Clear Channel Cagematch: Tietolman-Tétrault-Pancholy

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.

The would-be station owners at the CRTC hearing (from left): Nicolas Tétrault, Rajiv Pancholy and Paul Tietolman

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.

The application

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.

The players

Paul Tietolman

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.

Among the experts brought in: Jim Connell (centre) and Steve Kowch (right)

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.

The sell

“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.

The opposition

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.

The alternatives

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.

The team of Tietolman-Tétrault-Pancholy at the CRTC hearing (there's a smaller second row of people behind them, making it 15 in total)

The transmitter

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 chances

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.

Start date

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.

Other coverage

The Suburban’s Mike Cohen offers his own take on the Tietolman-Tétrault-Pancholy application on his blog.

Steve Kowch, who was part of these applications, offers another perspective on his blog.

The stations even have websites already (English, French), though it’s just a page with information on how to submit interventions supporting the station.

11 thoughts on “Clear Channel Cagematch: Tietolman-Tétrault-Pancholy

  1. Jeremy

    When the dust settles, I believe Cogeco will get both frequencies. Let’s simply look at the facts – of the four applications, only Cogeco’s proposal guarantees listeners, with the hammer being the governments subsidy assuring the station stay afloat. None of the other bids have guarantees they can survive; Bell has already admitted the all sports format loses money, this bid is hoping to revive a format that has already failed, and Radio Fierte isn’t considered a serious player for a class A station. If the CRTC really wants to avoid going through all this again in the near future, they’ll make the safe choice. Traffic and weather is about as safe as it gets.

    1. Fagstein Post author

      When the dust settles, I believe Cogeco will get both frequencies.

      I find this highly unlikely as they only have one application for a radio station.

      of the four applications, only Cogeco’s proposal guarantees listeners

      Actually, I’d say only CKGM guarantees listeners, since it already has them. Cogeco’s all-traffic station expects very poor ratings, particularly since people won’t tune in for more than five minutes at a time.

      None of the other bids have guarantees they can survive

      This is true, though even Cogeco’s survival is only guaranteed for so long as the government has a contract with them. The CRTC’s main concern was that the contract would put the Cogeco station under the effective control of the government, which Cogeco denies.

  2. ATSC

    Another excellent report putting into perspective what each applicant has to offer. Your site has almost become a must read site.

    As for this groups request to be licensed with two stations on the AM Band. I would say give it to them. Not sure if they can make it work. But, I don’t think that should be the concern of the CRTC. I think they should look at the need for competition in the market. This market is very stagnant. And controlled by too few players. This proposal would offer competition in Talk/News/Traffic.

    I think the question will be more around what frequencies they’ll be licensed to use. Do they get both 690 and 940, or just one, and another AM position.

    I expect this groups proposal for two new AM stations, and CKGM-AM will be the winners. I expect Cogeco to be told that in order to get a new station, they might have to sell off one of their other stations in this market. I just can’t see the CRTC giving them another station considering how many stations they already own in this market. Maybe they’ll convert CKBE-FM 92.5 to all traffic so that they can get their hands on public money offered by Transport Quebec.

    As a side note, and not related to this article. What is going on with the sound quality of CBC Radio 2 on 93.5 fm. The sound quality seems very compressed compared to other stations. I’ve tried it in the car radio, and on my home radio. Off both sources, it seems compressed, surpressed, no dynamic range to that stations sound quality.

    1. Fagstein Post author

      Maybe they’ll convert CKBE-FM 92.5 to all traffic so that they can get their hands on public money offered by Transport Quebec.

      I asked Mark Dickie, CKBE’s GM and part of Cogeco’s all-traffic team, about this scenario. He seemed quite confident there was no chance in hell it was going to happen. The FM music station makes far too much money. More likely they’ll accept a non-clear channel (600, 850 or 990), and modify their agreement with the government (again) if necessary.

    2. Fagstein Post author

      Not sure if they can make it work. But, I don’t think that should be the concern of the CRTC. I think they should look at the need for competition in the market.

      Viability is a concern of the CRTC because they don’t want to approve stations that won’t work. Each station has two years to start broadcasting after CRTC approval. Add to that the lengthy approval process itself, and a failed station could take three years to replace. There are other bad fates they want to avoid, like a small station being sold to a big player because it can’t make a profit on its own.

      The comment about competition is a good one. The fact that Cogeco already has a clear channel in the Montreal market, plus three francophone FM stations and an anglophone FM station, might factor into their decision.

