The transfer of large collections of print media to and from Quebecor has taken another step, with the announcement that Transcontinental is selling 15 magazines to its Groupe TVA subsidiary for $55.5 million (or $3.7 million each on average). (Quebecor release, Transcontinental release)
The deal, which also includes a contract that will see Transcontinental continue printing those magazines for seven years, includes the following (with number of editions a year and average circulation where I could find it):
French magazines
- Coup de pouce (general consumer magazine for women) — 12 x 209,260
- Véro Magazine (women’s lifestyle magazine tied to TV personality Véronique Cloutier) — 4 issues/year
- Décormag (home decorating) — 10 x 74,038
- Fleurs Plantes Jardins (gardening) — 6 x 54,166
- Québec Vert (horticulture) — 6 x 6,200
- MaisonNeuves.com
- Condo Maison Direct
- Elle Québec (51%, with Hearst) (fashion and beauty) — 12 x 81,211
- Le Bel Âge (50%, with Bayard Group) (lifestyle magazine for seniors) — 11 x 130,122
English titles
- The Hockey News — 24 x 100,058
- Canadian Living (general lifestyle) — 12 x 521,169
- Style at Home (home decorating) — 12 x 233,878
- Canadian Gardening — 6 x 92,624
- Elle Canada (51%, with Hearst) (fashion and beauty) — 12 x 126,967
- Good Times (50%, with Bayard Group) (lifestyle magazine for seniors) — 11 x 131,487
Digital
- recettes.qc.ca
- Quoi manger/On the Table mobile app
Not included are Les Affaires magazine or other business publications, or magazines regional to Western Canada, Vancouver Magazine and Western Living.
These would be the first major English magazines to come under the umbrella of TVA Publications.
Needs Competition Bureau approval
The deal requires the approval of the Competition Bureau, which might have something to say about Quebec’s two largest consumer magazine publishers merging like this.
This year, Transcontinental acquired all but three of Quebecor’s newspapers in Quebec, in a deal that received Competition Bureau approval with an agreement to try to sell a few dozen of them to third parties (which had little success). That deal was worth $75 million, so Transcontinental’s getting most of its money back in a swap of magazines for community newspapers.
Quebecor is also waiting approval for the sale of its newspaper assets in the rest of Canada to Postmedia (my employer). In all three cases, the argument for the consolidation of print media assets into a near-monopoly is that print media is struggling and competing not with other print media but with online and other platforms.
Why?
Transcontinental says it wants to focus on local publications now that it’s the only major community newspaper publisher in Quebec.
Quebecor’s TVA unit, for its part, says the acquisition “is in line with the Corporation’s strategy of investing in the production and distribution of high-quality, rich, diverse entertainment and news media content.”
TVA Publications has several of its own consumer magazines, including some that would seem to compete directly with the ones it’s acquiring, which might make some wonder about the possibility of mergers or shutdowns, though TVA’s collection of celebrity gossip magazines seem to have found a way to co-exist, and the company has already said it intends to keep all the acquired titles running.
By combining the acquired publications with its own, TVA says they will “contribute between $10 million and $14 million to operating earnings annually” (which would mean paying for themselves in about five years).
Awkward Véro is awkward
The announcement took many people by surprise, including Véronique Cloutier, the personality connected to Véro magazine, who told Paul Arcand that she found out Sunday night. She explained that TC Media had the right to sell the magazine without consulting her, but there are clauses in her contract that would allow her to leave if it comes to that, but she doesn’t expect it will.
The announcement led to some people thinking that Cloutier’s recent burying of the hatchet with Quebecor, including an appearance on TVA’s Sunday night show Le Banquier with Julie Snyder, is related to this somehow. Cloutier says it wasn’t, at least on her side of it.
Freelancers worried
The Association des journalistes indépendants du Québec, which represents freelance writers, is worried about the transaction because it had agreed to a freelance contract model with Transcontinental but not with Quebecor, which it says uses the “most abusive” freelance contract terms in the industry. It and the FNC-CSN union are asking Quebecor to honour the existing freelance agreements.
It’s interesting to see these two companies just about entirely swapping positions in the marketplace. The real question is the background motivations for such moves.
A couple of things come to mind here. One of them of course is that new ownership can in some cases help them get out of existing agreements / contracts, depending on how the takeovers are made, and also allow for tax benefits by writing down the “goodwill” of the purchases over time.
I think it’s telling that TC will continue to be the printing (and distribution, I gather) for the magazines. I suspect Quebecor, at least in Quebec, is thinking that they can use their existing QMI staff writers to make slightly longer form pieces for the magazines, perhaps saving them significantly on freelance and outside help. Combine that with their freelance contact terms are less favorable to outsiders, and there is perhaps a decent bottom line saving to be made here. TC continues to do what they do best (printing) and Quebecor gets to apply it’s QMI group / bulk writer model to magazines.
If you are working as a freelancer for these magazines, my guess is that you should be looking for other sources of income, this one is about to dry up!
Not really, no. Unless Quebecor wants to bring these publications into bankruptcy protection, their contracts remain valid. The AJIQ is worried about contracts for future freelancers (or renegotiating contracts for existing freelancers who want to keep contributing).
I don’t see why one would overpay for an asset just to write it down later. The tax benefits don’t come close to outweighing the stupidity of such a strategy.
Editorial isn’t likely to be the place they’ll find the most synergy. Rather, it’s things like advertising sales, human resources, bookkeeping, office space and other overhead that they’ll be able to save some money.
Of course Steve, you are entirely right. What was I thinking?
Anything Quebecor should always be boycotted.
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