I just woke up, and I’m still not sure I’m entirely conscious because I’m seeing that Postmedia (my employer) is buying Sun Media’s English newspapers — a total of 175 of them — and digital assets like Canoe.ca for $316 million. (Postmedia press release, Quebecor press release)
The transaction would have to go through the Competition Bureau, which quickly issued a statement saying it will examine the transaction (as it would for any transaction of this type).
The transaction includes the big Sun papers in Toronto, Ottawa, Winnipeg, Calgary and Edmonton, plus the 24 Hours papers in Toronto and Vancouver, the London Free Press, and a lot of community newspapers.
The transaction does not include the Journal de Montréal or any other French-language papers. It also does not appear to include the Sun News Network, which will make for an interesting situation there because of how that network and the Sun are tied together.
This deal follows another in which Quebecor sold its Quebec community newspapers to Transcontinental for $75 million. Both appear to be a way to shed legacy assets and build up cash to strengthen Quebecor’s position as a telecom company and potential national wireless player.
The Competition Bureau also reviewed the Transcontinental transaction and concluded that, where competing papers were acquired, an offer to sell one had to be made. That eventually led to the sale of 14 of them.
If I had to guess, I’d say this situation would be similar. The Bureau probably won’t allow the two major paid dailies in cities like Ottawa, Calgary and Edmonton to be owned by the same company, and would force Postmedia to sell them (or their existing broadsheets). Similarly for areas where both have community papers. And in Vancouver, where it would own three of four papers, and Toronto, where it would own three of six, it might be forced to make sales there too.
And breaking up the Sun chain sounds like it would be a disaster. Those newspapers share a lot of resources, not to mention branding. So it’s hard to see the Ottawa/Toronto/Winnipeg/Calgary/Edmonton Sun not ending up with the same owner.
We’ll see how it works out. The Transcontinental/Quebecor deal took almost a year to work through the system, and I suspect it will probably be next summer before we know who owns what as a result of this.
The $316-million value is about 1/5 of what Quebecor paid for Sun Media ($989 million in 1999) and Osprey Media ($576 million in 2007) to acquire those newspapers, though subsequent moves means there are some adjustments to that comparison.