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Crusade against CBC is no vendetta, Péladeau insists

Pierre Karl Peladeau, President and CEO of Quebecor Inc., speaks during an interview at Quebecor offices in Montreal, Tuesday, December 6, 2011.

Graham Hughes For The Globe and Mail/graham hughes The Globe and Mail

Pierre Karl Péladeau reigns over an empire of scrappy tabloids and populist television channels catering to conservative meat eaters.

But the staples of the Quebecor Inc. chief's news diet are Le Monde and the French CBC, media outlets that are perceived as left-leaning and are routinely attacked by his own publications.

To Mr. Péladeau, the suggestion that he is politically motivated and that Sun News is a platform for his political ideas, in essence making him Canada's Rupert Murdoch, is offensive. Quebecor's media properties are not vanity projects, he says, and he does not impose his tastes on his newspapers. He is concerned only with their profitability.

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The media magnate insists that his crusade to force the CBC and its French-language arm Radio-Canada to release confidential data about their operations – including the salaries of Peter Mansbridge and other network stars – is not about politics or ideology. It is about taxpayer dollars, and how they impact Quebecor's bottom line.

If Mr. Péladeau has personally taken up the cause – taking centre stage in October at a parliamentary hearing into the applicability of the federal Access to Information law to the CBC – it is because the stakes are mountain high for Quebecor.

"Since when have I ever made my personal political views known?" Mr. Péladeau charges in a boardroom in Quebecor's new Montreal office tower, where a bust of his late father, Pierre Péladeau, looms over the proceedings. "I never have."

Sparking a political debate about the CBC and its mandate could provide a boost to Quebecor if it leads, as is widely rumoured, to major cuts to the public broadcaster's $1.1-billion annual subsidy in the 2012 federal budget.

Radio-Canada remains Quebecor's primary competitor in Quebec, where Quebecor Media controls the top-ranked TVA network. TVA has seen its market share shrink dramatically with the proliferation of French-language specialty channels, lead by BCE Inc.'s Réseau des Sports and Astral Media Inc's family of properties.

In English Canada, the survival of the eight-month-old Sun News Network depends in part on siphoning viewers from the CBC's all-news channel. And to hear Mr. Péladeau tell it, the survival of the Sun tabloids, which Quebecor bought in 1998, depends just as much on the success of their sister cable channel.

While his colourful father never missed an opportunity to stir the political pot, even coming close to endorsing Quebec separatism, those who know the younger Mr. Péladeau best insist he is neither ideological nor politically-aligned.

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Former Progressive Conservative prime minister Brian Mulroney sits on Quebecor's board and remains one of the Mr. Péladeau's most trusted advisers. But the connection was established by the father, who hired Mr. Mulroney, then a young labour lawyer, to negotiate the first collective agreement at the Journal de Montréal in 1964. Theirs is a business relationship, not a political one.

"Pierre Karl inherited his father's entrepreneurial fibre," says Quebecor chairwoman Françoise Bertrand, a former Canadian Radio-television and Telecommunications Commission head under Liberal prime minister Jean Chrétien. "He believes that government has a role in regulating what needs to be regulated … but that wealth creation is ensured by entrepreneurs, not governments."

Mr. Péladeau is an unsentimental chief executive officer. His critics have another word for his management style: ruthless. It explains why the he has inherited none of the affection the Quebec public lavished on his father. With philosophy and law degrees under his belt, Mr. Péladeau would rather cite Montesquieu (as he does in our interview).

His feet are firmly planted, however, when it comes to running Quebecor.

A record two-year-long lockout at Le Journal de Montréal that ended last February, resulting in the departure of all but 62 of the tabloid's 253 unionized employees, cemented Mr. Péladeau's tough-guy persona in Quebeckers' minds.

"If we don't change the print media model, the acceleration of our own death is inevitable," Mr. Péladeau explains. "Sun News is an emanation of a strategy where, if we want to assure the jobs of the 1,000 journalists we employ, we must multiply our distribution channels to generate additional revenues."

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The idea for Sun News came from Kory Teneycke, Prime Minster Stephen Harper's former communications director and now a vice-president at the network. He envisioned its role as a Canadian version of Mr. Murdoch's Fox News Network – hence, the nickname Fox News North – pushing conservative causes and politicians.

But if Mr. Péladeau signed on, it was strictly for the money-making potential.

