Quebecor ends community newspaper war with Transcontinental by selling them all their papers

It was 2010 when it really started to heat up. Quebecor Media started up new community weekly newspapers in Laval and the north shore, encroaching onto territory served by Transcontinental Media. A few months later, new papers in Joliette and Repentigny. It was clear at this point that Quebecor was starting a war.

Transcontinental responded with papers on Montreal’s south shore, in Sainte-Agathe, Mont-Tremblant and Abitibi.

Before then, both companies had dozens of community newspapers across Quebec. There was sort of a gentlemen’s agreement, or maybe just a fear of competition, so they didn’t encroach on each other’s territory. Until Quebecor decided it would expand into fast-growing areas and take on Transcon directly.

But on Thursday, that ended, with this matter-of-fact announcement from Quebecor that it is selling all 74 of its community weeklies to Transcontinental for $75 million. The announcement comes a day after it said it would cut 200 more jobs at Sun Media, including 50 in editorial positions.

Quebecor has 600 employees at these papers.

“The digital revolution has brought profound changes in local print media markets,” Quebecor CEO Robert Dépatie said in the press release. “Advertisers now have a multitude of platforms available to them that did not even exist little more than 10 years ago. We believe in the future of print media but we cannot ignore the new market realities”.

Quebecor talks about how the papers are in good hands, but the reality is that with many papers in overlapping markets (and many of those in fierce, unfriendly competition with each other), some mergers and shutdowns are inevitable.

The fact that this leaves Quebec with only one major community weekly publisher will mean it should get attention from the Competition Bureau. Sun Media will keep running the papers until it gets approval.

UPDATE (Dec. 19): Quebecor has also killed Le Sac Plus, its Publisac competitor. The shutdown will result in the loss of about 30 jobs, not including all the people who actually deliver it. Selling the regional weeklies prompted it to re-evaluate Le Sac Plus’s viability as a business, Quebecor said.

The list of papers TC Media is acquiring is below.

List of the 74 community papersacquired by TC Media

Those marked in red are markets where TC already owns a competing newspaper, based on my quick perusal of their list of community papers. There may be more in competing positions because they serve nearby/overlapping markets.

Le Citoyen de la Vallée de l’Or Val-d’Or, Amos
Le Citoyen de l’Harricana Val-d’Or, Amos
Le Citoyen Rouyn Noranda Rouyn-Noranda
Le Citoyen Abitibi Ouest Rouyn-Noranda
Éclaireur Progrès Saint-Georges
Hebdo Régional Saint-Georges
Beauce Media Sainte Marie
Les Actualités d’Asbestos Asbestos
Le Plein Jour de Baie Comeau Baie-Comeau
Le Port-Cartois Port Cartier
Le Nord Est Sept-Îles
Le Saint-Laurent Portage Rivière-du-Loup
Le Mirabel Saint-Jérôme
L’Information du Nord – Mont Tremblant Tremblant
L’Information du Nord – Ste-Agathe Sainte-Agathe
L’Information du Nord – Vallée de la rouge L’Annonciation
L’Écho de la lièvre Mont-Laurier
Le Peuple Lotbinière Laurier Station
Le Peuple Lévis Lévis / Montmagny
Courrier du Sud Longueuil
Le Journal de Sherbrooke Sherbrooke
L’Oeil Régional Beloeil
La Seigneurie Boucherville
Le Journal de Chambly Chambly
Le Soleil de Salaberry-de-Valleyfield Valleyfield
Le Reflet Delson
Le Journal de St-Bruno St-Bruno
Le Soleil du Samedi Châteauguay
Le Soleil du Mercredi Châteauguay
L’Information Ste-Julie Ste-Julie
Le Journal St-François Valleyfield
Les 2 Rives Sorel
L’Écho Abitibien Val-d’Or
La Frontière Rouyn-Noranda
Businest Rimouski
Le Transgaspésien Gaspé
L’Avant-Poste Amqui
L’Écho de la Baie New-Richmond
L’Aviron Campbelton, N.B.
Le Havre Chandler
Le Pharillon Gaspé
L’Information Mont-Joli Mont-Joli
Le Riverain Ste-Anne-des-Monts
Le Sentinelle de Chibougamau Chibougamau
Le Jamésien Chibougamau
Brossard-éclair Brossard
Le Journal de St-Hubert St-Hubert
The Gleaner – La Source Huntingdon
Sortir Boucherville
Agri-Vallée Valleyfield
L’Information d’Affaires Rive-Sud Beloeil
La Voix Sorel
La Voix de la Matanie Matane
La Voix Gaspésienne Matane
Le Courier du Fleuve Rimouski
Le Journal des Pays d’en-Haut La Vallée Saint Sauveur / Sainte-Adèle
Le Progrès Écho Rimouski
Le Réveil Saguenay
Le Rimouskois Rimouski
VISION Rimouski
L’Écho du Nord St-Jérôme
L’Écho de St-Eustache St-Eustache
L’Impact de Drummondville Drummondville
Pub Extra Laval-Laurentides
L’Écho de Victoriaville Victoriaville
L’Écho de la Rive Nord Ste-Thérèse
L’Écho de Laval Laval
Le Journal de Magog Magog
Le Point du Lac St-Jean Lac St-Jean
Le Journal de Joliette Joliette
L’Écho de Repentigny Repentigny
L’Écho de Trois-Rivières Trois-Rivières
L’Écho de Shawinigan Shawinigan
L’Écho de St-Jean-sur-Richelieu St-Jean-sur-Richelieu

