CRTC approves change of Vancouver station ownership to Durham Radio Inc.

A Canadian radio broadcasting group operating in Southern Ontario will be taking over the shares of a commercial FM radio station serving Vancouver, B.C., despite a request from a former prospective buyer to hold off on the deal. The CRTC Thursday released its decision granting Roundhouse Radio authority to change its ownership and effective control of the station through the transfer of all the issued and outstanding shares to Durham Radio Inc. The company, based in the Golden Horseshoe of Southern Ontario, will now control the English-language specialty commercial FM radio station CIRH-FM Vancouver. Durham Radio will have to pay tangible benefits totalling $42,060 over seven consecutive broadcast years -- though it had requested an exemption -- and submit acceptable proofs of payment, according to the commission’s decision. In 2014, Roadhouse was granted its broadcasting licence for the specialty station which offered “a niche spoken word service” targeting adults aged 25 to 54, living in downtown Vancouver. It officially launched in October 2015 but ceased operations in 2018 due to “disastrous financial consequences for the founding shareholders,” according to CRTC documents. In 2019, the regulator approved Roundhouse’s application to transfer ownership and control of its shares to South Fraser Broadcasting Inc., a corporation wholly owned by Sukhvinder Singh Badh. However, the deal never closed. South Fraser was the only company to oppose this latest transaction, claiming in its intervention that the closing of its own deal was delayed because Roadhouse “declined to provide” the company with a full and accurate accounting of monies collected, invoices received and accounts paid. Badh, who wrote the intervention, also acknowledged South Fraser was delayed “due to personal issues.” “Because of the well documented failure to meet conditions on both sides of this process, we have filed an injunction with the Supreme Court of British Columbia on April 19, 2021 which we have supplied with this intervention. This process is with the courts and until such time as this is decided we request that CRTC not move forward with any decision on this application. It is a matter of contract law at this point and one that we think should be adjudicated before the CRTC can render a decision,” he wrote to the CRTC. Durham Radio, in its application, requested that the value of the change of control application be $1,000 because Roadhouse “has no site leases or valid contracts with any individuals or suppliers… and lost control of its broadcasting assets and cannot guarantee their title to Durham Radio,” plus $150,000 to settle the current shareholders’ loans -- the difference between the price paid for the shareholders’ loan if the company is acquired with a broadcasting licence ($700,000) and if it is not acquired with a broadcasting licence ($550,000). “The fact that some assets would have a value without a broadcasting licence cannot be used as an argument to reduce the value of the transaction. Moreover, accepting Durham’s position would lead to the restructuring of transactions in such a way as to reduce the amount of tangible benefits. The Commission therefore finds that the amount of $700,000 should be included in the value of the transaction,” the CRTC wrote in its decision. “Given the commission’s decision to set the value of the transaction at $701,000, the tangible benefits would total $42,060 (6 per cent of the value of the transaction).” The broadcasting licence for CIRH-FM will be renewed in September 2021 and last until August 2024, conditional on the licensee filing no later than Aug. 31, 2021, with supporting proof that the ownership transaction with Durham Radio has closed. “This short-term renewal will allow for an earlier review of the licensee’s compliance with regulatory requirements,” wrote the CRTC in its decision. Durham Radio made some requests to the commission to tweak the conditions of licence which were ultimately approved: The current spoken word programming conditions will be replaced with a requirement that a minimum of 50 per cent of all musical selections broadcast during each broadcast week be devoted to selections drawn from special interest music, and its required Canadian musical selections will be reduced from a 50 per cent to 40 per cent. “We are proposing to retain the specialty nature of the licence by playing a high proportion of Category 3 music in a mix of contemporary vocal and instrumental music - perfect for the Vancouver market. The station will have a local promotional presence and local news which will reflect Vancouver and be a distinctive voice in the market,” Durham Radio wrote to the CRTC in its application. The station will also be required to contribute $161,000 per year, for seven broadcast years, to Canadian content development with an additional one-time contribution of $200,240 to be expended within 30 days of the station resuming operations. In its application, Durham Radio said it would commit to the Canadian content development expenditures to “settle the unpaid CCD of the previous licensee and commit to a program of targeted CCD which will directly assist Vancouver and West Coast artists.” — Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Hannah Daley at hdaley@thewirereport.ca

CRTC approves change of Vancouver station ownership to Durham Radio Inc.

Broadcast | July 8, 2021

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CRTC approves change of Vancouver station ownership to Durham Radio Inc.

Broadcast | July 8, 2021

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