"It's a business strategy, period," Mr. Péladeau insists. "As the leader of a company that acquired a certain number of newspapers several years ago, I have to be sensitive to their brand and their history."

The extension of the Sun brand to cable news led, according to Quebecor insiders, to the most expensive specialty channel launch in Canadian history last April. Critics have panned the network as tasteless, if not un-Canadian. But Quebecor insists Sun News "regularly" beats CBC News Network and CTV News Channel in prime time.

It is also losing buckets of money. In the third quarter this year, operating profits in Quebecor's broadcasting division plummeted 77 per cent, primarily due to the launch of Sun News. But Quebecor has made a five-year commitment to Sun News, giving the network time to prove itself.

Mr. Péladeau seems sold on its convergence potential. Of course, weakening the CBC would make it all so much easier, not just for Sun News, but for all of Quebecor's broadcasting and Internet assets.

Mr. Péladeau insists the frequency with which Sun Media's newspapers have filed access requests regarding the CBC in recent years is in keeping with their long tradition of holding public agencies and officials to account.

The debate about the CBC's mission is as old as the public broadcaster, which turned 75 this year. But Mr. Péladeau argues it has never been as relevant as in the current multi-channel, multi-platform universe.

"I listen to the news on Radio-Canada everyday. As a citizen, I think it is undeniable that it has a news mission," Mr. Péladeau offers. "But should Hockey Night in Canada be on the CBC? Should Jeopardy! be on the CBC?"

Mr. Péladeau seized on the Nov. 24 testimony before the House of Commons Ethics Committee, which oversees the Access to Information legislation, of CBC general counsel Maryse Bertrand to show that public network competes directly with private broadcasters, instead of complementing their activities.

Asked why the CBC refused to make the salaries of Mr. Mansbridge and other network stars public, Ms. Bertrand responded: "It's the war for talent, basically. If precise salaries for our talent or even our programs are known, then others can try to poach them or somehow compete more efficiently against us than they would otherwise be able to."

There is not much sympathy for Mr. Péladeau's crusade in Quebec, where Radio-Canada remains a cherished cultural institution and, unlike its English-language arm, a ratings success story. Any diminution of its budget, the thinking in Quebec goes, would only enhance Quebecor's domination of the province's media landscape.

Last month, Enquête, a Radio-Canada version of The Fifth Estate, ran a highly critical probe of the "Quebecor Empire" that suggested Quebecor routinely advances its corporate interests in its newspapers and on its TV channels.

The program included a segment on the illegal hacking scandal facing Mr. Murdoch's News Corp. in Britain, noting that politicians there criticize the Australian-born magnate and his media properties at their peril.

Mr. Péladeau dismisses the Enquête segment as "intellectually dishonest" and a form of "guilt by association" timed to coincide with CBC president and CEO Hubert Lacroix's muscular counterattack against Quebecor. According to Mr. Lacroix, Quebecor has received more than $500-million in direct and indirect federal subsidies in the past three years, including favourable auction conditions for the wireless spectrum its Vidéotron subsidiary needed to enter the lucrative cellphone business.

The charge that politicians cower before Quebecor stems not only from the spectrum auction. It results from the Quebec National Assembly's passage this fall of a law that forbids legal challenges to a contract granting Quebecor exclusive lease and naming rights on a new major league hockey arena planned for Quebec City.

Mr. Péladeau counters that the law was adopted at the insistence not of Quebecor but of Quebec City Mayor Régis Labeaume, who is seeking to resuscitate the Nordiques franchise and thinks Quebecor would be the best owner. So, says Mr. Péladeau, does the NHL.

"We've made representations to the league. They like our business model," he says, alluding to the convergence strategy Quebecor intends to employ by broadcasting Nordiques games on its new TVA Sports channel and Vidéotron's smartphones. Indeed, it is the same model that inspired the $1.32-billion purchase this month of the owner of the Toronto Maple Leafs and Raptors, by BCE Inc. and Rogers Communications Inc.

The prospect of a Quebecor-owned hockey team sends shivers up the spines of media watchdogs in Quebec, who fear it will only increase the company's dominance of the province's media market and turn its news outlets into Nordiques cheerleaders.

Mr. Péladeau sees it differently. Quebecor Media is 45-per-cent-owned by the Caisse de depôt et placement du Québec, which manages the assets of the Quebec Pension Plan. Hence, what's good for Quebecor is good for Quebec.

Or, as he puts it: "Working for Quebecor is like working for all of Quebec."

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