Who will end up with UP in Calgary?

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Who will end up with UP in Calgary?

Postby jon » Tue Jul 15, 2014 12:40 pm

The more I think about the fate of UP in Calgary, the more possibilities emerge. Calgary is one of the hottest markets in Canada right now, in terms of their local Economy. For someone looking to expand either geographically or make their move into a major market, this is undoubtedly seen as the "most available" radio license right now.

Even smaller operators might find the trip to the bank a lot more rewarding: a Loans Officer would very likely see the profit potential of an FM radio license in Calgary right now.

With all that in mind, I plan to explore some of those possibilities here, in this thread, over the next week or so. I would encourage others to do their own speculating. And, of course, feel free to ridicule my ideas on the subject.
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Re: Who will end up with UP in Calgary?

Postby jon » Tue Jul 15, 2014 12:46 pm

I would like to begin with what I now (hadn't thought of this yesterday, and may think of something better tomorrow) think is the most likely future for UP in Calgary: Rogers will buy it, especially if they take up their "first right of refusal" on the Regina and Saskatoon Rawlco stations.

Until this morning, I had dismissed the possibility of Rogers' ownership of UP because they already own two FM stations in Calgary.

Then, I remembered that Rogers owns 3 FM stations in Edmonton. If they propose a flip of UP to an ethnic station modeled after CKER-FM (World-FM) in Edmonton, they would overcome the 2 station limit. Simply by arguing that UP would NOT be an English language radio station.

Once that is approved, with the same license terms as CKER, Rogers would be free to run 49% English language programming on UP, just as they are on CKER. Which would allow Sports, including Play by Play of NHL games. Ethnic and Sports could be a pretty profitable mix for what had been a money-losing license for Rawlco.
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Re: Who will end up with UP in Calgary?

Postby albertaboy4life » Tue Jul 15, 2014 1:58 pm

I'm doubtful Rogers is in a position of strength in considering buying UP 97.7 FM and making it an ethnic formatted station. Rogers' OMNI TV services in Calgary and Edmonton abandoned local news production some time ago. While it was likely a decision good for the viability of the stations and shareholders, it isn't very endearing to ethnic communities or the regulator.

The last round of applications for radio services in Calgary included a number of applications for ethnic stations and only one was successful.

In terms of financials, I'd argue Harvard as the other operator of a single FM service in Calgary is the front-runner. They instigated the 2011 CRTC call for Calgary radio applications. Their application included arguments pointing to their need for a second service for economies of scale. Harvard needs a second service in Calgary or an exit strategy. The deciding factor will be Rawlco's asking price and Harvard's desire (price they're willing to pay) to stay in the Calgary market.

Back in June 2011 I asked if we would see Pattison, Blackburn, Evanov/Dufferin, Vista, Clear Sky, Yerxa or ZoomerMedia apply to have a presence in Calgary. (viewtopic.php?f=2&t=10008)

Pattison is now in the market, with two FM stations. Rawlco is possibly leaving, or maybe they'll buy Harvard's Calgary FM service with some of the Pattison funds obtained from the (pending approval) sold Saskatchewan stations. Clear Sky tried in 2011 for a country FM in Calgary and failed with the CRTC saying they weren't large enough. Yerxa sold its only operation to Harvard in Edmonton and is no longer an operator. Calgary's demographics may be too young for ZoomerMedia. Blackburn doesn't look like it's growing beyond southern Ontario.

Evanov/Dufferin didn't apply in 2011 neither did Vista. Would they be interested in having one station in Calgary? Or would they make offers to both Harvard and Rawlco?

Both Harvard and Rawlco could decide to sell their Calgary FM services or keep them because no one is willing to pay the asking price.
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Re: Who will end up with UP in Calgary?

Postby jon » Tue Jul 15, 2014 6:56 pm

Interesting perspective. As always, I forgot to state the obvious (to me, but obviously not universally shared).

My assumption was that Rawlco is Toast. Or, more accurately, Rawlco Radio, including Prince Albert's panow.com, will no longer exist, and all of its assets are being sold. Pattison is buying Edmonton and the small market Saskatchewan stations. And I assumed that reports were true that say that Rogers has, and is exercising, first right of refusal on the Regina and Saskatoon stations.

Obviously, if any of that is false, then I would have to rethink my guesses.

In turn though, I would question whether Rogers would be perceived in a bad light for abandoning local content on the OMNI Alberta stations. I am sure that the Rogers Spin Doctors have both the ethnic community and the CRTC believing that they gave locally-produced Ethnic Television the "Old College Try" in Alberta, but just couldn't make it pay.

