MONTREAL – Seems as though in the burgeoning new media world, holding a broadcast license is less of “a license to print money.”
Quebec broadcaster TQS today said it has “obtained an order by Québec Superior Court under the Companies’ Creditors Arrangement Act with a view to protecting TQS and its subsidiaries from claims by creditors and allow it to reorganize its operations,” in the official press release.
In other words, TQS – a broadcaster 60%-owned by Cogeco Inc, and 40% by CTVglobemedia, is now under bankruptcy protection.
Issued for a period of 30 days, the order also applies to subsidiaries and to TQS’ parent, 3947424 Canada Inc. As reported by Cartt.ca, in October 2007 the board of directors of TQS engaged CIBC World Markets to advise on and assess strategic options to strengthen the TQS network in the face of financial difficulties.
At a meeting on December 17, 2007, after considering CIBC World Markets’ report and discussing its assessment and recommendations, the board concluded that it was in the best interest of TQS, its employees and creditors to request court protection.
Under the order, RSM Richter Inc. has been appointed as monitor by Mr. Justice Journet of the Québec Superior Court.
TQS has long been the third ranked (in a three team race) French-language conventional broadcaster in Quebec and has perennially trailed both Quebecor-owned TVA and SRC (French CBC) in the ratings in the province.
A “combination of circumstances beyond its control,” has led to this, says the press release. “TQS’ position in the Québec Francophone over-the-air television market deteriorated markedly in spite of the measures and investments initiated by the company over the last several months.
“The gradual loss of advertising revenue to specialty TV networks and content accessible over the Internet, combined with increased production costs, the (CRTC) refusal to grant general interest television networks the same ability to charge subscriber fees for signal distribution as the specialty television networks, the programming strategy of Société Radio-Canada’s (SRC), which acts like a commercial player rather than a publicly-owned television broadcaster and SRC’s notice of disaffiliation in Saguenay, Sherbrooke and Trois-Rivières after a 50-year partnership all contributed to today’s decision by TQS’ Board of Directors,” continues the release.
Just over a month ago, TQS let go about 40 employees citing the very same issues.
“TQS is a victim of circumstances beyond its control,” said Cogeco Inc. CEO Louis Audet. “However, other people besides ourselves – all TQS’ shareholders – have the required levers to bring about at a lasting solution. We are hopeful that they will seize the opportunity to make the necessary adjustments to save Francophone general interest television.”
With approximately 12% market share, TQS says it is very close to SRC’s and the “support of all TQS contributors, which include the equivalent of 649 full time employees as well as its many announcers, producers and artists, will be needed to pull through this unfortunate moment,” reads the release.
“We’ve done all we could. Today we were forced to make a decision that was difficult – but necessary. Now, it’s up to others to see this stage in TQS’ life as an opportunity and to take up the torch before the end of the initial order on January 17, 2008,” added Audet, who also indicated that all TQS operations would be maintained until further notice.
