TORONTO (Reuters) - Quebecor Inc is pulling its stable of newspapers out of the Canadian Press news co-operative in a bid to cut costs and expand its own in-house news agency.
Quebecor, which owns the Sun Media and Osprey newspaper chains, and represents CP’s biggest media member group, will depart at the end of June 2010. CP director Phillip Crawley told Reuters the impact would be “significant”.
The Sun Media chain includes eight big-city dailies, as well as free commuter newspapers and nine local dailies in Ontario and Western Canada. The Osprey chain has 20 daily newspapers.
Even so, they account for less than 5 percent of CP’s revenue, Eric Morrison, the news agency’s president, said in an interview.
For Quebecor, which has slashed costs and jobs across its newspaper properties amid the economic downturn and a sharp drop in the advertising market, pulling out of CP is in part about cutting expenses further, a company spokeswoman said.
“The membership at CP was costing us several millions of dollars each year,” she said, adding that Quebecor is working on building an in-house news service to share content between its papers.
The Canadian Press, meanwhile, is seeking outside investors to raise money and grow commercial and digital revenue. An investment proposal is currently being shopped around to both media and non-media players and has generated expressions of interest, Crawley said.
Currently, newspaper memberships account for 35 percent of the news agency’s revenue. The rest comes from commercial services and digital and broadcasting sources.
CP was created by newspaper publishers in 1917 to help exchange and distribute news across the country. It began generating its own content during World War One.
Restructuring CP by opening it to outside investment “will give us more flexibility to do different kinds of deals than we’ve had in the past,” Morrison said.
Reporting by Wojtek Dabrowski; editing by Rob Wilson