Instead, I'm sure Rogers is focusing the spotlight on the success of CKER-FM aka World-FM in Edmonton. The concept of sharing costs between an Edmonton and Calgary World-FM would be music to the ears of many on the CRTC decision-making execs. That's all I heard in the transcripts of the last major CRTC Edmonton hearings: CRTC Commissioners asking about cost-savings by having two or more stations sharing "stuff".

In general, I think a lot has changed since June 2011 which was the last time most of us thought much about the subject, as albertaboy4life references above. Almost every company being discussed has grown substantially. Evanov, Vista, Harvard, Clear Sky, Golden West, LA Radio Group (Lacombe). But, perhaps more important, the Alberta and Calgary economies are doing even better now than three years ago.
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Re: Who will end up with UP in Calgary?

Postby Aaron » Tue Jul 15, 2014 7:16 pm

The Rogers purchase of Up! to create Calgary's World-FM is solidly logical, but I'd still call it a long-shot.

First, do we know that Edmonton's World-FM is "successful?" Without any ratings to speak of, I'm not sure.

Secondly, the CRTC would see right through this, especially after the inevitable RED-FM appeals.

Lastly, I'm not 100% sure Rawlco is finished. Their business model over the last few decades has been to start stations under new licences, build them up, then sell them and retract to Saskatchewan, knowing a new FM license has been like winning the lottery....repeat. Granted, the window of "new licences" may be closing, and they've never sold their small (and first) stations, but this still looks familiar.

No doubt though, Calgary's for sale, and Harvard balked at the price.

We'll see!
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Re: Who will end up with UP in Calgary?

Postby merlin » Tue Jul 15, 2014 7:16 pm

Harvard with out a doubt !!! But they will pay for it. But I think at some point Evanov will buy them out. Harvard is not big enough to make it .
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Re: Who will end up with UP in Calgary?

Postby Aaron » Tue Jul 15, 2014 7:22 pm

I don't think Evanov has the cash to buy a major market station. They're in over their heads trying to start a Montreal AM station, and even their recent small town launches have barely made it on air. Beyond Z103, they really don't have much of anything working for them.
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Re: Who will end up with UP in Calgary?

Postby jon » Tue Jul 15, 2014 8:17 pm

I should define what I mean by "successful" when I refer to CKER-FM. I mean successful in the sense that KARI-550 in Blaine or KTW-1250 in Seattle were at the end of the 1960s.

If the BBM measured those stations, they would have called their listenership "not statistically significant". Which meant that the survey sample was not big enough to estimate how many listeners they had, other than to say "not much".

Both KARI and KTW made really good money for their owners. By selling almost all of their air time in half and one hour blocks for so-called religious broadcasts. Their rates were not based on their Ratings, but on their signal, i.e. - potential audience numbers.

The ultimate example of that time period was XERB when Wolfman Jack controlled the station. Yeah, he made a few bucks from those very expensive calendars with cartoon versions of the Wolfman Jack image and those hard to find Oldies packages he advertised and sold on his show that aired for many hours of the day. But over 90% of his money came from those religious broadcasts. XERB's directional pattern gave the station a huge potential audience.

Ethnic Programming is today's equivalent of the "brokered" religious broadcasts of 50 years ago. The same kinds of big dollars are involved. 1440 Wetaskiwin has been profitable for most of the last 30+ years not because of their Oldies or Country or any other type of music that they have played. But from the blocks of their broadcast week that they have sold over the years for both religious and ethnic programming, today, pretty much all ethnic programming.

When Rogers took over CKER-FM, it was already a nice little money-maker. Rogers almost immediately realized that they could make a lot more money out of CKER if they altered the amount of programming for each ethnic "group" based on the amount of money available from each group. As I recall, they were running 16 hours a day at one point for an ethnic group that could afford to buy that much time.

By Successful, when I referred to CKER, I meant how much profit Rogers makes on the station each year.

To put it in perspective, I'm not saying that CKER makes Rogers more money than #1-rated NOW-FM does for Rawlco, but I feel comfortable saying that CKER makes more profit than the majority of (AM and FM) stations in Edmonton. Of course, I can't prove it. Even a Rate Card wouldn't really tell me as contracted pricing rarely is at "Rate Card Prices".
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Re: Who will end up with UP in Calgary?

Postby Aaron » Wed Jul 16, 2014 5:25 am

Fair points, but the station will be for sale at commercial value. And while its ratings aren't great, expenses are also relatively low. It would take years to, if ever, make up that purchase price with the trickle of revenue ethnic programming brings in, especially if they took a run at NHL rights.
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