As if things aren’t bad enough for small media outlets, TC Transcontinental announced on Friday it is rolling out its Publisac replacement throughout the province and into areas of Ontario and British Columbia that other flyer distributors have pulled out of.
This is leaving many Quebec publications worrying that what happened to Métro Média could happen to them.
It’s been a while since we had news about triple-digit job cuts. Today’s news is that Postmedia (my employer) and Torstar have come to an agreement where they swap dozens of newspapers and shut most of them down.
No cash is being exchanged in the transaction.
Most of the newspapers going either way are Ontario-based community publications, but there are four major-market free dailies affected: Metro Ottawa, Metro Winnipeg, 24 Hours Toronto and 24 Hours Vancouver. All will close.
J-Source reports that Postmedia’s closing of ex-Torstar papers will result in 244 job losses. Torstar’s closing of ex-Postmedia papers will lay off another 46, for a total of 290.
Competition Bureau approval is not required for the transaction, the companies say, so there’s no government regulatory step required for the deal. The bureau did nothing to stop the deal between Postmedia and Quebecor that saw major-market dailies come under the same roof. Nevertheless, the bureau says it will review the deal after the fact.
Unifor has unsurprisingly condemned the shutdown.
As bad as the news is, and as many communities are losing local coverage, the deal won’t be cutting the last local paper out of most communities. Many are community papers covering parts of cities that have a daily, or competed directly with another newspaper being kept. Exceptions are the tiny town of St. Marys, near London, and Meaford, near Owen Sound.
There’s also Barrie and Northumberland, which lose dailies but are still covered by weeklies.
More coverage and reaction from:
The process by which Transcontinental is selling off its remaining community newspapers in Quebec (and Cornwall, Ont.) took its biggest step on Wednesday with the announcement that Icimédias Inc., led by Renel Bouchard, with Marc-Noël Ouellette, will buy 21 community papers and its Inmemoriam.ca website and take over 140 employees plus another 28 from TC’s production operations.
Bouchard had been an owner of Le Canada Français, a newspaper that’s part of the transaction, and Ouellette was a TC manager for 15 years.
The newspapers involved in the transaction, whose price was not disclosed but also involves an agreement for TC to print the newspapers, are:
Transcontinental has now sold more than half of the 93 publications it put up for sale in April, all to small local owners, through 10 transactions.
But as the months progress, the chances of remaining newspapers being sold diminishes. That includes titles in various Montreal neighbourhoods, Courrier Laval, and papers in the Outaouais and Abitibi regions.
More coverage in Le Devoir and Le Canada français.
As was rumoured last week when it sold its Atlantic Canadian newspaper portfolio to the owners of the Halifax Chronicle Herald, Transcontinental announced this morning that it has put its remaining newspapers, including Métro in Montreal, up for sale. This includes 93 publications, almost all of which are community newspapers in Quebec (there’s also the Seaway News in Cornwall, Ont.). And Transcontinental has grouped them into 27 groups, mainly by region.
The magazine Les Affaires and things like Publisac are not part of the sale process.
No buyer has been announced, and the process should “span several months.” Transcontinental will remain in charge of the newspapers during the process, and “will also continue to be the publisher of newspapers that may remain unsold.”
It’s unusual to announce a sale without a buyer lined up already. But there are also no obvious buyers for a collection of newspapers like this. Nevertheless, let’s go through the possibilities.
Many of these newspapers used to be owned by Quebecor, until they were sold en masse to Transcontinental in a deal first announced more than three years ago. (That deal also evaluated the newspapers at roughly $1 million apiece on average.) So buying them back, even at a discount, would be a big step back for this company that has shed assets to focus on its core properties Videotron and TVA.
On the other hand, Quebecor is going back to the past a bit, bringing Pierre Karl Péladeau back as CEO. If he wasn’t crazy about the sale of the newspapers in the first place (PKP stepped down a few months before it was announced), he could bring them back.
