but in a different company, so the capital expenditures for some of this stuff would be done by the building company which is not part of the radio station.
603 MR. McCALLUM: It's a related company in the Rawlco Group.
604 MR. GORDON RAWLINSON: Yes.
605 MR. McCALLUM: When did you convert CINT to talk radio?
606 MS LEYLAND: September 8, was it? I have a plaque on my wall. September 8, 1998.
607 MR. McCALLUM: So just at the beginning of the 1998-1999 fiscal year.
608 MS LEYLAND: At the very start, yes.
609 MR. McCALLUM: If there were a denial in this case, would you be thinking of flipping that AM station to FM if, for example, you are denied and another party receives the licence?
610 MS LEYLAND: We are committed to doing news/talk radio in Saskatchewan. News/talk really works on AM. It especially works with a big signal, which we have on 650, to reach not only the City of Saskatoon, but the entire province really. We are in news/talk radio for the long haul.
611 MR. GORDON RAWLINSON: It just brings that service to a much larger area on the Prairies and radio travels a long way, so you just get a much better coverage on the AM station than you do on the FM. In the city, FM is preferred but if we took total service, AM stations have coverage. Forvest AM station has great rural coverage and does a great job serving the rural too. I don't know what they will say, but you have got two AM stations that their coverage is a real big factor in this part of the world.
612 MR. McCALLUM: Thank you.
613 Thank you, Madam Chairperson.
614 THE CHAIRPERSON: Thank you.
615 I propose that we will hear the presentation by Forvest before we break for lunch. If you want to take five minutes and deplane.
616 Thank you very much, Mr. Rawlinson.
617 MR. GORDON RAWLINSON: Thank you.
--- Recess at / Pause à 1153
--- Upon resuming at / Reprise à 1207
618 THE CHAIRPERSON: We will resume.
619 Mr. Secretary.
620 MR. KRUSHEN: Thank you, Madam Chair.
621 The next application is by Forvest Broadcasting Corporation for a broadcasting licence to carry on an English language FM radio undertaking at Saskatoon. The applicant is proposing a contemporary hits format.
622 THE CHAIRPERSON: Please proceed.
PRESENTATION / PRÉSENTATION
623 MR. CHRIS JOHNSTON: Thank you, Mr. Secretary, Madam Chairman, Members of the Commission.
624 I am Chris Johnston, appearing as counsel to Forvest Broadcasting Corporation on this application.
625 Beside me is Clint Forster, the owner and Chairman of Forvest, who was born in Saskatoon and has maintained a residence in the city for the past 25 years. In addition to his long and distinguished career in broadcasting, Mr. Forster has been heavily involved in the community life of Saskatoon, having held among other positions the posts of the President of the Board of Trade, President of the Rotary Club, Chairman of the Saskatoon City Hospital Foundation and a Governor of the University of Saskatchewan.
626 Beside Mr. Forster is Vic Dubois, the President and General Manager of Forvest, and a shareholder, who is well known and widely respected for his involvement in the community and dedication to its causes. In fact, its well reflected in the letters on file from numerous community organizations supporting this application.
627 Seated behind us are Bob Fisher, a shareholder and Forvest's Vice-President of Sales, and Irene Osborn, the company's Chief Accountant. Mr. Forster will begin the presentation.
628 MR. CLINT FORSTER: Thank you, and good afternoon, Members of the Commission, and welcome to Saskatoon.
629 We are delighted to be here today to speak about the application filed with the Commission a year ago last October, which triggered a call for applications and this proceeding.
630 Our filing was the result of a comprehensive review of local radio service generally in Saskatoon, the outlook for our two radio stations, and the challenges posed by our competitor's three station LMA operation.
631 Three key reasons for making this application emerged from this review: the existence of a clear service gap in the market, the need to strengthen our competitive position and the related need to maintain the high level of local service our existing stations provide. Let me amplify these points.
632 First, the research carried out by Dr. Dobni of the University of Saskatchewan reveals that a significant portion of our population in the 12 to 30 year age range considers they are poorly served by radio and are dissatisfied.
633 As one of our supporting intervenors in this age group put it, the application we are putting forward "addresses a desperate need for a more diversified musical programming. Saskatoon currently suffers from a state of homogenized non-country musical programming".
634 Clearly we identified in our application more than a year ago an opportunity and need to provide a distinctive radio service to this underserved demographic.
635 Secondly, there is a severe competitive imbalance in the market. The Rawlco/Hildebrand three station alliance currently captures more than 73 per cent of the audience and, we suspect, a similar percentage of the total advertising revenue earned by the Saskatoon stations.
636 Moreover, the imbalance does not end with this LMA. The Rawlco group extends to an AM/FM combination in Regina, a similar combination in Prince Albert and an AM station in North Battleford. Mr. Hildebrand owns ten stations in Saskatchewan. Together, the two groups comprise 18 of the 27 radio stations in Saskatchewan, that is two thirds of the stations in a province of only about one million people.
637 These ownership groups, together with their three station alliance in Saskatoon, constitute an extremely powerful radio machine in this province, one that provides multiple station buying opportunities for regional and national advertisers, as well as promotional, sales and cost synergies. These competitive advantages are far beyond the reach of our stand alone operation in Saskatoon.
638 Thirdly, we are committed to continuing and building upon the service we have developed over the years for Saskatoon and the province. The competitive situation has an obvious impact on our ability to fully realize this objective.
639 We have successfully developed a dual AM/FM community based radio service featuring two country music formats. One, CJWW, is information and traditional country serving the 44 plus age group and the other, CFQC-FM, is young or new country, serving the 18 to 44 demographic.
640 We are particularly proud of CJWW-AM. Since we purchased this operation 20 years ago, this multiple award-winning station over the years has built a reputation for serving both rural and urban listeners with an excellent, traditional radio service. CJWW provides extensive news, sports, weather, agricultural, business and community information services. We have a nine person news and information department. This is a very large team for a market of this size and an operation with our level of revenues.
641 There are also many elements of our radio services in which we take special pride: Our daily Saskatchewan current affairs talk shows, knitting together listeners in a large area of the province; our live play-by-play coverage of local sporting events; our focus on building cross-cultural awareness with First Nations people through sponsorship of their events and our weekly "Sounding Sky" radio program broadcast in Cree and English, featuring music by aboriginal artists; our Internet web sites through which our stations reach listeners throughout Saskatchewan and, indeed, the world; the fact that CJWW is the only station in the province, we believe, to provide live programming 24 hours a day, and, the fact that in this year alone our stations have been instrumental in raising nearly $1 million for a host of charitable causes in which our stations were the exclusive radio sponsors.
642 This kind of service is what we believe radio should be all about and what motivates all of us at Forvest to be in this business. However, we know that we cannot maintain and keep improving our radio services by standing still, especially in the current highly competitive circumstances. We thus see this application as an opportunity to grow, to create more competitive balance in the market and to meet a clear service need.
643 I believe the reasons I have outlined for our application are compelling. I must also though confess to the excitement of a dyed in the wool entrepreneur at the prospect of starting a new venture in an industry and a city that are so close to my own personal position in the city. That feeling of excitement permeates the organization and I know that Vic will be able to provide you with a sense of it as he outlines his plans for the new station.
644 MR. VIC DUBOIS: Thanks, Clint, and good afternoon.
645 Our fundamental goal for the new station is to give our younger population, who feel disenfranchised from radio, a station they can call their own. What kind of service will create this sense of kinship? There are three essential building blocks around which we have planned the new station.
646 First, and most obviously, the music. Our filed research, the results of focus groups held recently and intervenors' comments confirm what we already knew from our own experience in the market. Young people want to hear contemporary music, the hits they themselves play a large role in creating through their listening habits and CD purchases, as well as fresh new music as it comes on the scene.
647 Saskatoon listeners have an abundant supply from the other two FM stations of classic rock music from the sixties, seventies and eighties. Our station will focus exclusively on the hits of today, featuring artists such as the Barenaked Ladies, Pearl Jam, Alannis Morisette, Madonna, Matchbox 20, Bryan Adams and Widemouth Mason.
648 Complementing the current hits from these established artists will be new music from up-and-coming Canadian bands, with a spotlight on local talent. One of the key attractions of the CHR format for us is the wider opportunity it gives as compared to classic rock formats, to feature new Canadian talent and music.
649 We think our young listeners will want to tune to this station nor just for the current hits but also leading edge, "what's new" music. In light of this and the attention we intend to give new music, we expect to achieve Canadian content levels well above our minimum commitment of 35 per cent.
650 As reflected in a number of the interventions supporting our application, we have a very strong track record in promoting Canadian artists and their music in the field of country music. For example, Stephanie Beaumont of Spooner Tunes, Inc., in Orillia, Ontario, stated in her letter to the CRTC, and I quote:
"As a Canadian artist I can tell you that both CFQC and CJWW have been incredible supporters of our nation's music. ... The consideration they have given to my music has helped me so much in that market. The in-studio interviews, the features and the airplay of songs that all too often are restricted to major label acts, are opportunities provided on a regular basis to all artists, no matter their situation."
651 In a similar vein, Mr. Joseph Kratz of Sony Music Canada, writes, quote:
"I have dealt with Forvest for the past five years and have found them to be professional, motivated individuals with a passion for music, most importantly Canadian music. Through early significant airplay and artist interview, whether the artist was in the city or doing interviews by phone, Forvest has proven time and time again to be the front runners in helping develop the futures of Canadian artists."
652 We were particularly gratified by a letter from Brian Ferriman, President of Savannah Music Inc., of Nashville, the agent for Michelle Wright. Mr. Ferriman writes:
"The development of Ms Wright's career in the Saskatoon marketplace has been tremendously enhanced by the enthusiastic efforts of CJWW and CFQC-FM in bringing her music to the local audience. Indeed, when Ms Wright was a new artist in the mid 80s, she heard her music on radio for the first time ever while listening to CJWW. ... The stations have played her music and made her songs chart hits in the Saskatoon area, they have done more interviews with Ms Wright than we can remember, they have regularly shared news of her career growth with their audience, and they have aggressively supported her concerts and her charitable activities.
For their outstanding an ongoing support of her career, we hold CJWW and CFQC-FM in the highest regard. And we are not alone in this opinion: many other Canadian country artists, managers and label personnel can relate similar stories referencing the support their music has received over the years from these two stations."
653 Similar sentiments are echoed in a number of other supporting interventions of which we ask the Commission to take special note as they reveal our ongoing dedication in this area. The passion for and commitment to Canadian music, of which these and other intervenors speak, is a hallmark of our organization and we look forward to bringing the same commitment and promotional successes to Canadian artists in the field of contemporary pop and rock music.
