Tag Archives: Leclerc Communication

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CRTC approves Radio Classique 99.5 sale to Leclerc, conversion to pop music station

Montreal radio listeners who tune to 99.5 FM to hear classical music will soon have to find another source for those runes. On Friday, the CRTC announced it is approving a sale of CJPX-FM from Radio Classique to Leclerc Communication, which will turn it into a pop music with the same WKND brand it uses in Quebec City.

Radio Classique’s other station, CJSQ-FM 92.7 in Quebec City, will remain a classical music station, but I wouldn’t count on it surviving for long now that its big brother has been sold off. Radio Classique is also maintaining its online streaming.

The sale is valued at $4.89 million, with Leclerc having to pay an additional 6% of that value to go to independent funds per the CRTC’s tangible benefits policy.

Leclerc, which tried the same thing with CKLX-FM 91.9 in 2018 (a deal that failed when the CRTC said it couldn’t also buy CHOI Radio X in Quebec City), said it was happy with the decision, and will convert 99.5 to WKND “in the coming months.”

UPDATE (April 28): The CRTC has published the rationale behind the decision. It says there’s no diversity of voices concern since one independent owner has been replaced with another, and “the entry of Leclerc would maintain musical diversity in Montréal, although the musical offering would differ from that currently broadcast by the station.” It also noted that the station had not been profitable since 2014, and other broadcasters (Radio-Canada, Stingray and SiriusXM) also provide classical music programming, though none are on analog FM.

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Gregory Charles sells Radio Classique to Leclerc to be turned into pop music station

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.

Radio Classique CJPX-FM average minute audience 2015-17 (Source: Numeris)

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.

| Radio

Leclerc abandons purchase of Radio X and 91,9 Sports after CRTC sets condition on transaction

The CRTC has said no to Leclerc Communication’s request to own three French-language FM radio stations in Quebec City, but approved the $19-million deal for it to acquire CHOI-FM (Radio X) in the provincial capital as well as CKLX-FM (91,9 Sports) in Montreal, for which it also acquired a licence amendment to convert from a sports format into a music one based off its WKND brand.

Though the overall deal has been approved, under the CRTC’s conditions, Leclerc would need to sell one of its other stations — WKND 91,9 or Blvd 102,1 — in order to buy CHOI and still comply with the ownership rules in Quebec City. The ownership rules limit an owner to two stations in one market in one language on one band.

And Leclerc has said it won’t sell its stations. So its own media are reporting that the entire deal is off, and its owner confirmed to La Presse that it won’t proceed with the transaction.

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Buyer of 91,9 Sports wants to drop its all-sports format and turn it into a WKND music station

Leclerc Communication warned its staff and even issued a press release to soften the blow of the posting of the CRTC application today, but it still comes as a disappointment to many Montreal francophone sports fans that it is seeking to drop the sports talk format of 91,9 Sports (CKLX-FM) and replace it with the pop music format of its existing WKND station in Quebec City (coincidentally on the same frequency).

The other station being acquired from RNC Media, Quebec City’s CHOI Radio X, will keep its format.

In the applications posted Friday, which will be considered at a hearing in Quebec City on Feb. 20, Leclerc says the station hasn’t been profitable “for many years” and hopes of it eventually becoming so are “slim.”

Leclerc says “no other francophone broadcaster is offering a mix of alternative, triple-A and hot AC” (and a bit of new country) that WKND would bring. (The format is particularly popular among women 25-54, according to Numeris data.) It says of the top 25 anglophone songs played on WKND, 11 are not found on Montreal’s francophone stations, and of the top 25 francophone songs, 9 can’t be found on commercial radio in the metropolis.

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RNC Media agrees to sell CHOI Radio X and 91,9 Sports

In August, as RNC Media announced the sale of 10 of its 15 radio stations in Quebec to Cogeco, the chair of its board said the remaining stations were “not on the market.”

Four months later, two of those stations — the most prominent, arguably — have been sold.

CHOI Radio X, the most famous of the Quebec City populist talk radio stations, as well as Montreal’s 91.9 Sports, are being sold to Leclerc Communication, for a price that hasn’t been disclosed.

If both transactions — which require CRTC approval — go through, RNC Media would be left with three stations that don’t form much of a network anymore:

  • 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

You would have to think those are also for sale for the right bidder.

