Marc Tellier’s fight to transform an old-world telephone book publisher into a modern digital advertising powerhouse has come to an abrupt end, with the chief executive officer of Yellow Media Inc. stepping down just as the company emerges from a difficult restructuring that put the company under the control of its creditors.
He leaves a company that was once one of the most recognized brands in the country, but struggled to find its place in the digital age. Companies that once wrote big cheques to ensure good placement in the company’s printed directories migrated to the Internet and took advantage of free services such as Google to ensure customers knew how to find them.
The company’s restructuring – which saw debt holders give up their claims in exchange for new debt and common shares – cut the company’s debt by almost $1.5-billion and gave it a chance to refocus its efforts on digital initiatives. The deal, approved in December, erased most of the company’s $2-billion debt – assumed in 2006 when Mr. Tellier led Yellow Media’s acquisition of western print directory publisher SuperPages Canada for $2.5-billion just as the industry was shifting hard toward digital advertising.
Now, a new chief executive officer must figure out a way to compensate for the losses the company has seen in its printed directory business. Yellow Media faces a similar challenge as other publishers who rely on advertising – digital revenue is increasing rapidly as companies direct their advertising budgets online, but the companies spend far less money online than they once did in print.
“Our business continues to experience a decline in revenues, as online growth is currently unable to fully compensate for print revenue pressure,” Mr. Tellier said last month, as the company reported profits from continuing operations declined by 50 per cent to $24-million as revenues declined almost 15 per cent to $313-million. “This trend was expected and we do not anticipate it to reverse in the near future.”
Mr. Tellier took over the company in 2001 at the age of 32, when Yellow Media was still owned by Bell Canada. In recent years investors grew increasingly restless as the company’s faced difficulty wrestling down its debt, with its shares declining almost 95 per cent in the past several years as it struggled to replace lost print dollars with digital revenue.
The company did not respond to requests for an interview. In a statement, it said chairman Robert MacLellan would lead a committee to find Mr. Tellier’s replacement. It hopes to have someone in place by the end of summer.
“We intend to look to Marc for his input and guidance during the upcoming transitional process,” the statement read. “We look forward to appointing a new chief executive officer who can continue the ongoing transformation into a leading digital advertising and marketing solutions company.”
Mr. Tellier joins several other high-level executives who have recently left the company, including its key digital architect Stéphane Marceau and chief financial officer Christian Paupe. In the statement, Mr. Tellier suggested his restructuring initiatives meant his replacement would inherit a company “well-positioned to successfully continue its digital transformation.”