24 thoughts on “Quebecor ends community newspaper war with Transcontinental by selling them all their papers

  1. Michael

    This should be good for local news coverage, sigh…. Transcontinental already does a really crappy job with barely 2 pages of combined articles to 14 of ads. They have absolutely no motivation to do better because they are the only game in town. Add to that that City of Montreal boroughs advertize heavily in Transcontinental papers and that they’ve recently cut staff “covering” local events. All in all, good news for local democracy and information of the population.

    Reply
    1. Fagstein Post author

      This should be good for local news coverage, sigh…. Transcontinental already does a really crappy job with barely 2 pages of combined articles to 14 of ads.

      This is true of their Montreal neighbourhood weeklies, which are little more than ad containers now. Its papers outside of Montreal have a bit more content.

      Reply
      1. GeoffreG.

        No local news content? Are you kidding me, it is full of news! At least, if we believe the CEO of Transcontinental, François Olivier: «Nous pensons qu’il y a un appétit grandissant au Québec pour des nouvelles locales.»

        And on the closing of newspapers, here is an other fantastic quote : «Oui il y a des dédoublements, mais s’il y a deux journaux qui publient 24 pages dans un même marché, on pourrait en faire un seul de 48 pages qui pourrait libérer de l’espace pour du contenu, a-t-il illustré. »

        Just insane to read him.

        Reply
  2. GeoffreG.

    December 2011: « On comprend que ce syndicat puisse avoir des interrogations face à ces nouvelles façons de faire, mais il est déplorable qu’il ait choisi de brandir des épouvantails plutôt que de saluer la contribution de Sun Media à la diversité des voix éditoriales et à la création d’emplois en régions, par l’entremise des 11 nouveaux hebdos que nous avons lancés depuis le début de 2010 » -Mario Marois, directeur du développement et des opérations régionales, journaux régionaux Québec pour Corporation Sun Media.

    December 2013: «Diversi…what?».

    Reply
    1. Fagstein Post author

      Will this finally mean the end of The Suburban?

      The Suburban isn’t owned by either Quebecor or Transcontinental, so this deal doesn’t affect them.

      Reply
  3. John

    It’s almost comical. In Chateauguay, Quebecor buys the Soliel and refuses to have it distributed by the Publi-Sac people which is owned by Transcontinental.( Who came out with their own paper. Fully bilingual at the beginning but now 95% French, just like the Soliel. ) So they distribute it themselves and try to pick up the flyer business as well. Except very few businesses change. So now we have two separate distribution networks for two very marginal papers. In practicality we now have two people, sorry three when you include Canada Post, walking on my lawn.

    Which one will now close down?

