The CRTC has approved the $18.5-million acquisition of 10 RNC Media radio stations by Cogeco, representing two thirds of RNC’s network of stations.
Affected stations are:
- Planète 104.5 in Alma
- Planète 93.5 in Chibougamau
- Planète 99.5 in Roberval
- Planète 100.3 in Dolbeau-Mistassini
- Radio X 95.7 in Saguenay (repeater at 96.3 Alma)
- Capitale Rock 104.3 in Val-d’Or
- Capitale Rock 102.1 in La Sarre (repeater at 95.7 Rouyn-Noranda)
- WOW 96.5 in Rouyn-Noranda (repeaters at 103.5 Val d’Or and 103.9 La Sarre)
- Pop 104.9 in Lachute
- Pop 102.1 in Hawkesbury
Of the remaining stations, two are being sold to Leclerc Communication:
- CKLX-FM (91,9 Sports) in Montreal
- CHOI-FM (Radio X) in Quebec City
The remaining three are presumably on the market with no sale announced yet (but I’m told there are talks with at least one potential buyer):
- CHXX-FM (Pop 100.9) in Donnacona (serving Quebec City, repeater at 105.5 Lotbinière)
- CFTX-FM (Pop 96.5) In Gatineau (repeater at 107.5 Buckingham)
- CHLX-FM (Wow 97.1) in Gatineau
The acquisitions bring Cogeco’s radio network from 13 to 23 stations, and means Cogeco’s first expansion into the Saguenay and Abitibi regions. Of population centres over 15,000, the only ones that wouldn’t be within 100 kilometres of a Cogeco transmitter will be Rimouski and Sept-Îles.
A map of Quebec’s major commercial radio networks: Cogeco Media (purple), RNC Media (red, with approved sales in reddish purple), Bell Media (blue), Attraction Radio (black) and Groupe Radio Simard (gold). Retransmitters are in a lighter colour.
Notable aspects of this transaction:
- Cogeco plans no immediate change to the “vocation” of the radio stations, which will remain local.
- Cogeco plans to introduce local newscasts to the Lachute station. For other stations, the benefits come mainly through access to the infrastructure of Cogeco Nouvelles.
- The commission has accepted Cogeco’s proposed tangible benefits of $1,184,217, based on a total transaction value of $19,736,958. The breakdown uses the standard formula for radio, with:
- $592,109 (3%) to Radio Starmaker Fund or Fonds Radiostar
- $296,054 (1.5%) to FACTOR or Musicaction
- $98,684 (0.5%) to the Community Radio Fund of Canada
- $197,370 (1%) to discretionary initiatives
- The nature of the discretionary initiatives isn’t specified, but Cogeco said it would include six-week paid internships at its radio stations. The commission pushed back on this (tangible benefits are not allowed to be self-serving), and Cogeco responded by saying it would use $10,000 a year for bursaries instead. The rest of the discretionary money would go to local initiatives, broken down as follows:
- $10,000 a year in the Saguenay region
- $5,000 a year in the Abitibi region
- $3,196 a year in the Lachute-Hawkesbury region
- The contract includes a 36-month service contract for RNC Media to continue providing local news, office space, outdoor advertising, transmitters and technical support for the stations in the Abitibi region after the deal closes. Following that, Cogeco will rent space for three transmitters at two sites from RNC for $5,000 a year each for 10 years (indexed to the consumer price index), and two transmitters at a third site for five-year renewable leases for a price to be negotiated.
- The radio stations (bought by Cogeco) and TV stations (retained by RNC Media) in the Abitibi region will continue to cross-promote for a period of 24 months after the acquisition. The exact value of these ads is confidential, but will be the same for both sides. A similar ad exchange deal is in place for Cogeco’s CKOF-FM (104,7) and RNC Media’s TV stations in Gatineau, even though those stations aren’t part of this transaction.
- Cogeco acquires the WOW brand (used by CHOA-FM in Val-d’Or) and gives RNC Media a licence to continue to use the brand for its Gatineau station. Cogeco also acquires the Planète and Capitale Rock trademarks.
- RNC Media holds on to the POP brand (used by CFTX-FM in Gatineau and CHXX-FM in Donnacona) but gives Cogeco licence to use it for the Rouyn-Noranda station.
- RNC also keeps the Radio X brand, which is used by CKYK-FM in Saguenay. Cogeco can use the KYK logo, but without any mention of Radio X. There does not appear to be transition allowance here, which means it would have to change the branding as soon as the deal closes.
- Cogeco says of the 220 on-air employees it will have if the transaction is approved, 92 (42%) are women, 4 (2%) people with disabilities, 2 (1%) visible minorities and 1 (0.5%) Indigenous person. (In the application, Cogeco gets the math wrong by two decimal places on the last three percentages there, making it look even worse.)
- About 55 employees will move with the stations — 10 in Abitibi, 44 in Saguenay and one in Lachute. Three of those employees are currently on leave.
- The deal will close on the first of the month after CRTC approval. This is listed as the only remaining condition for closing.
- The deal includes a non-compete agreement for Val d’Or, La Sarre, Rouyn-Noranda, Lachute, Hawkesbury, Amos, Dolbeau, Roberval, Alma, Chibougamau and Saguenay, for a confidential period.
Three out of the 55 are currently on leave? Do you know if there are any of them based in Abitibi?
No more detail was provided.
All right, thanks.
Deals like this appear to be entirely hinged on the idea that the bigger company can offer “centralized” services (such as news, music programming, network programming, etc) and make the bottom line better. The CRTC seems to generally fall for this logic without considering the longer term implications.
While these mega station owners are never “too big to fail”, they do end up organized in a manner where the individual pieces cannot easily to extracted from the whole organization. If you do remove a piece, that piece is often lacking in basic management and operations, as they have been centralized. So there is almost no way to remove the parts without significant changes.
Imagine trying to remove CHOM from Bell. In order for a new owner to do that, they would have to create station management, sales, news, sports, traffic… and a whole pile of other back office jobs like reporting, accounting… just to have a functional station. A buyer would even need to come up with new studios, potentially a new transmitter, new antenna location.. It would be like setting up the station from scratch. They might be able to negotiate a deal similar to what Cogeco is doing here, getting a couple of years to figure some things out, but management wise, well…