Sun Media Corp. has sold 74 community newspapers in Quebec to its publishing rival Transcontinental Media, in a $75-million deal that will likely mean consolidation in many cities where the companies compete for advertising.
Sun Media, which owns other weekly papers across the country as well as the Sun chain of tabloids and other daily newspapers in smaller communities, decided to make the sale because the newspaper industry was changing quickly for local newspapers that often rely on smaller businesses to fill ad space.
"The digital revolution has brought profound changes in local print media markets," said Robert Dépatie, chief executive officer of Sun Media's parent company Quebecor. "Advertisers now have a multitude of platforms available to them that did not even exist little more than 10 years ago. We believe in the future of print media but we cannot ignore the new market realities."
Transcontinental said owning the papers, which compete with its own papers in several cities in the province, would allow the company to "develop a local digital media offering for business and communities."
"This transaction will also give us the opportunity to continue building multiplatform offerings across all of Quebec by drawing on the talents of our people and on all those who work on the Sun Media community papers in Quebec. We are keen to welcome them into our midst soon," CEO François Olivier said in a statement.
The deal needs to be approved by the Competition Bureau. Sun Media said it will continue to operate the papers until that happens.
Wednesday, Sun Media cut 200 jobs out of its 3,800-employee work force. The company, which is the largest newspaper publisher in the country by number of titles, said 50 of those cuts would be to its editorial staff. he company last announced cuts in July, when it eliminated about 350 jobs from its 4,300-employee roster.
It has cut about 1,500 positions since 2008, when its print advertising revenue began falling dramatically as advertisers found other places to put their money. The reductions have yielded results – in its last quarter, its parent-company said profit in its newspaper division increased 15 per cent due to the "impact of significant cost-containment and repositioning efforts undertaken in recent years."
The July cuts, which included closing eight papers and three commuter papers, are expected to save the company $55-million a year.