The Leclerc transaction would face a major hurdle at the CRTC: Its common ownership policy says a single owner can have no more than two radio stations in the same market in the same language on the same band. Leclerc already owns WKND 91,9 (CJEC-FM) and BLVD 102,1 (CFEL-FM), so adding Radio X would put them over this limit. RNC’s press release says an exception will be requested.

Exceptions have been made (notably for Cogeco to allow it to own Rythme FM, CKOI and 98.5 in Montreal), but a strong case — and some serious commitments — would have to be made to get the CRTC to accept. Cogeco committed to establishing a news network across its stations to be able to keep 98.5.

And it’s not like CHOI has demonstrated a great deal of respect for the broadcasting system lately. There will also be concerns that BLVD, which got into the talk business with shows by Nathalie Normandeau and (until recently) André Arthur, would have the same owner as a direct competitor.

Ironically, Leclerc Communication was formed in 2012 and bought its two Quebec City stations out of required divestments from the Cogeco purchase of Corus’s Quebec stations. Corus at the time owned CFEL and CFOM-FM (M102.9) and Cogeco owned CJEC and CJMF-FM (FM93).

The CRTC is holding a hearing (as a formality — there won’t be any oral presentations) on Sept. 6 to consider the Cogeco-RNC deal. The CRTC request for the Leclerc purchase will be filed “in the coming weeks.”

UPDATE: The Journal de Montréal has some reaction from on-air personalities at CHOI and BLVD.

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CBC TV can (but shouldn’t) deny ads from commercial radio stations: CRTC

The Canadian Radio-television and Telecommunications Commission speaks through its decisions, and for the most part those decisions are straightforward. They’re written by a special team who ensure they’re as consistent, dry and clear as possible.

But a decision issued last week by the CRTC, while a victory for Canada’s public broadcaster, also takes a shot across its bow that almost seems snarky.

The decision responds to a complaint filed by Leclerc Communication, owner of radio stations CKOI and WKND in Quebec City. Leclerc argued that Radio-Canada was unfairly discriminating against it by refusing to air television ads for its radio stations, while running ads for Radio-Canada’s Première and Espace musique networks.

The CBC didn’t deny this. Instead, it argued that it is justified in having a policy that prevents running “advertisements for services considered competitive with CBC/Radio-Canada services.”

It also argued that Leclerc could easily advertise elsewhere, an argument Leclerc said was “as irrational as it is desperate.” And it invoked the idea of commercial freedom to argue that it shouldn’t be forced to run ads from anyone.

In the decision issued June 27, the CRTC sided with Radio-Canada. It determined that the public broadcaster did indeed put Leclerc’s radio stations at a disadvantage, but that this disadvantage was not “undue” and so did not break the commission’s rules.

It writes:

“The Commission is of the view that the CBC is not subjecting Leclerc to a material adverse impact by refusing to offer advertising opportunities since Leclerc has access to 72% of the local television advertising inventory by advertising on TVA and V and that it can therefore reach 93% of the television viewers in the market.”

This reasoning baffles me. Leclerc argued that it needed access to Radio-Canada TV because it wanted to reach a demographic of mature, affluent and well-educated listeners, which it felt would fit WKND. The CRTC argues that’s not necessary because there are other ways to get advertising (not including radio, of course, because those are direct competitors).

And if those other advertisers were to also refuse Leclerc’s ads for competitive reasons? The CRTC’s decision doesn’t address that rather obvious hypothetical. (Thankfully it’s not necessary. TVA, which owns no radio stations, was only too happy to take Leclerc’s money.)

Since return on investment is so hard to determine when it comes to traditional advertising, it’s nearly impossible for Leclerc to prove that the CBC’s policy has a material adverse impact on its business. And the commission seems to have given the benefit of the doubt to the CBC.

“The Commission questions the true motives of the CBC”

But the decision includes a paragraph that, while not binding, might force the broadcaster to rethink its policy:

“However, the Commission questions the true motives of the CBC, which continues to turn away a client that does not belong to a vertically integrated group on the grounds that it is in competition with its operations. The Commission takes this opportunity to suggest that the CBC focus less on viewing other players in Canada’s communications ecosystem as competitors and put more effort into fulfilling its public service mandate.”

