A group of Rogers Media employees has crafted a proposal to buy the company’s magazine brands, in an attempt to save jobs at a division the communications company no longer wants to own.
The group has put forward a plan to purchase Rogers Communications Inc.'s five remaining print magazines – Maclean’s, Today’s Parent, Hello! Canada and Chatelaine’s English and French editions – as well as digital titles Canadian Business and Flare and a custom content unit, which creates editorial-style content such as branded magazines for companies.
Rogers formally put the business for sale several months ago, hiring investment bankers at Canadian Imperial Bank of Commerce to find a buyer. It was near a deal in November to sell the titles to Roustan Media Ltd., the publisher of The Hockey News, but it fell apart at the last moment. Since then, Rogers has been looking for another buyer, and sources familiar with the negotiations have said it was hoping to sign a deal by the end of the year. In late November, Rogers sold a small piece of the business, the MoneySense website, to Toronto-based Ratehub Inc.
The print magazine industry faces financial difficulties. In Canada, magazines will make up just 2.2 per cent of all advertising spending in 2019, according to media buying company GroupM. The sector’s ad revenues fell by 16.4 per cent this year to $335-million, and is expected to decline another 3 per cent next year, the company wrote in a report in December. In June, Rogers Media laid off 75 full-time employees, or one-third of its digital content and publishing staff, in a move the company said was needed to keep the business “sustainable.”
Rogers is said to have two interested parties, of which the employee group is one. The group is spearheaded by Alison Uncles, editor-in-chief of Maclean’s magazine, and entrepreneur Scott Gilmore, a former diplomat who is a Maclean’s contributor. (The Globe has not been able to confirm the identity of the other bidder.)
“We do not comment on mergers and acquisitions,” Rogers spokesperson Andrea Goldstein said in an e-mailed statement on Sunday, in response to questions about the matter.
A memo has been circulating among employees of Rogers’s media division, outlining the details of the employee proposal, which have been confirmed by people with knowledge of the bid.
The employee-led offer was submitted to Rogers on Nov. 22. Most of Rogers’s publishing employees were not involved in putting the offer together, and the company asked the bid team not to discuss the deal with staff, according to sources familiar with the situation who were not authorized to speak publicly about the bid. The offer was designed to provide staff with equity in the business, as well as the opportunity to purchase stock over time.
A cornerstone of the offer is a commitment to maintain the staff headcount of nearly 150 people at the digital content and publishing business until at least 2021, with no reductions in pensions or benefits and following existing union agreements. It also promised to continue publishing all of the titles, including existing print editions. (Flare and Canadian Business transitioned to digital-only publications in 2016.)
Law firm Cassels Brock & Blackwell LLP and investment firm City Financial consulted on the bid for the employee group. An unnamed Canadian investment fund committed to underwrite the purchase and to invest in expanding the activities of the publishing business. According to the memo obtained by The Globe, that fund “believed in the long-term value of these publications and in the importance of protecting quality journalism in Canada.” It was not immediately possible to verify the identity of that fund.
Among the editorial goals of the deal was a potential plan to set up a team of reporters focused on investigative journalism, as well as introducing “safeguards to ensure editorial independence from ownership and sales teams,” according to the memo.
The employee group put forward two proposals for structuring the deal: one that would purchase the assets for a nominal fee, but invest more into providing equity to employees and to investing in the business; and another that would provide a larger sum to Rogers with less flexibility to invest immediately, according to people familiar with the bid.
Details of the offer began to circulate amid concerns the bid will not be successful, sources said, and as employees at Rogers worry about potential cuts that could come as a result of a change in ownership.
It is not clear when the sales process will conclude.