Transat A.T. is not the only potential acquisition on Pierre Karl Péladeau’s mind as he muses about buying the airline if its shareholders reject Air Canada’s sweetened $720-million offer.
The Quebecor Inc. chief executive officer also has his eyes on six former Power Corp. of Canada French-language daily newspapers after their latest owner, Groupe Capitales Médias, announced its intention to seek court protection from its creditors – the largest of which happens to be the Quebec government. It lent $10-million to GCM in late 2017.
In an interview on Quebecor’s QUB radio network on Monday, Mr. Péladeau insisted Quebecor is the only potential acquirer that can ensure the survival of the GCM dailies, which include Le Soleil in Quebec City, Ottawa’s Le Droit and Le Nouvelliste in Trois-Rivières. Quebecor already owns Quebec’s biggest daily, Le Journal de Montréal, and its sister Quebec City tabloid.
Quebecor also owns Quebec’s largest conventional television network, TVA, and a stable of specialty channels. But while media concentration and competition concerns might have once stood in the way of an acquisition by Quebecor of GCM newspapers, that’s unlikely to be the case now.
The Competition Bureau declined to intervene when Quebecor sold its English-language Sun tabloids to Postmedia in 2015, even though the deal left Postmedia in control of both daily newspapers in Ottawa, Edmonton and Calgary. It already owned both Vancouver dailies.
The GCM papers, which also include dailies in Sherbrooke, Saguenay and Granby, all have storied histories and are deeply rooted in their communities. That has left Premier François Legault’s Coalition Avenir Québec government scrambling to save them. On Monday, it extended an additional $5-million loan to GCM to keep the papers publishing until year-end.
“It is impossible to envisage the closure of these six newspapers,” Quebec Economy Minister Pierre Fitzgibbon said in announcing the loan, which came with a unique condition – that GCM’s sole shareholder and executive chairman, Martin Cauchon, step down from his post.
Mr. Cauchon, a former minister of justice under Liberal prime minister Jean Chrétien, bought the six dailies from the Desmarais family’s Power Corp. in 2015 for an undisclosed sum. The deal raised eyebrows at the time, given Mr. Cauchon’s partisan stripes and close ties to the Desmarais family, whom he befriended while growing up near the family’s Charlevoix estate.
Mr. Péladeau, who was a Parti Québécois MNA at the time of sale, accused Mr. Cauchon of creating a “front” for Power Corp., which had been eager to rid itself of the struggling newspapers but had been reluctant to see them fall into rival Quebecor’s hands. The deal left Power Corp. with only Montreal’s La Presse, which subsequently ended its print edition before last year becoming a non-profit “social utility trust” and severing its ties with the Desmarais family.
In late 2017, the Liberal government of premier Philippe Couillard extended a $10-million loan to GCM to underwrite its “digital transformation.” Unlike La Presse, however, the GCM papers have maintained their print editions, leaving them with large overhead costs.
The $5-million loan gives Mr. Legault some breathing space to weigh the political pros and cons of allowing Quebecor to buy the GCM newspapers. The government will hold scheduled parliamentary hearings beginning next week before drafting measures aimed at helping the province’s print media, allowing it to sound out public opinion on the matter.
“The government wishes to organize an open process to allow all potential buyers to manifest their interest to continue the operations of GCM, thus favouring the diversity of the press,” Mr. Fitzgibbon’s office said in a statement.
Late Liberal premier Robert Bourassa’s government twice blocked Power Corp. patriarch Paul Desmarais Sr. from buying Le Soleil, the largest of GCM papers. The Quebec City daily was acquired by Conrad Black’s Hollinger Inc. in 1987. Mr. Desmarais was finally allowed to purchase the paper in 2000, along with Le Droit and Le Quotidien in Saguenay. In recent years, however, sons Paul Desmarais Jr. and André Desmarais have lost interest in being media barons like their father, especially after Power’s shareholders began complaining about meager returns.
Mr. Péladeau, by contrast, appears to be as enthusiastic as ever about owning newspapers – French-language ones, at least – even though they remain the weakest link in the Quebecor empire. He tweets compulsively about articles published in Quebecor’s existing dailies, invariably with his own editorial comments attached. And unlike his musings about an offer for Transat, his designs on GCM’s newspapers stand far better odds of happening.
A deal to buy GCM’s papers would leave Mr. Péladeau as Quebec’s uncontested media baron. He no doubt likes the sound of that.