Over the past week, I have been taking a closer look at the applications for Montreal’s AM clear-channel frequencies 690 and 940 kHz that were presented at CRTC hearings in October. In today’s final installment, I look at the application from Paul Tietolman, Nicolas Tétrault and Rajiv Pancholy for a French news-talk station on 690 and an English news-talk station on 940. Though these are technically two separate applications, they are virtually identical in format and are being treated as one application here.
Do you believe in radio? Do you believe that corporate greed and ineptitude has more to do with the decline of media than the Internet or changing habits? Do you think the thing the media sphere needs right now more than anything else is an owner with the heart of a mom-and-pop operation and the bank account of a Fortune 500 executive?
If so, the three men pictured above are here to be your saviours.
If you don’t believe, if you think investing in talent has already been proven not to work, and that rigorous cost-cutting is the only thing that keeps radio profitable these days, then these three men will seem like morons willing to flush tens of millions of dollars right down the toilet.
Despite how closely I’ve followed radio, I can’t honestly say which of these is true. I want to hope for the former, but the latter just seems more realistic.
And the success of these applications will depend, more than anything else, on which side of that fence three CRTC commissioners sit.
Tietolman, Tétrault and Pancholy have applied, under a company officially known as 7954689 Canada inc., for a French news-talk station at 690 and an English one at 940.
The proposal is bold, to say the least. The annual budget for each station would rise over the license term from $6 million to $10 million a year (from $5 million to $7 million for the English station), half of which would go into programming. It would start with $25 million in financing for each station, $4.5 million of which is in cash and the rest from a bank loan. The two stations combined would have a staff of 150-200 people, including 8-10 journalists. It projects it would have a 5% market share the first year, increasing to 15% by the fourth year and holding at that level. Advertising would reach $12 million a year for the English station and $18 million a year for the French station by the seventh year.
Most of these numbers are an order of magnitude, or at least 3-5 times, higher than the other applicants for these frequencies.
And that’s why critics – including those who work at the big existing players – say it’s not feasible.
The station’s programming would be mainly talk, most in the form of what Tietolman calls “face-à-face”, where two hosts with wildly divergent opinions debate each other on a daily basis. A hippie, David-Suzuki-worshipping leftist with a libertarian free-market capitalist. A hardened separatist with a guy who wears maple leaf underwear.
Tietolman tells me he thinks the problem with talk radio these days is that it’s one-sided. For him, the “face-à-face” format is a winner.
Some blocks of the schedule would be devoted to culture, some to politics and crime, a few hours for style and leisure on the weekends, a block for the “female perspective” (with two female hosts), a block for investigative journalism, and shows devoted to nightlife and shift work overnights. Open-line call-ins take up a significant part of the schedule.
Under the applications, both stations would have local programming 24 hours a day, seven days a week.
Paul Tietolman: Most of my communication with this group has been through Tietolman. He was the one I met for lunch to discuss the application before the hearing, and I’ve had some conversations with him over the phone since then.
Tietolman is the son of Jack Tietolman, the man who started CKVL radio and later its sister FM station CKVL-FM, which would eventually change its callsign to CKOI.
The elder Tietolman sold those stations to a company called Metromedia, owned by Pierre Arcand and Pierre Béland. (Arcand is now Quebec’s environment minister.) Metromedia was sold to Corus in 2001, and then to Cogeco in 2011. While CKOI was kept running, CKVL was turned into Info 690 in 1999, where it ran an all-news format until the plug was pulled in January 2010.
So there’s some irony in the fact that Paul Tietolman is using 690 to try to rebuild, and that one of his competitors is Cogeco, which owns what used to be his father’s assets.
Paul Tietolman (pronounced “title-man”) is … well … let’s just come out and say this: He looks and sounds like a 70s record executive. He’s a smooth talker and a gifted salesman. He winks a lot. He’s not at all lacking in confidence. He’s filled with stories about radio and can tell you tales of things done and things tried. A discussion with him elicits the names of the biggest stars in music (both in Quebec and abroad), and how his family brought innovations to radio, among them their belief that FM radio would take off, at a time when nobody wanted an FM station.
Nicolas Tétrault: Tétrault is listed as a businessman and real estate agent. He is also a former Montreal city councillor, elected as part of Pierre Bourque’s Vision Montreal team in 2001, then switching to Gérald Tremblay’s Union Montreal in 2004. He was defeated by a Vision Montreal candidate in the 2005 municipal election.
Though he said in 2004 that he was tired of the sovereignty debate, Tétrault ran for both the Parti Québécois and Bloc Québécois, losing both times. In 1994, at the age of 19, Tétrault was the sacrificial lamb for the PQ in the northern West Island riding of Robert-Baldwin. He lost (83% to 10%) to Liberal Pierre Marsan, who still holds that seat. In 2000, he ran federally for he BQ in South Shore Brossard-La-Prairie, coming a distant second to Liberal Jacques Saada.
