Sun Media sells 74 community papers
Sun Media is ending a battle in Quebec with media rival Transcontinental by agreeing to sell its 74 publications and related websites for $75 million as it continues to adjust to a loss of advertising revenue caused by the digital revolution.
The agreement announced Thursday has been approved by the boards of both companies but the subsidiary of Quebecor Media (TSX:QBR.B) will continue to operate the papers until the transaction receives regulatory approval, including from the Competition Bureau.
"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," said Quebecor Media CEO Robert Depatie.
He said the transaction will ensure that the newspapers will stay in the hands of a Quebec company. Not included in the deal are Quebec's largest daily newspaper Le Journal de Montreal, Le Journal de Quebec, the 24 Heures free daily and the QMI news agency.
The deal comes a day after Sun Media announced it was laying off another 200 employees across its network, including 50 journalists outside Quebec.
Transcontinental CEO Francois Olivier said the transaction fits into its strategy of strengthening its core assets and developing a local digital media offering for businesses and communities. He expects the near doubling of its weekly presence in the province will add about $20 million in operating income before amortization.
"There is still a future (in newspapers)," he said in an interview. "These are very local publications. We will probably go more towards unique content to get away from national news."
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