MONTREAL — Leclerc Communication has decided to abandon its deal to acquire two Quebec radio stations after the CRTC refused to approve a key part of the deal on Tuesday.
Leclerc had sought an exception to the CRTC's common ownership policy in order to control a third French-language FM radio station in Quebec City — top-rated talk station CHOI-FM. It had agreed to acquire CHOI and Montreal's CKLX-FM from RNC Media for $19 million last year.
At the CRTC hearing in February, Leclerc vice-president Jean-François Leclerc made clear that if the request for an exception to the rules wasn't granted, it would not proceed with the transaction.
On Tuesday, the CRTC said it could approve the transaction but not give the exception, saying it had to dispose of a station, so Leclerc stuck to its promise.
"We're evidently disappointed, but we respect the decision," the company said in a statement to Cartt.ca. "Like we said throughout the hearing, we never considered the option of selling one of our existing stations. This was clear and remains so today."
Though it doesn't explicitly say the transaction itself is being abandoned, Leclerc's own newsrooms described it as such and Leclerc confirmed to La Presse the deal was off.
"This acquisition represented for us an opportunity and not a goal," Leclerc's statement added. "Leclerc Communication had the wind in its sails and we will now focus our efforts toward other growth opportunities to continue to advance our great company."
The end of the deal has a side-effect in that the Montreal station might not change formats after all. As part of the acquisition, Leclerc planned to take the station that currently operates in a sports-talk format as 91,9 Sports and convert it into a pop music station using the same branding as its existing WKND station in Quebec City.
Leclerc got the CRTC's authorization to switch CKLX-FM from a talk format to music, but with the overall deal scuttled, the future of the station is up in the air. The application prompted a petition with 1,025 signatures to ask the CRTC to save Quebec's only French-language sports talk station.
RNC Media said the station has never made money since it launched in 2003 as a jazz music station. With its recent sale of 10 other stations to Cogeco Media, RNC is clearly getting out of the radio business. It has five remaining stations, including two in Gatineau and a second in the Quebec City area.
Montreal's English sports talk station was similarly saved as a side-effect of a CRTC decision in 2012, during Bell's first proposed acquisition of Astral Media. The deal then put Bell above the limit for English-language stations in the market, so it proposed transforming TSN Radio 690 into a French station to comply with the rules.
Thousands of listeners wrote to the Commission to protest the request, but it was rendered moot when the CRTC denied the overall transaction.
On its second attempt, Bell requested an exception to the ownership rules, which the commission granted so Montrealers could keep an all-sports station on the air.
In its decision on Tuesday, the Commission said Leclerc failed to demonstrate it needed the exception to the ownership rules in Quebec City for any exceptional reason. The company promised no additional tangible benefits or even significant programming improvements to its Quebec City stations (most of its benefits were for the Montreal market). The CRTC concluded that the transaction as proposed "would allow Leclerc to dominate significantly in terms of revenue and tuning, breaking the market’s existing competitive balance."
RNC Media did not immediately respond to a request for comment about its intentions for CHOI-FM or 91,9 Sports. The Montreal station has kept its all-sports format pending the CRTC decision, though it lost a key personality when afternoon host Jean-Charles Lajoie left the station for TVA Sports in November.
