Tag Archives: Groupe Capitales Médias

Quebec’s regional dailies go weekly as COVID-19 devastates news media

The Coopérative nationale de l’information indépendante, the group that took over the six regional dailies formerly owned by Groupe Capitales Médias, has decided to suspend daily print editions and keep only the Saturday edition of each of those newspapers as they face a sudden disappearance of commercial ad revenue.

Affected are Le Soleil in Quebec City, Le Droit in Ottawa/Gatineau, La Tribune in Sherbrooke, La Voix de l’Est in Granby, Le Nouvelliste in Trois-Rivières and Le Quotidien in Saguenay.

They’re also laying off 143 workers, almost half their staff, temporarily during this crisis.

And no refunds “for the moment” because they don’t have enough staff to handle that.

This, less than a month after the group said it expected to be profitable in two years.

It’s just the latest media outlet to have to make drastic measures as COVID-19 causes traditional advertisers to pull their ads in what BuzzFeed’s Craig Silverman calls a “media extinction event.”

Among the dramatic changes in Canada:

If the crisis continues over the long term, the situation is likely to get worse.

It’s a perfect storm of problems:

  • The crisis itself has put increased pressure on news outlets, particularly television and radio, to increase coverage
  • Absences due to sickness or self-isolation measures
  • Event advertisers pulling ads because there are no more events to advertise
  • Local businesses pulling ads because they’re closed
  • Online advertisers opting out of placing ads on pages related to the outbreak
  • Fewer newsstand sales of newspapers because of those closed businesses
  • Less subscription revenue because newspapers and TV channels have considered themselves morally obligated to provide COVID-19 coverage for free
  • No more sports or arts to drive audience numbers

There are some effects working in the other direction — higher audience for news content, some virus-related government advertising — but the impact on the bottom line is very negative.

Governments have acknowledged this, and in Quebec at least, we may see some additional direct financial assistance to the media. Unifor is calling for emergency measures from the federal government, and it looked like they listened, with Justin Trudeau announcing new measures would be coming, but that turned out to be false.

So for now, the guillotine continues to fall day after day.

UPDATE: J-Source has mapped out how the COVID-19 pandemic has affected media across the country.

Groupe Capitales Médias files for creditor protection — What’s next?

Updated Aug. 21 with news of Métro Média’s interest.

Groupe Capitales Médias, the newspaper company started by Martin Cauchon when he bought six daily newspapers from Gesca in 2015, made good on rumours that it wouldn’t make it to the end of the month, filing for creditor protection on Monday.

The newspapers continue producing while their journalists await their fate:

  • Le Soleil in Quebec City
  • Le Nouvelliste in Trois-Rivières
  • Le Quotidien in Saguenay (which also publishes the weekly Le Progrès)
  • La Tribune in Sherbrooke
  • La Voix de l’Est in Granby
  • Le Droit in Ottawa/Gatineau

The stakes are serious, because there isn’t a lot of competition in this space. Quebec City has Le Journal de Québec, but Trois-Rivières, Saguenay and Granby don’t have other daily newspapers. Sherbrooke and Ottawa/Gatineau have English dailies but no other French ones. And Le Droit represents not only francophones of the national capital region, but Ontario francophones as a whole. Simply put, except for Quebec City there is no direct competitor that will take these newspapers’ places.

Without them, a lot of news will simply go unreported.

The Quebec government has stepped in with an emergency $5-million loan, which will get it to the end of the year. By that time, a new plan will need to be in place. That likely means new ownership, but in what form?

There’s no end to speculation about the group’s future. So let’s break down the suggestions and analyze them here:

Quebecor

The media empire is reportedly in talks with GCM. It makes sense on a few levels: Quebecor is already in the print media space, it owns TV stations in Quebec City, Sherbrooke, Saguenay and Trois-Rivières (and has an affiliate in Gatineau) that could benefit from news synergies.

But Quebecor has already owned regional newspapers, back when it was a competitor to Transcontinental in the community newspaper wars. That war ended with Quebecor selling all its weeklies to Transcontinental, and later Transcontinental selling all its papers to local owners for peanuts. Quebecor tried expanding to Saguenay with a Saguenay edition of Le Journal de Québec, but that edition quietly closed. (Quebecor also owned a weekly in Saguenay, but locked out its employees and later saw it disappear entirely.)

There’s also the competition concern in Quebec City, where Quebecor would own both daily newspapers. It’s unclear what the government would do about this. The Competition Bureau had no problem with Postmedia buying Sun Media, and owning both daily paid-subscription newspapers in Ottawa, Calgary and Edmonton. But it’s still investigating the community newspaper deal between Postmedia and Torstar, in which newspapers were swapped and immediately shut down.

If Quebecor did buy the chain (or the chain minus Le Soleil), it would be an admission that having a media empire is better than having no local media at all.

La Presse

These six newspapers used to belong to the same company as La Presse, which was at the time owned by Power Corp. But as La Presse shifted to a tablet-based publication, and the others maintained their print products, at some point it was decided to separate them, and Cauchon (with a source of funding that remains unclear) stepped in and bought them (for an amount we still don’t know).

Despite the separation, the publications maintain links, including content sharing (which would disappear if Quebecor was the buyer).

