Media Crisis: Groupe Capitales Médias proposes possible solutions
Groupe Capitales Médias (GCM) proposes to the government six solutions to get out of its precarious financial situation and especially so that all Quebec print media can once again afford to face the future.
Speaking to the National Assembly before the Parliamentary Committee on the Future of the Media, Claude Gagnon, President and Chief Executive Officer of Groupe Capitales Médias, responded to parliamentarians’ questions about the “upheavals” that have occurred in his business in recent days.
Mr. Gagnon explained that the entire loan of $ 10 million granted by the Government of Quebec in 2017 was spent, because the company has problems with revenues. “[Advertising] sales do not materialize in the way it should happen.”
The CEO of GCM indicates that the company has no problem of readership, it is rising sharply on its digital platforms and it does not make “crazy spending”. Between 2008 and 2019, the newspapers of GCM have reduced their workforce by 53%, says his memoir.
“I have the impression that the elephant in the room is the pension plan,” said PQ MP Sylvain Gaudreault, who wanted to know the extent of the problem. Mr. Gagnon admitted that employee retirement funds were “one of our biggest concerns right now”.
GCM has approximately 1000 retirees and beneficiaries of its pension plan, while it has only 400 active employees. The actuarial deficit of the plan is around $ 65 million and its solvency rate varies between 75 and 78%, explained Mr. Gagnon.
A potential purchaser of this company, which came under the protection of the Creditors Arrangement Act on August 19, should take this deficit into account. GCM can continue its activities until mid-November in a pessimistic scenario or until the end of December in a more optimistic scenario thanks to a new loan of $ 5 million from the Government of Quebec, which allows it to hold until a Buyer.
Thousands of supporters
In recent days, the perilous situation of the regional newspapers of GCM has created a wave of shock in Quebec. Voices have been raised to defend the importance of diversified regional information. “I believe that awareness is more important than ever … We receive thousands and thousands of letters of support,” says Gagnon.
But there is no illusion as to the duration of such a solidarity movement. “You know the” I’m Charlie “, it’s been a while. It goes up at one point. We’re all here, we’re all here, the fist raised and we’re going. But after a while, it all goes down again. ”
That is why he is asking parliamentarians to act and find “a long-term solution”, because otherwise the exercise will have to start every two or three years, he believes.
GCM’s CEO is asking MPs to think about the only thing that has not changed in the media world in 20 years, the ownership style, with a single owner. According to him, the opportunity is good “to look at other modes of ownership of the media”.
Mr. Gagnon also advocates that the various departments and Crown corporations are obliged to place a large part of their advertising in the Quebec media, “rather than to put that in the Google and Facebook of this world, which does not bring absolutely nothing, neither as a tax contribution nor as a social contribution “.
He believes that payroll tax credits are “essential” for all news media to survive in the next few years and advocates the creation of a provincial advertising agency.
The idea of such a management sprouted about a year ago from several press owners. However, it is slow to materialize. “We are in an industry that is competing as we speak. It’s not easy to get everyone around a table and create unanimity. ”
The goal would be for newspaper companies to join forces to sell advertising together. “It would be a way to compete with the big guys in this world,” says Gagnon, referring to Facebook and Google, who are eating away at a significant share of media advertising revenue.
THE SIX SOLUTIONS OFFERED BY GCM
– Offer tax credits on the payroll of press companies
– Create a provincial advertising agency that would bring together all the media in Quebec
– Eliminate the contribution that print media must pay for paper recycling
– Require the Government of Quebec to place a large part of its advertising in Quebec media
– Require municipalities to resume publishing their public notices in their local media
– Tax the multinationals of the web on the revenues they make in Quebec
GCM UNIONS OPEN THE DOOR TO A COOPERATIVE
Employees of Groupe Capitales Médias opened the door Tuesday night to the creation of a workers’ cooperative that could buy regional newspapers. The members gathered at a special meeting voted in favor of developing a business plan that would validate the viability of this model or not.
“We are convinced that a credible revival of these dailies will inevitably involve their participation,” said Pascale St-Onge, president of the National Federation of Communications (FNC-CSN). The union wants to develop a “proactive partnership with potential partners” interested in relaunching these newspapers.
Members of the Sun, the Nouvelliste, the Droit, the Voix de l’Est and Le Quotidien unions are in favor of exploring the idea, while union members at La Tribune, represented by Unifor, have not spoken out. .
Claude Gagnon, CEO of Groupe Capitales Médias, believes the opportunity is good to evaluate all media ownership styles. “All models are valid as we speak.”