On eve of $524M radio megadeal, John Steele reflects on changing broadcasting world
71 radio stations in Canada sold as part of $524M deal
On the eve of closing a deal — worth more than half a billion dollars — for his family's broadcasting empire, John Steele is reflecting on more than 30 years in the business and looking forward to new ventures.
The CRTC has approved the sale of Newfoundland Capital Corporation — the parent company of Steele Communications — to Stingray Digital Group, a Montreal-based media company, for almost $524 million.
The deal, set to close Friday morning, makes Stingray the owner of two TV stations and 101 radio licences across the country, including Newfoundland and Labrador radio stations VOCM and K-Rock.
"The deal came together quick, in April," said Steele, the president of Steele Communications.
"Since then, it's been a long wait for everybody involved."
The CRTC approved the deal Oct. 23.
"It's a range of emotions," said Steele, of hearing that final word.
"It's great getting the ball over the finish line, for us as a family. But business is people, and you build relationships … so that's a bit tough."
Steele's father, Harold Steele, waded into the world of radio in 1986, when he bought a single radio station in Charlottetown, P.E.I.
Now, 71 stations, in seven provinces, are being sold to Stingray.
"Everything that we go at, we always try to grow," said John Steele.
Despite that growth, Steele acknowledged the Canadian broadcasting industry has become tough in recent years, to the point his family felt unable to go on.
"The media landscape is getting very challenged," he told CBC Radio's St. John's Morning Show.
The media landscape is getting very challenged.- John Steele
"For us to continue on in the radio business, we looked at it and said we gotta get into other platforms to compete. At this point in time, for various reasons, me and Rob [Steele, his brother and business partner] weren't prepared to do it."
Steele said he'll now spend more time focusing on the family's hospitality operations, Steele Hotels, with plans to expand in both St. John's and Halifax.
Steele acknowledged his employees have been anxious about the impending changes.
In its approval, the CRTC noted Stingray plans to "embrace the level of service required for local stations," and work with "existing management and employee teams to develop strategies to make each station more competitive in its own market."
The CRTC also mandated Stingray to spend $30 million on its radio initiatives in the next seven years.
Steele added Stingray, which currently provides cable TV music channels as well as digital music content, is eager to expand into radio.
"They want the cashflow from that," he said, calling it "a very dynamic company."
The CRTC called the deal "a rare opportunity for a new but experienced player to enter the Canadian radio market," and said its newly acquired stations would "benefit from Stingray's expertise in providing innovative, cross-media, premium musical content."
With files from The St. John's Morning Show