An Accidental Success Story: The Forced Diversification of Quebecor Media

Abstract

Canada’s news media ownership landscape changed dramatically in 2009–10 with the bankruptcy of Canwest Global Communication and the voluntary separation of the CTV network from the Globe and Mail national newspaper. These developments suggested failure of the newspaper-television convergence business model adopted by these companies a decade ago. One company has been able to make the convergence model work in Canada, however. Quebecor Media acquired the TVA network in Québec in 2000 to go along with its chain of French-language newspapers in Quebec and the Sun Media national chain of English dailies it acquired in 1998. It subsequently acquired the Osprey newspaper chain to become one of the country’s largest newspaper publishers. Unlike other converged media companies in Canada and the U.S., however, Quebecor has remained profitable despite the recession that began in 2008. This paper examines financial data, including CRTC monitoring reports and annual reports from Quebecor and other companies, in an attempt to explain its success. One factor found to be of significance has been Quebecor’s diversification into more profitable areas, such as cable television and cellular telephony.

Key Words:

• acquisition
• divestiture
• strategy
• cross-ownership