654 The second building block is spoken word programming of particular relevance to our target audience. We will program features on the music and artists of today, the bands playing in local venues, the latest movies and videos, youth fashions, youth-oriented leisure activities and sports, innovations in computer technology, automobiles, books, hobbies and young family consumer products.
655 In short, the programming will speak directly to the teens and young adults of Saskatoon in an upbeat manner that we expect will strongly resonate with them and their interests.
656 It is well to remember in this respect that there are nearly 20,000 students at the University of Saskatchewan who, as the President of the University Students' Union states in his intervention, do not have enough real radio alternatives.
657 The President also notes that the Students' Union and Forvest Broadcasting "have entered into numerous partnerships in the last few years that have brought benefit to the whole University of Saskatchewan community". Forvest looks forward to extending these partnerships in a variety of ways through the new radio operation, which leads me to the third building block.
658 The success of the station will depend partly on its music and spoken word programming but, just as importantly, on the effectiveness with which it connects or interacts with its target audience. We accomplish this with our existing operations in large part by being out in the community and heavily involved in community life, a tradition we will certainly carry on with the new operation.
659 We will be at university and school events, providing radio coverage and promotion for them. We will be at concerts, fund raising events, fashion shows and other venues where current happenings are of interest to our listeners. In short, the station will be highly visible in the community and a lightening rod for the news and views of our listeners.
660 We also plan to expand our use of the Internet to achieve grater interaction with our listeners. We will establish a web site for our new station just as we already have for CFQC and CJWW. More and more, young people are listening to audio programming via the Internet. We want to be there as effectively as we have been with our existing stations.
661 The University of Saskatchewan is home to the largest, most intricate Internet web site in the province. We plan to extend the partnerships already established with the University into this key technology for interaction with our listeners and exchanges of information.
662 As noted in the intervention of Robert Kavanagh, Associate Vice-President of the University, we are currently exploring with the University how units such as the Office of Student Services, the Office of Communications, the Division of Audio Visual Services and Information Technology Services, among others, could be made available through the new station's Internet site. Such an initiative would be a natural and valuable fit with our new station. As Mr. Kavanagh states, and I quote:
"We are keenly interested in new ways to improve our communications to students and the community at large, and a relationship with a station that focuses on youth is potentially a very exciting development."
663 One of the partnerships we will establish relates to our proposal to devote the station's basic, annual Canadian talent development expenditures, plus 3 per cent of its profits, to assisting the music departments of the University of Saskatchewan and the Saskatoon public and Catholic school systems to purchase musical instruments and cover the costs of student concerts.
664 These institutions see great value in this proposal, especially in the assistance it will give to students whose financial circumstances prevent them from owning instruments of their own. The Saskatoon Catholic Schools Foundation is so supportive of the idea that it has agreed to match dollar for dollar our annual commitment.
665 Another way in which we will effectively connect with our audiences is the live evening programming we will present, filled with music, humour and information. Like our other programming, this show will be available via the Internet as well as conventional radio sets and we plan to install a video camera so that listeners with high speed Internet connections through their local cable or telephone companies can actually view what is happening in the on-air studio.
666 This attribute, along with instant communication available by e-mail or telephone, should greatly enhance interaction between program hosts and their audiences both on this show and others planned for the new station. There is currently no live evening programming on Saskatoon FM stations and we hope to make the station a welcome companion for our young listeners during the evening hours.
667 These then are the three building blocks on which we plan to create a vibrant, new radio service in Saskatoon. The need is there, the audience is waiting and we are more than ready, willing and able to provide the service.
668 Before turning the presentation back to Mr. Forster, I would like to elaborate a little on his earlier reference to Forvest's relationship with First Nations people. It is a special relationship and one which we highly value. In addition to our weekly program carried on CJWW, we engage in a number of initiatives to promote the cultural and other happenings of First Nations people.
669 For example, we team up with the Saskatoon Tribal Council to promote the Saskatchewan Indian Summer Games and the Indian Winter Games as well as the Council's Super Saturday Program which brings young students from throughout the province to the University of Saskatchewan for an introduction to university life and education.
670 With other members of First Nations, we have promoted numerous projects such as annual aboriginal youth talent searches and the Muskeg Lake Cree Nation project to raise funds helping underprivileged children to participate in sports events.
671 We have been approached by First Nations leaders to help facilitate their dream of establishing a full radio service for First Nations people in Saskatoon and central Saskatchewan.
672 Our discussions have covered a range of possibilities, including making available the former CFQC AM transmitter and tower facilities for their purpose. Initiatives like these will be carried forward and can be an integral part of the new station's involvement in the community, especially important in light of the youth orientation of the station.
673 MR. CLINT FORSTER: Let me conclude by listing the reasons why we believe our application merits your approval.
674 First, the music format we propose and the audience to which it is directed meet the greatest need in this market for a new radio service.
675 Secondly, the format we propose provides the greatest scope for introducing and promoting new Canadian music and artists. This has been our modus operandi in the country music field and we are highly motivated to achieve the same success in contemporary rock music with all the attendant benefits to artists and Canadian broadcasting.
676 Third, the breadth and depth of our community involvement will be easily and effectively extended to encompass the causes of greatest interest to the new station's audiences.
677 Fourth, the station will make innovative use of computer communications through its Internet site to complement the station's programming and provide effective means of interaction with our audience in the provision of information as well as music. This will be particularly important to students within our listening area.
678 Fifth, approval of our application will maintain and enhance the financial strength of Forvest, enabling it to continue our numerous sponsorship projects with the First Nations people and other initiatives to benefit the community at large.
679 Finally, the licensing of our proposed service will not only create better balance in the radio services available to the different demographic groups in Saskatoon, but also better competitive balance between our three stations and the station groups operated by Rawlco in Saskatoon and throughout the province.
680 More equal competition, we submit, will stimulate the growth of the radio market in Saskatoon, creating more diversity and better options for both listeners and advertisers.
681 In summary, Members of the Commission, we have a well defined business plan, proven strategies, and resources to mount a service of exceptional value to the younger residents of Saskatoon, the community as a whole and Canadian talent development within the music genre we propose.
682 We have tremendous community support for this application. For all the reasons we have discussed, we believe our application well merits the Commission's approval.
683 Thank you very much.
684 THE CHAIRPERSON: Thank you.
685 I propose that we would take our lunch break until two o'clock.
--- Luncheon recess at / Déjeuner à 1223
--- Upon resuming at / Reprise à 1400
686 THE CHAIRPERSON: I will ask a question. The first question is you note that we have asked everybody is that you have certainly read the recent decisions we have on Kelowna, Victoria and London on the radio side and the specific factors we are looking at. Would you care to address those factors vis-à-vis your application.
687 MR. DUBOIS: We will be pleased to do that, Madam Chair. As we understand it, the factors that are most important, of course, are the business plan, including the format, Canadian talent development, diversity of news voices in the market, the market impact of any new licences and, of course, competitive balance. We believe that all of these factors, of course, are important or they wouldn't be in there.
688 In this particular market, we believe that the weight that should be assigned to each of these would be heaviest in the areas of diversity of format and competitive balance, as well as community service. I believe the Commission did say in those decisions that they would give different weighting to different factors depending on the market.
689 THE CHAIRPERSON: So you believe here then is diversity, competitive balance and sort of local initiative.
690 MR. DUBOIS: Local service, yes.
691 THE CHAIRPERSON: I see here that contemporary rock is your chosen format and you are addressing 12 to 34 year olds. Why have you chosen this demographic?
692 MR. DUBOIS: If I may correct one point, it's contemporary hits. "Rock" is a very generic word whereas "hits" I think is defined again across the pop rock spectrum. Pop and rock we could put together as a contemporary hits format. Your question again then was?
693 THE CHAIRPERSON: Why have you chosen this demographic?
694 MR. DUBOIS: It is the most underserved demographic in the City of Saskatoon according to the research that we did a year ago, before we filed our application. It showed that the most underserved market in Saskatoon was -- essentially our research said 12 to 29 year olds, but we also go to 34 because the Bureau of Broadcast Measurement, of course, breaks down 12 to 17, then 18 to 24, and then the next block is 25 to 34. If you are targeting specifically 12 to 29, you will get I think some competitive spill into 30 to 34 year olds as well.
695 THE CHAIRPERSON: Can you tell me the distinction between that and the format of CFMC?
696 MR. DUBOIS: At the time we filed our research, CFMC was virtually everything to everybody in the marketplace because at the time I believe there was the CHSN just before it became CKOM-FM and was called The River and it was an easy pop station, an easy listening style station.
697 CFMC was the only radio station that covered any kind of what you would call up-tempo pop and rock music and they were playing hits from the 1970s, the 1980s and the 1990s. They were everything to everybody.
698 THE CHAIRPERSON: You specifically prefaced what you said by saying at the time the application was filed and the survey was done. Is there a change now in terms of format, differentiating yourselves and CFMC?
699 MR. DUBOIS: I believe that they have, from our listening, they have moved more towards the contemporary hit format just recently, just this fall.
700 THE CHAIRPERSON: When talk came in?
701 MR. DUBOIS: No. Talk came in -- I'm talking about 1999 now.
702 THE CHAIRPERSON: So now, if we would licence Forvest with this format, how much duplication would there be between your station and CFMC?
703 MR. DUBOIS: Well, we would make sure that when we launched our new station that if they had moved over to fill that hole, they would have had to have vacated another hole. We would be a little disappointed, quite frankly, because we are very excited about filling this hole, based on what our research said was the biggest hole in the market and about the plans that we have in our minds to do for this youth and young adult audience.
704 It would be disappointing, to be quite frank with you, but we would find the correct hole to fill and we would fill it.
705 THE CHAIRPERSON: Have I got you right then, if you consider CFMC has moved into contemporary hits, you would then move into what CFMC was doing, seventies, eighties, nineties?
706 MR. DUBOIS: We would fill whatever large hole we felt was best vacated at the time. We would have to do some focus groups and perhaps some more market research at the time just before we launched to see what the best hole was to fill because it's not sensible to go head on head, especially if you are going for the youngest demographics.
707 We still believe from listening to them lately, our perception is they are still not targeting the 12 to 17 year olds or even necessarily the 18 to 24 year olds. Twenty-five to 34, you would be more correct, but there is still very strong, I believe, in 25 to 34 and right up to probably 44.
708 THE CHAIRPERSON: Okay.
709 MR. JOHNSTON: Commissioner Cram, I hate to even raise my voice because I said to Mr. Burnside I have moved out of this demographic so long ago that I have no credentials to speak to it, but I asked the same question over lunch to Vic. The answer he gave to my simple untutored mind was that the difference between what he is proposing is that it is exclusively new music, nothing older than five years.