Buying the newspapers would let Quebecor re-establish a Quebec-wide source of local news, which would feed not only those local papers but also the Journal de Montréal/Québec and TVA.
But with Videotron spending a lot of money on building its wireless network and upgrading its cable network, TVA still trying to pull TVA Sports into the black, and the company prioritizing buying back the stake in it held by the Caisse de dépôt, there isn’t much extra cash lying around.
The owner of the half-dozen newspapers that used to be part of the Gesca chain (except La Presse) has regional news coverage as its core mission, so this purchase would make sense in that way.
Unfortunately we know little about GCM’s finances because it’s privately owned and Martin Cauchon still hasn’t been very forthcoming about where he got the money to buy the papers in the first place.
There’s also the fact that this purchase would further drive down competition, though the Postmedia/Sun Media deal effectively established that the Competition Bureau doesn’t care about that anymore.
There are several community newspaper publishers in English Canada. Among them, Torstar would seem the most likely candidate to make a bid here. Postmedia doesn’t exactly have a lot of extra money lying around, Black Press and Glacier Media operate only in western Canada and the new Saltwire Network is too new to think about expanding right away (and if it was interested, it might have already bought them).
Torstar co-owns the other Metro newspapers in Canada, so it makes sense to buy Métro Montreal, perhaps separately from the others. And it had an interest in buying the Canwest chain until it lost out to Postmedia in the bidding. Its financial situation isn’t nearly as precarious as Postmedia’s.
But language is a big barrier for Torstar and the others. You can’t share articles or editors or page layouts when you’re working in a different language, and none of their current assets operate in French. There wouldn’t be that much efficiency in sharing resources.
Alexandre Taillefer has made it a thing to try to rescue industries in need of innovation. He launched Téo Taxi to help the taxi industry compete against Uber. He bought Voir, and when Rogers decided to offload its Quebec publications he bought L’Actualité as well.
He definitely has the money, but does he think he can turn a profit on community newspapers?
An interview Transcontinental president François Olivier did with Presse Canadienne suggests this is the company’s actual vision, to sell off “at least half” of the publications to local owners who would be responsible for editorial and marketing, and would keep Transcontinental as their printer. Olivier also says that the newspapers are profitable, though that’s a difficult thing to measure on an individual basis when so much of newspaper operation is centralized.
There have been a few side deals where papers have been sold to entrepreneurs in their communities interested in buying. Others could be found to take over many of the remaining newspapers, but it’s almost impossible to find buyers for all 93. So going this route might mean many of them eventually get shut down, despite Transcontinental’s promise. (Olivier repeats in his interview that this won’t happen because the papers are profitable.) It would also mean breaking up the network, which relies a lot on centralized resources like editing, pagination and administration.
Anything is possible, but why would they?
Anyone who works at a struggling newspaper company fantasizes about a rich benefactor who buys the paper, doesn’t care about wasted money and doesn’t impose any editorial views. Unfortunately very few people like this exist. But there could be someone who decides to jump in and try to save the industry. We saw it with Cauchon’s purchase of the GCM papers, and with Taillefer’s purchase of Voir and L’Actualité.
It could even be someone, or a group of people, within Transcontinental itself that decide to start a new business. Some of them have decades of experience with community newspapers and could decide to become entrepreneurs.
Finally, there’s the possibility that Transcontinental doesn’t find any takers for the majority of its collection. If they’re making money, it could decide to cancel the sale process and keep them. If they’re not, it could be the beginning of the end. They could remain running for a bit longer, but eventually the company would throw in the towel, and when it does there won’t be another sale offer, everything will just be shut down.
Got about $100 million lying around? How about $75 million? Or maybe just a few million for a few papers in your region? If so, contact Allison Dent (dent.allison@rcgt.com) or Arnaud Vital (vital.arnaud@rcgt.com).
We’ll see which of these options comes true in the coming months.