The big advantage is that it would be the closest to maintaining the status quo. But La Presse isn’t swimming in cash either, and is making similar demands to governments for financial aid.

Le Devoir

Quebec’s only independent daily newspaper wants to help, but it doesn’t have the money. It has a particular affinity for Le Soleil. And Le Devoir has a strong presence in Quebec City already with its sizeable bureau in the National Assembly press gallery. They also have existing business partnerships — Le Devoir is going to use GCM’s software for its tablet edition, and GCM sells national ads for Le Devoir.

If Le Devoir took Le Soleil and Quebecor took the rest, that might solve competition concerns. But we’re still back to the same problem that Le Devoir doesn’t have the money to buy a newspaper, much less an entire chain.

Local owners

It’s the feel-good option: break up the chain and find local owners in each community to take control. It’s what Transcontinental did when it decided to get out of the community newspaper business. But owning a daily newspaper is much more of a financial commitment than a community one.

And selling to local owners is no guarantee. Those owners generally get their money from other industries, and are more likely to compromise their ethics when it comes to promoting those industries. And even if they’re purely altruistic, once that good will wears off, those papers could end up shutting down anyway.

Plus, selling to a series of local owners would be complicated and take time. This needs to be figured out in a matter of months.

The Journal de Montréal talked to two of the companies that bought Transcon newspapers, and both say there’s no interest in taking over the money-losing company. (Transcontinental itself also is not interested.)

Métro Média

One group that bought newspapers from Transcontinental is interested, though. Métro Média, the group owned by businessman Mike Raffoul and which purchased Montreal’s Métro daily and community weeklies in Montreal and Quebec City, is interested, it told La Presse.

Such a takeover would provide some synergies in the national capital, and create a chain that had a presence in both Montreal and Quebec’s other large cities. But Métro Média is still new, and less experienced in paid subscription newspapers.

Employee co-op

CSN says its unions are interested in taking over the papers and having them be employee-run. It’s another feel-good option, in the same vein as a non-profit. But would an employee-run (or union-run) shop be willing to make the staffing cuts necessary to stay in the black? Would it have the financial capacity to make major investments when necessary? Would it have the courage to stand up to the CSN if that union is its de facto owner?

Maybe. None of these things are dealbreakers, but the co-op model isn’t a magic solution either.

Cogeco

La Presse said they were interested, but Cogeco has repeatedly denied it on the record. Cogeco owns radio stations in most of these markets, so there’s some synergy sense there, but considering its experience with TQS (it was an owner of the TV network when Quebecor was forced to sell it to buy Videotron and TVA in 2001, then it went bankrupt before being bought by the Rémillard family), it’s unlikely the company wants to gamble away a bunch of money for little gain.

Postmedia (or other anglo Canadian chain)

No one has seriously suggested this, but it should be included in such a list. As much as I’d love to have sister newspapers across Quebec (and Le Soleil used to be owned by Conrad Black’s Hollinger chain), the biggest problem is that Postmedia, Torstar et al don’t have any French-language news assets, so don’t stand to gain much in terms of synergy. And, stop me if you’ve heard this one before, they don’t have a lot of money lying around.

The government

Nationalizing GCM sounds like a bad idea, and the Quebec government has already ruled it out.

It doesn’t really matter

In the end, though, regardless of who buys GCM and its newspapers, the business needs to change. Even a rich owner isn’t going to cover deficits forever. That means there will need to be cuts to staff, or new revenues, or direct government support, or some combination of all those things. Le Devoir’s Brian Myles talks about following his paper’s model, focusing more on subscription revenues. The Quebec government will be expected to consider more direct support when it conducts hearings next week. And the Canadian government is putting in place a tax credit system to help. There are also proposals like taxing telecommunications companies and using that money to support news media.

Speculating about potential new owners is fun, but the real problem is that this is a broken business, and someone needs to come up with a plan to fix it.

Gesca sells six newspapers to Martin Cauchon, keeps only La Presse

This one hit like a ton of bricks: Gesca, the media company owned by Power Corporation, is selling six of its seven newspapers to Groupe Capitales Médias, a new company (literally formed on Monday and registered yesterday) owned by Martin Cauchon, former Liberal Party MP for Outremont.

The sold newspapers are:

  • Le Soleil in Quebec City
  • Le Droit in Ottawa
  • Le Nouvelliste in Trois-Rivières
  • La Tribune in Sherbrooke
  • La Voix de l’est in Granby
  • Le Quotidien in Saguenay

The purchase price wasn’t disclosed. The new owner says current management at those papers will remain in place, including Claude Gagnon, who is president of the new company and remains in charge of the regional papers.

Gesca, for its part, says it wants to focus on La Presse+ and international sales of the platform it spent $40 million to develop. It never brought the other newspapers into this system, which many people found curious. Now I guess we know why. (Negotiations took several months — La Presse says it was a year — and other parties were interested in a purchase.)

UPDATE: Some details from InfoPresse: La Presse will continue selling national ads for the regional papers, and they will continue sharing copy. Plus La Presse+ and other technology will be shared with the regional papers, according to publisher Guy Crevier.

Reaction

UPDATE: The new owners are in negotiations with the union, and it doesn’t look good.