710 I think from your recent monitoring, though, there has been some move of 95 into that era. They are still playing plenty of earlier --
711 MR. DUBOIS: They are still playing music from the 1980s in what we have been listening. We are not purporting to play any music from the eighties or the seventies at all.
712 THE CHAIRPERSON: So there is a bit of a blurring of the lines. Is that where we are at on this?
713 MR. DUBOIS: No, no. We took that into consideration, of course. You have to take that into consideration since the Commission deregulated FM formats. Any radio station can virtually change any day and play whatever it wants to play.
714 We had to go, of course, by what we said in our application, which was filed under the circumstances the market was in at the time, when they were playing seventies, eighties, nineties and a lot from each of those decades. The other station was also playing a mixture of all genres actually. They were mixing country and pop and a little bit of soft rock.
715 We defined the biggest hole as being contemporary music, the history of today. Ninety per cent of the music we plan to play will be from the last five years. Nothing that I have heard up to today would change our minds if we were to launch a new station tomorrow morning.
716 THE CHAIRPERSON: In your letter to the Commission of November 25, 1998, you provided us with some audience projections. It ranges over the seven years from 40 per cent to 60 per cent. Do you mean your own station or do you mean all three stations when you provided that projection?
717 MR. DUBOIS: We mean our station, but we mean strictly in the 12 to 34 demographic. I believe that's the way the deficiency question was asked. They said "You state that your target will be 12 up to 34" and "What per cent of the hours tuned or of the audience", I forget, "will you get?" and we took that to mean in the target demographic.
718 That relates 40 per cent of that target demographic, which comprises about 43 per cent of the 12 plus population would be about a 17 share of 12 plus.
719 THE CHAIRPERSON: Okay. It translates into 17 share.
720 MR. DUBOIS: Yes.
721 THE CHAIRPERSON: You were talking about, and I understand Ms Dobney was talking about the source of your new audience. It's comprised of CFMC, new listeners and increased listening time. Can you give us a breakdown of those sources on a percentage basis? Out of that 17 share, how much of it would come from CFMC?
722 MR. DUBOIS: I think Mr. Fisher has some facts on that.
723 MR. FISHER: Approximately 75 per cent of the audience would come from C95's lowest end. The majority would come from the 12 to 18 group. The next increase size would be from the 18 to 24 group. The least migration would come from the 25 to 34 group. That's approximately 35,000 people.
724 THE CHAIRPERSON: So as a result, what percentage of your audience would come from CFMC?
725 MR. FISHER: Seventy-five per cent.
726 THE CHAIRPERSON: New listeners?
727 MR. FISHER: Ten to 20 per cent for love-alls, cross tuners, and 10 to 20 per cent for increased tuning.
728 THE CHAIRPERSON: The time.
729 MR. FISHER: Yes.
730 MR. DUBOIS: Mr. Fisher, would you define love-alls, please.
731 MR. FISHER: People that cruise the FM band and they will just switch if they don't like the tune. They just cruise the FM band continually.
732 THE CHAIRPERSON: We have asked all of the other parties about AM stations in Saskatoon, that they are losing audience to FM and yet their revenue shares are still high and relatively high profitability. Have you an explanation for this?
733 MR. DUBOIS: Yes, we do. CJWW is a full service information and country music station. As was alluded to, I believe, even by Mr. Rawlinson, and he is correct, that we have a very powerful signal. The Prairies, as you know, Madam Chairperson, is very flat. An AM signal goes a long way.
734 Also, I believe the ratio of rural to urban population in the Province of Saskatchewan is approximately 60 to 40. A great deal of our AM station's strength, probably two thirds, is from outside the City of Saskatoon.
735 We built up a reputation as being a radio station that serves the needs of virtually the entire demographic spectrum of the rural audience, I believe -- I'm quite proud of that -- in central and northern Saskatchewan and it has kept us extremely healthy.
736 THE CHAIRPERSON: Page 6 of your supplementary brief, and I looked at this when I was reading the application. Perhaps it's how it was phrased. At the bottom it talks about, page 6 -- have you got it?
737 MR. DUBOIS: Yes, ma'am.
738 THE CHAIRPERSON: It says:
"Given the Forvest commitment to the country music format, we are limited in our ability to gain market share and compete effectively against the three Rawlco combination."
739 If you changed format of your existing stations, could that help you to compete effectively?
740 MR. DUBOIS: Well, given the fact that C95 has enormous shares, and if another FM station was not country, that is possible, but given our commitment, as we said in here, it wasn't that many years ago that we did format finding research for the Saskatoon market to determine the hole for FM. When we purchased CFQC out of receivership -- Mr. Hildebrand isn't the only person who has rescued stations from the ashes.
741 THE CHAIRPERSON: I think there were quite a few here that were rescued.
742 MR. DUBOIS: I think we all have. Our format finding research said that there was definitely a need for a young, urban, pop/new country station to serve the Saskatoon CMA primarily. We filled that need and we don't want to abandon that loyal core of listeners to our country FM.
743 THE CHAIRPERSON: But it seems though in the paragraph above you are talking about an overall decline in the popularity of the country format.
744 MR. DUBOIS: That's correct.
745 THE CHAIRPERSON: Notwithstanding that, you have got this commitment to the format. You are staying with it even though you know you are entitled to change format.
746 MR. DUBOIS: Yes, we are.
747 MR. FORSTER: I could add to that. Of course we were looking a year and a half ago or so as to how we can grow. We can't stand still. We can't shrink. We must grow. As far as we are concerned, we cannot stir up very many more country music listeners within our area. We think we have captured most of them.
748 The only way then we found or we thought that we could grow was, of course, to apply for another licence under the new regulations.
749 THE CHAIRPERSON: Do I understand it that you think you have to have the two to cover the whole spectrum of country music? Is that the concept?
750 MR. DUBOIS: There is more cross-tuning we find in the ratings on FM especially from our FM country station to the other two FM non-country stations than there is to our two AM stations. Our two stations are distinctly different. Again, our AM station plays the hits of the nineties, eighties, seventies, sixties, fifties in country music, plus heavy on information, and heavy rural bent.
751 Our FM station is a CMA station targeting 18 to 44 year olds. It plays today's hot new country. It does not even go back and venture into that era prior to what we consider to be the start of the new country era, which is the late 1980s. Our station doesn't go back
752 We play a lot of brand new music on our country FM for which popularity has not even been established on the charts. Therefore, it is different from our FM station.
753 THE CHAIRPERSON: Same page, you also talk about the increasing competition you are facing from the three station under Rawlco, as you call it. I've got to say surely with the talk radio, has that increased competition to you?
754 MR. DUBOIS: I would like Mr. Fisher perhaps to speak to that. I think you have to look, with respect, outside just the central market of Saskatoon when you talk about this combination. Mr. Fisher can speak to that.
755 MR. FISHER: The new talk radio hasn't developed enough audience yet to become a serious competitor. However, they are moving into some areas that traditionally CJWW had as a strength, things like agricultural reports and that sort of thing, but at this point in time hasn't caused a real threat yet.
756 THE CHAIRPERSON: Would you perceive a talk format as a competition to a country format, to a music format?
757 MR. FISHER: Not the talk programming as such, but the features on the station could become competition to our agricultural programming.
758 MR. DUBOIS: I was referring, Bob, more to I think -- the Chairperson was thinking more about the advertising competition. I was thinking more in terms about the regional packaging and the synergies that they have together with the other radio stations throughout the province.
759 MR. FISHER: Currently for the most bought national demo, which is 25-54, the 25-54 demo accounts for almost half of all national buys. For the 25-54 demo in Saskatoon central, for share of hours tuned for commercial radio stations, the Rawlco combo currently has 79.4 per cent of those hours tuned.
760 The second most bought demo, which is 18 to 49, they have an 81.9 per cent share of hours tuned for commercial radio stations.
761 For a business that's national point driven, we are at a severe disadvantage. Usually a national buyer can't consider our operation as an option because we don't have enough rating points to fill their entire need. Therefore, they would have to go shopping.
762 Usually when they go to our competitors, they are obligated to buy the combination or, of course, face price discipline. Therefore, we get shut out of most national point driven business. Regionally, we face the same problem with local agencies from Regina, government business and so forth.
763 Local advertisers traditionally didn't use rating points to decide their advertising purchases. However, if you had strength in the range of 80 per cent or competitors of educated many local buyers about rating points, on a regional basis we faced the Golden West Broadcasting and Total Saskatchewan Radio Network.
764 One of the lines that I remember from a piece I picked up said that collectively, these 15 powerful radio stations provide radio coverage to the entire Province of Saskatchewan. They will provide huge discounts. That kind of activity doesn't grow the radio market. Naturally, that's a very severe competition for us.
765 THE CHAIRPERSON: You referred in your brief to viewing Rawlco apparently as a three station buy. Am I hearing you differently? Are you saying now it's a regional buy? Is that what I'm hearing?
766 MR. FISHER: No. My first comments were regarding national business and point driven business. The second part where I was talking about the 15 station combo, I was referring to a regional plan that they also have.
767 THE CHAIRPERSON: Say we licensed Mr. Hildebrand, the MLA would cease. Would that satisfy your concerns about competitive imbalance?
768 MR. FISHER: No, it wouldn't because nationally they would probably still be comboed considering their long relationship, so we would still face these problems of having control of the market with a national combo. They have one rep house that represents them nationally.
769 THE CHAIRPERSON: So what you are saying is even if the LMA ceased and we gave Mr. Hildebrand a separate licence and it was two, two and two in the Saskatoon marketplace, you are saying Mr. Hildebrand and Rawlco would get together on their national sales.
770 MR. FISHER: That's correct.
771 THE CHAIRPERSON: And that's your assumption.
772 MR. FISHER: That's correct.
773 MR. DUBOIS: They already are together on national sales. There is only a minimum amount of rep houses across Canada representing private broadcasters. With the synergies that they have obviously developed in their combined rating points, it doesn't seem logical to us that Mr. Hildebrand would leave and just have his two stations under this scenario, one of which would not have any rating points until it established itself after a couple of rating periods. His CKOM-FM standing by itself would not be in an advantageous position.
774 We also believe in terms of competitive balance that way and licensing just Mr. Hildebrand, he would have to then physically leave Rawlco's premises on Eighth Street, as was discussed earlier today, set up shop somewhere else in Saskatoon with his own building.
775 He would have to build two radio station studios from the ground up. He would have to hire an entire staff from the General Manager on down through his sales staff, right on down through copywriters, et cetera. He would be then coming out of the gate with what he would obviously then faced against two other existing combos that have been here for a long, long time.