Nowadays, Tétrault is more interested in business than politics. Last year, he teamed up with Tietolman to present a counter offer to Cogeco’s proposed $80-million purchase of Corus’s Quebec assets. The counter-offer of $81 million included a promise to bring 690 and 940 back on the air. It was rejected, Corus saying the deal with Cogeco was already done and it was too late for counter offers.
Rajiv Pancholy: Pancholy’s background is in telecom. He worked at Nortel, then was president and CEO of Microcell, a wireless company better known for the brand name Fido, which was eventually sold to Rogers. From there Pancholy went to Mitec Telecom. Now he’s chairman at something called TenXc Wireless.
Supporting characters: Tietolman, Tétrault and Pancholy came to the CRTC meeting with plenty of backup. Wanting to show they were serious about their plans, they brought in experts:
- Yves Guérard, former president of Radio Mutuel (another company whose assets eventually went to Corus and now Cogeco)
- Steve Kowch, former program director at CJAD and Toronto’s CFRB talk radio stations
- Jim Connell, radio announcer and the last on-air guy at 940 AM
- Christian Bourque and other representatives of Léger Marketing, to present a study showing audiences support the idea of new news-talk stations
- Marco Perron and other representatives of Raymond Chabot Grand Thornton Consulting, to show the company’s financial plan is sound
- Stuart Hahn, broadcasting engineer
It was an impressive lineup. Kowch and Connell may both be looking for work, but their presence here gave an air of credibility to the proposal. Having marketers and accountants on hand was a big step in convincing the CRTC that the stations’ business plan was viable.
“We’re not shareholders, we’re broadcasters,” Tietolman told me. And everything I’ve seen from this group suggests its ultimate goal is to bring back quality talk radio, even if that means less profit for themselves. (That said, they expect the quality will bring more audience and more ads, hence more profit.)
Their presentation to the CRTC was slick. While the other applicants had stapled documents out of a photocopier, Tietolman Tétrault Pancholy Media had a colour document in coloured duotangs (red for English, blue for French) with clear plastic covers. It’s a minor thing, but another indication of how serious they are.
A large part of the case for this station is that existing talk radio in Montreal isn’t doing enough. Tietolman didn’t want to slam CJAD, saying he has respect for what they’re doing, but he and his partners complained in their application that stations like 98.5FM and CBC Radio aren’t doing enough breaking news, particularly over the weekend.
They used as an example Hurricane Irene, a storm that hit higher on the U.S. East Coast than usual and, as a tropical storm, caused a large amount of damage to New York City and New England. As a post-tropical storm, it affected Quebec and the Atlantic provinces, causing thousands to go without power.
But Irene hit over the weekend, when CBC has little local programming, CJAD has fewer journalists and 98.5 plays music instead of talk. As a result, they said, Montrealers (and Quebecers) had nothing to tune to for news about the storm.
“The lack of competition, the lack of choice and the lack of diversity of radio voices resulted in what could have been a very stressful and nervous time for hundreds of thousands of Montrealers,” Jim Connell said at the hearing.
Kowch then made it perfectly clear: “Our management team makes this promise of performance to the CRTC and to Montreal’s Anglophone and Allophone communities: 940 Talk will be ready and able 24 hours a day, seven days a week, to be there live for our listeners when unexpected events, disasters and storms threaten the health and security of our listeners.”
The group also has other ideas to improve their connection with the community, including airing town hall meetings and applying for a low-power TV broadcast license so they can introduce something called “radio-vision”. They also plan to stream live video on their website.
Privately, the response from the competition to these applications was: These guys are nuts.
Publicly, the response was … well, actually it was about the same, though said in more polite terms.
“With respect to Mr. Tietolman and Mr. Tétrault’s application, it must be understood that 690 and 940 were previously dedicated to the same formats for many years, with some of the best available talent in the city and it did not work,” said Wayne Bews of CKGM.
Cogeco chose not to comment on competing applications at the hearing, but Mark Dickie, who ran 940 News, agrees with the sentiment.
The commissioners also focused most of their questions on the viability of the station. They don’t really care what these guys do with their own money, but they don’t want to award a license for a station that is just going to fail.
The fact that the last incarnation of 690 and 940 were news and news-talk stations that failed financially is the clearest evidence that this might not work. CINF and CINW, like CIQC and CKVL before them, tried various formats of news and talk, constantly reinventing themselves, but eventually failed. CINW in particular started off as all-news, then tried a personality-based opinionated talk format, and finally gave up and played music.
