Transformation & BCG's First CRTC Case
The successful strategies applied and lessons learned in Bay Consulting Group’s first-ever case in 1984 still remain relevant today. The client was Craig Broadcasting, then the operator of a small CBC-TV affiliate in Brandon, Man. Craig was at a crossroads, facing paralysis as it looked to the future, unable to grow because of its small market and stymied in its attempts to secure CRTC approval for new stations.
For Bay Consulting’s Hans Jansen, the Craig situation is a classic case of the need for transformational consulting. “A company could be in trouble, or simply stuck in its development and growth,” says Hans. “Either way, they often need an outsider to help transform the situation, even if they understand the problem.”
Craig’s president had heard Hans speak at an industry forum in Montreal on the need for strategic planning in the broadcasting industry. Impressed, he called Hans and asked for assistance.
“It was clear to me,” recalls Hans, “that the local Brandon TV audience was too small, so Craig needed a licence for another city.” They decided on Portage la Prairie, also a small market, but close enough to Winnipeg to tap into that growing area.
In preparing Craig’s pitch to the CRTC, Hans developed a proposal that was broader than the regulator had encountered before. “The opposition to Craig’s licence bid had come from existing stations who were trying to protect their own turf,” he says. “They claimed that the market was not big enough for another competitor. We proved them wrong.”
Hans developed a sophisticated and unique economic model that was uncannily accurate. Relying on a broad spectrum of indicators such as housing starts and retail demand, he projected that cumulative revenues for the proposed new station over five years would be $25.4 million. As it turned out, the real number was $25.5 million.
As for the competitive argument, Hans pointed out to the CRTC that Manitoba’s broadcast industry was the most profitable in the country with a 31.5 per cent return on investment. It was the first time those figures had been made public.
At the end of the day, says Hans, “our argument was inescapable.”
Indeed, Bay Consulting’s success at the CRTC at the expense of Craig’s competitors led to those other broadcasters hiring Hans and his Bay Consulting team when they, in turn, went looking for approvals for their own expansion plans.