776 He would then have to launch with a pretty extensive marketing campaign. He would have to drive advertisers fast to his radio station, probably would have to discount it to get them on in the first place, driving the rates down, which would then cause an imbalance for all three of us for a certain period of time.
777 Also, for the central area alone, notwithstanding what we said earlier about CJWW's strength in a rural area and knowing NTR's lack of strength, he would then have two FMs in a growing metropolitan area as against an AM/FM combo for us and an AM/FM combo for Mr. Rawlinson. I submit that might give him a competitive advantage over time.
778 THE CHAIRPERSON: I would like to start with the hypothesis that we denied your application. I would like you to tell me what the impact would be on you if we denied your application and approved Rawlco's application.
779 MR. FISHER: From a revenue point of view, we would still have to contend with the disproportionate share of hours tuned that the combo has for point driven business, nationally, regionally, and now some locally. That overwhelming dominance would leave us in the same or worse position than we are today.
780 THE CHAIRPERSON: I think we have gone over -- did you have anything to add, Mr. Dubois? I'm sorry.
781 MR. DUBOIS: No.
782 THE CHAIRPERSON: What if we refused your application and approved Mr. Hildebrand? Do you have anything to add to what you previously said, Mr. Fisher?
783 MR. FISHER: We would still be in the same position because they are comboed nationally.
784 MR. FORSTER: And I might add they also have the other stations in Saskatchewan, a significant number of additional stations in Saskatchewan, with which to couple up their costs and their sales activities and so on. We, of course, don't have that advantage either.
785 MR. DUBOIS: I also believe that it would not address the diversity issue as we believe our application has addressed the diversity issue and that licensing either one of the other two applicants would be invading territory in certain demographics that are already served by radio in this market.
786 THE CHAIRPERSON: Again, you are referring to diversity of genre.
787 MR. DUBOIS: Right.
788 THE CHAIRPERSON: Not diversity of voices.
789 MR. DUBOIS: Correct.
790 THE CHAIRPERSON: Do I hear, if I summarized, that if we didn't license you, you would prefer we didn't license anybody?
791 MR. JOHNSTON: The best of all possible worlds is that plus termination of the LMA arrangement. That would be wonderful.
792 THE CHAIRPERSON: I was just following up on what Mr. Fisher was saying. If we chose door number one or door number two, Rawlinson or Hildebrand in lieu of yourselves, you essentially said you would be better off if there were none licensed. Isn't that what I heard?
793 MR. FORSTER: Yes. It's not so much the LMA that we are concerned about. It's the sales alliance. It's the ability of coupling these large, large audiences together to sell against ours without us having some way to grow our own audience numbers.
794 THE CHAIRPERSON: Last case scenario. If we approved all three, what would be the impact on your business plan, revenues, audience share?
795 MR. FORSTER: I think Mr. Rawlinson explained it very well this morning, that three licences in this market all at once would not be good for anybody, particularly the listening public, so we don't think that that should be an option.
796 THE CHAIRPERSON: On the programming side, you propose 35 per cent Cancon. Is this because the supply in this format is limited?
797 MR. DUBOIS: No. Actually, when we applied, the 30 per cent was still technically in effect at the time that we applied and we put 35 per cent in again as a minimum. I can state categorically that that will not be a problem, exceeding the 35 per cent. Our country stations do exceed 35 per cent now slightly on a weekly basis. We always exceeded on CJWW. We traditionally ran 33 or 34 per cent weekly when the regulation was 30 per cent.
798 Because we purport to play contemporary music, meaning the music of today by the strict meaning of the word "contemporary", there is a lot of new music coming out. Our competitors have certainly talked about that this morning.
799 If you encompass all the music of today in both pop and rock genres from Alannis Morissette to Celine Don and Sarah MacLachlan and Our Lady Peace and Widemouth Mason, the Saskatoon band I was talking about this morning, and on and on and on, plus all the independent new releases that are coming out, there is absolutely no problem in maintaining 35 per cent Canadian content.
800 THE CHAIRPERSON: You are referring both in your application and today to regular information updates every half hour during drives, an hour during non-drives and separate news department. I'm thinking about mby 16 year old nephew.
801 Normally, you know, these similar contemporary hits formats, they have less emphasis on news and information because of the target demographic. Why have you chosen to highlight it?
802 MR. DUBOIS: Highlight the --
803 THE CHAIRPERSON: The news information issue.
804 MR. DUBOIS: Well, because the diversity of those news voices we believe is important as we believe the Commission believes is important, diversity of news voices in a market.
805 News doesn't have to be all hard news. News doesn't have to be necessarily all what's happening on Parliament Hill and what's happening in terms of death, destruction and wars and inflation around the world either. The target demographic, the 12 to 29 year olds in our youth and adult survey, did identify that a more music and less talk station was most definitely, as you pointed out there.
806 I think we have a responsibility to make sure that they are kept aware of what's going on in the world. We do propose -- we did some focus groups too recently, just to see if we are up to date still on what our research said in 1998 within the demographic. They also told us yes, they would like to hear some news, seven o'clock, eight o'clock in the morning, 12 noon, maybe five o'clock in the afternoon. That's decent newscasts, three to five minutes in length, including all information, lifestyle information, weather, sports scores, things of that nature. The rest of the time, please just give us headline updates in terms of hard news and that's all we would really like to hear.
807 THE CHAIRPERSON: So you are really talking three to five minutes three or four times a day.
808 MR. DUBOIS: That's right.
809 THE CHAIRPERSON: So on a weekly basis, can you give me a percentage spoken word/music?
810 MR. DUBOIS: Spoken word, are you referring to everything, including commercials?
811 THE CHAIRPERSON: Skip commercials.
812 MR. DUBOIS: Skip commercials? Oh, dear. You made my spine tingle there for a minute.
813 We actually would consider -- break it down to a specific percentage. About five hours a week of what we would traditionally call news information, but if you include information like the lifestyle features, the interesting anecdotal information by on-air personalities as spoken word, you would probably be up 20, 25 per cent.
814 THE CHAIRPERSON: On the CTD, you are proposing $3,000 under the CAB plan and then 3 per cent of the prior year's profit to the university and schools and music organizations, performing arts groups. You do agree, and we need to get this on the record, the term that you used in your correspondence, "net operations profit", is PBIT.
815 MR. DUBOIS: Correct.
816 THE CHAIRPERSON: If there's a negative PBIT, then there would be no contribution the subsequent year.
817 MR. DUBOIS: There would always be the minimum as proposed by the CAB plan which I believe is now $5,000 a year because the Bureau of Broadcast Measurement has just recently bumped Saskatoon up into the "other large market" category due to the fact that our 12 plus population has exceeded 200,000. We would be prepared to commit to the $5,000 minimum.
818 THE CHAIRPERSON: I just want to talk about the percentage part and go into it. So if there was a negative PBIT, then in addition to the CAB plan there would be no further contribution.
819 MR. DUBOIS: That's not necessarily true because historically we have exceeded the commitments in our promise of performance on our existing radio stations, CJWW in particular. There is nothing to say that we will not exceed our minimum commitment that's in our licence.
820 THE CHAIRPERSON: But it's your minimum commitment and I don't see another commitment on the table, do I?
821 MR. DUBOIS: The principle is that we share the profit.
822 THE CHAIRPERSON: Very well. How would we monitor this? How would the Commission monitor this?
823 MR. DUBOIS: The Commission is privy to our income statements, filed by the end of every November, plus with the new Canadian talent development initiatives regulations, all radio stations are required to in effect file the cancelled cheques, so to speak, and show the Commission annually where the money was spent. We would, of course, do that.
824 THE CHAIRPERSON: If there were discrepancies and variations from, say, the business plan that you filed today in terms of costs, let's say, and I am just using an example, a material variation of say 25 per cent in administration costs, what should the Commission do then?
825 Say in your two you had administration costs of $200,000 and it ended up being $300,000 and, therefore, the PBIT was negative. Like there's a real issue of monitoring here in my mind.
826 MR. FISHER: Perhaps your concern is with their being three stations and one accountant, any number of things could happen to the bottom line. We talked about that, Madam Chair, since we put the application in.
827 We have considered just changing that, simply changing that and making it 3 per cent of the bottom line of the three operations. If that would make the Commission feel more comfortable, we would be prepared to do that.
828 THE CHAIRPERSON: Based on your five year projections, and I have got them here, if we stuck with the original commitment -- I think I have got it here -- on page 10 of the application. That's the new undertaking. Have you been able to quantify the total that that 3 per cent would be over the five years?
829 MR. FORSTER: In the fifth year for the one station with straight line accounting, it would be approximately $9,000 to $10,000 as the total.
830 THE CHAIRPERSON: And over the total five years, have you calculated that at all?
831 MR. FORSTER: I haven't added that.
832 THE CHAIRPERSON: I see your proposal with the concept being that it should be tied to profits. If that's the case, what if you have profits after five years?
833 MR. FORSTER: We are prepared to continue the obligation and commitment.
834 THE CHAIRPERSON: The 3 per cent.
835 MR. FORSTER: Yes.
836 THE CHAIRPERSON: And how long?
837 MR. FORSTER: Well, we considered that as well. As a matter of principle, we are quite prepared to go well into the future. The word perpetuity is not one that I am particularly happy with, but as I say, in principle we are prepared to go for, let's say, two licence terms with that undertaking.
838 THE CHAIRPERSON: Thank you.
839 I have no more questions.
840 COMMISSIONER NOËL: I have one question. You mentioned a few minutes ago when Madam Chair asked you a question, 3 per cent of the total PBIT of the three stations. I hope you meant the averaged.
841 MR. FORSTER: The average?
842 COMMISSIONER NOËL: Yes, because if you totalled the PBIT of your three stations and you all give the 3 per cent as a condition of licence for this licence, you will be short somewhere. You mean the average. You want to divide your total PBIT of the three stations divided by three.
843 MR. FORSTER: No, I didn't mean that.
844 COMMISSIONER NOËL: You didn't?
845 MR. FORSTER: I meant the total.
846 COMMISSIONER NOËL: Okay.
847 THE CHAIRPERSON: Commissioner Williams.
848 COMMISSIONER WILLIAMS: Mr. Forster, I was reading through and listening to your presentation, particularly on your efforts in building cross-cultural awareness with First Nations through your regular programming. It's the first time we have heard that today, so I have a couple of questions on that.
849 What is the aboriginal demographic in Saskatchewan? Then I guess taking it a step further, what is it in Saskatoon?
850 MR. DUBOIS: Mr. Fisher, I believe, probably has some information on that.
851 MR. FISHER: I believe there's in excess of 80,000 aboriginals in the Province of Saskatchewan and I believe it's growing. I couldn't give you an exact figure for Saskatoon, but there is a reasonable population living here.
