MONTREAL – Cogeco has offered a comprehensive new plan for the radio stations it plans to take over under its $80 million deal to acquire nearly all of Corus Entertainment’s Quebec radio stations.
The CRTC said Tuesday it will hear the application to buy the 11 stations on September 28. The stations involved in the transaction announced in April are: CFQR-FM 92.5, CHMP-FM 98.5, CKOI-FM 96.9 and CKAC-AM 730 in Montréal; CFOM-FM 102.9 and CFEL-FM 102.1 in Québec City; CJRC-FM 104.7 in Gatineau; CHLT-FM 107.7 and CKOY-FM 104.5 in Sherbrooke; CHLN-FM 106.9 in Trois-Rivières; and CIME-FM 103.9 in St-Jérôme.
"Cogeco has presented a plan that focuses on local content to ensure the recovery and sustainability of regional stations that face serious financial difficulties, and on restoring competitive balance in the French-language commercial radio industry in Québec," said Cogeco Diffusion vice-president Richard Lachance, in a press release.
That plan includes, says the press release:
• The creation of a major news agency to be fed and accessed not only by all of the group’s own radio stations, but also by independent stations and community radio stations.
• A request for an exception to the common ownership policy in the Montréal French-language radio market to allow it to own three FM stations and one AM station in the French language instead of two FM stations and two AM stations, and thus support the money losing regional stations that are being acquired
• The sale of two FM stations in Québec City and the conversion of one FM station in Sherbrooke into a retransmitter of another station in order to comply with the common ownership policy
• The allocation of a contribution of 9% of the total transaction value, namely $ 7.2 million, to various organizations and initiatives to support the Canadian broadcasting system if the transaction is approved in its entirety.
The news agency that Cogeco proposes to set up will provide a complement to the other information sources available in Québec, says the company. All of the stations of the Cogeco group as well as independent stations in the regions and community stations will be asked to contribute to the content available through the agency. In return, they will be able to select the most relevant news for their respective listening audiences and produce their own news bulletins locally.
Pooling resources through the news agency, which will be coordinated by FM 98.5, will create a full information source available 24/7.
Plus, “sharing information resources will allow regional stations CHLN-FM Trois-Rivières, CHLT-FM Sherbrooke and CJRC-FM Gatineau, which will remain predominantly spoken-word radio services but will now primarily target men between the ages of 25 and 54, to devote their resources to producing local shows. Most significantly, this means the return of local public affairs programming in the morning and at noon, as well as locally produced news bulletins,” reads the press release.
Finally, a night-time show and a weekend morning public affairs show will be produced and offered to all stations of the group. Community stations and independent stations in the regions will also have the benefit of these new resources and information content.
"We want to put information radio in Québec back on top," added Lachance in the release. "Since Cogeco is a business that is close to its people, it is a natural fit for us to make local information and local interest content the heart of our strategy. The decision to include independent stations in the regions and community stations in the agency aligns with that, and we think this is great news for radio in Québec."
The biggest stumbling block to be sure is Cogeco’s request for an exception under the CRTC’s common ownership policy, which limits to two the number of same-language FM stations one person can own in a single market. “The proposed exception affects only FM 98.5 in Montréal’s French-language radio market and would allow Cogeco to operate three French-language FM radio stations, each in its own niche,” reads the release.
It would bring the number of commercial stations Cogeco owns in Montréal to five, although the common ownership policy would allow in principle up to eight – four French-language stations and four English-language stations. There are currently 13 private commercial radio stations and some 30 radio stations of all types in Montréal.
However, allowing Cogeco’s request would signal not just an exception, but a shift in Commission policy on diversity of ownership in single markets. Then again, AM is mature technology where many companies are struggling to keep them afloat and the industry is pushing the CRTC to abandon its AM vs. FM approach to ownership since many consider AM radio a dying technology. Those in the industry feel that since the Commission allows two AM and two FMs to be owned by a company, it should just switch the policy to four stations, whatever their band.
This request may finally force that policy shift. Heck there’s only one privately held AM station left in Montreal anyway (CKAC, which is part of the transaction).
"The distinctiveness of the bilingual Montréal market and the importance of keeping talk radio like FM 98.5 strong in order to ensure the sustainability of French-language spoken-word radio in Québec justify our request for an exception," added Lachance. "Without that exception, it will be next to impossible for Cogeco to indefinitely support regional spoken-word radio stations that have been running heavy deficits for many years."
Despite the request for the exception in Montreal, Cogeco has decided to comply with the ownership policy in other Quebec markets.
In Québec City, the company has undertaken to sell two stations – Rythme FM Québec (CJEC-FM) and CFEL-FM. It made this choice based on the complementarity of the two other stations in its current and future portfolios, FM 93 (CJMF-FM) and CFOM-FM, it said.
In Sherbrooke, Cogeco proposes to convert CKOY-FM into a retransmitter for CKAC, thereby ceasing to sell advertising. “The solution has the threefold advantage of ensuring that Sherbrooke receives a full radio service focusing on sports and sports information, which is a complementary service to the current market, of not overburdening the local advertising market where most stations, including CKOY-FM, have been unable to achieve profitability, and of complying with the CRTC’s common ownership policy,” reads the release.
"We are aiming to support jobs in the Québec French-language radio industry," added Lachance. "If the CRTC approves our overall plan, for the first time in many years, there will be a net creation of jobs in the private French-language radio industry in Québec, particularly with the creation of the news agency.”
Cogeco is also proposing a contribution of 9% of the total transaction value, $7.2 million, to various organizations and initiatives to support the radio system, in particular for Musicaction, Fonds Radiostar, the Community Radio Fund of Canada, and for many others, if the transaction is approved in its entirety.
"Our plan is without a doubt the best opportunity to increase diversity of voices across Québec that the broadcasting system has seen in many years. We are confident that the CRTC will recognize its value and the immediate and long range benefits it will have for all elements of Québec society," said Lachance.