The Halifax Chronicle Herald surprised me this morning by announcing it is purchasing almost all of Transcontinental’s print assets in Atlantic Canada, including 27 newspapers, one online-only news outlet, and four of Transcon’s six printing plants. (This despite the fact that the paper is 15 months into a general strike.)
Included in the sale are newspapers like the St. John’s Telegram and Charlottetown Guardian. The sale takes effect immediately, Transcontinental said. No word on purchase price, but we’ll probably learn that at Transcontinental’s next financial report to shareholders.
This sale follows several recent region-wide newspaper selloffs, including Quebecor selling 74 community papers in Quebec to Transcontinental, Transcontinental selling its 13 Saskatchewan newspapers to Star News Publishing, Transcontinental buying all of Rogers’s business-to-business magazines, Gesca selling all its newspapers except La Presse, and swaps of newspapers between Black Press and Glacier Media in B.C. (Not to mention the whole Postmedia/Sun Media thing.)
The result of most of these transactions is that the country is being divided up regionally, and community newspapers are avoiding competition so much that their owners are swapping assets to stay away from each other’s markets.
After the Transcon/Chronicle Herald deal, the new owners (who have incorporated as Saltwire Network) made it clear they have no plans to expand into New Brunswick (beyond the purchased Sackville Tribune Post, which is on the Nova Scotia border) to avoid competing with the Irving-owned Brunswick News. The Transcontinental-Quebecor deal ended the companies’ competition in Quebec, which had heated up a few years earlier when Quebecor decided to launch some new publications on Transcontinental territory.
A look at which groups own more than a nominal number of newspapers in each province shows how fragmented it has become (numbers are based on a quick count and may not be exact):
Besides Alberta and Manitoba, no province has more than two major community newspaper publishers (as measured by number of titles). But just as importantly, no publisher operates substantial operations in more than four provinces.
As a result of the latest sale, Transcontinental will drop to being a Quebec-only newspaper publisher (except for papers in Cornwall, Ont., and its partnership in the Halifax Metro free daily).
The transactions make sense from a business perspective, and as much as we can complain about lack of competition, the truth is that healthy competition in community newspapers just isn’t possible as the industry continues its slow death march.
We may see further consolidation (particularly in western provinces) in the future, and if the situation doesn’t improve, major shutdowns. And if one of these companies goes under and is forced to shut down completely, it could leave an entire province without community media.
Following through on commitments made when Transcontinental bought Quebecor’s entire slate of community newspapers in Quebec, the company has received Competition Bureau approval to sell 14 community newspapers to smaller companies. And Transcontinental has responded by announcing it is shutting down 20 more, laying off 80 people.
The papers being sold, a mix of those previously owned by TC and Quebecor, are among 34 papers that Transcontinental was ordered to put on the market because they compete with other papers also owned by the company. (One of those papers, Le Courrier du Saguenay, which includes the Courrier du Fjord, Courrier de Jonquière and Courrier de Chicoutimi, was later removed from that list.)
Sold to Les Médias de la Rive-Sud:
Sold to Serge Langlois, Michel Langlois, Claude Langlois, Carole Côté and Pierre-Marc Langlois, who also own Les Éditions Blainville Deux-Montagnes:
Sold to Néomédia, a division of iClic Inc., where they will become online-only publications:
The remaining 19 community newspapers are now Transcontinental’s to do with as they please. Of them, 18 are on the shutdown list:
Also being shut down are:
The only paper that was put on the market and left unsold but will be kept by Transcontinental is Le Courrier du Fleuve in Rimouski.
Transcontinental is now left with 105 weekly papers, five biweeklies, six monthlies and one bimonthly in Quebec, plus the Métro Montreal daily, or 118 total newspapers.
UPDATE: The FNC-CSN union isn’t happy with the job losses, and worries about Néomédia, which it believes is more interested in advertising than maintaining editorial integrity.