    Reply
  4. Dilbert

    “The fact that this leaves Quebec with only one major community weekly publisher will mean it should get attention from the Competition Bureau.”

    Does it really matter what the competition bureau thinks? The papers are getting sold for about $1 million each (approximately) which I suspect is about the coffee and donut budget for the Quebecor head office yearly. Selling them for a price like this tells you the real truth about the situation. Quebecor would not walk away from a profitable business or a business with a future, and they have chosen to get out.

    The competition bureau can say no, and Quebecor would likely pull the plug on many of them (if not all). The costs to run something that has only a net worth of 75 million to them is just not a good continued investment. This is even more true because they have figured out the same things I have talked about here before, that the ad dollars are leaving to other media (online) and that community papers in print are essentially a losing concept at this point. People don’t wait a week for the local paper to come out to see one picture from the local soccer tournament, they go to someone’s facebook page or flickr account and download all 800 pictures from the weekend.

    The competition bureau won’t have much to say when the options are “sell to them or close”. Saving a few jobs at the non overlapping papers is better than having all of them fold.

    Reply
    1. Fagstein Post author

      Does it really matter what the competition bureau thinks?

      Yes it does.

      The papers are getting sold for about $1 million each (approximately) which I suspect is about the coffee and donut budget for the Quebecor head office yearly.

      Quebecor’s financials don’t break things down quite so much, but I think that’s an exaggeration. Quebecor has about $300 million in annual profit, and about $4 billion in annual revenue. So whether $75 million is a lot compared to that, I’ll leave up to you to decide.

      Quebecor would not walk away from a profitable business or a business with a future, and they have chosen to get out.

      Any publicly traded company is ready to walk away from anything for the right price. I suspect your analysis is right here, and Quebecor’s comments seem to confirm it, but one company selling something to another doesn’t necessarily mean that asset is worthless.

      People don’t wait a week for the local paper to come out to see one picture from the local soccer tournament, they go to someone’s facebook page or flickr account and download all 800 pictures from the weekend.

      Assuming there’s someone who’s taking 800 photos and uploading them to Flickr. The reality of local newspapers is that people will read them if they’re interesting. The fact that something happened a week ago doesn’t matter nearly as much as people think for things that aren’t breaking news.

      The competition bureau won’t have much to say when the options are “sell to them or close”.

      I don’t know that those are the only options here. We’ll see what the bureau has to say.

      Reply
      1. Dilbert

        I think you miss the point Steve. The competition bureau would matter if the papers were the sort of ongoing concern that could find plenty of buyers. However, buyers in the print newspaper field are few and far between, so if the competition bureau says “You can’t sell the papers to them” the next logical step is going to be many (if not all) being closed or crippled by layoffs that would make them meaningless.

        Either way, Transcon effectively has won the war of the local papers, although it may be a hallow victory if the trend in print media continues. Perhaps they can use it as a spring board to putting the whole deal online, using the papers to promote the online presence.

        Reply
        1. Fagstein Post author

          if the competition bureau says “You can’t sell the papers to them” the next logical step is going to be many (if not all) being closed or crippled by layoffs that would make them meaningless.

          Maybe. Or maybe not. I don’t know what Quebecor’s plans would be in such a situation. I agree the market for newspapers isn’t very robust right now, but that doesn’t mean their value is zero.

          Reply
          1. Dilbert

            There is no claim that there value is zero, rather that, when you weigh the costs of operating them and the costs to go through all the motions of getting these things published, is there any real money in it?

            A good quote is that “the Quebecor Media transactions are expected to add about $20 million in operating income before amortization.” – and that includes a deal to print some Quebecor magazines and flyers. That is a good indication that the newspapers were not making a ton of income for Quebecor, and they appear to have obtained a price somewhere about 7 times annual income, which is pretty good in that marketplace.

            The real value in this deal is the elimination of competition in a marketplace that cannot support it. Neither side was likely making much money (TC had a nice 91 million dollar loss, widening from a previous 50 million loss), so getting rid of the competition is certainly the best way to turn the situation around. It’s unlikely based on the numbers I can see in news reports and financial statements online that either company would have been able to continue the current situation indefinitely.

