“There are two clans emerging”

Behind the scenes of the small screen, the subject is as taboo as it is inevitable: Pierre Karl Péladeau’s company is trying to get its foothold in as many production houses as possible.

Currently, Quebecor has acquired minority shares in five television content companies, namely ComediHa! (2018), Pixcom (2021), Déferlantes (2022), Fair-Play (February 2024) and Attraction (March 2024). The largest broadcaster in Quebec has shown interest in the shareholding of at least four production companies, we have learned The Press from sources involved in the discussions.

“But is this the solution to broadcasters’ problems? », asks a producer, referring to the domination of the Quebec giant. “Is it normal for a media group to get its hands on so many production houses? The truth is that it is bad for democracy, artists, unions and entrepreneurs. »

Asked by The Press on the acquisition strategy of the Quebecor Group on the sidelines of the company’s annual meeting, its president and CEO, Pierre Karl Péladeau, responded: “Establishing partnerships with production companies is what that we want. We have them everywhere in our activities. I don’t see why we wouldn’t have it on television. Quite the contrary. And we want to continue to build a strong television industry here in Quebec and it is certainly by adding financial capacity that we will be able to continue this activity. »

Quebecor directed us to this response following our interview request.

Competition with Bell

Bell Media, which notably owns Noovo and Crave, has also entered independent production. The telecommunications company purchased minority shares in Sphère Média in May 2023. This acquisition was made in reaction to Quebecor’s strategy, according to our information. Bell declined our interview request for this report.

“We will end up with Bell which has its partners and Quebecor which has its partners, the blue against the yellow, with each its own studio,” warns producer Louis Morissette. The big losers in all this will be the creators, the directors, the screenwriters. »

The president of KOTV, who has no business ties with Quebecor, is the only producer who agreed to be named in this report. But his speech rallied the leaders of at least six other production companies to whom we spoke in exchange for anonymity so as not to harm their company or their employees. “As I have been barred by Quebecor for 20 years, I am the only one who has this freedom,” said Mr. Morissette.

The businessman fears that “internal competition” will set in between the production houses co-owned by Quebecor and will drag down all budgets, to the disadvantage of artisans, artists and viewers.

One of the producers surveyed goes further: the current situation could actually lead to “the collapse of independent production in Quebec”.

“Completely independent producers have little chance of making sales [d’importance] to the Quebecor group, he believes. With Bell, there are two clans emerging and if we let things go, it’s the end for us. »

The eight most watched shows on TVA are produced either by partner companies (positions 1 to 6) or internally (positions 7 and 8).

Another producer also fears that the small boxes will be sacrificed in this “war of titans”.

“What’s strange is that Bell and Videotron are starting to act like Los Angeles studios,” she continues. For a studio to decide to have its own producers and to place orders, it makes sense when it is private financing. They can do whatever they want. But here, the money is public. It’s a big problem. »

Independent production houses, unlike broadcasters who develop content in-house, benefit from a provincial tax credit administered by the Société de développement des enterprises culturelle (SODEC)⁠. This aid was put in place by the government of Quebec to stimulate Quebec production in terms of volume, diversity and quality.

The tax credit lowers the bill for television projects by around 15% on average, while all public support is estimated at 40% of expenses, indicates the Observatoire de la culture et des communications du Québec.

The Minister of Culture and Communications of Quebec, Mathieu Lacombe, invites broadcasters who invest in independent production to be “cautious”, since “the rules [de financement] could change over the next few years,” he told The Press (see other text).

Logical choices

VAT is ineligible for the SODEC tax credit. The network completely abandoned its internal production of entertainment content in November 2023. The broadcaster chose Déferlantes – partly owned by Quebecor – to resume the show The cheater. In a press release published last March, the broadcaster explained that it had made its choice “following a rigorous selection process”, enthusiastic about “innovative ideas to both renew the show and preserve its essence”.

An independent box from Longueuil, Blimp Télé, inherited the production of VLOG.

Very recently, TVA announced that it had chosen, following a “substantiated selection process”, the production house Fair-Play – which it has co-owned for several months – to take over the popular show The goose that lays golden eggs.

In August 2023, the Quebecor network requested a change of producer of the Upside-down world after the company in charge of the set hosted by Stéphan Bureau, Sphère, had been partly acquired by Bell.

Decisions which illustrate, according to several producers, Quebecor’s one-way policy: its partner companies are free to submit their projects to other broadcasters, but its doors rarely open to production houses in which it does not have of interests.

“There is no chance that I will have a daily with TVA one day,” notes a production source who sometimes does business with the most watched channel in Quebec – TVA alone holds a quarter of the market share. “Large series with high turnover and high turnover go directly to the production companies where Quebecor is already a shareholder. »

“I wouldn’t see why Quebecor would do a soap opera with me rather than doing it with Pixcom,” explains another production veteran. “It will bring him money, he will control costs and he will impose his vision. With me, it will be more difficult. »

Quebecor is an “ultimate beneficiary” of the five production houses in which it has invested, meaning it holds at least 25% of the voting rights and market value, according to the Quebec Business Register .

Acquisition and reciprocity

According to the President and CEO of the Institute on Governance, François Dauphin, it is obvious that a company that acquires shares, even minority shares, in a production company must find an interest in it.

“As soon as there is an injection of capital, there must be some reciprocity, whether it is a right of first glance, the presence of directors on the board or other forms of benefits. All this is negotiated over-the-counter in the shareholder agreement,” explains Mr. Dauphin.

During the last annual congress of the Association québécoise de la production media (AQPM), which has around 200 members, moderator Catalina Briceño asked Olivier Aghaby, director of original fiction series, Quebecor Content, the question. Referring to the purchase of minority shares in Attraction, she asked him: “Is this another form of business collaboration that we risk seeing increase? »

“It’s sure that it’s a way of doing things,” replied Olivier Aghaby. We measure success by the quality of the relationships we maintain with producers. This report allows us to speed up the process, to arrive more quickly with projects to sell. Success, for us, is not coming up with a cultural phenomenon once in a while, it is having repeat business with our partners. »

Despite the agreements concluded with private production houses, Olivier Aghaby still indicated that he wanted to “have the same type of exchanges with other producers who have expertise” of interest to Quebecor. When Catalina Briceño suggested: “So there is no preferential treatment…”, snickers erupted from the room.

We have to put ourselves in the place of the broadcasters, however, believe at least two independent producers.

“They have enormous losses of income,” one of them told us, who does not rule out joining Quebecor if they have no choice. Despite the good ratings, advertisers are jumping ship. Subscription revenues to specialty channels are also declining, so they are looking for ways to make their operations profitable and one of the solutions is to vertically integrate all services. The impact is that it weakens private production, but if they don’t do it, there might not even be any TV! That’s the context. »