There was no announcement of the transaction, so the CRTC application for a change in ownership is the first we hear of the sale of CKIN-FM 106.3 by Marie Griffiths to Mississauga-based businessman Neeti P. Ray, owner of Mississauga’s CINA 1650 AM and Windsor’s CINA-FM 102.3.
According to the application, the purchase price is $500,000. Add in an $18,000 consulting contract ($1,500 per month) and $22,500 over five years for the assumed lease for the transmitter, and the total cost for CRTC purposes is $540,500.
Griffiths and CHCR will keep ownership of CKIN’s sister station CKDG-FM (Mike FM 105.1) and use the proceeds of the sale to help the financial situation of CKDG.
The sale doesn’t include the offices of CKIN, which are shared with CKDG. “The purchaser has an option to co-occupy Groupe CHCR Inc.’s existing premises for a period of up to one year to permit an orderly transition of ownership and operations for CKIN FM,” the application reads.
Ray says the transfer of ownership won’t result in a loss of local programming:
Centralized management will not detract from the essentially local nature of CKIN’s ethnic radio station. The station will continue to be operated from offices located in Montre?al and day-to-day responsibility for programming on the station will remain in Montre?al. The principal synergies relate to the centralization of management and ownership, not operations.
For CHCR, the transaction represents a much-needed cash infusion. The company is privately held, so this is a rare glimpse into its finances (emphasis mine):
At the same time, approval of the current application will enable Groupe CHCR Inc. to refocus its resources to maintain and build on the strength of its original FM radio station, CKDG-FM. Groupe CHCR Inc. has developed a particular expertise in creating multicultural programming with a mainstream appeal (the Radio Culture Fusion format) and in serving Montre?al’s Greek-language audiences.
The sale of CKIN-FM is taking place at a critical time for Groupe CHCR Inc. Despite years of effort and investment, it has become apparent that the company requires an injection of capital to reach its potential in the current financial climate. The programming, operating and capital requirements of both stations have proved to be quite challenging for Groupe CHCR Inc. to meet on its own.
It has become apparent that building on CKIN-FM’s success will require additional investment and a focused management effort to improve the station’s visibility and realize its potential. Regrettably, this investment is beyond Groupe CHCR Inc.’s means at this time. Without this investment, there is a real likelihood that the station will continue to be a strain on Group CHCR Inc. as a whole.
From the perspective of Groupe CHCR Inc., the proposed transaction will enable the company to revitalize CKDG-FM, its flagship station; to retire most of its third-party debt, which has accumulated with the launch of the two stations; and to focus its management effort on a single radio station, the Radio Fusion Format, and the linguistic and cultural groups served by that station.
CKIN-FM was first licensed in 2007 and launched in 2010. Like CKDG, it offers ethnic programming in several languages, and uses non-ethnic programming during peak hours to subsidize that. While CKDG’s rush-hour programs are in English, CKIN’s are in French. CKIN offers programming in Arabic, Creole, French, Hindi, Mandarin, Punjabi, Spanish and Urdu. Ray says he will continue serving those groups, which makes sense because South Asian is Ray’s specialty.
The contract comes with non-compete clauses for both sides. Ray agrees not to broadcast any Greek-language programming on CKIN, while Griffiths agrees not to broadcast any South Asian programming (Hindi, Punjabi, Urdu, Tamil, Bengali, Gujarati) for five years after the sale. This clause does specify that it doesn’t apply if the other station ceases programming in that language.
Ray has proposed a standard tangible benefits package of 6% of the cost of the transaction ($32,430), distributed to Canadian content funds, the Community Radio Fund of Canada and other approved initiatives.
Though he only owns two stations, Ray has applied unsuccessfully to start several others, including in Montreal. In fact, he competed with Griffiths for the 106.3 frequency in 2007. In 2011, the CRTC denied an application by Ray to start a new ethnic radio station in Montreal (250W at 600 AM) mainly because of the negative impact it would have on the then year-old CKIN-FM. And he complained when the commission went through with applications in 2013 for two new ethnic stations in Montreal, saying he missed the notice that the commission was accepting applications.
He has an application pending for an AM station in Brampton, Ont. He also applied for a station in Calgary in 2011, but missed the deadline.
The CRTC will hold a hearing on this proposed purchase (and others, including Radio Classique) on July 22 in Gatineau. The parties are not expected to attend. People wanting to comment on the application can do so here until June 19 at 8pm ET. Note that all information submitted becomes part of the public record.