852 MR. DUBOIS: The projection, I believe, is 30 per cent by the year 2012. I would hate to be quoted on that specifically, but I think that's for aboriginal population at the Saskatoon CMA. It is growing.
853 COMMISSIONER WILLIAMS: So 30 per cent of Saskatoon will be made up of people of aboriginal ancestry by 2012. Is that what you just said?
854 MR. DUBOIS: Or 2015. I apologize for not being able to remember the specific year, but it's somewhere in that ballpark. That's correct. That's the projection by Statistics Canada.
855 COMMISSIONER WILLIAMS: Thank you.
856 THE CHAIRPERSON: For your information, it's 10 per cent of the total Saskatchewan population.
857 COMMISSIONER WILLIAMS: It's much higher than the Canadian average then, with the exception of the North.
858 MR. DUBOIS: That's right.
859 THE CHAIRPERSON: I wonder if we could take just a short five minute break and then I will ask legal counsel to ask questions.
--- Recess at / Pause à 1440
--- Upon resuming at / Reprise à 1445
860 THE CHAIRPERSON: Mr. McCallum.
861 MR. McCALLUM: I have a question about your statement at page 2 of your application, that there is a severe competitive imbalance in the market is what you said in your presentation. I am asking about the effective determination of the LMA that has happened, as discussed today between the other two broadcasters.
862 MR. DUBOIS: From a sales point of view on a national basis in particular, it would have no effect on the overwhelming dominance of their stations because they are comboed up nationally.
863 MR. FORSTER: And I guess it's fair to say from the comments this morning, I for one was not entirely clear that that LMA has in fact been executed or the termination executed. I'm not sure that there is going to be a separation of the two parties, unless perhaps one or the other of them is licensed.
864 Perhaps also it's fair to say that our concern is more a matter of their relationship with respect to sales, not so much whether or not they are sharing secretaries or other staff or facilities.
865 If the LMA is in fact terminated, we would also like to be assured that the sales relationship in this overpowering number of listeners that they can sell against us is also a part of that termination.
866 MR. McCALLUM: From what the other parties said this morning, they had served notice that they would terminate and they served notice that they would be creating separate studio facilities. That's what information we have. That's the information I am asking you on.
867 In terms of your financial projections, my understanding is the local sales revenue projections are much, much greater than the national sales revenue projections. I still wondered what the impact of the termination of the LMA is on the local sales which seems to be much, much greater.
868 MR. FISHER: Because we are attempting to generate revenue from a currently untargeted demographic of 12 to 34, a lot of our revenue generation is based on brand new business to radio, 50 per cent of it. Fifty per cent of our revenue would be new to radio.
869 Our line of thinking regarding generating that 50 per cent is when we see advertisers that should be on radio, a targeted 12 to 34 year old customer, dominating yellow pages, print, billboards, even television, we realize that there is an opportunity to generate some new business for radio.
870 MR. McCALLUM: Are you saying you would get that opportunity regardless of whether there is an LMA or not in effect?
871 MR. FISHER: Considering that we are after a 12 to 34 target, we would get that opportunity whether there was an LMA or not.
872 MR. McCALLUM: Thank you.
873 Again in the hypothesis that you do not receive a licence in this case, one of the other applicants was asked, and I will ask the same to you, would you think of applying to flip your AM station to FM?
874 MR. DUBOIS: No, we would not. Given the strength, as I mentioned earlier, of our AM station, it would be folly to flip a regional full service AM station which is successful to FM, which would primarily confine it to the CMA, I think would be cutting our throats somewhat.
875 MR. McCALLUM: Thank you.
876 I believe you have received notice from Industry Canada that there is a problem with the frequency that you have applied for. Have you plans to file a new application with Industry Canada?
877 MR. DUBOIS: Yes. NavCanada filed the same objection shortly before these hearings regarding Mr. Hildebrand's proposed frequency and our proposed frequency. I have been in contact with D.E.M. Allen and Associates out of Winnipeg, our consulting engineers, who have found potential in frequencies for us, both of us, and he is working on the filing of the new engineering brief as we speak.
878 MR. McCALLUM: So when would you anticipate that it would be filed then?
879 MR. DUBOIS: I would hope tomorrow, but I can't say for sure.
880 MR. McCALLUM: I asked the same question to one of the other applicants.
881 MR. DUBOIS: Yes.
882 MR. McCALLUM: They short of thought by mid-December it would be filed.
883 MR. DUBOIS: Yes. I think they probably would be filed coincidentally.
884 MR. McCALLUM: I see. And if you were to receive the licence here, you would have no problem with some sort of conditional approval subject to obtaining Industry Canada approval of a new frequency for the station.
885 MR. DUBOIS: That is correct.
886 MR. McCALLUM: Finally, could you give us perhaps updated information about the state of the market. Again, we asked the other applicants for the 1999 fiscal results in the sense of how they were as compared to the 1998 fiscal results in terms of audience share and revenue outcome. I was asking mostly for percentages. How have you done for the year ending 31 August 1999 as compared to 31 August 1998?
887 MR. FORSTER: Yes. Our audience, as I explained earlier, audience is pretty much stabilized. We have acquired about all the country listeners that we can find. As a result, our revenues are pretty much stabilized as well.
888 The answer is it's a flat picture as far as we are concerned with respect to revenue. We are unable to see at this point that there will be any significant increase for our stations in the near future as they now stand.
889 We understand as of this morning that the market apparently here is about $13 million. That's a pleasant surprise to us, even though we didn't seem to share in any of the increase in the last year or two since the LMA came in.
890 Our revenue is quite straightforward. Our revenue now has flattened at about $4 million a year, so our competitors are sharing in the difference. It's a very healthy situation for them and I guess emphasizes the fact that we just simply need some other vehicle by which we can grow our business and stay competitive and continue our service level.
891 MR. DUBOIS: If I could just add one point to that. Of course, as the Commission knows, since the last figures we were privy to for the market were August 1996. We were unable, of course, to get figures for fiscal 1997 or 1998 because of the existence of only two operators in the marketplace.
892 Like most broadcasters, our August 31 financials are sitting with the auditors at the moment. I live in a bit of trepidation because our Chairman or the Board is going to find that our numbers are actually a little down from 1998. They are not flat. They are a little bit down from the previous fiscal year. If we are not -- sorry.
893 MR. McCALLUM: The $4 million you mentioned, that's a total of the AM and the FM stations.
894 MR. DUBOIS: That's correct. It's actually less than that.
895 MR. McCALLUM: And the audience share is, as you say, more or less flat as well.
896 MR. DUBOIS: The audience share has actually in the central market, and again it depends what demographic, if you want to talk about target demos or just the 12 plus rated audience in the CMA, is actually smaller than it has ever been because country music has gone into a bit of a decline in the last couple of years. Our shares are actually smaller than they used to be.
897 MR. McCALLUM: And for the first few months in the 1999-2000 fiscal year, again the projections are approximately level.
898 MR. DUBOIS: Level? Correct. Level on AM and a little bit behind on FM. We don't have a crystal ball, of course, to see into the second or third quarters.
899 MR. McCALLUM: Thank you.
900 Thank you, Madam Chair.
901 THE CHAIRPERSON: Thank you.
902 We are moving into phase two. Mr. Hildebrand, would you like a few minutes or can we go ahead? We will have Forvest deplane and then Mr. Hildebrand.
903 MR. KRUSHEN: Thank you, Madam Chair.
904 As the Chair just mentioned, we are now starting the second phase of this process, so I now call Mr. Elmer Hildebrand to present his interventions to the other two applications.
905 MR. ELMER HILDEBRAND: Madam Chair, we don't have anything to add at this time to what was added this morning, just to reconfirm that the MLA is being cancelled and no further action needs to be taken.
906 That's all the comments I have.
907 THE CHAIRPERSON: I have one question. You have just heard Forvest's concern about the sales relationship to cease even if the MLA terminates. Their concern is with the sales relationship.
908 MR. HILDEBRAND: There is an ongoing process and wherever we can work out relationships to generate more sales, we obviously have to do that. We are doing it in other parts of the Prairies as well. This is just good business practice to develop as much business as you can.
909 I don't see where you would want to do anything on that score. I don't think it's reasonable to hamper or to hamstring radio operations. Part of our job is to develop business and as we develop more business, we can provide more service.
910 THE CHAIRPERSON: Thank you.
911 Mr. McCallum, you have no questions?
912 MR. McCALLUM: No.
913 THE CHAIRPERSON: Thank you, Mr. Hildebrand.
914 MR. HILDEBRAND: Thank you.
915 THE CHAIRPERSON: Do you require time, Mr. Rawlinson?
916 MR. GORDON RAWLINSON: No.
917 MR. GORDON RAWLINSON: Thank you, Madam Chair. I now call representatives of Rawlco to present their intervention to the other applications.
918 MS LEYLAND: Madam Chair, we don't have any interventions about the other applications.
919 THE CHAIRPERSON: Commissioner Noël.
920 COMMISSIONER NOËL: I don't have any questions.
921 THE CHAIRPERSON: We are letting you off lightly. We have no questions.
922 Thank you.
923 Mr. Secretary.
924 MR. KRUSHEN: Thank you, Madam Chair.
925 I now call the representatives of Forvest to present their interventions to the other applications.
926 MR. CLINT FORSTER: Madam Chair, we have nothing to add to our presentation.
927 THE CHAIRPERSON: Thank you.
928 I think we are moving along very smoothly. Would it be probably best if we went through phase three, if we can, some part of phase three and then call a break?
929 MR. KRUSHEN: Thank you, Madam Chair.
930 I now call the first appearing outside intervenor, Mr. Curtis Olson, to intervene to the application by Elmer Hildebrand.
931 THE CHAIRPERSON: When you are ready, Mr. Olson.
932 MR. CURTIS OLSON: I am appearing on behalf of Elmer Hildebrand, of course, as an intervention and, of course, support for his new radio licence. I will give a quick background to where I come from.
933 I play in a band in the city by the name of Five Minute Miracle. We are professional touring musicians who have toured across Canada and that and so this hearing, of course, is of some concern to me for developing our band and the local Saskatoon market.
934 I have three points to make, I guess, of why I am in favour. The first one, as I am sure you have discussed quite a bit today, is that being one of the, you know, a member of the community here who listens to the radio at times, I feel that Saskatoon can best be served by having an even spread of ownership of radio stations and that. I think this is very important just for receiving the best news stream possible.
935 Saskatoon lives in a monopoly when it comes to print media. There used to be two papers, but now the other one was basically squeezed out of the market. It's one of Conrad Black's papers. So there's things like that I'm just not comfortable with. I feel that giving Elmer Hildebrand would create a level playing field and fair competition in the radio market in Saskatoon. The first point. I don't need to say much on that. I'm sure you have talked about it all day.
