Steve Ladurantaye

From: ”Corporate Communications” <Corporate.Communications@CBC.CA>
Cc:
Date: Thu, 29 Mar 2012 21:01:01 +0000
Subject: Federal budget day / Jour du budget fédéral

BCE Inc.  could spend at least $21-million on severance pay for five Astral Media  executives if the company’s deal for the broadcaster closes.

The two companies announced details of the $3.2-billion deal last week. BCE gets dozens of radio and television stations as part of the agreement, and strengthens its hand considerably in Quebec.

Read the story in the Globe and Mail

Astral’s management circular outlines who gets paid what in the event of a takeover, and it indicates five of the company’s executives are in line for $21-million in payouts. The total dollar amount is a combination of severance pay, stock options and other share plans.

Founder Ian Greenberg, for example, would receive $5.8-million in severance on top of $5.1-million in stock-related compensation for a total of $10.9-million. The final amount is likely to be higher, because the vesting options section of the circular assumes a takeover price $34.35 for the company’s Class A shares. BCE has offered $50 for these shares.

Mr. Greenberg won’t vanish quietly into retirement, however. He’ll be joining BCE’s board.

“I don’t want people to miss this, one of the absolute critical parts of this acquisition is we now have access to the leading media content team in the province of Quebec … and their CEO is joining our board,” BCE chief executive officer George Cope said in a conference call about the deal. “ It doesn’t get any better than that in terms of an acquisition going forward.”

Other employees receiving payouts include chief operating officer Jacques Parisien ($3.7-million), Chaînes Télé Astral president Pierre Roy ($3-million), Astral Television Network president John Riley ($2.8-million) and vice-president of finance Robert Fortier ($737,389).

Other employees eligible for payouts include Astral’s chief operating officer Jacques Parisien ($3.7-million), Chaînes Télé Astral president Pierre Roy ($3-million), Astral Television Network president John Riley ($2.8-million), and vice-president of finance Robert Fortier ($737,389).

Mr. Greenberg’s payment is triggered the minute the deal is done, other executives would receive the payment if replaced within 18 months.

BCE may need to consider severance for employees as well. UBS analyst Phillip Huang said head office jobs are likely to be eliminated when the companies merge, due to overlap. He didn’t quantify how many positions could be cut.

“We believe there is significant function overlap between Bell Media and Astral’s head offices, and expect substantial synergies,” Mr. Huang wrote in a note to clients.

The deal has been criticized by some because it doesn’t treat all shareholders equally. While it is common for media and communications companies in Canada to have two classes of shares, Astral has three.

BCE is paying $50 a share for the class A non-voting shares and $54.83 for the class B voting shares, the majority of which are controlled by the Greenberg family holding company. But they also control a third class of shares, which have extra votes and are called “special shares” and of which there are only 65,000. BCE is paying $50-million for those – or $769.23 each.

Agence France-Presse chief executive Emmanuel Hoog made a quick visit to Canada this week to talk about his global wire service. I had a quick chat with him, and we talked about how speed – once the hallmark of news services – is now the biggest threat facing the industry. Here’s what he had to say:

What is life like at a wire service in 2012?
These are challenging times because we are in big competition with other agencies like Reuters. But we are doing well, we duplicate a number of our wires in different languages. We produce in six languages, and that remains one of our biggest priorities. We are investing in text, and we have a strategic plan for other media such as video. We have 200 bureaus all over the world, and 80 of them are now able to shoot video.

How are you dealing with the pace of social media? Can wire services compete in a Twitter world?
The biggest challenge has always been the quickness of serivce. We want to get news out as fast as possible. Yet, the speed that was once the best virtue of a wire service is now a liability. In a world where you have so many producers of news, you can often have a lot of not really good news. You get a lot of rumors. For a news agency, the job is to be first with precise and exact information. Fastness can be a liability.

How do ensure journalists aren’t tempted to try and get the news first at any cost?
Professionalism has to be part of the DNA of journalists. We always want to be doing teamwork – it’s the reason we train people to work together. When rumors are circulating on Facebook and Twitter, it must be the news agencies that tell the newspapers it is accurate. We are the mark and the brand that is able to certify this news. A few years ago perhaps there was a thought that news agencies belong to the past, that it was a dinosaur that would die with the digital industry. But we’re realizing we are stronger than ever, even though we have to change and offer new services such as video. We need to connect to social networks. But we are still a partner for news and a big player in this world.

