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Broadcasting Decision CRTC 2002-336
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Ottawa, 24 October 2002
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Corus Entertainment Inc., on behalf of 3899071 Canada Inc.
Across Canada
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Application 2002-0647-6 |
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Transfer of effective control of 3899071 Canada Inc.
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1. |
The Commission has received an application by Corus Entertainment
Inc. (Corus), submitted on behalf of 3899071 Canada Inc. (3899071,
the licensee), to effect a transfer of effective control of 3899071. |
2. |
3899071 is the licensee of the Category 1 national digital
specialty television programming service known as Country Canada,
which is in operation since September 2001. |
3. |
The proposed transaction would be implemented through the
transfer of all of the shares held by Corus in 3899071, 70 common
voting shares representing 70% of the licensee’s voting interests,
to the Canadian Broadcasting Corporation (the CBC, the Corporation). |
4. |
As a result of this transaction, the CBC, which currently holds
the remaining 30% of the voting interests of 3899071, would own and
control the licensee.
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5. |
Based on the Purchase and Sale Agreement, the purchase price for
the shares held by Corus would be $1,200,000. |
6. |
The Corporation proposed tangible benefits consisting of new
programming initiatives for the Country Canada service. The proposed
benefits package is estimated at a total cost of $425,000, and would
include the following: |
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- bringing CBC Radio One’s highly popular radio call-in
program Cross-Country Check-Up to television and
broadcasting it live on Country Canada on a weekly basis
(estimated at $125,000);
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- introducing the new weekly program Your Town as a
regular Country Canada feature (portraying life in small-town
Canada) (estimated at $100,000); and
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- introducing two new daily call-in programs (estimated at
$200,000).
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7. |
Pursuant to the Commission’s benefits policy outlined in
Building on success - A policy framework for Canadian television, Public
Notice CRTC 1999-97, 11 June 1999, the dollar value of tangible
benefits generally required of applicants in transactions involving
the transfer of control of television undertakings is set at
10% of the value of the transaction, as accepted by the Commission.
In this case, the Corporation has proposed, as tangible benefits,
programming initiatives that are above and beyond existing Country
Canada services and which are valued at $425,000. |
8. |
The Corporation’s proposed intangible benefits would be
comprised of the following:
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- under the Corporation’s ownership, Country Canada would be
maintained as a viable national Category 1 specialty service;
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- substantial foreign entertainment program content would be
replaced by Canadian programs, including new programs unique to
Country Canada that would be tailored to its rural and regional
audiences; and
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- Country Canada’s Canadian content would increase from its
current authorized level of 60% to not less than 80% by the end
of the seven-year licence period. In this respect, the
Commission acknowledges the application filed by the Corporation
to amend the service’s conditions of licence pertaining to the
broadcast of Canadian programs in accordance with its
commitment. The Commission will process this application in a
separate public notice to be issued today.
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The Commission’s determination
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9. |
The Commission considers the value of the proposed transaction to
be reasonable and a fair representation of the 70% voting interest
in Country Canada. The Commission is satisfied that the proposed
tangible benefits are appropriate and commensurate with the size and
nature of the transaction. Moreover, considering the proposed
intangible benefits, the Commission finds that the proposed transfer
of effective control of the Country Canada service to the
Corporation is in the public interest. |
10. |
The Commission notes that the Corporation has agreed to
conditions of licence being imposed on the Country Canada service,
requiring it to maintain accounts for this service separate from its
television networks, and to file an annual statement of accounts
relating to its specific revenues and expenditures. The addition of
these conditions of licence is included in the public notice being
issued today. |
11. |
In view of the particular circumstances of this transaction, the
Commission approves the transfer of effective control of
Country Canada to the CBC and it will modify its ownership records
accordingly.
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Secretary General
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This decision is to be appended to the
licence. It is available in alternative format upon request, and may
also be examined at the following Internet site: http://www.crtc.gc.ca
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