936 Now I am going to go into some stuff that is maybe a little bit detailed in the music industry in Saskatoon or in Canada actually. I'm sure you guys aren't very familiar in this. You can stop me any time if you don't understand what I'm talking about.
937 Our band is a totally independent band. We manage our business, book our shows, promote ourselves and we do very well at it. We have toured across Canada three times this year, out to Halifax and back and to Vancouver. There's basically about two cities left in Canada that we haven't been to.
938 Part of this was made possible by recording an album which released a year and a half ago. The album that we did, we originally intended to record it in Saskatoon, but as we got into the project, we found that to get a professional quality album we felt we had to leave, so our album was done between Saskatoon, Vancouver and Toronto.
939 The final cost for our album was $24,000. The only way that we were able to record that album was from funding that we got from FACTOR. We received the money from them for an independent recording loan which totalled $7,000. Five thousand was for the recording, two thousand was for marketing and promotion.
940 You can stop me if I'm going too fast. I can see you are trying to take notes.
941 THE CHAIRPERSON: I can take notes really fast, so it's all right.
942 MR. OLSON: I'm sure you have had some practice.
943 By doing this album it allows us, that is basically the medium for promoting the band. If people cannot hear your music, they are not going to book you. They are not going to buy your show or anything like that.
944 What we found was we had spent a lot of money on getting this album. We were very happy with it and still very proud of it today. We released the album a year and a half ago, which would have been May 23, and we had our slowest summer ever, the reason being that once our album was out there, we had spent everything in the bank and we were in debt. We didn't have any money to market the album properly.
945 I'm sure people are familiar with this. The analogy is like building the best car in the world, but not having any gas stations around to fuel it up to take it places.
946 We had serious problems promoting our album. The reason is that -- I like just using my hands as a level. Our album was up here, right up in the top ranks of all independent albums I have heard, and our business was down here. We did not have the strong business to support the album.
947 We spent the last year and a half building up our business. It has taken us that time to learn the industry really well, learn how to effectively promote to college stations and that where we have secured really good radio rotation throughout college stations across Canada.
948 I'm just trying to remember. We are doing quite well right now. As always, like the broadcasting corporations here, we are trying to develop and trying to get to the next level.
949 We have applied for FACTOR funding again. We are no longer eligible for the grant we got last time. We are now into the next phase, which is a recording loan program for whatever reasons that you don't need to know. It's just details.
950 We heard back from that application in the middle of October and we were rejected. That is the only funding which is available to us through FACTOR. In that application period, there were 95 applications for funding of which only seven were approved, so the competition is very stiff for these funds for another album. With a percentage of approval like that, you can see that it's a very tough thing to get.
951 The other way of getting FACTOR funding is direct approval through some companies in Canada, record labels such as Warner Brothers that have direct approval. Some of their bands do not have apply. Network Records out of Vancouver is another example of this. Their bands get automatic funding because they are hooked up with these people and they are tied into FACTOR.
952 Being that we live in Saskatoon, there are no record labels, no management companies like Jones and Co. which are another example out of Halifax, for us to get funding on that.
953 What I'm getting at is FACTOR has been essential in getting us to where we were about a year ago, but we are having serious difficulties getting funding from here on in. We will not be able to do another album without funding just because live playing and that does not generate a lot of extra money to be saved up. So that's dealing with FACTOR.
954 Now on to the money that Elmer Hildebrand has allotted over the next five years, which I believe is $200,000 a year over five years.
955 In the Saskatoon scene there are a lot of artists and musicians and writers and performers, ranging from everything from jazz music to classical, rock, folk, everything. Just go to any of the bars this weekend -- I'm sure you won't be here, but the local bars are full of local bands playing and that.
956 Like I said before, the problem is the industry around Saskatoon has not developed to the point that the musicians are. There is no distributor in Saskatchewan at all. What a distributor does is take the CDs, put them in record stores and take care of all album sales.
957 There are no management companies that bands like ourselves could hook up with. There are a few small select record labels, most of which are aboriginal recording or folk recording, that kind of stuff. What happens if musicians want to develop to the point where we are or the next step we are trying to get to, you are forced to move to a larger centre, one of the musical hubs of Canada, either Vancouver or mostly Toronto.
958 An example of that is a band Age of Electric which moved to Vancouver. They are originally from Saskatchewan, but they moved to Vancouver to make things happen.
959 The other approach is to take the business and promotion and that into your own hands, which we have done and are doing well at, but we have kind of reached a bit of a blockade and we are fighting to get around it, fighting to find new ways of funding or new ways of making money.
960 You know, being that musicians aren't always the best business people in the world, that means people are forced to move out of Saskatoon, so $200,000 a year put into the Saskatoon market, I feel it is enough to start developing the industry in Saskatoon with support from Mr. Hildebrand's station for local artists. There is an incentive there. It will start up the market a little bit more.
961 Money put into the local economy here should be put in beyond just recording because, like I said, you can put out an album, but if there's nothing behind that album, it's no good. I guess the goal that I see with this money is to put some into helping the bands, some into the industry so that in five years when this licence is up, the industry then no longer needs funding and they are self-sufficient and there's people working in the industry and developing the music and the acts here.
962 That's about it.
963 THE CHAIRPERSON: Thank you, Mr. Olson.
964 Commissioner Williams, do you have any questions?
965 COMMISSIONER WILLIAMS: How many groups will be competing for that $200,000 in your estimation?
966 MR. OLSON: In my estimation. Well, it all depends how the funding was set up. If there was across the genre -- I'm not exactly sure. There's a lot of musicians, some recording, some just performing. I guess if I had to give you a number of serious recording bands in Saskatoon across all genres, you know, possibly maybe 15 to 20 serious acts.
967 COMMISSIONER WILLIAMS: I have no further questions, Madam Chair.
968 THE CHAIRPERSON: Commissioner Noël.
969 COMMISSIONER NOËL: And how many in classic rock, how many bands?
970 MR. OLSON: Classic rock? Honestly, I'm not too up to date on the classic rock scene for bands in Saskatchewan, so I couldn't really say.
971 COMMISSIONER NOËL: Thank you.
972 MR. OLSON: You're welcome.
973 THE CHAIRPERSON: Thank you, Mr. Olson.
974 MR. KRUSHEN: I would now like to call the next intervenor, Mr. James Boswell, to intervene to the application by Forvest Broadcasting.
975 MR. JAMES H. BOSWELL: Good afternoon. First of all, welcome to Saskatoon. Enjoy the weather. We don't often get this in November.
976 COMMISSIONER NOËL: I brought it from Quebec.
977 MR. BOSWELL: You brought it from Quebec. Tell me another. I thought this was to be truthful presentations today.
978 Thank you for allowing me to say a few words on behalf of the applicant Forvest Broadcasting Corporation.
979 My name is Jim Boswell. I would very briefly like to give you a little background on who I am and why I might make such an application today.
980 I'm a cowboy poet and a rodeo announcer, not a radio announcer but a rodeo announcer. I was born in Scotland and came to Canada as an 11 year old boy with my family, moved to Calgary in 1961 and stayed there until 1984. At that time we won the lottery. We didn't understand that for every 1,000 families that leave Saskatchewan and move to Alberta, one name gets drawn and that family moves from Alberta back to Saskatchewan. However, we are here and delighted to be here. Saskatchewan is home now and we are proud to call it home. We intend to continue to call it home.
981 My wife, Sandra, was born in Saskatoon, so Saskatoon had many ties to her. However, I had no ties to the city. I am delighted to say though that the city and the province is now my home. A new job, a new city, a new house and new relationships greeted us when we came here in 1984. Among the new relationships was one that I entered into with radio station CJWW which at that time was at 750 on the AM dial.
982 I was a country music fan and found a home on the dial which pleased me. I tuned in to CJWW at that time and have remained a loyal listener for the past 15 years. Over time I have been pleased to expand the relationship from simply that of a listener to that of an active partner and I would like to explain what I mean by that.
983 As I said, I'm a cowboy poet and I am also a song writer. Being part of the music industry has occasioned me to serve as a member of the Board of Directors of the Saskatchewan Country Music Association since 1993.
984 The SCMA, Saskatchewan Country Music Association, has recognized on six occasions CJWW's commitment to the music industry by naming that station the radio station of the year. The national body, the Canadian Country Music Association, has honoured CJWW in a similar fashion on three occasions.
985 The provincial body, the SCMA, has received generous assistance through on-air exposure to keep the public informed of coming events as well as much needed direct financial contributions over the years.
986 The main reasons these prestigious awards have been given to CJWW has been the considerable ongoing support of Saskatchewan and Canadian talent offered by the station. The music industry is not, as I'm sure you can appreciate, an easy industry in which to achieve success. Talent must be coupled with drive and dedication, commitment and perseverance.
987 The final necessary ingredient which the artists cannot supply themselves is radio support. CJWW and CFQC-FM play country music often, I believe, in excess of the mandated minimum requirements laid out. They do so because they wish to see talented Saskatchewan artists and Canadian artists succeed.
988 Airplay translates into buzz, into sales and into presence. Without buzz, sales and presence, a performer's career is going absolutely nowhere. I have personally heard on many occasions artists express their appreciation for the airplay their recordings have received from CJWW and CFQC-FM.
989 Please bear in mind that both CJWW and CFQC-FM are reporting stations. Their decision to play or not play an artist's music can have a huge effect on a performer's career. I and many others, especially within the country music field, are delighted that they have chosen over the years to be so supportive of Saskatchewan and Canadian talent and the associations which represent those artists.
990 The applicant's two existing stations support worthy talent in other ways. Financial contributions directly and to the Saskatchewan Country Music Association have enabled Saskatchewan artists to perform more, to perform in new venues and to perform further afield, including showcasing their talent at Canadian Country Music Week in Hamilton and Calgary.
991 Without question, such assistance has helped further the career of many performers.
992 Additionally, Forvest Broadcasting spearheaded a bit to have the Canadian Country Music Awards show brought to Saskatoon.
993 I have been myself a performer on the CJWW Travelling Country Road Show which has toured over the last two years. This variety show features classic and contemporary country music, cowboy poetry and humour, and has been very well received. Attendees especially appreciate the fact that live entertainment has been brought to them right in their home communities, sometimes towns of only a few hundred people.
994 Because all costs, including travel, meals, hotels and performance fees were underwritten by CJWW, the entire amount of gate receipts were left in those communities with the sponsoring groups. Those groups included Kinsmen Clubs, seniors lodges and safe grad organizing committees. This would not have been possible without the generosity of Forvest Broadcasting.