Considering the drastic cuts facing the broadcaster in the years ahead, even the CRTC is wondering why it’s saying no to money from a small broadcaster in order to protect the market share of a network that doesn’t carry any advertising and should have nothing to fear from commercial radio.

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Why is CBC refusing ads from radio stations?

It sounded like the kind of story that even Sun News Network couldn’t make up: The CBC saying no to money from private industry for the sole reason that it wants to compete with it.

A complaint has been filed with the CRTC by Leclerc Communication, the company that bought Quebec City stations CKOI (CFEL-FM) and WKND (CJEC-FM) when Cogeco was told it couldn’t keep them after its purchase of Corus Quebec. The complaint alleges that the stations have been trying to book advertisements on Radio-Canada’s television station in Quebec City to promote the stations, and that Radio-Canada has issued a blanket refusal because it has a policy not to accept ads from competitors.

This would seem to go against a very clear CRTC policy that says that media companies can’t give themselves preference over their competitors in things like this.

Convinced there must have been a misunderstanding, I contacted the CBC and asked the public broadcaster about the allegation.

Radio-Canada actually confirmed it. CBC and Radio-Canada don’t accept ads from commercial radio stations because they compete with CBC services. And they don’t see anything wrong with that.

I explain the positions of Leclerc and Radio-Canada in this story at Cartt.ca. In short, Leclerc wants to advertise on RadCan because it finds that the demographics of RadCan viewers match the listeners it’s trying to target. And Radio-Canada refuses because its advertising policy prevents it from accepting ads for competitors.

The policy is CBC Programming Policy 1.3.11: Unacceptable advertising. It bans tobacco ads, ads for religious viewpoints, “any advertisement that could place the CBC/Radio-Canada at the centre of a controversy or public debate” and “advertisements for services considered competitive with CBC/Radio-Canada services.”

Now, we can argue whether two Quebec City music stations with personalities like Les Justiciers masqués are competitive with Première and Espace Musique. But even if they were, so what? These are television ads, first of all, not radio ads, and if Leclerc wants to spend money this way, why should the public broadcaster say no?

More importantly, can it even do so legally?

The television broadcasting regulations, which Radio-Canada and all other television broadcasters have to abide by, says a licensee may not “give an undue preference to any person, including itself, or subject any person to an undue disadvantage.”

A similar provision exists for TV distribution, which is why Videotron can’t give Quebecor-owned channels advantages over their competitors unless it can find a good reason to back it up.

But the CBC doesn’t quite see it that way. It argues that it’s not giving anyone an undue advantage, because it’s not accepting ads from anyone. Everyone’s being treated equally, so there’s no advantage.

Leclerc points out, though, that Radio-Canada’s radio services get plenty of advertisement on its television network. And giving free ads to its own radio stations and refusing ads from all competitors is pretty well exactly what this rule was meant to prevent.

Radio-Canada confirmed that the programming policy is set by the CBC board of directors, not by legislation or CRTC condition of licence. So logic would suggest that CRTC regulations take precedence over internal rules at the CBC.

The CBC rule becomes all the more absurd when you consider it in context. The CBC is facing a major cash crunch, seeing government funding tightened and now losing the rights to NHL games. CBC’s president is talking about “dark clouds on the horizon” because of lower revenue. So why say no to what is practically free money?

It would be one thing if this was a big corporate player wanting to buy airtime on the CBC to encourage people not to listen to Radio One or something. But this is a small independent broadcaster that just wants to expose his radio stations to Radio-Canada’s audience in Quebec City.

The CBC is going to have to come up with some real good justification for shutting the door to competitors. Bell or Shaw or Rogers would never be allowed to get away with something like this, and I don’t see why the CBC should be able to.

And if the CBC doesn’t come up with a good reason to refuse these ads, they should expect to be told to shut up and take Leclerc’s money.

Leclerc’s complaint letter can be read here. The full file is on the CRTC’s website in this .zip file. The CRTC is accepting comments on this complaint until March 6. You can submit comments here. Note that all information submitted, including contact information, becomes part of the public record.

(So far, only the Journal de Québec has covered this story aside from myself. We’ll see if others pick it up before the deadline.)