The CRTC has approved Stingray Digital Group’s purchase of Newfoundland Capital Corporation Limited (NCCL) and its radio and television stations for $523,949,242.

In addition to the purchase price of $393,943,062, the deal includes $18,297,180 in assumed leases and $111,709,000 in assumed debt.

Based on the number of issued and outstanding shares, each Newcap shareholder is expected to receive approximately 0.15371 Stingray subordinate voting shares (or Stingray variable subordinate voting shares, as applicable) and approximately $13.17 in cash for each share of NCCL owned.

Stingray will take ownership and effective control of Newcap’s 71 radio stations and 29 rebroadcasting transmitters in British Columbia, Alberta, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador, and two conventional television stations in Alberta, where the company also operates an exempt tourist information radio station.

Stingray to leverage multi-platform music expertise

Headquartered in Montreal, Stingray is a global provider of multi-platform music and video services including audio television, premium and 4K UHD TV channels, karaoke products, digital signage, in-store music, and music apps.

Stingray’s application to the CRTC indicates that it plans to leverage that experience intending “to build on the strong local focus of the current programming of the NCCL stations by bringing its financial resources, music programming experience, multi-platform reach and committed personnel to the existing NCCL operation.”

Stingray has stated its objective to make each station more competitive in its own market by developing brand strategies for each of the stations and the larger Stingray “family” of services. Further, “it will focus on producing premium programming and will work closely with NCCL’s current teams to grow audiences and revenues for each station.”

The transaction, set to close Oct. 26, includes Newcap’s “twin-stick” conventional small-market television stations CITL-DT and CKSA-DT Lloydminster, and rebroadcasting transmitter CKSA-TV-2 Bonnyville.

The standard local programming requirement for each station is currently seven hours per week, however the CRTC has relaxed that to allow the licensee the flexibility to offer a total of 14 hours of local programming per broadcast week on both stations combined.

Stingray said it intends to immediately audit the programming lineups of the TV stations to determine where it can use its expertise to support and supplement the existing programming, and improve the viability of the stations.

The transaction will result in $31 million in tangible benefits from the radio undertaking alone, representing a financial contribution to Canadian content development (CCD) of at least six per cent of the value of the transaction. Three per cent will be directed to the Radio Starmaker Fund or Fonds Radiostar, 1.5 per cent to FACTOR (English-language initiative) or MUSICACTION (French-language initiative), one per cent to any eligible CCD initiative at the discretion of the purchaser, and 0.5 per cent to the Community Radio Fund of Canada (CRFC).