Meanwhile, Radio-Canada’s eastern Quebec bureau gets some reaction to the closing of six papers in that region. And the FPJQ’s regional offices denounce the cuts in the Montérégie and Gaspésie regions
The Competition Bureau has ruled that Transcontinental can acquire Quebecor Media’s 74 regional newspapers in Quebec, but in order to preserve competition, it must then sell 22 of those papers and 12 of its own.
In its decision, the bureau said it looked closely at the financial situation of the Transcontinental and Quebecor papers, noting that rivalry between the two intensified in 2009:
Since 2009, Transcontinental and Quebecor Media have engaged in aggressive competition for advertisers, entering markets where the other Party was the historical incumbent and cutting advertising prices. While a few independents remain in certain markets, Transcontinental and Quebecor Media own the only community newspapers in many of Quebec’s local communities and, as such, the Proposed Transaction may allow Transcontinental to have the only community newspaper(s) in numerous local markets.
…
The Bureau determined that at least one of the Parties’ newspapers was in financial distress in the vast majority of markets where the Parties compete. These were typically the newspapers that had been launched in recent years.
The competition rules by which the bureau operates allows for mergers that would reduce competition if the alternative is that one of the parties goes bankrupt and nobody picks up its assets, which would reduce competition anyway. The bureau’s assessment shows the community newspaper sector isn’t doing that well, but that Transcontinental should nevertheless put the newspapers on the block, and for no minimum price, for a period of 60 days, and managed by a third party.
“Following the completion of the sale period defined in the Consent Agreement, if no potential purchaser is identified for a particular paper, Transcontinental will be entitled to retain ownership of the newspaper,” the bureau writes. So Transcontinental could end up keeping many of these papers (or being allowed to shut them down and merge them with their competitors in each market) if no one else is interested in buying them for even $1 (with printing and distribution provided by Transcontinental for a limited time).
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.
The Gazette’s suburban reporter David Johnston has a piece on Média Sud, a “hyperlocal” (i.e. local) news website setup by community newspaper PointSud and community radio station 103.3FM that covers the south shore.
The article mainly focuses on an apparent controversy: the fact that Média Sud works off government grants while its competition (community newspapers run by megacorporations Transcontinental and Quebecor or by Les Hebdos Montérégiens) pay their own expenses.
In addition to being unfair to the competition (you’ll note it’s that competition that’s pointing this out), they also argue that it puts them in a conflict of interest: How can you criticize a government that’s paying your bills?
Of course, as the article points out, the corporate-owned weeklies also get assistance from the government in the form of postal rebates, not to mention all those ads for council meetings and whatnot.
Instead, the real threat is that Média Sud is run by motivated people who aren’t beholden to the megacorporations. Their goal is to present news, not suck up to the boss in the hope of getting a promotion to senior vice-president. And because what they have online isn’t crap, browsers are going to start flocking to them.
Sorry guys, that’s the thing about the Internet: You can’t just keep shovelling crap into people’s faces and expect them to take it forever.
But let’s get back to that government subsidy thing, because that still kind of bothers me.
I’ve always dreamed about creating my own little media empire, expanding Fagstein WorldMedia Ltd. into a true independent source for regional news. I’ve considered the costs of running a one-man newsgathering operation, and whether advertising alone would cover that with enough left over to pay me a proper salary.
But I’d never considered the idea of asking the government to just pay me outright.
I’m not a conservative wacko or anything, but when I hear that government grants pay the entire minimum-wage salaries of private employees (whose employers top them up to the tune of about $2 or $3 an hour), I’m shocked. Is this what we spend our tax money on? Does the media really need this much help to survive? Or is this just handouts for the sake of handouts?
Here’s hoping Média Sud grows up into a real local news source and grows out of its need for government funding.
Transcontinental has bought up the Corriere Italiano, a Montreal Italian community weekly, and the monstromerate’s first third-language newspaper.