This post has been corrected.
Last year, when Quebec City’s Leclerc Communication agreed to buy two radio stations from RNC Media, fans of Montreal’s 91.9 Sports (CKLX-FM) were upset that the new owner planned to turn their sports-talk station into a popular music station with the same format as Quebec City’s WKND (coincidentally also at 91.9).
The transaction failed because the CRTC wouldn’t agree to Leclerc buying CHOI-FM in the provincial capital while holding on to WKND and Blvd 102.1.
Now, Leclerc is trying again, and this one will probably prompt even more upset listeners. It has agreed to purchase Radio Classique 99.5 from Gregory Charles, and will turn it into a WKND station instead.
The transaction does not include CJSQ-FM 92.7, Radio Classique’s sister station in Quebec City, which will remain in Charles’s hands, as will the radioclassique.ca website. Charles says in an interview with La Presse that he hopes to find a different buyer for that station to turn it into something else as well.
Shortly after the announcement, the CRTC published the associated application, which sets the purchase price at $3.88 million. That’s only 57% of the $6.78 million it was priced at when Charles bought it in 2015.
While there’s no Quebec City element that would cause competition concerns, CJPX is required by condition of licence to operate in a specialty format, and Leclerc is applying for a change in its licence to remove that requirement. The commission may or may not be crazy about replacing a specialty music station with a loyal audience with yet another pop station, as much as Leclerc promises its format is different.
In the meantime, it’s status quo at Radio Classique in Montreal, just as it was with 91.9 Sports.
Gregory Charles bought CJPX and CJSQ from founder Jean-Pierre Coallier in 2015. Charles admitted in the La Presse interview that he paid too much for the station at the time. But he also said he wasn’t looking to sell until Leclerc came to him with an offer.
Charles also seems to suggest that he thinks CJSQ can still be a success without its bigger brother, which would be quite a challenge, especially considering how much content is shared between the two stations. He says the Quebec City market is more stable, while most of the Montreal audience listens online.
For tangible benefits, Leclerc is proposing the usual 6% minimum, broken down in the standard way between music development funds, the Community Radio Fund of Canada and discretionary initiatives that haven’t been determined yet. The total comes out to $293,350 over seven years, but Leclerc is also proposing to take over $219,514 of the $340,121 remaining in tangible benefits from that 2015 transaction (the rest will stay with Charles and CJSQ).
The deal also includes $100,000 worth of advertising for Charles on CJPX in the two years after it closes.
Will the CRTC accept the transaction? It’s hard to tell, and will depend on the resistance it meets. Previous attempts to transform 91.9 Sports and TSN 690 failed not because of angry submissions by loyal fans, but because they were part of larger transactions that failed to go through.
The commission is also usually reluctant to replace a specialty station with a pop music station unless it can be demonstrated that the only alternative is the station shutting down.
With CJPX, that argument could be made. The application says the station has not made money since it was purchased (exact numbers are confidential) and “has no hope of recovery without a repositioning of the station.” Its already modest advertising revenues were $2 million in 2012-13 and $1.3 million in 2017-18.
And despite efforts by Charles, including bringing in celebrity hosts like Bernard Derome and Marc Hervieux, the station’s audience share has tumbled 20-30% in five years, depending how you count it. In 2017 it stopped subscribing to Numeris ratings.
If the commission can be convinced that there aren’t other options for the continued survival of a classical radio station in Montreal, or that a third player in the mainstream commercial music space is more important, then it would likely approve the transaction and licence change.
The application has been posted and the CRTC is accepting interventions until Dec. 19 (note that all information submitted, including contact information, becomes part of the public record). The application is being officially heard (though so far without the presence of the parties) at the same Feb. 12 hearing in Montreal when it is considering the proposed purchase of V by Bell Media.
See also: I summarize the application and provide more context in this story for Cartt.ca, available to its subscribers.
Correction: An earlier version of this post quoted La Presse as saying Gregory Charles wants to keep his Quebec City station. In fact, the story says he wants to sell that station as well.