Who will get 88.1 Toronto?

A few months ago, the CRTC put out the call for those interested in acquiring 88.1 MHz on the FM band in Toronto. It came open in 2011 after the Ryerson University-affiliated station CKLN FM failed to comply with broadcast regulations and was stripped of their license.

This was obviously a hot topic among broadcasters at CMW and in turn I was asked about it a number of times by music industry folk who’ve been approached to petition in favour of one application or another.  While I’m not going to take the side of any one application, I thought it may be an interesting topic to cover this month. Below is more of an overview, than any form of analysis.

There are few things that get radio people fired up to the same degree as applying for a new broadcast license. For the people involved in the application it means a chance to build the radio station they dreamed about working at as a teenager, not to mention the chance to move up the corporate ladder. It’s often the case that the people who help to orchestrate new station applications will insert themselves into the new outlet at a higher pay-grade than their current position allows. This understandably helps them keep a positive attitude during what can be an arduous, un-remunerated application process.

The Application Process

The application process is no picnic. There is a ton of technical research (in terms of the tower, frequency, coverage, etc) as well as a pretty comprehensive market analysis that helps you illustrate to the CRTC that the market being targeted is very much under-served as of the application date. In essence, the first thing you have to prove is that there is a need (and demand) for ‘your’ station. Follow that up with a technical explanation of how you’re going to do it, and most importantly, how you’re going to be profitable doing it. One of the CRTC mandates is to not dilute a marketplace to a point where all of the existing stations can’t cohabit, both in terms of listeners and available advertising dollars.

The Value Of A License

There’s also an underlying value that’s associated with a license, once it’s in your hands. For example, in the last few months the original owners of two ‘new’ stations have sold their properties. Hot 107 Edmonton went for a cool $8,500,000 and the recently defunct Shore 104 in Vancouver raked in a hefty $13,393,000. Not bad for a few years work. That’s a pretty solid dollar value for what’s essentially a ‘failed’ station (I use the term ‘failed’ because often, though not always, sellers have to explain that they just can’t make a living with their current business  model in order to get CRTC approval to sell the license. The ‘failed’ term is not necessarily reflective of the staff or format of any given station). And that’s because in many instances the new owner is a larger conglomerate that can make significantly more revenue off of a property by consolidating overhead and operating expenses. So to them, the future earnings of the license is worth an inflated value at the time of purchase. Especially when it keeps it out of the hands of a direct competitor.

An interesting piece of the puzzle in this particular Toronto free-for-all is that under CRTC rules, no one company can own more than four stations in any particular market. For now. There are rumors swirling around that all of that could get thrown out under a number of scenarios. Beginning with the current Bell Media/Astral takeover and ending with Clear Channel entering the market from the USA. It’s all speculation at this point, but the question of multiple station ownership is going to get raised again very soon as Bell Media is imminently about to surpass the alloted maximum in several markets. For now however, the ‘big buyout’ isn’t necessarily on the table, so whomever gets the license for 88.1 best have a long-term plan for survival.

I mention all of that to illustrate that in most of these ‘call for application’ situations several groups of prospective owners will try to ‘game the system’ and guess which format the CRTC is most likely to approve. The most notable recent examples of this include the “Urban” licenses that were doled out just shy of 10 years ago and more recently the spate of “AAA” stations that have cropped up which might again come into play with the 88.1 applications in Toronto.

Who’s Applying

Based on the above noted ownership rules, unlike previous license hearings in Toronto, aside from Newcap Radio, there are no other major commercial broadcast companies lining up for the frequency.  This is simply due to the fact that Rogers, Corus and Bell Media have all reached their ownership limits in the market and were prohibited from applying for 88.1, which has opened up the possibility of a smaller or independent broadcast operator gaining entry into the largest radio market in Canada.

Of the 22 applicants vying for the slot, the planned uses for the frequency vary, from mainstream music and business talk, to a wide variety of multi-cultural outlets designed to reflect the diversity of the city.

Proposed Music Stations

There are several variations of Rock being proposed, with “AAA” the format of choice on applications from Larche Communications, Michael Wekerle and Stanislaus Antony, while Newcap Radio is offering up a “AAA” variant that they’re calling “Modern Adult”.  Rock 95 Broadcasting Ltd. is aiming directly at an “Alternative” format and Radio Ryerson Inc. is planning on presenting campus programming.  The Ryerson group has no association to the former operators of CKLN FM.

Frank Torres is hoping to launch a “Blues” station, similar to his “101.9 Dawg FM” in Ottawa.

Durham Radio Inc. will be targeting an older adult demo with an “Easy Listening” format.

Tosan Lee is betting on an English-language “World Beat and International programming” station to be called “Asia FM”.

Trust Communication Ministries is proposing “Contemporary Christian,” while Family FM Inc. wants an eclectic “family friendly” format dedicated to songs with positive messages.

Non-Music / Multi-Cultural Stations

Tietolman Tetrault Pancholy Media have their eyes set on a spoken-word “Talk / Info” format, while Channel Zero hopes to launch “Biz 88,” a spoken-word “Business and Information” channel.

Ethnic licenses servicing a variety of languages are being proposed by Radio 1540 Ltd., MTSD Broadcast Inc., S. Sivakkumaran, and by Worldband Media.

Other Applications

A number of applicants with existing stations in the city want the frequency for technical reasons, claiming that, at comparative transmitter power, the 88.1 signal is stronger and achieves a better reach through the region.  Dufferin Communication Inc.’s CIRR (“Proud FM”), Intercity Broadcasting’s CKFG (“G98.7”), and La Cooperative Radiophonique de Toronto Inc.’s CHOQ at 105.1 are all looking to move down the dial.

Moses Znaimer’s MZ Media Inc. would like the frequency to host a nested FM transmitter for their existing “Zoomer Radio” offering that currently broadcasts on AM740, while the CBC also wants a nested transmitter for their French AM station in Toronto.

The next round of CRTC hearings for the 88.1 frequency are scheduled for May 7, 2012.

Complete details on all applicants and their proposed stations can be obtained at: http://crtc.gc.ca/eng/archive/2012/2012-126.htm#15

If you have any questions or comments please feel free to email or call me.

Gary McDonald
(212) 869-0835