995 Forvest Broadcasting's two stations are there when worthwhile events need help. CJWW and CFQC-FM support community events on an ongoing basis, as Captain Percy from Salvation Army will soon attest to. For example, the stations were founding sponsors of the Mewassen Dragon Boat Festival which goes on the South Saskatchewan River each summer. Proceeds form that event support the use and protection of the city's river bank.
996 This year the all star pro rodeo challenge was one major sponsor short of budget. Rodeo organizers approached CJWW for sponsorship in the amount of $10,000, not a small amount. The station quickly came on board as a major sponsor, allowing the organizers to offer the full amount of prize money and maintain this important event in the city. With economic benefits to the community estimated to exceed $1 million, we on the rodeo organizing committee are very grateful to CJWW for helping us produce this great event.
997 As a rodeo announcer, I have repeatedly had the pleasure of informing rodeo crowds that the rodeo that they were watching was supported by sponsorship from CJWW, Hot 93 or both.
998 Mayfair School has enjoyed an interesting relationship with both stations for a number of years. Staff from the two stations attend at the school and participate in in-class activities such as reading and discussions as well as helping serving special luncheons. Cowboy poetry even gets offered up on occasion.
999 Such mentoring programs are invaluable, especially in schools where high proportions of the students are disadvantaged in one way or another.
1000 I will deviate from my notes a little bit here. One of the reasons that I enjoyed being involved in that came to mind the last time that I was at Mayfair School with the radio stations. We had the meal presented to us which that day was hamburger, soup and buns. Dessert was donuts donated by a local donut company.
1001 A little fellow that was sitting at the table that I was at was about nine years of age. Suffice to say, his parents didn't buy him clothes at The Gap, nor was his hair professionally cut. When he was finished his donut, he was informed that he could have a second one. When he went and brought it back to the table, I said "Are you going to enjoy that?" He said no. He wrapped it up in a serviette and he took it home. He said "This is for my mom. It's been a long time since she had a donut".
1002 I'm a little emotional. That little guy saw the value in taking that donut home to reward his mom for what she had given him over the last period of time. It opened my eyes.
1003 Finally, I would like you to know that as a professional cowboy poet, a performer in a growing genre, I appreciate the on-air mentions, the public service announcements and the positive feedback offered by these radio stations.
1004 Part of my livelihood and the well-being of my family is dependent upon the growth of cowboy poetry. CJWW and CFQC-FM have offered their unsolicited support and for that all cowboy poets and western musicians are grateful.
1005 CJWW and CFQC-FM are part of my life. They are part of my recreational life, supporting rodeo and country music. They are part of my vocational life through my role as a sports announcer, cowboy poet and master of ceremonies. They are part of my life as a volunteer within this community and I am pleased to say that I enjoy a number of friendships with staff from the stations, these friendships having evolved over the years.
1006 I appreciate both the personal relationships I enjoy with the stations and their staffs and the interest and the commitment to the well-being of this community and surrounding area which they have demonstrated. I believe the residents of the listening area for the new radio station will benefit collectively and individually as I have should you award a licence to Forvest Broadcasting Corporation and I heartily encourage you to do so.
1007 One final note which was not on my notes as I came in. I am especially delighted to hear your repeated statements about the spoken word. I encourage you to force all your applicants to offer up cowboy poetry ad nauseam over the years.
1008 Thank you. That concludes my presentation.
1009 THE CHAIRPERSON: Thank you, Mr. Boswell.
1010 I will ask Commissioner Noël to ask you questions.
1011 COMMISSIONER NOËL: Well, Mr. Boswell, your presentation was pretty clear. I don't think I have any questions.
1012 Do you think you will be able to accept this one? Do you think cowboy poetry will fit in that new station if a licence is awarded?
1013 MR. BOSWELL: No, I don't think so, but I'm sure we will have opportunities on CJWW and Hot 93 to offer some up.
1014 Thank you.
1015 COMMISSIONER NOËL: Thank you.
1016 THE CHAIRPERSON: Thank you for your time, Mr. Boswell.
1017 MR. KRUSHEN: Thank you, Madam Chair.
1018 I now call Captain Ken Percy of the Salvation Army to present his intervention.
1019 CAPTAIN KEN PERCY: Let me echo the words of our last presenter in welcoming you to Saskatoon.
1020 When I was asked to be an intervenor, I told the person who asked me, I said "You realize you are talking to a preacher". He said "Well, you are limited to ten minutes". I said "Well, you do believe you are talking to a preacher here", so I will try to abide by those rules.
1021 Madam Chair and Members of the panel, thank you for this opportunity. It's a real honour. I have given you copies of my sermon for today and the lesson herein.
1022 A positive message of hope. The headlines seem to be screaming at us these days with headlines such as "Teen shootings in our high schools". We see news of teen pregnancy, drugs and alcohol and every other abuse that one imagine.
1023 Our society in this day and age is in need of some good news. We need a positive message for the youth of our society. Canada needs a positive message of hope.
1024 This message can come to our communities in each of the following three ways: Partnership, promotion and perspective.
1025 Partnership. When I was considering the Salvation Army as my life's vocation, I received some very good fatherly advice from my dad. On one occasion he said that this would be the toughest job I would ever love. I have proven that to be true down through the years, but how much tougher would this job be if there were no partnerships to rely on.
1026 Throughout our history we can see the evidence of great partnerships, partnerships that changed our world. Look what happened when a little boy partnered with one of the 12 disciples by giving his lunch of five loaves and two fishes. Over 5,000 people were fed.
1027 The Salvation Army since its inception has formed partnerships with other organizations to further its work of hope and today is no exception.
1028 The Salvation Army truly believes in partnerships. No one organization can meet the need of countless thousands of the disadvantaged of our society. However, the Salvation Army does its best to alleviate the suffering that is brought about by the different abuses of our time, but we can't do it alone. We need partnerships like that of Forvest and others within the community to bring about that positive message of hope and start to heal the hurt.
1029 At this very moment the Salvation Army is accepting applications for Christmas hampers from thousands of people right here in Saskatoon. This takes place every year at this time and the numbers are on the increase. Every year Forvest, under the leadership of Mr. Vic Dubois, brings that very positive message to the people of Saskatoon.
1030 The messages comes through the willingness of Forvest to partner with the Salvation Army to help meet the needs of those who cannot, for some reasons possibly their control, they cannot help themselves.
1031 The message also comes through people who are willing to give of themselves, volunteering for the CJWW Secret Santa. The message is "Someone really does care".
1032 Promotion. Forvest has been that positive message for the City of Saskatoon for many years. As I stated in my letter to the CRTC on September 29 of this year, Forvest's support of the Salvation Army is legendary. CJWW's Secret Santa Campaign, which was started by the voice of Saskatoon, Mr. Denny Carr, has been giving that very positive message of hope to countless thousands over the past 14 years.
1033 With the loss of Denny Carr, Forvest is picking up the ball and running with it. At this very moment, Mercedes Weyman, CJWW Secret Santa's head elf, is at her desk at CJWW making arrangements for this year's toy distribution drive.
1034 Forvest has brought the community together under the banner of Denny Carr's CJWW Secret Santa. Many different groups have rallied to support this worthy venture. Groups such as the Saskatoon Real Estate Board, Saskatchewan Chefs' Association, various business associations around town, Saskatoon Fire and Protective Services with their Singing Fire Fighters. If these fellows came and sang at your restaurant table during lunch, you would gladly give them a donation just to get them to stop. If you have heard them sing, you know what I am speaking of. Last year they raised more than $5,000 for the Christmas effort.
1035 Every year in September close to 400 motorcycles can be heard roaring through the streets of Saskatoon. These are bikers with a difference. They carry with them toys for CJWW's Secret Santa. Bikers come from all parts of western Canada and some as far away as the northern states.
1036 This year my own parents rode their Honda all the way from Calgary to participate. My father and I had the honour of leading this year's participants in the CJWW Secret Santa Bikers Toy Run.
1037 Last year the Salvation Army helped 2,000 families with Christmas hampers. The hamper included enough food for a Christmas dinner, including either a turkey or a ham, enough for at least two to three days after Christmas. Each of the 2,000 families had two or more children which resulted in a total of 8,000 to 9,000 children who were in need of toys last Christmas.
1038 The CJWW Secret Santa elves were on hand passing out more than 10,000 toys. Not one family who came to the Salvation Army for help last Christmas went without.
1039 It was a joy to be present on distribution day when the people came in empty handed but left needing help to carry the hampers and bags of toys for under the tree. The excitement of the children and the relief on the faces of the adults spoke volumes to the hearts of those who had volunteered their time to help us help others.
1040 As well as promoting this program in years past, Mr. Vic Dubois, President and GM of Forvest, has also co-hosted an amazingly successful "Kettle Kickoff" for the Salvation Army's major Christmas fundraising effort which will be happening actually this Thursday morning at the Ramada Hotel. If you wish to come for breakfast, you are most welcome to do so.
1041 This takes place in conjunction with Mr. Jim Wirum and the Ramada Hotel. Volunteers are invited to a full breakfast hosted by the Ramada Hotel and Forvest. A Forvest radio celebrity gives of his or her time to be master of ceremonies. There is a special guest speaker who brings greetings and makes the first donation to the Christmas Kettle campaign.
1042 CJWW's remote one day radio blitz, also at the Ramada Hotel, brings in many donations of food and money that are added to the Salvation Army's Christmas hampers for distribution to the needy in Saskatoon and area.
1043 Forvest is not just a friend of the Salvation Army at Christmas. They are also on hand to publicize the Salvation Army's Red Shield Appeal held in May of each year. Forvest has utilized their two radio stations here in Saskatoon for the betterment of the community at large.
1044 In my dealings with the staff and management of Forvest, I have come to realize that this company gives back to the community. The assistance, promotion and good will of Forvest has been instrumental in getting the Salvation Army's positive message of hope out to the public using public service announcements, on-air ad lib mentions and special interviews.
1045 Forvest has also been instrumental in providing publicity for our efforts to purchase an emergency/disaster response vehicle to be used in Saskatoon and Northern Saskatchewan. Last year's assistance in reaching the proper contacts to promote this project at the Reba McEntire concert was just outstanding.
1046 Perspective. My wife and I have always believed in building the proper relationships needed to undertake the seemingly insurmountable tasks that come our way as officers of the Salvation Army. The Salvation Army has always utilized outside allied professionals to advise them on varying subject matter. Professionals such as lawyers, accountants, doctors, people from virtually every profession.
1047 I am very pleaded to inform this panel that the door to Vic Dubois' office is always open. I can always call on him when I am in need of advice in areas of communications.
