Arsenal Media, already Quebec’s largest radio broadcaster by number of stations, has been given the green light by the CRTC to acquire BPM Sports, the network of French-language sports talk stations in Montreal, Gatineau and Quebec City.
The transaction, worth $1.45 million for all three stations, can now go ahead and should close in the coming weeks, Arsenal Media said in a press release. The result will see Arsenal owning 29 stations, while RNC Media’s radio family, which once numbered 15, will be down to two: CHOI Radio X in Quebec City and CHLX-FM, its Rhythme FM affiliate in Gatineau. (It also owns TVA and Noovo affiliate TV stations in Gatineau and the Abitibi region.)
The good (or maybe bad) news for listeners is that Arsenal is not planning major changes. The stations will retain the BPM Sports branding and continue to have most of their programming originate from Montreal, though there would be some local programming on weekends at the Quebec City and Gatineau stations.
“This acquisition is fully aligned with our strategy to strengthen the presence of sports across all our platforms and stations. Our ambition is clear: to quickly propel the BPM Sports brand throughout Quebec and offer fans an essential sports destination, both on radio and on our digital platforms,” Arsenal CEO Sylvain Chamberland is quoted as saying in the company statement.
The one change mentioned in the application adds some music programming, particularly on the non-Montreal stations. CFTX-FM (96.5 in Gatineau) would broadcast country music on weeknights and weekends (Arsenal owns the Hit Country network, which doesn’t have a station in the Outaouais), while CHXX-FM (100.9 in Quebec City) would broadcast adult pop music. CKLX-FM (91.9 in Montreal) would also have some unspecified music on weekend evenings.
While Arsenal is not planning to take away much from the stations, it also isn’t planning to add much either. It made no commitments to increased programming or new investments. Instead, it argued it was saving the stations from being shut down, and for that reason it should not have to pay tangible benefits, one of a few issues the commission had to look at with this sale, and that prompted a dissenting opinion from a commissioner.
Tangible benefits
Normally, when buying a radio station, the purchaser has to pay a de facto tax of at least 6% of the purchase price on tangible benefits, money that gets distributed to production funds or are used on special projects to benefit the broadcasting system.
The CRTC allows an exception to this policy where the transaction is in the public interest and the assets being acquired have consistently lost money over a long period of time.
Arsenal argued that it met all the criteria, but the commission found that the public interest criterion was not met because Arsenal “has neither proposed to increase the level of local programming or news on the stations, nor proposed other benefits or commitments to offset the loss of financial contributions that would otherwise be invested in the Canadian broadcasting system.”
Commissioner Ellen Desmond did not agree with that argument. Her dissenting opinion agrees to approve the sale, but she would not have imposed tangible benefits.
“Arsenal has committed to providing programming that meets the tailored needs of these communities and has committed to integrate the existing employees into its organization. It is an independent broadcaster and will continue to ensure the diversity of voices in the marketplace. These are all benefits that must be considered in the analysis of public interest,” she writes. “In the context of the application and in the context of the financial environment in which radio broadcasting is operating, the Commission should be encouraging good-faith efforts to sustain local stations that serve their communities.”
She was outvoted, so Arsenal will have to spend an additional $108,210 over seven years on eligible funds and programs. Arsenal said it would still go ahead with the transaction if it had to pay the benefits.
Quebec City or Donnacona?
The other issue concerns CHXX-FM and its area of service. Despite being a de facto Quebec City station, it was originally licensed in 1995 to serve Donnacona, a community 40 kilometres west of the city. Its original owner was the company behind the newspaper Le Courrier de Portneuf, and they wanted to establish a local service for the Portneuf region that differed from Quebec City stations that could be received there.
There are a few examples of this kind of thing happening where someone files to create a new station in a suburb of a large city promising local programming for that suburb. And in most cases what eventually happens is the owner of that station starts marketing it toward the bigger city and then eventually requests the station’s licence be moved to that larger city.
RNC Media, which acquired the station from Genex Communications in 2005, has tried to remove conditions of license tying the station to Donnacona and the Portneuf region. It first got approval to no longer limit advertising solicitation to the Portneuf region, allowing it to sell ads from Quebec City, in exchange for promising a studio in Portneuf and 14 hours a week of local programming for the region. Then in 2013 and again in 2017, the CRTC denied applications to relieve RNC of those promises, because doing to would deprive the Portneuf region of a local presence.
But in 2019, the CRTC licensed another commercial station to serve the Portneuf region, CHOC-FM 88.7 in St-Raymond-de-Portneuf.
“The Commission notes that with the arrival of CHOC-FM, which offers local programming entirely geared toward listeners in the Portneuf RCM, CHXX-FM is no longer the only broadcasting service required to provide local programming specifically tailored to listeners in that region,” it writes.
As a result, it approved the licence change. CHXX-FM is no longer required to maintain a studio in the Portneuf region or have 14 hours a week of local programming for Portneuf. Arsenal can, instead, merge CHXX’s studios with CJSQ-FM, which it just received approval to acquire last week.
The request prompted the owners of CHOC-FM to request the CRTC re-designate CHXX-FM as serving Quebec City instead of Donnacona, to relieve the region of the “uncertainty” and protect CHOC’s status as a station entirely devoted to the Portneuf market. But the commission stopped short of moving CHXX-FM’s licence area (it would require a separate process to do anyway).
“CHXX-FM must continue to serve the Portneuf region. In fact, the removal of the conditions of service is not intended to alter CHXX-FM’s authorized market and does not allow it to abandon the Portneuf region market in order to serve only the Quebec market,” the commission writes. “The station would operate as a hybrid of music and sports programming, and its lineup must include local content that is of particular interest to the communities served by the station, namely Quebec and Portneuf.”
Despite removing the official quotas, the CRTC has maintained this “expectation” of CHXX:
“The Commission expects the licensee, in its local programming, to incorporate spoken word material of direct and particular relevance to the Portneuf-region listeners located within the authorized market, rather than focusing solely on the Quebec region. The Commission also expects that programming to include, namely, local news, sports coverage, and the promotion of activities, events, and athletes of that region.”
Also noteworthy is that while Montreal’s CKLX-FM is licensed as a mainly spoken-word station, the Gatineau and Quebec City stations are not, which means they must maintain at least 50% music content during the broadcast week, which stations like this generally accomplish by having music after 6pm weekdays and all weekends.