Transcontinental puts newspapers in Quebec and Ontario up for sale

CEO Francois Olivier says he doesn't expect all 93 newspapers will be bought

MONTREAL – Transcontinental has put its 93 newspapers in Quebec and Ontario up for sale, days after unloading its publications in Atlantic Canada, but its CEO says he doesn’t expect all of them will be bought.

Francois Olivier said he expects to sell more than half of the papers to local entrepreneurs, but likely won’t find buyers for all titles because some of them may be too small or isolated to attract interest.

“We will be much smaller, but we don’t think we will be out,” he said in an interview Tuesday. “It’s a good possibility that we end up being still the biggest in Quebec.”

The media and publishing firm (TSX:TCL.A) said the sale process involves 91 local and regional weekly publications in Quebec, one in Cornwall, Ont., and the free daily Metro in Montreal, along with their related websites. The company said it expects the process will last several months.

Transcontinental entered the publishing business in the mid-1990s. In 2014, it acquired 40 Quebec weeklies from Quebecor Media.

The company has since migrated away from the newspaper business, which has been hit hard by falling advertising and circulation revenues.

Dwayne Winseck, professor at Carleton University’s School of Journalism and Communication, said the sale is a recognition that the deal was a mistake.

“Newspapers were never a big part of their business and so for them to get out of it and for them to go back basically sticking with their knitting in printing in terms of a business decision I think it makes sense,” he said from Ottawa.

Last year, Transcontinental sold off its media assets in Saskatchewan, including 13 newspapers, to Star News Publishing. It announced last week the sale of 27 newspapers in Atlantic Canada and the website to SaltWire Network, the publisher of the Halifax Chronicle Herald.

Winseck said it is part of a trend that has seen the rise of regional players such as Black Press, Glacier Media, SaltWire and Groupe Capitale Medias decades after the newspaper industry’s consolidation.

“This division of the land into regional monopolies is what we are seeing here,” he said.

Olivier said the best strategy for Transcontinental was to decentralize its remaining publishing activities by selling to local owners who would contract with Transcontinental for the printing and distribution of the papers.

The sale does not include about 15 specialty business, financial and construction publications, including seven purchased from Rogers Publishing, along with education book publishing activities that generate about $100 million in annual revenues.

The specialty publications have a more provincial or national scope with a business-oriented readership than the local papers, Olivier said. They also follow a business model that is less reliant on advertising for revenue, he added.

While dropping advertising revenues have eaten away at the newspaper business, local publications have fared better than their national counterparts, he said, adding that the ones put up for sale Tuesday are all profitable.

Transcontinental plans to keep publishing the newspapers that aren’t sold, he added.

“If you would own publications that earn money every week, would you shut them down?”

John Hinds, the CEO of Newspapers Canada, said despite the advertising challenges there continues to be interest to purchase newspapers.

“There’s been a lot of talk about the state of the industry, but it appears that these newspapers are profit-making enterprises and that there are buyers out there,” Hinds said.

“In a way it’s good news for the industry in the sense that there is an active market.”

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