Emboldened by the success of its digital paywall that has seen some 455,000 users pay for online news, The New York Times is tightening access to its website in a move that paves the way for more aggressive pay models at publications across North America.

For the past year, the publisher allowed access to 20 free stories a month from any single computer. It has lowered that number to 10 to encourage more people to pay for the news – although it said readers who were directed to a story via social media or a search engine would have unrestricted access to it.

Read the story in the Globe and Mail
View a slideshow of Canadian online paywall efforts 

The newspaper group’s efforts to have readers pay for online content have been closely watched by publishers around the world since it launched its paywall last year. As it officially announced subscriber numbers for the first time Tuesday, publishers began scrubbing the release for insight into how to enhance their own fledgling paywalls.

The Times’ metered system is rapidly becoming the preferred method of newspaper publishers charging for online content, and is being adopted by a number of Canadian outlets.

Following experiments in Montreal and Victoria, Postmedia Network Canada Corp. will restrict access to several of its metropolitan daily newspapers in the spring. The Globe and Mail is expected to launch a metered version of the business content on its website in the second half of the year, and Torstar Corp. continues to test a metered model at its Hamilton Spectator.

Magazine publishers are also considering how to charge for their content online, with Rogers Media Inc. considering enhanced paid-access models for its consumer magazines such as Maclean’s and Chatelaine.

“We are really all in this together as an industry as we try to figure out what works,” said Wayne Parrish, chief operating officer at Postmedia. “I don’t think anyone has an idea of what will work in two, three or five years.”

Some analysts took the Times’ move as an encouraging signal.

“Today’s positive announcement is the first good news from the company in some time,” said Douglas Arthur, a media analyst at Evercore Partners. “[It] also announced a new restrictive access policy … this would seem to underscore the company’s confidence in the pay wall model.”

The confidence has been infectious, largely because the Times is expected to reap an $85-million haul from its online subscribers in 2012.Gannett Co. Inc., the largest publisher in the United States, recently announced plans to restrict content at 80 of its newspapers (excluding its flagship USA Today).

Other organizations such as the Wall Street Journal and Financial Times have also adopted online pay schemes that include metered systems, as well as subscription-only models.

All of the companies are trying to figure out how to wring money out of readers, regardless of how they access news. Websites are still the most popular method of online access, but smartphones and tablets are becoming increasingly popular.

Companies initially believed that selling apps would be a good way to monetize news, but a Nielsen study finds that has had mixed results in the United States, where the top 25 news apps in the country are all free to download and only two require a paid subscription.

Most publishers still depend on selling advertising, however, and a recent study suggested American newspapers are earning $1 in digital advertising revenue for every $7 they lose in their print products. The Pew Research Center’s Project for Excellence in Journalism studied 38 newspapers in the United States, and cited “cultural inertia” for the papers’ inability to seize new revenue opportunities.

“The shift to replace losses in print ad revenue with new digital revenue is taking longer and proving more difficult than executives want and at the current rate most newspapers continue to contract with alarming speed,” the report stated, adding the executives they interviewed considered replacing print revenue an “existential” issue.

Transcontinental Inc. will close two printing plants and eliminate 500 jobs as it reorganizes its operations across Canada following its takeover of Quad/Graphics Canada Inc.

The Montreal-based company said it would close two plants owned by its former competitor – one in Montreal and one in Dartmouth, NS.

Read the story in the Globe and Mail

Transcontinental acquired the American company’s seven Canadian plants last year, in a swap for Transcontinental’s Mexican operations. Transcontinental also handed over the portion of its Canadian book printing business that exported to the United States as part of the deal, which closed on March 1.

The company said Tuesday that the plants will close at the end of June, and the four remaining plants will be “integrated into the Transcontinental network in order to maximize the use of each piece of equipment across our entire print network.”

The printer said it has invested almost $700-million into its print network over the past several years, and the acquisition of Quad/Graphics is expected to bring in about $230-million in new business over the next two years.

“Naturally, many scenarios were examined by the integration committee in order to keep as many employees as possible, but given the low utilization rate of the equipment in the newly acquired network, strategic decisions had to be made,” Transcontinental said in a statement.

There were 6,900 employees working in the company’s 33 plants prior to the announcement. Chief executive officer François Olivier said the 500 workers will receive “separation packages and out-placement services to support them in their efforts to quickly find new employment.”

“Transcontinental wishes to thank all the workers at all the plants involved,” Mr. Olivier said in a statement. “It is important to stress that over the years it has been the dedication, professionalism and talents of the men and women at these plants that has driven the success of their company.”