Press release details


For immediate release
COGECO presents its radio strategy to the CRTC:
Local information, support for the radio industry and diversity
Montréal, September 28, 2010 – In connection with the acquisition of certain Corus Entertainment Inc.
radio stations in Québec, COGECO (TSX: CGO) is presenting the broad lines of its radio strategy to the
Canadian Radio-television and Telecommunications Commission (CRTC) at its hearings today and
tomorrow in Montréal.
The strategy, which focuses on local content, will revitalize and ensure the sustainability of the financially
troubled regional stations that are pa rt of the tra nsaction, allowing them to survive as a releva nt information
source in all areas of Québec. The strategy also aims to re-establish competitive balance in the French-
language commercial radio industry in Québec. To achieve this, COGECO is requesting that CRTC grant
an exception to the 1998 common ownership policy in Montréal to allow it to own three FM stations and
one AM station serving the city's francophone market rather than two FM and two AM stations.
A justified request for exception
The CRTC's common ownership policy stipulates that one group may own a maximum of two FM and two
AM stations per language. However, the objective of the common ownership policy was to ensure that a
group can operate two talk stations and two music stations per language.
If the transaction is accepted as is and the CRTC grants COGECO the exception, it will be upholding the
policy’s objective, with two talk stations (CKAC and 98.5 FM) and two music stations (Rythme FM and
Information available across Québec
COGECO’s news projects are based on its intention to make use of the information activities of CHMP-FM
(98.5 FM) to revitalize news in the Gatineau, Sherbrooke and Trois-Rivières regions. In addition to
expanded impact for CHMP-FM is the creation of Cogeco News, a new cooperative agency to which all the
stations of the COGECO Group as well as independent and community stations across Québec will be
invited to contribute. They will then be able to select the most relevant news for their respective audiences
free of charge and produce their own news bulletins locally. Setting up the agency will mean a net creation
of jobs within the COGECO Group.
A clear competitive imbalance
In COGECO’s view, there is a deep-rooted competitive imbalance in the Québec radio landscape. Astral’s
control in the majority of Québec markets, a situation unparalleled anywhere else in Canada, significantly
hinders the development of commercial radio stations by other groups acro ss Québec, and inevitably limits
the manoeuvrability of both local and provincial advertisers.
This imbalance is heightened by a phenomenon unique to the bilingual market in Montréal, where
significant numbers of francophone listeners tune in to English- language pop music radio stations, with t he
majority drawn to the two stations owned by Astral.
The competitive imbalance considerably reduces the financial resources available to support French-
language stations overall. The phenomenon is particularly evident in the regions, where most stations
cannot secure the revenue they need not only to ensure their survival but to enable them to grow.
Numerous and important letters of support
Many groups, associations, advertisers and individuals have come out in favour of COGECO’s proposal.
Almost 140 letters of support have been sent to the CRTC backing it. The letters of support acknowledge
that the challenge that financing an acquisition of this size, integrating the acquired st ations and revamping
three talk radio stations in the regions represents can and must be met by a Québec group with the
necessary qualifications, experience and human and financial resources.
This support comes from the Fédération des chambres de commerce du Québec, the Union des Artistes,
the Fédération nationale des communications (CSN), the Fédération professionnelle des journalistes du
Québec, the Board of Trade of Metropolitan Montreal, several m unicipal elected officials including Montréal
Mayor Gérald Tremblay and Québec City Mayor R égis Labeaume, the Société professionnelle des auteurs
et compositeurs du Québec and the Association québécoise de l’industrie du disque, du spectacle et de la
vidéo (ADISQ), to name only a few.
A simple proposal with many advantages
COGECO’s proposal reflects a number of incontestable facts. Promoting the future of French-language
commercial radio in Québec, it is a global solution, a forward-looking solution, and a sustainable solution
that will infuse local radio with new vigour, revitalize news with value added and accessible information
available across Québec and open the way to sufficient resources to adequately serve all areas of Québec.
Furthermore, COGECO is the only francophone business with the necessary experience to productively
and sustainably operate the Corus radio stations and provide a quality alternative to the player that
dominates not only the majority of the geographic markets affected by the transaction, but the entire radio
landscape in Québec.
To recap, COGECO proposes to:
1. Create a new complementary, value added information source by establishing Cogeco News,
offering content free of charge to cooperating independent and community stations across Québec.
2. Use a portion of the resources and expertise of the radio stations to be acquired in Montréal to
support radio in the regions.
3. Give back to stations in the regions the ability to offer locally relevant, quality programming for
broadcast at peak times.
4. Provide more balanced and sustainable competition for radio in Québec.
5. Pay an exceptional contribution of 9% of the total transaction value, or $7.2 million, to various
stakeholders in the Québec radio system.
COGECO is a diversified communications company. Through its Cogeco Cable subsidiary, COGECO
provides its residential customers with Audio, Analogue and Digital Television, as well as HSI and
Telephony services using its two-way broadband cable networks. Cogeco Cable also provides, to its
commercial customers, data networking, e-business applications, video conferencing, hosting services,
Ethernet, private line, VoIP, HSI access, dark fibre, data storage, data security and co-location services
and other advanced communication solutions. Through its Cogeco Diffusion subsidiary, COGECO owns
and operates the RYTHME FM radio stations in Montréal, Québec City, Trois-Rivières and Sherbrooke, as
well as the FM 93 radio station in Québec City. COGECO’s subordinate voting shares are listed on the
Toronto Stock Exchange (TSX: CGO). The subordinate voting shares of Cogeco Cable are also listed on
the Toronto Stock Exchange (TSX: CCA).
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Information: Catherine Pleau
Advisor, Corporate Communications