  3. Jordan

    With all due respect towards Mr. Dickie of the FREE GOVERNMENT MONEY TRAFFIC TEAM and Mr. Bews of the soon to be plugged in from Toronto TSN 990 station, Mr. Tietolman and Mr. Pancholy and Mr. Tetrault are not proposing a news wheel, they are proposing a new talk and information station and this is a fact

    1. What's In A Name?

      What exactly is “plugged in” from Toronto? The name – TSN? They feature all LOCAL broadcasting from 6 AM until at least midnight and beyond. Weekends also feature local shows.

      What’s your real issue?

  4. AlexH

    The comments for those opposed to this application “formats tried and failed on their frequencies” are certainly being less than honest about the whole thing.

    The history of 690 and 940 under Corus seems to be typical of what happens with many Corus owned stations: They aren’t patient to allow things to develop, and the continue to play around, tinker, and re-arrange the deck chairs. They also seem to have a mentality of “shrinking to profitablity” for stations, and making it clear that keeping the on air talent that people relate to on the air is not a priority. They seemed to have looked at staffing as an area to cut in order to “shrink enough to be profitable”.

    The results on the English side were predictable, as CINW went though first an endless downsizing and staff reduction phase, as they cut, cut, and cut some more until there was almost nobody working there. Then they switched format from news to talk, did so without much of a promotional budget, and without enough support to make it go. Running Charles Adler in Montreal was like having Rush Limbaugh host a Democratic convention. It just didn’t play. and that step alone was enough to pretty much doom the station. It was a good move bottom line wise for Corus (they were already paying Adler, so why not?). While he may have had some past connections to Montreal, he really wasn’t in line with the mentality of Montrealers, and a mid-day show beamed into Montreal from the conservative West was a loser end to end.

    When you alienate your listeners for a big chunk of the day and drive them to your competition, it is incredibly hard to get them to tune back in.

    Is what this group proposes viable? I think that, considering that CJAD seems to have a hard time to afford to have full staff (hence quack 2 quack overnights), and the attempts in the last couple of years to pipe in talk radio from Toronto at night, it would seem that the market is either not as big as they think, or the advertising base not big enough to pay the freight. At least on the english side, they may be in trouble.

    On the french side, I think they have more hope. There has been way too many talk stations lost, converted, or diminished, and yes, there is a lack of french language information programming out there, especially on weekends. With the right players, they could very easily end up with a reasonable product, and probably do pretty well in advertising income as well. It’s not a huge market, but clearly there is more space there.

    I would prefer this option to the all traffic choices. I would prefer that TSN radio gets at least one clear channel though, as the all sports programming is a unique voice in the Montreal market, compared to “another talker”.

  5. Paul Tremblay

    “If they’re denied, we’ll know they didn’t [believe the business plan could be successful].”

    Considering the preferential treatment given to Cogeco regarding their deal with Corus last year, I could see the CRTC rejecting the TTP applications on the grounds that if successful they would hurt 98.5 and CJAD (CJAD being mentioned mostly as a distraction), while questioning at the time the potential for success of TTP’s proposed stations.

    However I think that Cogeco may have made a serious strategic error by removing their application for 690.

    Had they maintained that application the CRTC would have been able to approve both applications without provoking any reaction from the separatist humiliation industry, and claim at the same time that everyone had a chance to apply and therefore Cogeco did not really benefit from any special treatment.

    Approving Cogeco only for 940 will mean, unless they approve a francophone station from someone else on 690, that the linguistic balance will be tilted towards the anglophone side.

    The CRTC could approve TTP’s application for 690 but not the one for 940, but TTP has clearly said that they need approval for both stations.

    If the CRTC approves both applications from TTP, they can’t approve Cogeco without creating a similar linguistic problem.

    I understand that the potential political impact of the CRTC’s decision did not appear to be a factor at the hearing, but I would submit that if they want to take this into account, and I think they will, they would not necessarily want to advertise this fact.

    And it is not obvious at all to me that the CRTC is willing to give 690, or any other AM frequency for that matter, to Radio Fierte.

    I think there’s a good chance that TTP will be approved for both 690 and 940.

    I also think there’s a possibility that all applications will be rejected. This doesn’t happen that often, but it has happened in the past…

  6. Pingback: TTP Media already looking to buy or start more AM stations – Fagstein

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