Tuesday, 11 August 2009

CP's $7 million

If PKP wants to be master of a self-sufficient national news agency next year, he should use the $7 million saved annually in dumping Canadian Press to beef up lean newsrooms in his domain.

QMI Agency could become a serious contender if Sun Media newspapers across the country were adequately staffed in time for CP's departure next June. As is, good luck in filling the shoes of CP.

Pumping up a print-based QMI Agency in the next year or so makes more sense than flogging online news.

Let's face it, Internet newspapers are not the advertising bonanza media conglomerates thought they would be a decade ago. Time to rethink news service strategies.

For starters, aging baby boomers who grew up with print newspapers in their hands should be considered the demographics of choice.

For example, the majority of people who began reading the Toronto Sun when it was launched in 1971 are just under, or past, the Sun's current under 50 demographics. A 10-year-old reading the Toronto Sun since Day One would be 48.

Let today's younger generation dabble in new media and all of the related electronic toys that are providing vast amounts of free news and information.

Canada's 10 million or so baby boomers should be sufficient to carry print newspapers that are adequately staffed and focused on community affairs.

Conduct a survey of those 10 million - a third of Canada's population - asking them their preference: (a) A print newspaper (b) An online newspaper.

Our money would be on the majority opting for print media, paid for or free.

PKP says he believes in newspapers. That is news to us, but if he has seen the light, it is time for him to reverse the decline in staff numbers and morale.

That $7 million a year would be a good start.


  1. Good points made here, but one thing to keep in mind is that advertisers target the 18-50 year old demographic and so a paper focused mostly on the over 50 age group will not attract sufficient advertising. Just the way it is.

  2. The $7 million will go into Quebecor's upcoming cellular network. I was reading QMI's 2008 annual report -- too bad they didn't spend any money on spell-checking, grammar-checking or editing -- and the report outlines all the potential problem$ they are expecting. In fact, they state: "We may not successfully implement our business and operating strategies."

    Quebecor says one of its problems is its inability to retain talented employees. Gee, wonder why?

  3. Speaking of money: Quebecor Media's long-term debt is currently $4.35B. It went up by $1.3B in 2008. This year's (2009) minimum payment is a cheap $37M, but it balloons over the next five years: $162M, $166M, $270M, $652M and finally $3B in 2014. Obviously, they will refinance before 2014.

    87% of that debt is due to Videotron and Quebecor itself. Only 6.7% is due to Sun Media. Sun Media on its own, could pay off its debt in 6 years without breaking a sweat, or maybe in three years with some effort.

    The long-term debt does not include the expected $1B to be spent on the cellular start-up.

    However, Quebecor Media's current *total* financial obligations, which includes the above long-term debt but not the cellular, is $6.3B. So that $7M savings is a drop in a bottomless bucket.

    About 50% of Quebecor Media's employees are in newspapers. So, if you need to cut more costs, guess where it'll happen?

    Total newspaper revenue is 77.5% from advertising, 15.9% from circulation sales, and the remaining 6.6% from commercial printing and "other". Quebecor now lumps the web sites under "newspapers". Not sure if web advertising is included in that 77.5% number. The two cash cows are Le Journal de Montreal and the Toronto Sun, which together account for 22% of *total* newspaper revenue.

    Quebecor has a total 254 publications (paid and free) with a combined grand total of 15.9 million copies per week. By comparison, the Toronto Star alone has a weekly circulation of 3.1 million.