Ex Transcontinental employees hoping to breathe new life into local papers


As Transcontinental sells off its weekly newspaper portfolio, many of its former employees are jumping at the chance to get into the publishing business by snapping up the publications.

And they are hoping to succeed where the media and publishing firm had encountered difficulties in recent years: by re-establishing its place within local communities.

"The decline (of income) we experienced was because we forgot that the news had to be local," said Dave Beaunoyer, a former regional executive with Transcontinental who heads a group that took over French newsmagazine L'Express in August.

Transcontinental (TSX:TCL.A) put its 93 newspapers in Quebec and Ontario up for sale in April.

Of the eight transactions the company has concluded since then, three were with former employees who've decided to give the newspaper business a shot.

Transcontinental had centralized many aspects of the operation related to production, sales, marketing and editorial – a move that eroded the flexibility of the weekly newspapers, say the former employees-turned publishers.

"Transcontinental was filled with good intentions," Beaunoyer said. "But, for example, spring doesn't arrive everywhere in Quebec at the same time so when we produced a section on gardening for the entire chain, the results weren't always successful."

It's a similar refrain from the president of Gravite Media, Julie Voyer, who spent 11 years with the company, most notably as general manager for the region south of Montreal.

Voyer got a hold of six newspapers serving those suburbs last month and took it as an opportunity to re-establish links with local advertisers who'd drifted away and opted for online advertising.

"If I am an advertiser and I am called by an office in Montreal telling me my payment is late, even if I almost always respect the deadlines, it is not pleasant feeling," Voyer said. "The customer wasn't treated as well as before."

Transcontinental spokeswoman Katherine Chartrand says the company was pleased to see employees take an interest in the publications for sale. Twenty have been sold already, but she wouldn't say whether other sales were in the work.

She noted that the company's decision to consolidate activities stemmed from a time when it operated newspapers in Saskatchewan, Ontario and the Maritimes.

But she added it may not be the best model for all regions.

Faced with the rise of digital advertising, Beaunoyer and Voyer say they're aware of the challenges ahead but add that the titles they've acquired are profitable.

In 2016, before Transcontinental decided to leave the local news sector, the media division accounted for only 15.5 per cent of its $2 billion in revenues, compared to 19 per cent of total revenues in 2015.

When the sales process was announced, the company's regional newspaper network had about 1,000 employees, compared to about 1,500 by the end of 2016.

Going forward, Beaunoyer says he'll be looking at other revenue sources, such as offering up graphic design services.

He says he was able to finance his purchase with the help of local business owners who don't interfere with editorial content.

Colette Brin, director of Universite Laval's centre for media studies, says it's difficult to know whether making inroads with local communities is a sustainable, long-term business model for the regional press.

"The return on investment for an advertiser today is much less clear in a weekly compared to an advertisement on Google ... where one can measure the impact of an advertisement," she said.

"This is the challenge."