Article publié dans The Globe and Mail - Toronto - 20 décembre 2008
Globe and Mail Update
December 20, 2008 at 2:20 AM EST
MONTREAL — — Pierre Karl Péladeau got a first-hand feel for the
worsening economic conditions late last year when printing giant Quebecor
World Inc. [IQW-T] was forced into filing for bankruptcy protection.
A $400-million (U.S.) rescue package proposed by parent Quebecor Inc.
[QBR.A-T]and a private equity partner fell through at the eleventh hour
and the printer sought shelter under the Companies' Creditors Arrangement
Act. "The liquidity crisis at Quebecor World around October and November of
2007 was the first tangible sign of what we were in for," says Mr. Péladeau,
chief executive officer of family-controlled Quebecor Inc., which was
founded by his late father, Pierre Péladeau.
"From that moment on we became aware that we were going to live through
a number of turbulent situations for months, if not years, to come."
'The liquidity crisis at Quebecor World around October and November of
2007 was the first tangible sign of what we were in for,' says Quebecor Inc.
CEO Pierre Karl PThe liquidity crisis at Quebecor World around October and
November of 2007 was the first tangible sign of what we were in for,' says
Quebecor CEO Pierre Karl Péladeau
The crisis management at Quebecor World, however, didn't slow
Mr. Péladeau's ambitious plans for the rollout of a wireless network in Quebec.
Nor did it put a crimp in a longer range project to transform Montreal-based
Quebecor's newspaper holdings into properties that are more in line with
the increasingly important role of the Internet.
It boils down to not falling into recession-think, not letting the short-term
shocks get in the way of the big picture. To stay focused on the long term
and what needs to be done today to ensure rewards further on down the
Investing in technology
Through subsidiary Quebecor Media Inc., Quebecor Inc. is intent on making
its planned mobile-phone service a key component of its communications
business.Quebecor Media is set to spend more than $800-million (Canadian)
on the build-out of the network over the next 18 months. The wireless project
will involve use of content from other Quebecor Media platforms, which include
newspapers in the Sun Media Corp. empire; the TVA television broadcasting
group; the Canoe website and the Vidéotron cable, Internet and telephony
unit. "We're investing with a medium- and long-term perspective,"
Mr. Péladeau says.
"There is no future for a cable and telecom company that doesn't invest in
Bundling its cellphone offering with other services, such as residential
telephone, Internet and cable TV, will allow Quebecor Media to take on
established rivals such as Bell Canada with competitive pricing.
"The economic downturn doesn't mean there is a change in our wireless strategy,
" Mr. Péladeau says.
"In telecom, you have to take the long view. You can't stop investing
because you're in a difficult economic situation."
Financing for the system doesn't require tapping capital markets and will
come from internal cash-flow generation and existing credit facilities, he says.
"And even in a difficult environment, it would be hard to envisage that people
will stop using their wireless phones," Mr. Péladeau says, adding that it's
expected that significant savings will be the order of the day for customers
once the bundling of services is set up.
Wireless is the future
As part of its larger multimedia strategy, Quebecor Media is overhauling its
newspaper division and positioning it to be competitive in the digital era.
The current economic slowdown is walloping newspaper advertising.
Sun Media is the country's biggest newspaper publisher, with 43 dailies
and more than 200 community publications, and has been forced to take
It recently announced it is slashing 600 jobs — about 10 per cent of the
total work force — to deal with the fallout from the deteriorating economic
environment and the impact of the Web.
But the cutbacks are also one element of a larger strategy Mr. Péladeau is
"Conventional newspapers are in a highly perturbed environment," he says.
It's not just about the current crisis: Readership and circulation erosion and
falling advertising constitute a long-term trend.
The challenge is not only to weather the latest downturn but also to embrace
the changes taking place, he says.
Radical times call for radical measures.
Last month, Mr. Péladeau took over the leadership of Sun Media as well as
Quebecor Media's Canoe online operation.
The management shakeup meant the departure of Michael Sifton, who had
headed up Sun Media after Quebecor Inc. took over his Osprey Media
newspaper group of small Ontario newspapers last year.
Building into cyberspace
The goal under Mr. Péladeau's leadership is to create a seamless integration
of the Sun Media newspapers and the Canoe portal.
That means winning over print reporters to the Quebecor Media vision of
providing content across various platforms, including newspapers, the Web
and mobile phones.
Content is increasingly in the form of video news items uploaded to the
website. "We have to adapt, we have to get greater flexibility from our
reporters," Mr. Péladeau says.
He's entertaining no illusions about the receptivity of journalists.
Talks aimed at renewing the collective agreement at flagship francophone
daily Le Journal de Montréal broke down last month. An arbitrator has been
appointed at the request of the union, but the two sides appear to be far
apart on many issues.
"At Sun Media, we want to accelerate the plan to better adapt to new
technologies," Mr. Péladeau says.
"We have an advantage in that we are a diversified, well-balanced media
company with a solid revenue base on the cable side," he says.
"That allows us to take on the challenge of developing a new model
with the newspapers and Canoe."
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