Management at Metromedia at the time said they tried their best at those stations, investing millions into them, but the high price of journalism and local programming couldn’t be sustained with advertising revenue, particularly on the English side where CJAD has a 25% market share.
Tietolman-Tétrault-Pancholy has a response to that, as it does most criticisms of its application. It says the plan is nothing like 940 News/Info 690, which had a 15-minute news loop. Instead, its stations would be controversial talk designed to engage an audience.
Tietolman points to other markets in North America, where talk radio stations are often the ratings leaders. On the French side, he sees a giant gap in the market for a talk station, particularly now that 98.5 has to share its schedule with sports talk and Alouettes and Canadiens games. On the English side, he sees CJAD’s market share as huge and needing competition, even if he thinks much of the audience for his stations will come from people who don’t normally listen to the radio.
The marketers and accountants made the strongest case for the viability of the stations, showing there is an audience interest for news-talk stations and that the business plan was sound.
But the certification of the financials was based on assumptions about audience, costs and advertising sales. It’s a big step from people looking at a spreadsheet with a calculator in hand to seeing if this will actually work.
When asked at the hearing what would happen if the CRTC approved the license for one station but not the other, Tietolman-Tétrault-Pancholy was clear: It wouldn’t accept that. Despite the rosy projections for revenue and profit, the partners said their business plan wouldn’t work unless they could share costs (such as administrative and technical costs) between the stations. If offered one license but not the other, they would refuse it.
They also made clear that their plan would only work with 690 and 940. No other frequencies would do.
After the hearing, there was concern among the team about whether they had taken that position too far. Was it a bluff, a strategic decision to try to force the CRTC’s hand into giving them what they want? And would it backfire, giving them nothing to show for all this effort in the end?
Given a week to think about it, the position softened somewhat. They still require both stations, Tétrault wrote to the commission, and 690 is the only one that would work for the French station, but the English station could move to an alternative frequency if they could find one that is sufficient.
990 and 850 are inadequate to the task because of their poor coverage in the West Island, Tétrault wrote. (It’s a position that differs with their contention that CKGM is exaggerating its signal issues in the West Island, though that position is also based on the assumption that CKGM is not properly switching to its night pattern.)
Another alternative frequency, 600 kHz (the old CIQC frequency), might be sufficient, but their transmission site can’t be modified to use it without buying adjacent land and building new towers, Tétrault wrote. Only the former CINW/CINF site owned by Cogeco could be used for the task, and they could use it under “commercially reasonable terms.”
Here, Tétrault seems to be opening the door to using 600 for the English station, provided the CRTC requires Cogeco to commit to reasonable negotiation like Bell Media has committed to should they be awarded a frequency change.
Tétrault’s response also reiterates an argument that the group is making in favour of its 690 application: Language politics.
If we discount Radio Fierté, the French news-talk station is the only one for a French-language station, and the frequency has been used by French-language stations for more than half a century. Awarding the clear channels to two English stations might be seen by some as politically problematic, even moreso than the idea that two of three clear channels in Quebec would go to local Montreal traffic information.
“We are firmly of the opinion that 690 kHz should continue to be used for broadcasting in the French language,” Tétrault writes in his letter.
I don’t know whether the commissioners will keep this in mind when it makes its decision, but my impression is that the applications will be judged on their merits rather than political impact.
If approved for 690 and 940, both stations would be broadcast from a two-tower transmitting site near the interchange of Highway 30 and 730 just east of Kahnawake. That site is currently being used to transmit CJMS at 1040AM, a station that has no relation to the previous CJMS even though it shares the same call letters.
The bottom line
Everyone who loves radio, even the CRTC, would love for these stations to succeed. But the scale of this proposal, combined with the realities of declining audience in radio and AM in particular (nationally, AM radio loses money, according to CRTC figures), put the odds heavily against them.
To make it worse, Tietolman, Tétrault and Pancholy have doubled down, saying they won’t accept one license without the other. It’s a curious position looking at their business plan, and seems more like a bluff designed to force what they want. If the CRTC calls them on it and, say, offers just 690, I’m not convinced they’ll say no.
Whether the CRTC approves one or both of these applications depends more than anything else on whether they believe the business plan could be successful. If they’re denied, we’ll know they didn’t.
The applications are undeniably strong and bold, but are they realistic? I don’t know. But I sense in the CRTC a willingness to let them try, and I think they would prefer to see a good station fail after a few years than risk closing the door to people who want to revitalize radio for the sole reason that their plan was too optimistic.
The double-station gamble makes things more difficult for the CRTC to say yes, but I will still rate this application’s chances good.
Tietolman said the two stations would take about nine months to a year to setup, putting their launch date around fall 2012 or January 2013.
Steve Kowch, who was part of these applications, offers another perspective on his blog.