            Moreover, if two deep pocket companies can’t keep it up, it’s unlikely that smaller companies could afford to come in and compete. Therefore, outside of TC, it’s unlikely that Quebecor could find a buyer for all of the properties, and undesirable to try to sell them piecemeal as individual papers might not make financial sense without the “collective” printing and distribution services.

            So the competition bureau can wave their arms around if they like, but the situation isn’t tenable as it was, and the end result of anything that blocks the sale isn’t a return to the status quo. Quebecor is making it clear by it’s statements that it doesn’t see a future in this market, and appear to be looking to accelerate their way out of print media prison.

            As a side note, I notice you didn’t comment much on the recent post media financial results, which were dismal to say the least. Where do you think all of this goes?

            Reply
            1. Fagstein Post author

              I notice you didn’t comment much on the recent post media financial results

              I don’t normally comment on financial results of any media company, unless there’s some other news about it. But obviously when things go bad for Postmedia, me and my colleagues who get our paycheques from them get nervous.

              Reply
  5. Nicolas Montagne

    I have a feeling most of the papers they started in the last few years will be shut down. From what I could see on the North Shore, the lack of ressources never allowed them to compete in an already crowded market. I wonder, however, what will happen to their Sac Plus, the Publisac type of bag full of flyers they delivered the weeklies in. Was that also part of the deal?

    Reply
    1. Fagstein Post author

      I wonder, however, what will happen to their Sac Plus, the Publisac type of bag full of flyers they delivered the weeklies in. Was that also part of the deal?

      No. Quebecor keeps Le Sac Plus.

      Reply
      1. Dilbert

        If I hadn’t noticed an update on the story on the sidebar, I might never have learned that they shut that down too… not worth a new story?

        Reply
        1. Fagstein Post author

          If I hadn’t noticed an update on the story on the sidebar, I might never have learned that they shut that down too… not worth a new story?

          Nope. Though I do post updates like this on Twitter. If you want to stay updated, you should keep up on that as well.

          Reply
          1. Nicolas Montagne

            Well, the writing was on the wall for that as well, since their bags were usually almost empty. This week in Sainte-Therese (North Shore suburb), le Sac Plus contains: Sears, Target, Jean Coutu, Jysk and Centre HiFi. Scrap their struggling weekly newspaper (lack of ressources, already saturated market) and that doesn’t justify keeping a separate delivery for five flyers.

            Reply
  6. Media Man

    Small weekly papers are on the way out, in terms of one paper for one city or small area like you have here on the Island. More regional weeklies could survive, like the Suburban, the Chronicle, The Hudson weekly, and I am also hearing that the West End times who have changed to Montreal times..and their territory, effectively takes in the territory of the three above mentioned weeklies….

    Are the smaller ones doomed like the various papers in the southwest, such as Verdun and Lasalle and along the Nuns Island Journal and La Voix Populaire which covers Ville Emard and Cote St.Paul , they could use a merged south-west weekly…Why Not? and a bigger regional reach for advertisers.

    Reply
    1. Fagstein Post author

      Are the smaller ones doomed like the various papers in the southwest, such as Verdun and Lasalle and along the Nuns Island Journal and La Voix Populaire which covers Ville Emard and Cote St.Paul , they could use a merged south-west weekly…Why Not? and a bigger regional reach for advertisers.

      Since they’re all owned by the same company, it’s pretty moot whether they get ads in each paper or in one paper covering all the regions. It might even work against them, since advertisers who serve only one local community might not want to advertise in such a large area.

      Reply
    2. Michael

      Maybe la Voix Popuklaire could start filling it’s mandat towards the people of Pointe St-Charles and Little Burgundy before aiming it’s sights on incorporating Verdun, Nun’s Island and Lasalle? They could use a better paper in the area they already serve St-Henri / Émard / Côte-St-Paul and the two other mentioned neigjbourhoods. I think one borough is plenty of news to cover without adding 2 more on top.

      Reply
  7. Pingback: Competition Bureau approves sale of 14 Transcontinental/Quebecor community newspapers | Fagstein

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