Five new stations licensed for Calgary area

The race for new radio station licences in Canada’s most profitable and fastest-growing radio market is over, but not without some disagreement within the CRTC. Ten parties answered the call in CRTC Public Notice 2005-48 and filed applications for new radio licences to serve the Calgary Central Market Area, which encompasses not just the city but also surrounding communities such as Airdrie. Those services would be based in Calgary; three applicants also stepped forward with proposals for Airdrie-based stations. The applicants ran the gamut of English-language music formats, and even included an ethnic service that would broadcast in 14 languages each week. In Public Notice 2006-97, released on August 2, the commission speculated that the Calgary Central Market Area could support as many as five new stations – four in Calgary proper, one in Airdrie. "The Calgary commercial radio stations enjoyed a combined profit before interest and taxes (PBIT) of just under $24.5 million in 2005," the commission observed. "This represented an increase of just over $5 million, or 26%, compared with the results for 2004. In 2005, the average PBIT margin of all Calgary radio stations was 31.8%, well in excess of the average PBIT margin of all Canadian English-language radio stations, which was 22.9%." Two outright winners were announced in PN 2006-97, Harvard Broadcasting Inc.’s Alternative Rock service at 92.9 MHz and Rawlco Radio Ltd.’s 100.3 MHz Folk Specialty proposal. Three other hopefuls were also approved in part. Newcap Inc.’s Adult Album Alternative station got the green light, but only if it moves from its proposed frequency of 92.9 MHz – granted to Harvard in the same decision – to 90.3 MHz. A Hot Adult Contemporary offering from CHUM Ltd. will also proceed, provided it can find a new frequency: it had proposed operating at 90.3 MHz, but will now be displaced by Newcap. Finally, Thiessen Media Inc.’s proposal for an Eclectic Adult Contemporary station based in Airdrie received approval, but must also find a new frequency to broadcast on. As of the end of 2005, Calgary was the most profitable market for radio in the country for seven years straight, according to Statistics Canada, and that momentum seems set to continue. "It looks like the way it’s pacing, Calgary will break $80 million in radio revenue this year," predicts Mark Maheu, executive VP and COO at Newcap’s parent company, Newfoundland Capital Corp. Ltd. "There’s no signs of it slowing down at all, and when you add new stations as well, the market will grow at an accelerated rate." Moving frequencies isn’t a problem for Newcap, he adds: "It’s already done – 90.3 is just as good, it’s a full-power signal and it’ll certainly do the job for us." Newcap already operates one station serving the city, the jazz-and-blues formatted California 103 at 103.1 MHz. That existing presence led commissioner Helen Ray del Val to voice concerns that the radio market in Calgary might become concentrated in the hands of too few media outlets. "Awarding a second station to the incumbent Newcap further consolidates ownership in a market where radio ownership is already concentrated and worsens the competitive imbalance for several stand-alone stations in that market," Ray del Val wrote in her dissenting opinion. Newcap’s Maheu disagrees. "There are competitors in that market who have four stations, so adding another station in that market from Newcap certainly doesn’t create any competitive imbalance at all," he says. Maheu notes that Corus Entertainment Inc., Rogers Communications Inc. and Standard Broadcasting Corp. all operate two or more stations within the Calgary Central Market Area, together accounting for 10 of the 13 existing services. "They enjoy all the economies of scale that go with consolidation, and they’ve had a pretty robust and hot marketplace to themselves for a lot of years," he says. "I don’t think anybody would disagree with the contention that the market can support new services." However, in light of the fiscal health of Calgary’s radio market, Ray del Val continued in her dissenting opinion, the Soft Vocal service proposed by Jim Pattison Broadcast Group should have also been licensed, which would mean five new stations based within the city. If the commission wanted to err on the side of a more conservative outlook for the Calgary market, it still should have licensed Pattison instead of Newcap for the previously mentioned reasons of diversity in ownership, she argued. "Even if Pattison were also licensed for Calgary, the average PBIT margin of all stations would not have been significantly eroded," Ray del Val said. With Pattison projecting that 20% of its year-one revenues would come at the expense of stations in similar genres in Calgary, that would put the average PBIT for all new and existing players in Calgary’s radio market at 30%, "still well above the 22.9% average PBIT margin of all English radio stations across the country" and also in excess of last year’s PBIT of 24.5% for Calgary, Ray del Val concluded. Rick Arnish, president of Pattison, declined to comment on the decision. However, he did say of Ray del Val: "Her dissenting opinion is bang-on." Five new stations for the Calgary areaOwnerLocationFrequencyFormatCore AudienceHarvard Broadcasting Inc.Calgary92.9 MHzAlternative RockMales 12-24Rawlco Radio Ltd.Calgary100.3 MHzSpecialty – Folk and Folk-oriented45-64Newcap Inc.Calgaryto be determinedAdult Album AlternativeEarly 20s to mid-30sCHUM Ltd.Calgaryto be determinedHot Adult ContemporaryWomen 25-34Thisssen Media Inc.Airdrieto be determinedEclectic Adult Contemporary25-54

Five new stations licensed for Calgary area

Broadcast | August 15, 2006

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Five new stations licensed for Calgary area

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