1048 You will find within the mission statement of the Salvation Army that we will help anyone regardless of race, colour, creed, sex or age. With this diversity of humanity coming to the Salvation Army for assistance, we are in need of more diversified approaches to getting the positive message of hope out to the Canadian public.
1049 We in the Salvation Army are very excited about the prospect of a youth centred radio station in Saskatoon. Our hearts are broken when we hear reports of children, some as young as 12, living on the streets of our city, some having to prostitute themselves for a meal or a warm place to sleep.
1050 Where are the parents? When some parents leave their children at a community Christmas dinner and don't come back for them until the next day, there is something desperately wrong. We need a clear positive message that will be able to reach these children and what better way to accomplish this task but with a youth centred, youth focused radio station, a radio station that is willing to bring kids into its boardroom to discover what our children are needing in a radio station and to discuss the issues that are facing the children of today.
1051 We are anticipating some great things from this new venture of Forvest. With the addition of this youth centred station, the children of Saskatoon will have the opportunity to be heard. They will have the opportunity to hear about and have access to the services that they are in need of. With the addition of this youth centred station, the Salvation Army will be aided in reaching more youth with that positive message of hope and thus help us to fulfil our mandate.
1052 These children are the future of our country and to ensure a positive future, I believe that it is time we as a nation presented them with more positive messages. Let's, my friends, give them some hope.
1053 Thank you for your time.
1054 THE CHAIRPERSON: Thank you, Captain Percy. I would ask Commissioner Williams to ask any questions.
1055 COMMISSIONER WILLIAMS: Have you, Captain Percy, partnered with other broadcasters in the Saskatoon market?
1056 CAPTAIN PERCY: Yes, we have.
1057 COMMISSIONER WILLIAMS: Should Forvest be successful in obtaining this new FM station, do you see your organization working with them on that station as well?
1058 CAPTAIN PERCY: Yes, I do. As I said before in my presentation, we are very excited about the prospect of, using the marketing term, of wider demographic. For instance, in Saskatoon now we are seeing in our own statistics that there is a hole or a gap in reaching young single males.
1059 We have our Bethany Home for pregnant teenage girls, girls in crisis on the street. We have our alcoholic drug addiction centres for people who have abused drugs and alcohol, usually primarily the older male, but what of the younger boys who are living on the street and now, more increasingly, females as well?
1060 COMMISSIONER WILLIAMS: Okay. I have no further questions, Madam Chair.
1061 THE CHAIRPERSON: Thank you very much.
1062 MR. KRUSHEN: Thank you, Madam Chair.
1063 I now call Mr. Eugene Arcand of the Saskatchewan Indian Gaming Authority.
1064 MR. EUGENE ARCAND: (Mr. Arcand spoke in native language.)
1065 Ladies and gentlemen, it's nice to have this opportunity to speak to you. I only spoke that language for ten years. I have been a First Nations person for 47 years tomorrow. I learned my language when I was about five years old and lost it in the residential school experience.
1066 I am proud to say that I got my language back and can share it with people who make decisions that affect everyone's life in Canada, in this particular time, Saskatoon.
1067 I agreed to speak on behalf of the Saskatchewan Gaming Authority and the Saskatchewan Tribunal Council today in support of Forvest as it relates to the Saskatoon market.
1068 Forvest and CJWW are the first radio station in my short time here, which is approximately seven years, that have come to us and asked for advice, consultation and provided for direct say on programming as it relates to First Nations people and went further to take some risks in implementing programs that were relative to the First Nations and Aboriginal community.
1069 We have done business with others, the Saskatchewan Gaming Authority. We have invested in media buys and continue to do so.
1070 I also want to respect those other communities that are here, North Battleford and Prince Albert, who I have had an opportunity to work with and have provided, although not as much as can be done to eliminate capabilities that they have, have shown respect to our community, the First Nations and the Aboriginal communities, the work and best interest of coexistence.
1071 In Saskatoon, CJWW and Forvest Broadcasting Corporation have been our partners in the area of promotion of socioeconomic lifestyles for not only First Nations people but also the community that is at the lower end of the economic scale. Other radio stations in Saskatoon do the same thing, but it's important that we have a say in how that's done, when it's done and Forvest have done that.
1072 We don't want to be continuing to go out with hat in hand as beggars, as recipients of good will. Sometimes it's nice to be there to decide on how it's done when it's done and given an opportunity to say thank you prior to when we receive the goods.
1073 Earlier you talked about profits with one of the other groups. Again, our name was not mentioned, the Saskatchewan Gaming Authority. It's nice to have an opportunity to speak to that because if you will notice in the audits that you received in the last four years, every radio station, television and newspaper's profits have went up a slight degree in Saskatchewan because of the advent of the Saskatchewan Indian Gaming Authority.
1074 It's not only because of more media buys by others because the population certainly isn't going up. Forvest have recognized that. Aside from us, by us I mean Saskatchewan Gaming Authority, being involved in the business of media buys to promote our business ventures which at the present are casinos, we also see the other side of the respect for our community. Respect is our most valued value as First Nations people. By showing respect, you earn respect when dealing with the future.
1075 I haven't met you all, but the gentleman on my right asked about demographics earlier. I'm glad you did because it's important.
1076 Last year with the Federation of Saskatchewan Indian Nations we released a demographic study done by the University of Saskatchewan that showed in Saskatoon the percentage average of First Nations and aboriginal people was approximately 17 to 20 per cent. Three per cent is a big percentage, but it's sad to say that the percentage went up for a while with the Saskatchewan Court of Appeal decision on hunting rights. More people came out and said they were of aboriginal ancestry that we didn't know about before.
1077 There are approximately 128,000 First Nations people, treaty status people, in Saskatchewan with a fluctuating number of about 100,000 Metis people and non-status. The average of non-First Nations people in Saskatchewan is 47. The average of the First Nations and Aboriginal community is 23.
1078 The highest age group is six years old. In ten years, in the year 2009, the year 2010, that age group when Census Canada comes around again is going to blow the population up at least another 10 per cent. Ten years from that time the age group -- six and down is the fastest growing age group in Saskatchewan right now.
1079 CJWW and Forvest in our consultations and our talks, formal and informal, are always ready to learn and ask these questions. We have been with the other companies socially, golf outings, and we appreciate those opportunities, but sometimes you don't deal with the nitty-gritty issues that should be dealt with as we go into the future of what's going to happen in Saskatchewan.
1080 We have attempted as First Nations people to educate our young people about corporate relationships, not to go hat in hand to receive gift in kind and monetary donations for special events that we run, get to know those people, solidify that base.
1081 What Forvest is trying to do for the future of Saskatchewan and Saskatoon in addressing the FM station is something we agree with. We wouldn't come here just to share information with CRTC because we don't feel good about it because when people allow us an opportunity for direct say and consultation, many of us have survived in a non-Indian world, be it Corrections, be it food banks, on and on, but many of us are also educated and can survive in that world and we have something to offer. We are very happy that somebody like Forvest recognizes that we know what they know, but they don't know what we know.
1082 With that, I would say to the Commission then I don't see too many people in the room wearing a warrior shirt like I'm wearing. I would encourage you through the next -- you are going to be here for the next couple of days I think. I don't think anybody else is going to come in here wearing what I'm wearing. If there's ever anything you wanted to ask about Indians but were afraid to ask, now's your chance.
1083 Thank you.
1084 THE CHAIRPERSON: Thank you, Mr. Arcand. Happy birthday.
1085 MR. ARCAND: Thank you. Glad to be here.
1086 THE CHAIRPERSON: And I am sure it is very pleasing for Commissioner Noël. She thinks Scorpios are nice people. I agree totally. Don't get me wrong.
1087 The Saskatoon Tribal Council, what bands does that include?
1088 MR. ARCAND: That includes Muskeg Lake which is the First Nation I am from. We have reserve land right here in the city which is the southern selection. The Mistawasis First Nation, One Arrow First Nation, Kineston, Yellow Quill, Muskavay and just south of the city here we have the White Cap First Nation, and with a working agreement with the Beardy and Okemasis First Nation who are not yet formally part of our Tribal Council which is just by Duck Lake over there.
1089 THE CHAIRPERSON: Your letter refers to "Sounding Sky", the program. You call it aboriginal language/English language. On a weekly basis, how long is that program?
1090 MR. ARCAND: It used to be one hour. One of the problems that we find, and it's not only Saskatoon but across the country, is we don't have people that want to come out of the Misinipi broadcasting area as announcers to come and try their trade and their experience in mainstream because of various reasons that include urbanization and that kind of stuff. A northerner is a northerner or a westerner is a westerner. It's hard to get those people to come out and do that.
1091 Unfortunately, unless I decide to go into the radio business and be a DJ, the people that want to take that risk are few and far between.
1092 THE CHAIRPERSON: So it's presently one hour a week.
1093 MR. ARCAND: Actually, Roger Fox, who was the host, is not there, but at the time of the application he was there. Roger's not doing that any more. We try to assist CJWW in finding new people when the time comes or someone comes forward. They were the first ones though in Saskatoon to introduce such a program. I know I listened to it every Sunday night, even though it was at ten o'clock.
1094 THE CHAIRPERSON: So you don't have anybody for that.
1095 MR. ARCAND: Not right now.
1096 THE CHAIRPERSON: Thank you. Those are my questions. Thank you for coming.
1097 MR. KRUSHEN: Thank you, Madam Chair.
1098 That now completes the third phase of our proceeding for today. We now enter the fourth phase. At this time I would now like to call representatives of Forvest Broadcasting to reply to any of the interventions filed to their application.
REPLY / RÉPLIQUE
1099 MR. FISHER: Madam Chair, we have nothing to add.
1100 MR. KRUSHEN: Thank you.
1101 I now would like to call a representative of Rawlco Communications to reply to their interventions.
REPLY / RÉPLIQUE
1102 MS LEYLAND: Madam Chair, we have nothing to add.
1103 MR. KRUSHEN: Thank you.
1104 I would now like to call Mr. Elmer Hildebrand to reply to his interventions.
REPLY / RÉPLIQUE
1105 MR. HILDEBRAND: Thank you. I would like to thank my intervenor, Curtis Olson, for coming in and speaking to you and I would like to thank you for listening to all of our presentation today.
1106 That's all I have to say.
1108 THE CHAIRPERSON: I would like to thank all of the parties for their excellent presentations today and thank all of the intervenors and thank all of the other people here, including the staff, and my fellow Commissioners.
1109 We will adjourn until tomorrow at nine in the morning.
--- Whereupon the hearing adjourned at 1550, to resume
on Wednesday, November 17, 1999 at 0900 /
L'audience est adjournée à 1550, pour rependre le
mercredi 17 novembre à 0900